• Did the CIA Sabotage Russia At The Olympics?

  Authored by Rick Sterling via Oriental Review,

  There is something very fishy about the Anti Doping Rule Violations (ADRVs) pinned on the Russian curler and Russian bobsledder during the final week of the Pyeongchang Winter Olympics.

  It makes no logical sense that an athlete would do a one-time consumption of a chemical that is of no value in circumstances where it is almost certain to be detected with huge negative consequences.

  That is precisely the situation. The Russian Mixed Curling bronze medal winner, Alexander Krushelnitsky, had to give up his medal, plus that of his partner wife, because traces of meldonium were found in his urine sample. He had previously tested clean. Meldonium is a medication which helps keep the heart healthy by increasing blood flow. That would be of no benefit in a sport like curling which requires accuracy, strategy and focus but is not taxing physically. The “sweeping” to help guide the rock down the ice lasts only 20 seconds or less. International curlers were astounded at the news and bemused at the idea of performance enhancing drugs (PEDs) for curling. The skip of the Danish curling team said ”I think most people will laugh and ask, ‘what could you possibly need doping for?”

  Krushelnitsky strongly denies taking banned drugs. “I am categorically opposed to doping …. never, at any time that I have been involved in sport, have I ever used prohibited substances”.

  

  Russian curling team Alexander Krushelnitsky and Anastasia Bryzgalova

  Similar curious circumstances apply in the second ADRV. Russian bobsledder Nadezhda Sergeeva had numerous negative (clean) tests before she was tested positive for banned trimetazidine. Bobsledding is another sport which requires physical and mental skill but not physical endurance.

  In the February 25 IOC meeting to close the Pyeongchang Winter Games, the head of the IOC Implementation Group, Nicole Hoevertz, said the Russian athletes had been tested “more than any other athletes”. She and her group were convinced that the 168 member Russian athletic team was clean. At about 82:00 in the video, she says the two Russian doping violations were “so peculiar.” She introduced the IOC Medical and Scientific Director, Dr. Richard Bludgett, to provide more detail. He suggested that meldonium would not be of benefit in curling. He then went further and suggested the ADRV regarding trimetazidine may be in error. He said trimetazidine “is a substance where there is a parent compound which is a common headache migraine treatment available particularly in China and Japan and if that is found then it is not considered an ADRV. And if there is a very low level, as there was in this case, that is a possibility.”

  Sergeeva denies ever taking banned drugs and even went on social media with a T-shirt declaring her commitment to clean sport.

  

  Russian bobsledder Nadezhda Sergeeva.

  In summary, it seems highly unlikely that two different Russian athletes would intentionally take medications that have no benefit but which are almost guaranteed to be detected resulting in huge harm to them and their team.

  Who Benefits?

  Another possibility is that meldonium or trimetazidine powder was surreptitiously put in the food of the athletes. This one time consumption would cause a positive test.

  In fact there are forces on the international scene who are pleased that Russia has been battling defamation and charges of “state sponsored doping” for the past two years. They want the current denigration and punishments of Russia to continue, perhaps influencing Russia’s upcoming national election and undermining Russia’s hosting of the Football World Cup this summer.

  One such group is the US Central Intelligence Agency (CIA). The CIA has a long history of big and small criminal deeds. Presumably it would not be difficult for them to infiltrate Olympic facilities or bribe a corrupt individual to put traces of meldonium or another powder in someone’s food or drink.

  Those who quickly dismiss this possibility probably also thought that Iraq had weapons of mass destruction in 2002. That was a false claim supported by evidence fabricated by the CIA.

  It is well documented the CIA carries out murders, coups and major sabotage. The CIA has documented some of their methods in “The Official CIA Manual of Trickery and Deception”. They don’t just carry out assassinations and coups. In the book “In Search of Enemies”, former CIA officer John Stockwell documented how the CIA created a false story about Cuban soldiers raping Angolan women to defame Cuba.

  Corrupt police forces sometimes plant evidence on a suspect they wish to convict. It would be essentially the same thing to get a Russian athlete to ingest spiked food or beverage.

  The CIA has motive and expressed intent:

  * In contrast with Russian leaders who call the US a “partner”, US officials increasingly call Russia an “adversary”. The latest US National Security Strategy explicitly says they intend to respond to Russia as an adversary: “ The United States will respond to the growing political, economic and military competitions we face around the world. China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity.”

  * Despite the lack of clear evidence, there is widespread belief that Russia “meddled” in the US election. The anti-Russia sentiment has been fanned into the exaggerated claim that the unproven Russian action was “an act of war, an act of hybrid warfare”.

  * Neoconservatives forces openly talk about “punishing” Russia. The former Deputy Director of the CIA, Michael Morrell, said “We need to make the Russians pay a price” . He confirmed on public television that means killing Russians (and Iranians) in Syria. This is the 33 year veteran CIA leader who publicly campaigned for Hillary Clinton.

  Did the CIA plant the doping evidence? We don’t know for certain but it should not be dismissed out of hand. The CIA has the means, opportunity and above all the motive to falsely implicate Russians in new doping cases with the goal of preventing Russia from getting beyond the international sporting sanctions and punishments. They have done vastly more deceitful, manipulative, and outrageous things than this.

  Media Bias

  Unfortunately, western media will not investigate this possibility. Western media cannot even accurately report on events like the IOC meeting yesterday. The fact that the head of the IOC Implementation Group warmly praised the Russian participation at the Pyeongchang Olympics is not mentioned in western media. The fact that Dr. Bludgett raised questions about the accuracy of the ADRVs against Russia is not mentioned in reports from NY Times, the UK Guardian or Inside the Games. Instead, the writer at Inside the Games once again exaggerated the voice of critics of Russia as he downplayed the voices of international athletes who want to put the doping scandal behind and move forward.

  Western media have reported deceptively that the Russian athletes have “admitted” to the violations. In fact, both Russian athletes strongly deny taking banned drugs.

  Western media bias is also shown in the focus on alleged Russian doping and minimization or ignoring of other possible violations. For example the story about the Norwegian cross-country ski team and their use of banned asthmatic medications. They get around the restrictions by having their doctor claim that most of their athletes are asthmatic. This situation is a result of the inconsistent rules and regulations. A Therapeutic Use Exemption (TUE) can be given to any athlete designated by a doctor and in secrecy. They are not required to publicly disclose this, giving incentive to corruption and misuse.

  Richard McLaren’s Bias

  The World Anti Doping Agency (WADA) has also been biased. Over one year ago, their investigator Richard McLaren claimed “over one thousand Russian athletes benefited” from the alleged Russian conspiracy to cheat the ant-doping system. McLaren said the proof would be provided to the various sport federations.

  In September 2017 it was revealed that charges had been filed against 96 athletes. Of these, WADA cleared 95 athletes of wrongdoing; only one athlete was proven to be in violation. More recently, the Court of Arbitration in Sport completely overturned the bans on 28 Russian athletes.

  In summary, it appears that McLaren’s accusation about “over one thousand athletes benefiting” was a huge exaggeration or fabrication.

  Where Do Things Go From Here?

  The IOC Executive Board has indicated they intend to lift the suspension of the Russian Olympic Committee if no more “anti doping rule violations” are found in the last batch of athlete samples from the Pyeongchang Olympics. The results are expected in a few days.

  Another ADRV may appear. If so, that will greatly complicate the effort to reintegrate Russian athletics. Even if the final tests are all clean, those who oppose Russia will continue trying to delay or prevent the full integration of Russia within the world sporting Community.

  The former Moscow Laboratory Director Grigory Rodchenkov is the primary weapon in the campaign accusing Russia of “state sponsored doping”. “Icarus” is a movie about him which has received huge funding and promotion. It is nominated for an an Oscar Academy award. This will serve the campaign well.

  The Russians have been accused of trying to murder Rodchenkov. But if he suddenly dies one day, it is more likely to be by the CIA. At this point, Rodchenkov has done all the damage he can to Russian sports. The only thing he could possibly do is to recant or fall apart. His handlers have prevented him from appearing before the various committees looking into the accusations. At this point, Rodchenkov could be more valuable dead than alive. His death would be a powerful weapon to disrupt the normalization of relations with Russia.

  

  Former head of Russian anti-doping laboratory and key “witness” of the “Russian doping program” Gregory Rodchenkov then and now.

  In conclusion, going back to the Pyeongchang Olympics, there should be caution before assuming the guilt of the Russian athletes who received ADRVs. It makes no sense that two Russian athletes would take useless medications knowing they will be tested and found out.

  The doping incident serves the interests of those in the West who seek more not less conflict and seek to weaken Russia through “hybrid” warfare.

  It is possible the CIA has a hand in the latest incidents, just as they have a hand in Dr.Gregory Rodchenkov. They have the means, opportunity and motive. They have the experience and history.

  If this is true, it’s another example of the dangerous descent in international relations. The Olympics movement has the goal of fostering peaceful relations. The sad truth is there are forces who want to prevent that. They prefer to demonize and divide in a quest for economic and geopolitical supremacy over “adversaries”. International sports is just another arena for them.

  

• New Mexico Is The US State With The Highest Rate Of Burglary

  The long and freezing winter nights are finally starting to let up in most parts of the United States. Many people will probably feel the threat from burglary will be reduced in line with the longer evenings. In actual fact, as Statista’s Niall McCarthy notes, break-ins are more of a summer phenomenon in the U.S., becoming more common when the evenings get brighter.

  They actually spike ten percent in June, July and August. One of the theories behind the trend is that people let their guard down and become complacent as the weather gets warmer. Even though it’s true that some burglars use the winter nights as cover, it is far more likely that people are at home during cold weather while during the summer, they tend to go out for longer.

  According to the FBI, 60 percent of burglaries happen between 6am and 6pm. In 2016, there were 278,600 break-ins at night and 486,006 during the day with an average of $2,361 stolen. With spring on the horizon, which parts of the U.S. are experiencing the biggest threat from burglars? 

  

  You will find more infographics at Statista

  The most recent FBI data shows that the South-Central states suffer the worst impact with New Mexico experiencing the highest rate.

  In 2016, it had 840.4 instances per 100,000 residents and experts aren’t too surprised about that considering how much of the Mexican drug trade flows through the state, particularly Albuquerque.

  Arkansas comes second with 795.5 burglaries per 100,000 inhabitants while Mississippi comes third with 781.4.

  New York has the lowest burglary rate in the U.S. with just 201.7 per 100,000 inhabitants in 2016.

  

• Growing Risk Of US-Iran Hostilities Based On False Pretexts, Intel Vets Warn

  Via ConsortiumNews.com,

  As President Donald Trump prepares to host Israeli Prime Minister Benjamin Netanyahu next week, a group of U.S. intelligence veterans offers corrections to a number of false accusations that have been levelled against Iran.

  

  *  *  *

  February 26, 2018

  MEMORANDUM FOR:  The President

  FROM:  Veteran Intelligence Professionals for Sanity (VIPS)

  SUBJECT:  War With Iran

  INTRODUCTION

  In our December 21st Memorandum to you, we cautioned that the claim that Iran is currently the world’s top sponsor of terrorism is unsupported by hard evidence. Meanwhile, other false accusations against Iran have intensified. Thus, we feel obliged to alert you to the virtually inevitable consequences of war with Iran, just as we warned President George W. Bush six weeks before the U.S. attack on Iraq 15 years ago.

  In our first Memorandum in this genre we told then-President Bush that we saw “no compelling reason” to attack Iraq, and warned “the unintended consequences are likely to be catastrophic.” The consequences will be far worse, should the U.S. become drawn into war with Iran. We fear that you are not getting the straight story on this from your intelligence and national security officials.

  After choosing “War With Iran” for the subject-line of this Memo, we were reminded that we had used it before, namely, for a Memorandum to President Obama on August 3, 2010 in similar circumstances. You may wish to ask your staff to give you that one to read and ponder. It included a startling quote from then-Chairman of President Bush Jr.’s Intelligence Advisory Board (and former national security adviser to Bush Sr.) Gen. Brent Scowcroft, who told the Financial Times on October 14, 2004 that Israeli Prime Minister Ariel Sharon had George W. Bush “mesmerized;” that “Sharon just has him wrapped around his little finger.”  We wanted to remind you of that history, as you prepare to host Israeli Prime Minister Benjamin Netanyahu next week.

  *   *   *

  Rhetoric vs. Reality

  We believe that the recent reporting regarding possible conflict with nuclear-armed North Korea has somewhat obscured consideration of the significantly higher probability that Israel or even Saudi Arabia will take steps that will lead to a war with Iran that will inevitably draw the United States in. Israel is particularly inclined to move aggressively, with potentially serious consequences for the U.S., in the wake of the recent incident involving an alleged Iranian drone and the shooting down of an Israeli aircraft.

  There is also considerable anti-Iran rhetoric in U.S. media, which might well facilitate a transition from a cold war-type situation to a hot war involving U.S. forces. We have for some time been observing with some concern the growing hostility towards Iran coming out of Washington and from the governments of Israel and Saudi Arabia. National Security Adviser H.R. McMaster is warning that the “time to act is now” to thwart Iran’s aggressive regional ambitions while U.S. United Nations Ambassador Nikki Haley sees a “wake-up” call in the recent shooting incident involving Syria and Israel. Particular concern has been expressed by the White House that Iran is exploiting Shi’a minorities in neighboring Sunni dominated states to create unrest and is also expanding its role in neighboring Iraq and Syria.

  While we share concerns over the Iranian government’s intentions vis-à-vis its neighbors, we do not believe that the developments in the region, many of which came about through American missteps, have a major impact on vital U.S. national interests. Nor is Iran, which often sees itself as acting defensively against surrounding Sunni states, anything like an existential threat to the United States that would mandate the sustained military action that would inevitably result if Iran is attacked.

  Iran’s alleged desire to stitch together a sphere of influence consisting of an arc of allied nations and proxy forces running from its western borders to the Mediterranean Sea has been frequently cited as justification for a more assertive policy against Tehran, but we believe this concern to be greatly exaggerated. Iran, with a population of more than 80 million, is, to be sure, a major regional power but militarily, economically and politically it is highly vulnerable.

  Limited Military Capability

  Tehran’s Revolutionary Guard is well armed and trained, but much of its “boots on the ground” army consists of militiamen of variable quality. Its Air Force is a “shadow” of what existed under the Shah and is significantly outgunned by its rivals in the Persian Gulf, not to mention Israel. Its navy is only “green water” capable in that it consists largely of smaller vessels responsible for coastal defense supplemented by the swarming of Revolutionary Guard small speedboats.

  When Napoleon had conquered much of continental Europe and was contemplating invading Britain it was widely believed that England was helpless before him. British Admiral Earl St Vincent was unperturbed: “I do not say the French can’t come, I only say they can’t come by sea.” We likewise believe that Iran’s apparent threat is in reality decisively limited by its inability to project power across the water or through the air against neighboring states that have marked superiority in both respects.

  The concern over a possibly developing “Shi’ite land bridge,” also referred to as an “arc” or “crescent,” is likewise overstated. It ignores the reality that Iraq, Syria, and Lebanon all have strong national identities and religiously mixed populations. They are influenced — some of them strongly — by Iran but they are not puppet states. And there is also an ethnic division that the neighboring states’ populations are very conscious of– they are Arabs and Iran is Persian, which is also true of the Shi’a populations in Saudi Arabia and the Emirates.

  Majority Shi’a Iraq, for example, is now very friendly to Iran but it has to deal with considerable Kurdish and Sunni minorities in its governance and in the direction of its foreign policy. It will not do Iran’s bidding on a number of key issues, including Baghdad’s relationship with Washington, and would be unwilling to become a proxy in Tehran’s conflicts with Israel and Saudi Arabia. Iraqi Vice President Osama al-Nujaifi, the highest-ranking Sunni in the Prime Minister Haider al-Abadi government, has, for example, recently called for the demobilization of the Shi’ite Popular Mobilization Forces or militias that have been fighting ISIS because they “have their own political aspirations, their own [political] agendas. … They are very dangerous to the future of Iraq.”

  Nuclear Weapons Thwarted

  A major concern that has undergirded much of the perception of an Iranian threat is the possibility that Tehran will develop a nuclear weapon somewhere down the road. We believe that the current Joint Comprehensive Plan of Action, even if imperfect, provides the best response to that Iranian proliferation problem. The U.N. inspections regime is strict and, if the agreement stands, there is every reason to believe that Iran will be unable to take the necessary precursor steps leading to a nuclear weapons program. Iran will be further limited in its options after the agreement expires in nine years. Experts believe that, at that point, Iran its not likely to choose to accumulate the necessary highly enriched uranium stocks to proceed.

  The recent incident involving the shoot-down of a drone alleged to be Iranian, followed by the downing of an Israeli fighter by a Syrian air defense missile, resulted in a sharp response from Tel Aviv, though reportedly mitigated by a warning from Russian President Vladimir Putin that anything more provocative might inadvertently involve Russia in the conflict. Israeli Prime Minister Benjamin Netanyahu is said to have moderated his response but his government is clearly contemplating a more robust intervention to counter what he describes as a developing Iranian presence in Syria.

  In addition, Netanyahu may be indicted on corruption charges, and it is conceivable that he might welcome a “small war” to deflect attention from mounting political problems at home.

  Getting Snookered Into War

  We believe that the mounting Iran hysteria evident in the U.S. media and reflected in Beltway groupthink has largely been generated by Saudi Arabia and Israel, who nurture their own aspirations for regional political and military supremacy. There are no actual American vital interests at stake and it is past time to pause and take a step backwards to consider what those interests actually are in a region that has seen nothing but disaster since 2003. Countering an assumed Iranian threat that is minimal and triggering a war would be catastrophic and would exacerbate instability, likely leading to a breakdown in the current political alignment of the entire Middle East. It would be costly for the United States.

  Iran is not militarily formidable, but its ability to fight on the defensive against U.S. naval and air forces is considerable and can cause high casualties. There appears to be a perception in the Defense Department that Iran could be defeated in a matter of days, but we would warn that such predictions tend to be based on overly optimistic projections, witness the outcomes in Afghanistan and Iraq. In addition, Tehran would be able again to unleash terrorist resources throughout the region, endangering U.S. military and diplomats based there as well as American travelers and businesses. The terrorist threat might easily extend beyond the Middle East into Europe and also the United States, while the dollar costs of a major new conflict and its aftermath could break the bank, literally.

  Another major consideration before ratcheting up hostilities should be that a war with Iran might not be containable. As the warning from President Vladimir Putin to Netanyahu made clear, other major powers have interests in what goes on in the Persian Gulf, and there is a real danger that a regional war could have global consequences.

  In sum, we see a growing risk that the U.S. will become drawn into hostilities on pretexts fabricated by Israel and Saudi Arabia for their actual common objective (“regime change” in Iran). A confluence of factors and misconceptions about what is at stake and how such a conflict is likely to develop, coming from both inside and outside the Administration have, unfortunately, made such an outcome increasingly likely.

  We have seen this picture before, just 15 years ago in Iraq, which should serve as a warning. The prevailing perception of threat that the Mullahs of Iran allegedly pose directly against the security of the U.S. is largely contrived. Even if all the allegations were true, they would not justify an Iraq-style “preventive war” violating national as well as international law. An ill-considered U.S. intervention in Iran is surely not worth the horrific humanitarian, military, economic, and political cost to be paid if Washington allows itself to become part of an armed attack.

  

  FOR THE STEERING GROUP, VETERAN INTELLIGENCE PROFESSIONALS FOR SANITY

  William Binney, former NSA Technical Director for World Geopolitical & Military Analysis; Co-founder of NSA’s Signals Intelligence Automation Research Center (ret.)

  Kathleen Christison, CIA, Senior Analyst on Middle East (ret.)

  Graham E. Fuller, Vice-Chair, National Intelligence Council (ret.)

  Philip Giraldi, CIA, Operations Officer (ret.)

  Matthew Hoh, former Capt., USMC Iraq; Foreign Service Officer, Afghanistan (associate VIPS)

  Larry C. Johnson, former CIA and State Department Counter Terrorism officer

  Michael S. Kearns, Captain, USAF; ex-Master SERE Instructor for Strategic Reconnaissance Operations (NSA/DIA) and Special Mission Units (JSOC) (ret.)

  John Brady Kiesling, Foreign Service Officer; resigned Feb. 27, 2003 as Political Counselor, U.S. Embassy, Athens, in protest against the U.S. attack on Iraq (ret.)

  John Kiriakou, Former CIA Counterterrorism Officer and former senior investigator, Senate Foreign Relations Committee

  Edward Loomis, Jr., former NSA Technical Director for the Office of Signals Processing (ret.)

  David MacMichael, National Intelligence Council, National Intelligence Estimates Officer (ret.)

  Ray McGovern, former US Army infantry/intelligence officer & CIA analyst; CIA Presidential briefer (ret.)

  Elizabeth Murray, Deputy National Intelligence Officer for Near East (ret.)

  Todd E. Pierce, MAJ, US Army Judge Advocate (ret.)

  Coleen Rowley, FBI Special Agent and former Minneapolis Division Legal Counsel (ret.)

  Greg Thielmann, former Director of the Strategic, Proliferation, and Military Affairs Office, State Department Bureau of Intelligence & Research (INR), and former senior staffer on Senate Intelligence Committee (ret.)

  Kirk Wiebe, former Senior Analyst, SIGINT Automation Research Center, NSA ret.)

  Lawrence Wilkerson, Colonel (USA, ret.), former Chief of Staff for Secretary of State; Distinguished Visiting Professor, College of William and Mary (associate VIPS)

  Sarah G. Wilton, CDR, USNR, (ret.); Defense Intelligence Agency (ret.)

  Robert Wing, former Foreign Service Officer (associate VIPS)

  Ann Wright, Colonel, US Army (ret.); also Foreign Service Officer who, like Political Counselor John Brady Kiesling, resigned in opposition to the war on Iraq

  

  

• Mnuchin's Wrong: Here's Why Investors Should Be Very Worried About Inflation

  Despite Treasury Secretary Steven Mnuchin’s bizarre insistence that there’s no connection between consumer-price inflation and rising energy prices and wages, these factors – plus a spate of others – are forcing some food companies to consider raising prices on goods from chicken to cereal, according to Reuters.

  One of these factors, as Reuters explores in a wide-ranging feature published on Monday, involves US trucking and railroad operators foisting higher shipping rates on customers like General Mills Inc. and Hormel Foods Corp.

  According to Reuters, transportation costs are climbing at double the rate of inflation.

  

  These increases are catching food companies off guard. Struggling railroads and trucking companies haven’t expanded their capacity, choosing instead to focus on cost cuts – much to Wall Street’s delight.

  Interviews with executives at 10 companies across the food, consumer goods and commodities sectors reveal that many are grappling with how to defend their profit margins as transportation costs climb at nearly double the inflation rate.

  Two executives told Reuters their companies do plan to raise prices, though they would not divulge by how much. A third said it was discussing prospective price increases with retailers.

  The prospect of higher prices on chicken, cereal and snacks costs comes as inflation emerged as a more distinct threat in recent weeks. The U.S. Labor Department reported earlier this month that underlying consumer prices in January posted their biggest gain in more than a year.

  As US economic growth has revved up, railroads and truck fleets have not expanded capacity to keep pace – a decision applauded by Wall Street. Shares of CSX Corp, Norfolk Southern, and Union Pacific Corp have risen an average 22 percent over the past year as they cut headcount, locomotives and rail cars, and lengthened trains to lower expenses and raise margins.

  Quickening economic growth, a shortage of drivers and reduced capacity, and higher fuel prices have driven up transportation costs, prompting some companies to threaten to raise prices on goods ranging from chicken to cereal.

  So far, Reuters has confirmed that Cream of Wheat maker B&G Foods Inc, Cheerios maker General Mills and Tyson Foods Inc, owner of Hillshire Farms brand and Jimmy Dean sausage, are planning to pass along higher freight costs to their customers. Many see these increases taking place during the coming months.

  Tyson Chief Executive Officer Tom Hayes told Reuters in an interview that its price increases ”should be in place for the second half” of its fiscal year, and that it has begun negotiating price increases with retailers and food service operators. The company declined to specify how much its freight costs increased in recent months, but a spokesman said they are up between 10 to 15 percent for the total industry.

  General Mills informed convenience store and food service customers of the price increases directly, a spokeswoman told Reuters in an emailed statement, declining to provide specifics. Chief Executive Officer Jeff Harmening cited logistic costs and wage inflation as factors.

  “It feels to me like an environment that should be beneficial for some pricing,” he said in a presentation at last week’s Consumer Analyst Group of New York conference.

  Hormel Foods, the maker of Skippy peanut butter and SPAM, has been talking with retailers about raising prices, according to Chief Executive Jim Snee.

  “We don’t believe we’re going to recoup all of our freight cost increases for the balance of the year,” Snee told Reuters in an interview, noting operating margin sank to 13.2 percent, from 15.6 percent due to higher costs – including freight – in the most recent quarter.

  Of all the factors contributing to these cost increases, the paucity of qualified truck drivers is also leading to production disruptions and delays at some of the country’s largest food-processing plants.

  Confectionary and snack company Mondelez International Inc halted operations over a weekend late last month at its Toledo, Ohio wheat flour mill – the second-largest flour mill in the United States – because the plant could not get enough rail cars to carry flour to bakeries, a spokeswoman said.

  She declined to comment on whether Mondelez would raise prices to cover any higher costs.

  A new government regulation for drivers and truck availability are pushing up freight costs at JM Smucker Co. “We anticipate inflationary pressures likely to cause upward price movements in a variety of categories,” Chief Financial Officer Mark Belgya said last week at an analyst conference.

  To be sure, transportation costs are just a sliver of the price consumers pay at the grocery store. The U.S. Department of Agriculture estimates transportation represents just 3.3 cents of every dollar consumers spend.

  But an increase in truck rates over the next 12 months implies a 15-to-18 basis point gross margin headwind for U.S. food companies on average, according to Bernstein analyst Alexia Howard.

  “A lot of the consumer goods companies work on margin,” said Joe Glauber, a former USDA Chief Economist and a senior research fellow at the International Food Policy Research Institute. “They are going to be pushing those costs along” to retailers. Ultimately “consumers end up shouldering more of the burden,” he said.

  That would be a change for consumers who have seen years of low-to-negative food inflation, he noted.

  While prices for most agricultural commodities remain near cycle lows, rising oil prices are contributing both to higher transportation costs while also raising the price of plastics used in packaging.

  

  This trend has forced many food brands and commodity producers to lower their full-year earnings forecasts.

  Some are blaming CSX and Norfolk Southern for unfairly trying to squeeze “every last dollar” of profit out of their customers.

  Global energy prices have risen sharply from 2016’s lows, driving up prices for not only diesel but also packing material like plastics, which are byproducts of crude and natural gas.

  Others companies have blamed freight hikes for lower earnings forecasts for 2018, including US oilfield services company Halliburton Co. It shaved ten cents per share from its earnings forecast last week due to delays in deliveries of sand used in fracking.

  “They try to squeeze every dollar for profit rather than provide service,” said Robert Murray, the chief executive of Murray Energy Corporation, the largest privately-owned U.S. coal company which relies on CSX and Norfolk Southern to help transport its goods.

  Murray said both CSX and Norfolk Southern have lacked rail cars and crew to haul 4 million tons of coal from mines in West Virginia and Ohio to the Port of Baltimore this year.

  Despite worsening train speeds, Norfolk Southern has no plans to hire more employees or move some of its equipment out of storage. However, Union Pacific plans to rehire 500 employees in the first quarter to prevent rail cards from idling too long.

  Earhart said the railroad was moving some employees to problem spots, like its terminal in Birmingham, Alabama, from other areas of its network.

  Union Pacific has started pulling stored locomotives back into service and plans to bring back 600 employees in the first quarter 2018 to prevent rail cars from spending too much time in yards, said Union Pacific spokeswoman Raquel Espinoza.

  The time UP rail cars were sitting idle in terminals rose to 32.5 hours in the fourth quarter from 29 hours in the year-ago period, and its overall workforce dropped during the last two quarters, according to company data.

  Berkshire Hathaway’s BNSF said winter weather has impacted velocity and fluidity on portions of its primary route between the Pacific Northwest and Midwest, but said it has not been cutting crews and rolling stock.

  Another factor that’s prevented trucking companies from expanding is a federal regulation that requires drivers to electronically log their hours. This, Reuters said, has turned off many drivers, who aren’t willing to drive – and shoulder these extra responsibilities – for the wages being offered.

  

  This would suggest that many trucking firms will soon be forced to raise wages – another cost that will likely be passed along to customers.

  And because of the tightening capacity, trucking firms have additional leverage as they negotiate rates.

  Tight capacity means trucking firms have leverage as they negotiate freight rates. Dry van shipping rates are expected to rise as much as 10 percent in 2018, while “spot” rates for last-minute cargo hit record levels in January before falling slightly, according to online freight marketplace DAT Solutions.

  Chemical maker Chemours Company estimates 30 percent of its rail shipments have highly unpredictable delivery times, while automaker Toyota Motor Corp has struggled periodically to get rail cars for finished vehicles at plants served by the major railroads.

  “If I was to ask for anything, it’s consistency,” said Lee Hobgood, general manager of Toyota’s transportation operations. “I am not feeling cuts. I am feeling imbalance at times.”

  Agribusiness giant Cargill declined to quantify how much its freight costs are going up and whether it would pass costs on to its customers. But at a soybean processing plant near Lafayette, Ind., Cargill has had such long delays getting loaded railcars moved out, the company plans to buy its own Trackmobile railcar mover to relieve the congestion. One Trackmobile unit can cost at least $250,000.

  Brad Hildebrand, Cargill’s Global Rail and Barge Lead, told Reuters the Lafayette plant otherwise could shut down.

  “When we load a train at one of our eastern elevators it sits for an extended period of time before locomotive power and crews can come in,” Hildebrand said. “There is no slack in the system to handle weather problems or even a small uptick in demand.”

  Increasingly inconsistent delivery times are a huge problem for companies hoping to sell their goods at Wal-Mart, the country’s largest brick-and-mortar retailer is punishing trucking companies by charging them additional fees.

  In summary, higher energy prices and dwindling workforces are pushing up costs for shipping companies. These costs are, in turn, being passed along to their clients – the big food processors and commodity producers.

  How much longer will it be before these companies turn around and hike prices on the consumer?

  

• Career Advice To 20-Somethings: Create Value As A Mobile Creative

  Authored by Charles Hugh Smith via OfTwoMinds blog,

  Finding work that fits who you are is rarely easy, especially if you don’t fit into the mainstream, and usually it requires a lot of compromises, hard work and dead-ends. But that’s the process.

  Establishing a satisfying career is difficult in today’s economy, doubly so for those who find life within hierarchical institutions (corporate America and government) unrewarding, and triply so for those burdened with student loan debt and college educations/diplomas of uncertain market value or those re-entering the job market with skills that have been marginalized.

  Given that I wrote a book entitled Get a Job, Build a Real Career, and Defy a Bewildering Economy, it’s unsurprising that I get emails from young people asking for career advice.

  I’ve also written essays of friendly advice such as A Teachable Moment: to the Young Person Who Complained About Her Job/Pay at Yelp and Was Promptly Fired.

  Here is my response to a recent email from a 20-something in a familiar place: burdened with student loan debt, aware that the self-serving institutional shuck-and-jive is false (get a college degree and your future is secure), and uncertain how to proceed.

  Here is my correspondent’s email:

  I wish my faith in our conventional institutions had faded sooner, but I borrowed a lot of money in my early 20s only to find out that most of what I was learning was utterly useless.

  But I can’t go back. Only forward. So with thousands of dollars in debt aside, and limited experience in the professional world (food service, retail, and industrial construction), where in the hell can I start? I get a lot of the concepts you are proposing. I get the need to create value for people. I’ve just never really seen it done in a “professional” environment. I’ve scrubbed floors, calibrated thermometers, bent tubing and made coffee. But intellectually this is obviously not satisfying.

  I want to create value, I want to solve problems. Not just for altruistic reasons, but because it is the only thing that seems challenging.

  So what would you tell a late 20 something, who’s not used to wearing a suit and tie, starting from the bottom, with the intellectual capacity to do more than scrub floors? Because I guarantee you… there are plenty of us waiting in the shadows to exercise our inalienable human right to achievement, collaboration, and freedom.

  A lot of us just resent the monstrosity that centralized thinking has created. But we need to put that bitterness aside and come out of the shadows to contribute.

  Extremely well said. Here is my response:

  You’re right–there’s often very little value created in “professional” environments, which is partly why so many people are dissatisfied/frustrated with their jobs/ work life.

  My book Get a Job, Build a Real Career has some suggestions, which I will summarize here.

  1. Lower your cost basis (cost of living) so you can live a satisfying life while earning comparatively little money. This starts with the usual drill: cook all your own food, waste nothing, etc. The first bit of advice a successful artist tells people is “get accustomed to poverty.” But low income doesn’t have to mean unhappiness/destitution.

  Focus on the highest expenses where you have the most leverage, which is often housing. How can you create value? Lots of small apartment owners can’t find anyone responsible to maintain their building, so becoming that person could drop your rent a lot. Another possibility is rent a house and then rent rooms to responsible people at rates that lower your share of the rent to very low rates. You’re in charge, you keep the place tidy, you select nice, responsible people to share the house and that’s why people will pay to rent rooms in your house. You’re creating value by taking care of all the stuff most people won’t do or can’t do.

  2. Find ways to get satisfaction/meaning /purpose in life regardless of the income generated. This could be a community garden, volunteering at a church or school, or pursuing some project of your own that doesn’t rely on others’ approval or money for its success. If “work” isn’t satisfying, at least you have multiple sources of satisfaction/purpose outside of work.

  3. As for work, the cliché is, find an endeavor that you would do for fun or after hours regardless of the pay. This “work” will align with your character, aptitudes, interests, strengths and subconscious/unconscious drives. As Carl Jung observed, “Until you make the unconscious conscious, it will direct your life and you will call it fate.”

  And as Jerry Garcia said, “You do not merely want to be considered just the best of the best. You want to be considered the only one who does what you do.”

  Finding work that fits who you are is rarely easy, especially if you don’t fit into the mainstream, and usually it requires a lot of compromises, hard work and dead-ends. But that’s the process.

  4. Trust your network. I’m not good at networking, far from it, but the more people who know you’re a responsible hard-working person who will do what you say you’ll do, and the more people who know your interests, the greater the chances that somebody will offer you some apparently tiny opportunity that might turn into something larger with time.

  5. As Drew Sample points out in our recent podcast, sometimes the best way to create value is to work on ourselves, i.e. develop the eight soft skills I list in my book that are applicable to every field of endeavor and are thus always in demand. They require dedication, self-awareness, humility and hard work to acquire. They create value in every field because all fields are now collaborative, networked, global and fast-changing.

  6. Set a goal of creating multiple income streams/ways of creating value for others. In terms of living an anti-fragile, fulfilling and relatively resilient life, the ideal arrangement is multiple income streams/value creation in disparate (unrelated) fields, so if one field of endeavor is disrupted then others will still continue since they’re not connected to the sector that’s been overturned by technological innovation, globalization, etc.

  This is what I call the Mobile Creative class–not necessarily mobile in terms of physical movement between locales but mobile between sectors and ways of generating value.

  The New Class: Mobile Creatives (May 1, 2014)
  The Mobile Creative credo: trust the network, not the corporation or the state.

  The Changing World of Work 3: “Full-Stack” Skills (April 15, 2015)

  To be honest, I’ve struggled for decades to reach this understanding. I didn’t have any mentors, so I had to mentor myself, which given my lack of experience, was difficult. Sometimes we have to mentor ourselves from the perspective that we’re going to become successful at being ourselves and adding value, regardless of our income. As our own mentor, we seek to advise and encourage ourselves just as we would advise and encourage a close friend.

  This advice is not age-specific. The Mobile Creative approach to creating value applies equally to people in their 30s, 40s, 50s, 60s and yes 70s.

  Drew and I discuss the process of creating value from the perspective of those working outside “professional” institutional environments: The Sample Hour 184: Creating Value.

  
  *  *  *

  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.

  

• Michael Wolff Busted Faking Earpiece Malfunction During Question About Trump Affair

  Weeks after author Michael Wolff was kicked off of MSNBC’s Morning Joe for deflecting questions about a claim over an alleged extramarital affair in his anti-Trump book Fire and Fury, the wacky author faked an earpiece malfunction on Australian television when asked about the exact same claim. 

  Wolff wrote a book full of salacious claims about the Trump White House after former advisor Steve Bannon reportedly let him in 

  “You said during a TV interview last month that you are absolutely sure that Donald Trump is currently having an affair, while President, behind the back of the First Lady. I repeat, you said you were absolutely sure,” asked host Ben Fordham on Today.

  Despite having zero technical issues prior to that question, Wolff begins to insist that he can’t hear the host – fiddling with his earpiece.

  FORDHAM: “You said during a TV interview last month that you are absolutely sure that Donald Trump is currently having an affair, while President, behind the back of the First Lady. I repeat, you said you were absolutely sure.”

  WOLFF: “Hold on, I can’t–”

  FORDHAM: “Last week, you backflipped and said, ‘I do not know if the President is having an affair.’ Do you owe the President and the First Lady an apology, Mr Wolff?”

  WOLFF: “I can’t hear you. Hello?”

  FORDHAM: “Just last month you said you were absolutely sure that the President was having an affair, and now you say he is not.”

  WOLFF: “I’m not getting anything.”

  FORDHAM: “You are not hearing me, Mr. Wolff? Mr. Wolff was hearing me before, but he’s not hearing me anymore. So the interview may be over.”

   

  Hello ? You there, Mr Wolff ? Author blames technical issues when I ask him if he owes an apology to @realDonaldTrump and @FLOTUS pic.twitter.com/Ihyon5q370

  — BenFordham (@BenFordham) February 25, 2018

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  Following Wolff’s “technical difficulties,” Fordham released the audio of what Wolff was hearing in his earpiece when he appears to fake the malfunction:

  LISTEN – This is what Michael Wolff was HEARING in his earpiece when he claimed he couldn’t hear my question on @TheTodayShow this morning. pic.twitter.com/dl3ZvQfKWm

  — BenFordham (@BenFordham) February 26, 2018

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  On February 1st, MSNBC’s resident Trump-hating host, Mika Brzezinski, kicked Wolff off the air after he denied suggesting Trump was having an affair with U.N. Ambassador Nikki Haley.

  Michael Wolff is such a fraud he is kicked off Morning Joe mid segment. 😂

  And the “This is Morning Joe, we don’t BS here” is the icing on the cake.

  Liberals are a mess. pic.twitter.com/bP7Cl7giBM

  — Nobel Patriot 🇺🇸 (@nobelpatriot) February 1, 2018

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  Wolff all but confirmed the rumor from his book in a January interview with Bill Maher. Via Vanity Fair: 

  During an appearance on Real Time with Bill Maher Friday, Wolff said that he’s “absolutely sure” Donald Trump is currently having an extramarital affair with someone inside the White House.

  When Maher asked Wolff to tell him “something that the other people have not noticed in this book,” Wolff said, “There is something in the book that I was absolutely sure of, but it was so incendiary that I just didn’t have the ultimate proof.” He then elaborated: “Well, I didn’t have the blue dress.”

  Maher asked if Wolff was talking about somebody Trump is “f—ing now,” and Wolff nodded. “It is,” he said. “You just have to read between the lines. It’s toward the end of the book. . .You’ll know it. Now that I’ve told you, when you hit that paragraph, you’re gonna say, ‘Bingo.’”

  Between the FBI using the Clinton-funded “pissgate” dossier to spy on Carter Page and Wolff’s salacious claims that he now refuses to substantiate on live TV, it seems that the all-out assault on President Trump is, like Hillary Clinton’s campaign, becoming a complete failure. 

  When Michael Wolff’s earpiece works fine but he doesn’t want to answer the question: pic.twitter.com/GcvJN33suW

  — jeremy scahill (@jeremyscahill) February 26, 2018

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• Are You A Russian Troll?

  Authored by A Burton Hinkle via Reason.com,

  The federal indictments special counsel Robert Mueller handed down a few days ago confirmed that Russian agents did, indeed, use social media to interfere with the 2016 presidential election – and, even more than that, to sow political animosity, heighten divisions, and pit Americans against one another. Several workers at a Russian “troll farm” have now confirmed the thrust of the indictment.

  As Deputy Attorney General Rod Rosenstein said when the indictments were announced, “the Russian conspirators want to promote discord in the United States and undermine public confidence in democracy. We must not allow them to succeed.”

  Absolutely right. But how to stop them?

  Lyudmilla Savchuk – a worker at the troll farm – has explained how Russian agents take pains to hide their true identity: “The most important principle of the work is to have an account like a real person. They create real characters, choosing a gender, a name, a place of living and an occupation. Therefore, it’s hard to tell that the account was made for the propaganda.”

  That ability to blend in with online communities raises several troubling questions, the most disturbing of which might be: What if YOU are a Russian troll who sows animosity, heightens division, and pits Americans against one another—and you don’t even know it?

  

  The following quiz has been developed to help answer that very question. Let’s play!

  (1) When you see a post online that supports your political tribe, you

  (a) treat it skeptically until its assertions can be independently confirmed;

  (b) nod sagely and move on;

  (c) pause to enjoy the sweet, sweet dopamine hit that comes from having your existing beliefs confirmed; or

  (d) immediately share it with everybody you can think of.

  (2) When you read something that makes you mad, you

  (a) pause to consider the possibility that the author is right and you are wrong;

  (b) forget it and move on;

  (c) stop reading immediately to avoid being exposed to ideas you dislike; or

  (d) leave a comment pointing out that the author is a despicable excuse for a human being who should die a slow and wretched death.

  (3) Terms such as “libtard” and “rethuglican” are

  (a) demeaning insults that inhibit the open exchange of ideas and prevent learning from others;

  (b) kind of juvenile;

  (c) pretty witty, actually;

  (d) literally true.

  (4) An article about a person of the opposing political tribe who has said or done something really stupid and embarrassing is

  (a) nothing but partisan clickbait;

  (b) not surprising;

  (c) further proof that all members of the opposing tribe are stupid;

  (d) going up on your social-media account in 3… 2….

  (5) A politician of your own political tribe has just done something really stupid and embarrassing. You

  (a) find this dismaying, and say so;

  (b) explain why it’s not so bad;

  (c) attack the opposing tribe for being jerks and making a big fat deal out of it;

  (d) point out that it’s not half as bad as all the stupid, embarrassing things members of the opposing tribe have done.

  (5) As a member in good standing of your political tribe, you have always believed X. The leader of your political tribe has just come out against X. You

  (a) call him or her to account for abandoning your tribe’s principles;

  (b) try not to notice;

  (c) change your mind about X;

  (d) change your mind about X and attempt to excommunicate any member of your political tribe who still has the audacity to think X is even defensible.

  (6) People who disagree with you deserve

  (a) an honest hearing;

  (b) pity;

  (c) scorn;

  (d) to burn in hell for all eternity.

  (7) Online memes are

  (a) superficial and usually inaccurate characterizations of the opposing tribe’s views;

  (b) occasionally sharp critiques of the tensions inherent in any belief system;

  (c) hilarious;

  (d) stupid if they’re about your side and brilliant if they’re about the other side.

  *  *  *

  SCORING:

  Give yourself one point for each (a), two points for each (b), three points for each (c), and four points for each (d).

  7-10 points: America. Love it or leave it.

  11-15 points: Both sides were equally to blame for the Cold War.

  16-20: Hey, who doesn’t get goosebumps listening to the Song of the Volga Boatmen?

  21+: You live under a bridge and eat Vladimir Putin’s table scraps.

  

• CDC Official Who Handled Zika, Ebola Outbreaks Mysteriously Disappears Without A Trace

  A Harvard-trained CDC official has been missing since February 12 after leaving work midway through the day due to an illness, prompting his friends and family to sound the alarm and issue a $10,000 reward for information leading to an arrest and indictment in the event of malfeasance.

  

  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,” Terrell Cunningham said. “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.”

  

  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.

  Police investigating the disappearance have not turned up any leads, however they have found no evidence of foul play. “As of today we have been unable to locate Mr. Cunningham and we are seeking the assistance of the public with this case,” Officer Donald T. Hannah of the Atlanta Police Department said in an email to The Times on Saturday.

  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.

  

• Averting The US-Russia Warpath

  Authored by James Miller, Richard Fontaine, and Alexander Velez-Green via The Strategic Culture Foundation,

  For nearly twenty years following the end of the Cold War, military confrontation between the United States and the Russian Federation seemed implausible. Even during periods of tension, as during the Kosovo crisis in the late 1990s, few believed that disagreement between Washington and Moscow could lead to a serious crisis, no less war. Before the first decade of the new century had passed, however, Russian officials were accusing the United States of working to isolate Russia. Such apprehensions have mounted steadily in Russia in the years since.

  At the same time, Russian behavior, including interventions in Ukraine and Syria, military posturing and harassment in Europe, and interference in Western elections, has led many in the United States to conclude that, while a U.S.-Russian conflict is by no means inevitable, the risk of such a confrontation is growing.

  

  Even as U.S.-Russian tensions have risen, fundamental shifts in the military-technological environment threaten to erode strategic stability between the two nations. In the coming years, both sides’ extensive dependence on information technology, coupled with likely perceptions of lower risk for the use of “nonkinetic” and nonlethal attacks, are creating new incentives to use cyber and/or counterspace weapons early in a crisis or conflict. At the same time, the advent of novel cyber, counterspace, precision-strike, missile-defense and autonomous military systems could cause one or both nations to lose confidence in their nuclear second-strike capabilities—thereby eroding the stability afforded by mutually assured destruction.

  WASHINGTON AND Moscow hold divergent—and, in some cases, directly contradictory—views of the international security environment. Whereas Russian leaders see their country as behaving in a fundamentally defensive manner, the United States and NATO perceive a revanchist actor intent on reimposing its will in eastern Europe and Central Asia.

  The Russian government rates the United States and NATO as the most serious threats to Russian national security. From its standpoint, the United States is intent on remaining the world’s sole hegemon, and, as such, is unwilling to tolerate a strong Russia that enjoys its own sphere of influence. Moscow has spoken out against American and European efforts to encircle the Russian Federation by integrating former Soviet republics into Western institutions like NATO and the European Union. Russian officials further condemn the United States’ purported use of “color revolutions”—or, as Moscow would characterize them, the sponsorship of coups d’état under a guise of democracy promotion—to install proxies in Russia’s “near abroad.” In addition, Russian analysts assert that the United States and NATO are using a variety of political, economic and informational tools to penetrate and disrupt Russian society itself. In response to these perceived threats, Russia has undertaken a major military modernization effort and used more aggressive rhetoric and military operations, economic coercion and inducements, and information operations to counter alleged U.S. and NATO expansionism.

  

  The view from Washington and Europe differs markedly. In the assessment of the United States and NATO, the Kremlin appears intent on restoring a buffer zone of compliant or client states throughout its self-declared “near abroad.” Western officials condemn Russia’s violations of international law and norms by using force against Ukraine, changing borders in Europe through violence, violating arms-control agreements and seeking to undermine Western democratic elections. They are equally concerned by Russian military modernization, which, coupled with intensified military exercises, activities and bellicose rhetoric, is seen as a direct threat to NATO security. The United States and its allies have responded to perceived Russian aggression by strengthening NATO’s deterrent posture, as well as holding increasingly frank discussions about NATO’s central role in defeating a Russian attack.

  U.S.-Russian relations in the coming years will take one of three forms: strategic rapprochement, intensified military competition or managed competition. Although a long-term rapprochement cannot be ruled out, and indeed is a valuable (very) long-term goal, striving for such an outcome—or even another attempted “reset” (or “re-reset”)—in the near term would likely lead to quick disappointment. This reality does not eliminate room for the pursuit of common interests on issues such as nuclear nonproliferation, counterterrorism and counternarcotics. Yet both the United States and Russia must act on the understanding that there is a real potential for political disputes to lead to crisis, and for crisis to lead to conflict.

  At the same time, Russia’s nuclear forces will, for the foreseeable future, allow it to destroy the United States as a functioning society. Hence, as distasteful as “working with” Russia may seem, the alternative of full-throated confrontation would pose unacceptable and unnecessary risks to the United States. That said, one should not brim over with unbridled optimism. Russian leaders are engaged in continuing efforts to undermine America’s alliances, democratic processes and global role. A change in this strategic approach appears highly unlikely, and as a result U.S.-Russia competition is the likeliest path short of outright confrontation. The challenge, then, is charting a balanced path ahead that recognizes the real competition and potential for conflict, while allowing for prudent cooperation and improvement in the relationship where possible.

  THE UNITED States and Russia are each pursuing a range of advanced military technologies in order to bolster their respective conventional military postures in Europe (and in the western Pacific, in the case of the United States). Priority investments for both sides include novel cyber, counterspace, long-range nonnuclear-strike, missile-defense and autonomous weapons systems. Russian strategists writing in Military Thought, the in-house journal of the Russian General Staff, rightly note that these technologies are likely to significantly increase the pace of military engagements. Uncertainty about these systems’ effects will also increase risk of miscalculation or misunderstanding. These factors, both singularly and in interaction with one another, could lead to “slippery slopes” of rapid escalation from crisis to conflict, especially in cyberspace and outer space.

  The U.S. and Russian militaries are increasingly dependent on networked information technology (IT), and both have embarked on ambitious offensive cyber programs. Because of the frailty of cyberweapons—once a weapon is revealed in detail, the adversary can fashion effective defenses—there exists a tremendous premium on secrecy regarding both states’ cyber tool kits. As a result, a great deal of uncertainty surrounds each side’s capabilities. Even so, a 2013 Defense Science Board report conveyed a sense of cyberweapons’ potential impact: “The benefits to an attacker using cyber exploits are potentially spectacular.” Similar dynamics obtain in the space domain. The United States relies heavily on vulnerable military satellites for a host of critical military functions. The Russian Federation does so too, but to a far lesser extent. At the same time, both side possess inherent antisatellite (ASAT) capabilities in their ballistic-missile defense interceptors, and are developing other ASAT weapons, such as co-orbital satellites, missiles, directed-energy weapons and cyberattacks.

  Five specific factors could lead to rapid and unintended escalation in cyberspace and outer space.

  First, the United States and Russia will likely face strong incentives to use cyber and counterspace attacks early in a future crisis or conflict. These capabilities could offer—or be seen to offer—an opportunity to rapidly degrade an adversary’s information systems at the outset of a conflict, conferring a significant advantage to the first mover. Indeed, Russian strategists have been clear in their assessment that seizing the initiative in the information domain will be key to victory in future wars. In addition, Washington and Moscow may perceive the use of cyber and nonkinetic counterspace weapons as less escalatory than that of kinetic weapons, since they can be employed in nonlethal, non-physically-destructive and reversible ways. This assessment is also reflected in Russian doctrinal writings. Russian strategists characterize both ASAT and cyberweapons as optimal tools for deterrence, since they can be used to destroy enemy infrastructure without inflicting heavy civilian casualties. Such a belief could further lower the threshold for early cyber and counterspace attacks.

  Second, cyber and counterspace attacks intended to be highly discriminative against military targets may cascade to affect critical infrastructure essential to a broader society and economy (e.g., electrical grids or commercial satellites). If this occurred, an attack intended to be precise and limited to military targets could instead result in the widespread loss of electrical power, water or other essential services, with resulting economic disruption and potential loss of life. The attacked side could feel compelled to respond at least in kind. Alternatively, a tit-for-tat cycle may occur, as one side might believe it could gain coercive advantage by intentionally demonstrating its ability to pose risks to the other side’s critical infrastructure through a combination of cyber, counterspace and perhaps sabotage attacks. Prominent Russian strategists endorse this view, arguing that attacks on socioeconomic targets can frighten an enemy population into abandoning its war effort against Russia. Yet such countervalue strikes could lead to major conflict and even, in an extreme scenario, nuclear war.

  Third, attacks intended to target nonnuclear systems (including but not limited to cyber and space attacks) could inadvertently impinge on nuclear systems, and be misread as a much more escalatory move. For instance, some assets in outer space support both conventional and nuclear missions—particularly in the case of the United States—and both theater and strategic missions. In addition, many terrestrial elements of U.S. command, control and communications, as well as long-range strike systems, are dual-use, and there may be co-location of conventional and nuclear systems by one or both sides. Cyber or counterspace attacks on these systems could therefore implicate nuclear systems, raising the potential for inadvertent escalation.

  Fourth, to the extent that the attacker’s initial cyber, space and precision-strike attacks were successful in negating a portion of the other side’s military, the attacked side would fear further debilitating attacks, and could worry that it must use or lose its strategic-level attack capabilities, including not only cyber and space, but also long-range strike capabilities. In the extreme, it may feel its conventional capabilities so weakened that it would consider the use of nuclear weapons. By the same token, nuclear forces use IT and space assets for warning and communications. As a result, a cyber or space attack could put nuclear use-or-lose considerations into play early in a crisis.

  Russian strategists are especially cognizant of these dynamics and recognize that a drawn-out conflict will likely force both sides up the escalation ladder. To avoid this outcome, a number of Russian military theorists argue for the use of defensive preemptive strikes—especially using nonnuclear capabilities—on enemy military and/or socioeconomic targets. Some suggest that these strikes could degrade adversary power-projection capabilities, such that Russia could avoid being forced into a situation where it had to use or lose its strategic-level assets in the first place. Others say—as previously mentioned—that tailored preemptive strikes could deter aggression by communicating to target policymakers and publics alike that the costs of attacking or escalating a military confrontation with Russia would outweigh the benefits.

  Fifth, inadvertent escalation could result from a mis-attributed attack or third-party false-flag operation. Chance errors in a key system, in the midst of crisis, such as an internal fault in a side’s command-and-control system or one induced by natural causes (e.g., a solar flare or an electrical surge), could be construed by one side to be an intentional act by the other. In addition, the diffusion of offensive cyber capabilities could allow smaller powers or nonstate actors to provoke a conflict—for instance, by conducting a “false flag” digital operation designed to trigger a crisis. Alternatively, once a conflict has begun, they could use their own capabilities to expand the scope or scale of the conflict.

  The possibility of escalation to large-scale war stemming, even inadvertently, from lower-order conflicts or tensions has long been appreciated in the context of the United States and Russia. The contention here, however, is that technological advances, their integration into military postures and doctrines on both sides, and the often-unanticipated ways in which such integrations may interact are together heightening the possibility of inadvertent, rapid and dramatic escalation in the event of crisis or conflict between the United States and Russia.

  STRATEGIC STABILITY between the United States and Russia has long rested on each side’s confidence that it could absorb even an all-out nuclear first strike by the other side and then unleash a devastating nuclear second strike. That confidence, however, is being tested by the deployment of new military systems.

  As these capabilities mature, each side is likely to have growing fears that the other side might employ these capabilities (with or without also using nuclear weapons) in a first strike to attempt to negate its nuclear second-strike capabilities, thereby obviating mutually assured destruction.

  Cyber weapons could be used against vulnerable nuclear weapons, delivery systems, and command, control and communications (NC3). The potential vulnerability of these systems, particularly as both countries’ offensive cyber capabilities mature, may exacerbate each side’s fears about the vulnerability of its nuclear deterrent to the other side’s potential preemptive attack. For instance, if a cyberattack on NC3 could delay the other side from giving an order to execute a nuclear strike for even thirty minutes, it could potentially negate the other side’s ability to launch its intercontinental ballistic missiles (ICBM) under attack, increasing the risk to such ICBM and narrowing the potential response options for the victim’s leadership. In a future crisis, in which one side believed that the other was able and willing to stage such an attack, it could perceive itself as having extremely little time to make a decision and might employ cyber or other capabilities (e.g. nonnuclear or nuclear weapons) preemptively, or more extensively than otherwise might be the case.

  Counterspace attacks also pose serious escalation risks given space systems’ relevance to nuclear operations, especially for the United States. There appears at this time little prospect that either side could substantially impact the other’s second-strike capabilities through counterspace attacks, and unclassified reporting suggests that neither the United States nor Russia has a robust counterspace capability. Moreover, even if it were able to disrupt or destroy key elements of the other side’s space architecture, each side has ground-based radars to support early warning and substantial terrestrial and/or airborne communications to support secure communications. However, as ASAT technologies improve—for instance, with the deployment of space-based interceptors or directed-energy systems—the risk of an adversary using counterspace operations to disable critical NC3 systems, intentionally or otherwise, will grow commensurately.

  Long-range nonnuclear weapons could also pose a threat to strategic stability. Neither side has yet deployed conventional-prompt global-strike (CPGS) capabilities—either conventional weapons on long-range ballistic missiles or hypersonic cruise missiles—that could realistically threaten to disarm an opponent’s strategic deterrent or decapitate its NC3. However, nonnuclear precision strike appears likely to become an increasingly severe problem over time, for two reasons. First, there is concern that the launch of a CPGS missile could be mistaken for the launch of a nuclear-tipped missile, leading the side that fears attack to launch nuclear-tipped missiles in response. Second, the United States and Russia could develop and deploy sufficient numbers of highly capable CPGS weapons to imperil the strategic nuclear deterrent of the other side. Many nuclear delivery platforms, such as road- and rail-based ICBM launchers, might readily be destroyed by conventional forces if they could be effectively targeted. Moreover, future CPGS systems, some Russian and other analysts believe, might ultimately be able to destroy even more defended targets, such as hardened ICBM silos. Missile defenses could “mop up” residual second-strike forces, in turn. The counterforce threat posed by a combination of long-range nonnuclear strike and improved missile defenses is a priority concern for Russian (and Chinese) officials.

  As with long-range nonnuclear weapons, neither the United States nor Russia has sufficiently capable or extensive missile-defense systems to deny the other side from being able to conduct a devastating nuclear attack, including in a second strike. Three possible future developments in missile defenses could, however, undermine strategic stability. The first is the deployment of large numbers of kinetic-kill or nuclear-tipped interceptors with the sensor capability, burnout velocity and other features required to engage CPGS and SLBM. The second is the deployment of space-based kinetic-kill interceptors. Third is the deployment of directed-energy systems for missile defense, which appear increasingly plausible as advances are made in solid-state lasers. Any of these developments could seriously threaten the viability of a nation’s second-strike capability.

  Finally, the advent of autonomous systems and artificial intelligence may allow states to more reliably target adversary SSBNs and mobile ICBMs. Inasmuch as these systems form the backbone of the U.S. and Russia nuclear forces, respectively, such a breakthrough would pose a severe threat to one or both sides’ nuclear deterrents. Ultimately, however, it is very difficult in an unclassified article to assess the plausibility of developments in strategic antisubmarine warfare or the ability to target mobile ICBMs. It is possible that advances in big-data analytics, for example, yield a breakthrough in antisubmarine warfare and/or time-critical targeting of mobile missiles. Even in this case, however, it is one thing to locate a system, for instance in the middle of the Atlantic Ocean or the Siberian forest. It is another thing to be able to deliver a sufficiently destructive and accurate weapon against the targeted system before it is able to fire or conceal itself.

  STABILIZING U.S.-Russian relations requires actions along each of these three pathways, conducted in parallel. Shaping and managing the overall relationship is fundamentally important. But whatever the course of U.S.-Russian relations in the future, there will remain a possibility (one, we argue, that is growing over time) of sliding into crisis and even armed conflict. Moreover, if a crisis or conflict does occur, there is a possibility (also growing over time) that escalation to strategic attack could occur. The following recommendations seek to manage these risks by helping shape the ongoing debate regarding U.S.-Russian relations and guide actions affecting U.S. nuclear posture, ballistic-missile defenses, cyber deterrence and space resilience. The recommendations also address the American role in NATO and NATO-Russia relations, both of which are of critical importance to all three pathways.

  To safeguard American interests in the face of Russian actions, the Trump administration should begin by articulating a clear policy on Russia, in close coordination with Congress and NATO allies. In the absence of a coherent American approach, Russian leaders are less likely to cooperate on common interests, since Russian advocates of cooperation will wonder whether the United States will reverse itself and make them appear naive. Russian leaders are also less likely to be deterred, as advocates of a more aggressive approach can argue credibly that Russia should take advantage of a window of incoherence in Washington. And of fundamental importance, in the absence of a clear U.S. policy, Russian leaders are more likely to miscalculate how the United States will respond in a crisis—and, if a crisis does occur, be more likely to miscommunicate.

  A clear U.S. policy toward Russia should include sanctions in response to Russia’s annexation of Crimea, its continued military intervention in Ukraine, and its meddling in U.S. and European elections. The absence of painful and sustained costs would prompt Putin and his leadership coterie to conclude that they have little to fear from Washington and its allies, as long as there is the thinnest patina of deniability. At the same time, however, the United States should clarify for Moscow what actions it can take (or avoid taking) over a given period of time to achieve relief from sanctions. Unconditional—or poorly conditioned—sanctions would leave Russia with little incentive to alter threatening behavior.

  In addition, the United States should respond with military deployments to Russia’s violation of the Intermediate-Range Nuclear Forces (INF) Treaty. This should include strengthening America’s nonnuclear long-range strike capabilities in Europe and supporting its partners’ efforts to do so as well. Washington should also work with NATO allies to continue to improve missile defenses in Europe. It should make clear that EPAA deployment, along with other missile-defense capabilities, will have a role in deterring Russia’s use of missiles in Europe, while reaffirming that EPAA deployments in Romania and Poland will still be unable to engage Russian ICBMs aimed at the United States. The U.S. response to Russia’s INF violation should further include the deployment of a follow-on to the Tomahawk Land Attack Missile–Nuclear (TLAM-N), built with stealth features based on the Long-Range Standoff (LRSO) nuclear cruise missile. This follow-on to TLAM-N would fill a deterrence gap by adding a survivable and credible theater nuclear deterrent that complements dual-capable fighter-bombers (potentially vulnerable both to preemptive attacks on air bases and to advanced air defenses) and dual-capable long-range bombers (the use of which, if in response to theater use of nuclear weapons by Russia, would require the United States to be the first to engage in homeland-to-homeland nuclear strikes).

  Finally, the United States should continue to develop areas of cooperation with Russia. Washington will need Russian support for (or abstention on) further U.N. Security Council–imposed sanctions on North Korea, and likely other threats to international peace and security that come before the council in the future. The two might productively cooperate in some areas of the Arctic, in civilian space activities, in diplomatic negotiations over Syria’s future and in the Global Initiative to Combat Nuclear Terrorism, which Russia and the United States cochair. Even as American leaders continue to press a modest, positive agenda, they should put greater priority on deterring bad behavior and avoiding a slide toward crisis and conflict.

  THE UNITED States should take additional steps to mitigate the potential for attacks in cyberspace and outer space to trigger rapid, uncontrolled escalation. One of the first steps should be to define its desired rules of the road for cyberspace and outer space, not only in peacetime, but also in crisis and conflict. It should then seek consensus with key allies and partners, with whom a common understanding of preferred guidelines for offensive cyber and outer-space activities remains lacking. Armed with an allied consensus, Washington should test the degree to which arriving at a common view with Moscow (and, likely separately, Beijing) is possible. Even if the United States and Russia fail to reach a common view, well-prepared bilateral discussions regarding rules of the road in cyberspace and outer space would help clarify where various actions might fall on the escalation ladder, thereby reducing the risk that either side unwittingly takes actions viewed by the other as extremely threatening.

  Next, following a framework offered in a Defense Science Board Task Force report on cyber deterrence, DOD should bolster cyber and space resilience for critical military capabilities in three ways. First, it should ensure the cyber and space resilience of the nuclear triad, and the “thin line” of NC3 systems that supports it even in a nuclear exchange. Second, the department should ensure the essential cyber and space resilience to support a select but substantial subset of nonnuclear long-range strike capabilities, such as the new B-21 bomber and JASSM-ER and attack submarines equipped with conventional Tomahawk cruise missiles. Having punishing nonnuclear strike options available for response even after withstanding the other side’s best efforts at cyber and space attacks would significantly decrease the incentive to conduct such an attack, without requiring the president to escalate to a nuclear response. Third, DOD should ensure that select offensive cyber (and, if applicable, offensive counterspace) capabilities are highly resistant to both cyber and counterspace attacks, so that the United States may respond in kind to an attack limited to cyberspace and outer space.

  The United States should also improve the digital resilience of its critical infrastructure. A focused national effort sustained over a period of many years could fundamentally reduce the cyber vulnerability of at least the most essential U.S. critical infrastructure, including the electrical grid, key elements of the financial sector, water and wastewater systems, and the electoral system. There will be no quick fixes, but with strong leadership from both the public and private sectors, the United States could substantially reduce the digital vulnerabilities of select portions of its critical infrastructure over the next ten to twenty years. By addressing these vulnerabilities, Washington can reduce Russia’s incentives to attack and the potential escalatory impact if it does so.

  In addition—and critically—the United States should reopen diplomatic and military lines of communication with Russia. These channels are crucial for reducing the risks of miscommunication and avoidable conflict. Notwithstanding how difficult U.S.-Russian relations are today, the United States should work to reopen channels of communication, including diplomatic as well as military-to-military ones. Some initial steps—for example, tactical deconfliction in Syria—have taken place already, but much more is needed.

  JUST AS the integration of a range of new technologies is undermining strategic stability, so too is an integrated program necessary to buttress strategic stability between the United States and Russia in the coming years and decades. This program must consider changes in both nuclear and nonnuclear systems, and in both nuclear and nonnuclear strategies.

  As a first step in such a program, the United States should adopt a “triad-plus” strategic force structure. This means proceeding with the Columbia-class strategic submarine modernization program, B-21 dual-capable bomber program, and LRSO missile program. It also means that, rather than pursuing a one-for-one replacement of Minuteman III ICBMs in underground silos, the United States should develop a replacement ICBM that is significantly lighter than the Minuteman III and deploy perhaps two or three hundred of the missiles in silos. The United States should also initiate a mobile ICBM research-and- development program, including prototypes, so that the United States can shift weight to a mobile ICBM force in the event of a Russian breakthrough in antisubmarine warfare (ASW). Remanufacturing a stealthy version of the TLAM-N would also allow the United States to hedge against Russian ASW improvements.

  At the same time, the Department of Defense should address vulnerabilities in NC3 systems and review launch-under-attack postures. DOD should invest first in ensuring that its nuclear forces and NC3 are highly resilient to a top-tier cyber adversary. Next, both the U.S. and Russian leadership must understand the reality that their NC3 systems could suffer some degradations in crisis or conflict—some of which may not be due to attacks by the other side; a third party might attempt a false-flag operation. Accidents and acts of nature can also cause service disruptions of some systems. Both sides should ensure that their planning and exercises account for such events. Finally, the U.S. and Russian postures to be prepared to launch ICBMs under attack deserve careful review, so as to minimize the risk of launching on false warning. How both sides can adjust their postures to this effect remains difficult to say. It is important to note, however, that the more the United States hedges through other means (e.g., TLAM-N and mobile ICBMs) in the future, the less pressure there will be to launch ICBMs under the warning of attack.

  As the United States proceeds with a program of nuclear modernization, it should also develop and deploy nonnuclear hypersonic weapons, tailored to defeat major improvements in the air-defense systems of potential U.S. adversaries. The United States should aim for a “sweet spot” for nonnuclear hypersonic weapons in terms of military effectiveness (high), cost (relatively low), potential for high-volume strikes (significant) and impact on strategic stability (low). Medium-range ballistic missiles (with and without boost-glide vehicles) and hypersonic cruise missiles, launched from heavy bombers and/or attack submarines, could fall in this sweet spot. The systems would have a low impact on strategic stability because their infrared and other signatures would be substantially different and distinguishable from those of U.S. nuclear-delivery systems (including SLBMs and nuclear-tipped cruise missiles), attacks on one nation would not require overflight of others, and these systems would either lack the range to attack deep into Russia (the case for submarine-based medium-range systems) or would be unable to do so in volume without creating a massive detectable signature (the case for bomber-based systems).

  The United States should also invest in its missile-defense architecture. To start, as North Korea improves its nuclear-tipped ICBM capabilities, the United States should continue to grow its missile defenses. Second, the United States should continue to press forward with directed-energy systems for defensive purposes. Priority should be given to helping to deal with the immediate challenge of negating North Korean long-range and medium-range missiles, likely by deploying directed-energy systems on manned or unmanned aircraft. Third, the United States should forswear space-based missile defense interceptors and directed-energy systems, strongly urge Russia to do the same and pursue a bilateral agreement with Russia (and, separately, a bilateral agreement with China) to this end. Because of the massive and immediate threat that such systems would pose to American satellites and their essential support to warfighting—and potentially to early warning and secure communications satellites that are vital to the U.S. nuclear deterrent—any Russian deployment of space-based missile defense interceptors or lasers would pose an immediate and unacceptable threat.

  Finally, the United States should regularize strategic-stability talks with Russia and seek to extend the New START treaty by five years. The U.S.-Russian meeting in Finland in September 2017 was an important first step toward a regular Track 1 dialogue on strategic stability issues in the coming years. The American and Russian governments should sustain these sorts of efforts. At the same time, however, in view of the volatility of U.S.-Russian relations at this time, and recognizing that circumstances may delay or derail Track 1 efforts, both parties should pursue Track 2 and Track 1.5 dialogues on strategic stability. Extending New START would serve strategic stability through its verification provisions, which provide transparency and predictability, thereby reducing the propensity of each side to rely on worst-case assessments. It would not currently be helpful to press for further reductions in force levels, as having some extra margin above the bare minimum force levels that each side thinks it needs will help buffer the impact of new military capabilities as they are deployed.

  

  THE UNITED States and Russia have reentered a period of serious tension that shows no sign of abating. Relations between the two sides appear likely to remain tense, if not hostile—at least through the medium term—and may involve considerable turbulence. Bluntly put, serious disagreement and even outright conflict are possible. Exacerbating this geopolitical reality, emerging new military capabilities—cyber, space, missile defense, long-range strike and (cutting through all) autonomous systems—are increasing uncertainties associated with strategic stability. Unless measures are taken to cushion the consequences of these military trends, conflict may become more probable and escalation more dramatic and severe than they need to be—all in an era when both crisis and conflict are more plausible than they were just ten years ago. If adopted by the Trump administration and its successors, a fresh American approach to U.S.-Russian relations will protect American and allied interests. If the U.S. approach is also articulated clearly and is consistent over time, it may well reduce the risk of crisis or conflict arising from Russian miscalculation.

  

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• Mapping The Top Tourist Attraction In Every Country

  Even as early as a decade ago, if you were backpacking in a foreign place, Visual Capitalist’s Jeff Desjardins remembers that it was not uncommon to rely on the wisdom printed in travel guides such as Lonely Planet or Rick Steves to choose your day-to-day activities.

  “Go off the beaten path to see this secluded black sand beach that’s only used by locals.”

  “See this historic city tour, because it’s a hidden treasure that you won’t find in any other guidebook.”

  Tips like these felt like secrets only privy to you and other smart readers – and while you were sitting on that hidden black sand beach, you could revel in the fact that the rest of the travelling masses were stuck in a two-hour line to get into some silly tourist trap.

  For better or worse, things are now very different.

  THE CROWDSOURCED ERA

  Today’s infographic comes to us from Vouchercloud, and it shows the top rated “Thing to Do” for every single country in the world, according to Tripadvisor reviews.

  

  Courtesy of: Visual Capitalist

  In other words, the list is based on the amalgamation of millions of reviews from fellow travelers that have experienced these sights or activities first-hand.

  On the upside, these reviews are coming from your peers. People just like you have rated all of the attractions in an area – from tourist trap to hidden gem – and the end result is pretty fair and democratic.

  But this democratic component also has a downside. In the United Kingdom, for example, the highest rated activity is not seeing Big Ben, Ancient Roman baths, Stonehenge, or the Churchill War Rooms – it’s the Harry Potter Studio Tour, with 32,000+ reviews and 83% of reviewers giving it a perfect 5-star rating.

  While the Harry Potter tour is obviously a popular attraction, it’s not likely representative of the type of attractions that old school travel critics may have raved about in their travel books.

  TOP THINGS TO DO

  In the map, the top tourist destinations are broken down based on the type of attraction.

  Here’s the mix of top destinations for the 197 countries and jurisdictions included in the analysis:

  

  The top category of attraction is natural (38.6%), which includes places like Canada’s Niagara Falls or Norway’s Geiranger Fjord. Meanwhile, historic attractions like China’s Great Wall made up 27.4% of the total, and places of religious significance such as Thailand’s Temple of the Reclining Buddha were the top tourist attraction for 14.7% of the countries.

  The remaining category, called “Tourist” includes a much wider variety of destinations within it.

  These attractions range from Central Park in the New York City to the aforementioned Harry Potter Studio Tours in the United Kingdom. The wide category also includes museums like France’s Musee d’Orsay, which holds a staggering collection of impressionist art, as well as Germany’s Miniatur Wunderland, which is a massive miniature railroad in Hamburg.

  

• "Never Seen Such A Large Crowd": Record Numbers Flock To Florida Gun Show After Shooting;

  A record number of firearms enthusiasts made their way to the Florida State Fairgrounds this weekend to attend the Florida Gun Show, amid a fierce national debate over gun rights following the Valentine’s Day massacre at Stoneman Douglas high school in Parkland, Florida. 

  Organizers say almost 7,000 people attended on Saturday, with Sunday’s tally expected to be higher. Organizer Steve Fernandez said they’ve never seen such a large crowd – however it’s possible that the cancellation of next month’s show in Fort Lauderdale may have attracted concerned citizens. 

  The line outside the Florida Gun Show is growing by the minute. Yesterday, an estimated 7K people attended, which organizers say was a huge turnout for Tampa @BN9 pic.twitter.com/WTW75lWZmJ

  — Angie Angers (@angie_angers) February 25, 2018

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  Inside a Florida gun show, days after the Parkland shooting https://t.co/53tqAnQNTp pic.twitter.com/fIgw9OhDU4

  — Bloomberg (@business) February 21, 2018

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  Hundreds have signed up for firearms safety training classes at the Florida Gun Show & organizers say it’s a big spike from years past @BN9 pic.twitter.com/sDA7mcsEXG

  — Angie Angers (@angie_angers) February 25, 2018

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  Just 3 days after Florida’s worst ever school shooting….Floridians flood to a gun show to further arm themselves with high powered assault weapons. pic.twitter.com/igy2mUu8mo

  — Piers Morgan (@piersmorgan) February 18, 2018

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  Somewhat ironically, this was to be expected considering the massive effort by gun control advocates to erode as much of the Second Amendment as they can in the wake of the Parkland shooting – never letting a crisis go to waste and all that. President Trump’s recent advocacy for more stringent background checks, a 10-day waiting period and raising the age limit on the purchase of guns following the Parkland shooting likely fueled concerns over a “slippery slope” of firearms legislation.

  Florida lawmakers such as Senator Bill Nelson (D) have called for stricter laws to fix the so-called “gun show loophole” which allows people to purchase firearms without a background check. While federally licensed vendors at a gun show are still required to run background checks (FFL), private sellers without a federal license do not have the same requirement in 40 states. (California, Colorado, Connecticut, Delaware, Washington D.C., New York, Nevada, Oregon, Rhode Island and Washington all require private sellers to conduct background checks). 

  “Some of the people attending are afraid that future legislation will impact their gun ownership rights,” said Fernandez. That said, 95% of the vendors at this weekend’s Florida Gun Show are required to run background checks since they are licensed dealers. 

  Also of note, suspected gunman Nikolas Cruz passed a background check before legally purchasing a semiautomatic AR-15 style rifle.

  “This was a mental health issue. This is someone who should have been identified from the beginning by law enforcement,” says Fernandez.

  In any event, google searches for both “buy a gun“, “buy AR15″, as well as “second amendment” just hit all time highs.

  

  

  

  Interest in firearms ownership also spiked following President Obama’s 2008 election – as a flurry of “gun control” headlines resulted in a flood of purchases – as evidenced by number of FBI background checks conducted following the 2008 election – a phenomenon which spiked after every mass shooting or act of domestic terrorism:

  

  Indeed, Obama was jokingly referred to as the “best gun salesman in America,” with 52,600 weapons sold daily under his administration as of June 2016.

  

  Wall St. pushes back

  Following the Parkland massacre, over a dozen major companies cut ties with the NRA, including Delta, Hertz and MetLife. Wall St. is no exception. In addition to Bank of America “reexamining relationships with clients who make AR-15s,” Blackrock – the world’s largest money manager – and the largest shareholder in gunmakers in Sturm Ruger & Company and American Outdoor Brands (Smith & Wesson) said it will speak with both manufacturers  about their response to the Florida shooting. 

  Gunmakers may also come under pressure from pensions – such as Florida’s state pension, which holds shares of American Outdoor Brands. As Bloomberg put it, “as Florida teachers grieve over the mass shooting that left 17 students and colleagues dead last week, some of them may be surprised to learn they’ve been helping fund the firearms industry—including the company that made the gun used that bloody Wednesday.”

  Investment giant Blackstone Group, LP asked outside fund managers at a dozen hedge funds to detail their ownership in companies that make or sell guns, requesting answers by Sunday night – a one day turnaround. 

  Perhaps this explains why both shares in Ruger (RGR) and American Outdoor Brands (ABOC) have remained depressed in light of the predictable bump in sales which correspond with the renewed debate over gun control.

  

  

  For reference, American Outdoor Brands and Ruger are down roughly -7% and -5% YTD respectively, while the S&P 500 is up 5.64%. 

  Meanwhile, guns are flying off the shelves…

  FLORIDA GUN SHOW I Organizers say they saw record numbers yesterday with close to 7k people showing up and they expect more today! They also tell me they do not support a ban on assault rifles but more laws for mental health. @10NewsWTSP pic.twitter.com/95YGMKGl3E

  — Shannon Valladolid (@ShannonMarieTV) February 25, 2018

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• Lawyers For The DNC Argue That 'Primary Rigging' Is Protected By The First Amendment

  Via Disobedient Media,

  The ongoing litigation of the DNC Fraud Lawsuit and the appeal regarding its dismissal took a stunning turn yesterday. The defendants in the case, including the DNC and former DNC Chairwoman Debbie Wasserman Schultz, filed a response brief that left many observers of the case at a loss for words.

  

  The document, provided by the law offices of the Attorneys for the Plaintiffs in the case, Jared and Elizabeth Beck, and appears to argue that if the Democratic Party did cheat Sanders in the 2016 Presidential primary race, then that action was protected under the first amendment. Twitter users were quick to respond to the brief, expressing outrage and disgust at the claims made by representatives of the DNC and Debbie Wasserman Schultz.

  The Defense counsel also argued that because of Jared Beck’s outspoken twitter posts, the plaintiffs were using the litigation process for political purposes: “For example, Plaintiffs’ counsel Jared Beck repeatedly refers to the DNC as “shi*bags” on Twitter and uses other degrading language in reference to Defendants.” Fascinatingly, no mention is made regarding the importance of First Amendment at this point in the document.

  The defense counsel also took issue with Jared Beck for what they termed as: “…Repeatedly promoted patently false and deeply offensive conspiracy theories about the deaths of a former DNC staffer and Plaintiffs’ process server in an attempt to bolster attention for this lawsuit.”

  This author was shocked to find that despite the characterization of the Becks as peddlers of conspiracy theory, the defense counsel failed to mention the motion for protection filed by the Becks earlier in the litigation process. They also failed to note the voice-modulated phone calls received by the law offices of the Becks which contained a caller-ID corresponding to the law offices of Debbie Wasserman Schultz, a defendant in the case. In light of this context, the Becks hardly appear to be peddlers of conspiracy theory.

  The DNC defense lawyers then argued that: “There is no legitimate basis for this litigation, which is, at its most basic, an improper attempt to forge the federal courts into a political weapon to be used by individuals who are unhappy with how a political party selected its candidate in a presidential campaign.”

  The brief continued: “…To recognize any of the causes of action that Plaintiffs allege based on their animating theory would run directly contrary to long-standing Supreme Court precedent recognizing the central and critical First Amendment rights enjoyed by political parties, especially when it comes to selecting the party’s nominee for public office.”

  It appears that the defendants in the DNC Fraud Lawsuit are attempting to argue that cheating a candidate in the primary process is protected under the first amendment.

  If all that weren’t enough, DNC representatives argued that the Democratic National Committee had no established fiduciary duty “to the Plaintiffs or the classes of donors and registered voters they seek to represent.”

  It seems here that the DNC is arguing for its right to appoint candidates at its own discretion while simultaneously denying any “fiduciary duty” to represent the voters who donated to the Democratic Party under the belief that the DNC would act impartially towards the candidates involved.

  Adding to the latest news regarding the DNC Fraud Lawsuit was the recent finding by the UK Supreme Court, which stated that Wikileaks Cables were admissible as evidence in legal proceedings.

  If Wikileaks’ publication of DNC emails are found to be similarly admissible in a United States court of law, then the contents of the leaked emails could be used to argue that, contrary to the defendant’s latest brief, the DNC did favor the campaign of Hillary Clinton over Senator Sanders and that they acted to sabotage Sanders’ campaign.

  The outcome of the appeal of the DNC Fraud Lawsuit remains to be seen. Disobedient Media will continue to report on this important story as it unfolds.

  

• North Korea's Winter Olympics Cheerleaders "Forced Into Sexual Slavery" Back Home

  As mainstream outlets such as USA Today, ABC News, and the New York Times pumped out a steady stream of propaganda about North Korea’s cheerleaders at the Winter Olympics “stealing the spotlight” and wearing “matching snowsuits,” a more sinister story of sexual abuse and exploitation was apparently not worth the MSM’s investigative resources.

  

  A North Korean defector says that members of the North Korean Olympic cheerleading squad are being forced into sexual slavery by the country’s top politicians, reports the New Straits Times.

  

  “North Korea’s art troupe came here and performed with dances and songs, and it might seem like a fancy show on the outside. However, they also have to go to parties and provide sexual services, that sort of pain also follows,” said former military musician Lee So-yeon, 42. She now heads the New Korea Women’s Union – a group which helps defectors adjust to life in South Korea. 

  “They go to the central Politburo party’s events, and have to sleep with the people there, even if they don’t want it. Those sorts of human-rights infringements take place, where women have to follow what they are told to do with their bodies.”

  “The women there, when they attend, they have to undress. They’re asked to undress, like objects. That’s the physical pain they have to go through.”

  Bloomberg also spoke with Kim Hyung-soo, 54, who defected to South Korea in 2009 with his son – a North Korean national league skier. Kim said that all of the North Korean coaches and atheletes are “slaves” of Kim Jong-un, though he did not mention sexual abuse. 

  “The cheerleaders, too,” he said. “They select people who are unlikely to defect, and people with loyal backgrounds. This factor is crucial from a very early stage.”

  The cheerleaders are hand picked by the North Korean regime based on a stringent set of criteria, according to defector An Chan-il who runs the World Institute for North Korea Studies. 

  “They must be over 163 centimetres tall and come from good families,” An said. “Those who play an instrument are from a band and others are mostly students at the elite Kim Il-sung University.”

  That said, Mike Pence was a bit standoffish with Kim Jong-Un’s sister, the head of propaganda for North Korea – which in retrospect may have been more newsworthy than North Korea’s forced sexual slavery of it’s national cheerleading squad.

  

• Why Do Governments Fail? (The Exponent Problem)

  Authored by Robert Gore via Straight Line Logic blog,

  2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096, 8192…

  

  Most people find managing their own affairs sufficiently challenging. Earning a living, establishing a family, rearing children, saving for college and retirement, and dealing with illness and aging fill the days and leave little time, attention, or energy to manage someone else’s affairs.

  A hypothesis: the effort required to run other people’s lives is an exponential function. If X is the sum total of everything required to run your life; running two lives is X squared; three lives is X cubed, and so on. Call it the exponent problem. For partial verification, try running someone else’s life for a day or two. See it how it works out for you and the other person.

  Why do governments fail? Government is someone imposing rules on someone else, and backing them up with repression, fraud, and violence when necessary. The governed always outnumber those governing, which means the latter face the exponent problem. In the US, there are around 22 million employed by the government, and let’s add in another million who actively influence it. The US population is around 323 million, so there are 23 million rulers to 300 million ruled, or about 13 ruled per ruler. How fitting, like the 13 original colonies!

  Whatever amount X of time, energy, money, attention, and other resources the rulers expend on their own lives, they must expend that X to the thirteenth power to “govern” the ruled. If X could actually be quantified and it was only 2, it would still take 8192 times the effort to rule the US as it does for the rulers to govern their own lives. Those are just illustrative numbers, but you get the picture.

  No wonder rulers use repression, fraud, and violence. They’re overwhelmed by the exponent problem. On its best days governance is a comic proposition, on its worst, a tragic and terrible one. A farce, but in its own way tragic and terrible, is preceding the ultimately tragic and terrible outcome of the US government’s efforts to govern every aspect of its constituents’ lives and exercise power over what it considers its global domain.

  Robert Mueller’s Russian indictments scream Keystone investigation. The indictments of out-of-reach Russians are a tacit admission that Mueller has nothing on the Trump campaign’s alleged collusion with Russia. They are a laughable attempt to divert attention from evident criminality by the Clintons, their foundation, Barack Obama, and members of the Department of Justice, the State Department, the FBI and the intelligence community both before and after Trump’s victory. There are Russian angles to that apparent criminality, which Mueller has shown little willingness to investigate.

  Such blatant ineptitude and corruption are to be expected from people who think they can run other people’s lives. The delusion is almost universal, a toxic cognitive cloud that has persisted throughout history and has spread over the entire planet.

  The ruled usually know when their rulers are inept and corrupt. However, they often believe that somewhere else the wise and sagacious effectively govern. In the 1930s and 40s, many in Europe and America gushed over Hitler, Mussolini, and Stalin. In the 1980’s, the Japanese had the secret sauce. Liberals have long hailed Scandinavia as utopian governance.

  Across the alternative media, articles extoll Russian and Chinese leadership, particularly their joint leadership of the new Silk Road, the Belt and Road Initiative (BRI). SLL has reposted some of them. Directed by Russian and Chinese bureaucrats and politicians—surely wiser and less corrupt than our own—the BRI will build transportation and communications infrastructure across Asia, the Middle East, and Europe. The Maritime Silk Road will build Indian Ocean shipping facilities.

  The US government does not see this in a benign light. It’s an attempt by the our geopolitical rivals to rule Halford MacKinder’s center of the world, (see “Washington’s Great Game and Why It’s Failing,”  SLL, 6/8/15) and we can’t have that. The Eurasian land mass contains much of the world’s population, raw materials, and oil. Vital US interests are at stake. So are vital Russian and Chinese interests.

  Oddly enough, the contest for the center of the world has coalesced in Syria, a country about the size of Washington state. The US, Russia, China, Saudi Arabia, Turkey, Israel, Iraq, Iran, Jordan, Qatar, Kuwait, France, and the United Kingdom, various tribal and ethnic groups, various Islamic guerrilla groups, and the government of Syria itself have all declared interests in that nation. It doesn’t even have that much oil. The situation has its darkly comic aspects and at least one satire, Prime Deceit by yours truly, has been written about it.

  The situation also has its tragic and terrifying realities. On this small patch much blood has been spilled, much treasure has disappeared, and Syrian lives have been ended or upended as “interested parties” try to impose their versions of control on all or part of it. They run into the exponent problem, usually compounded by the would-be controlled’s violent resistance to the would-be controllers.

  Syria is a microcosm of what analyst Richard Maybury labels Chaostan: “The area from the Arctic Ocean to the Indian Ocean, and Poland to the Pacific, plus north Africa.” An investment in Maybury’s newsletter, Early Warning Report, may be the best investment you’ll ever make. Anybody who’s followed its recommendations since its inception in 1991 has made a fortune. “Chaostan,” Maybury notes, “contains thousands of nations, tribes and ethnic groups who have hated and fought each other for centuries.” They don’t take too well to outsiders, either.

  Attempts to impose order, be it US-style order or the Russian-Chinese-BRI version, confront that history and the exponent problem.

  We haven’t even mentioned the other exponent problem, compounding interest on the world’s mammoth and growing debt load. Imposing order takes money. Good luck, everyone, with Chaostan.

  The question is not whether efforts to impose order in Chaostan will crash and burn—they will—but how low they will take humanity. Destruction of the species is a nontrivial possibility. At present, not one person in the motley coterie that governs this planet appears to understand that control is mathematically impossible. Of course, when impossible butters your bread you embrace it, and this quixotic quest for control butters a lot of bread. Just the world’s military and intelligence spending sums to trillions of dollars.

  The exponent problem yields a testable hypothesis: present efforts at control, much less expanded efforts like global governance, will require increasingly unattainable amounts of energy and resources and will collapse. Another hypothesis: a system that would adapt itself to available energy and resources is the one which allows individuals to direct their own lives, i.e., freedom. There is a nontrivial possibility that hypothesis may get a test, too, but only after the first hypothesis has been confirmed.

  

• Ohio Sheriff Offers Free Gun Training To 50 Teachers; Forced To Cap At 300 After Huge Response

  An Ohio sheriff who offered free firearms training to 50 teachers was forced to cap his offer at 300, after a flood of local school employees signed up in the wake of a Florida high school shooting that left 17 people dead. 

  “We put it online, we thought we’d get 20 school teachers maybe. Within 20 minutes we had 40. Within an hour we had 100. Within four hours we had 200. By the next morning, at 300, we cut it off,” Butler County Sheriff Richard Jones said on “Fox & Friends.”

  If you listen 2 media teachers do not want to carry weapons in schools. We have over 300 said want 2.

  — Richard K. Jones (@butlersheriff) February 24, 2018

  https://platform.twitter.com/widgets.js

  School personnel start gun training in butler county Ohio Monday ccw. We will train this week over 120.

  — Richard K. Jones (@butlersheriff) February 24, 2018

  https://platform.twitter.com/widgets.js

  The Parkland, FL shooting has renewed a national debate on the Second Amendment. Sheriff Jones noted that only a few schools in Ohio allow the concealed carry of a firearm, and that the plan to arm teachers would only work if “the school boards have the guts to make it a reality.” Jones suggested that school staffers should go through mandatory firearms training to help them identify the sounds of gunfire. 

  “We have to do something here because we can’t wait for our government to do anything. All they do is fight, they get nothing done,” he said.

  https://video.foxnews.com/v/embed.js?id=5740119604001&w=466&h=263

  Watch the latest video at foxnews.com

  Four days ago during a White House “listening session” on school shootings, president Trump suggested arming teachers – a call he as repeated since. 

  “If you had a teacher who was adept at firearms, they could very well end the attack very quickly, and the good thing about a suggestion like that — and we’re going to be looking at it very strongly, and I think a lot of people are going to be opposed to it. I think a lot of people are going to like it. But the good thing is you’re going to have a lot of [armed] people with that,” said the President. 

  President Trump on concealed carry for teachers: “If you had a teacher who was adept at firearms, they could very well end the attack very quickly.” pic.twitter.com/SnKjyYH0uw

  — Josh Caplan (@joshdcaplan) February 21, 2018

  https://platform.twitter.com/widgets.js

  “We can’t stop the school shootings, we can’t stop guns from being manufactured, but we’ve got to do something, we’ve got to make the schools more of a hardened target,” said Sheriff Jones – adding that the class was open to teachers, secretaries and maintenance workers.

  

• Trump Pivots Toward Trade Wars With Promotion Of Trade Uber-Hawk Peter Navarro

  Trump is officially on a trade war path.

  Defying threats of retaliation from the Chinese, on Friday Bloomberg reported that President Trump was pushing for the “harshest possible” global tariff of 24% on all steel imports and 10% on aluminum, a decision that would anger nearly every industrial manufacturer based in the US, while at the same time helping revive the fortunes of US steel producers. The rates were first proposed by Commerce Secretary Wilbur Ross last week.

  Now, two days later, in the latest and clearest indication yet that Trump will not back down from the coming global trade wars, the WSJ reports that the president plans to promote his advisor Peter Navarro – also known as the author of  “Death by China” and “Crouching Tiger: What China’s Militarism Means for the World” and an unrepentant trade hawk, best known for his protectionist views on trade policy and giving economic nationalists a stronger voice in internal debates as the Trump administration nears decisions on high-profile trade issues.

  Peter Navarro, an economist who helped shape Donald Trump’s 2016 protectionist campaign platform, will be named an assistant to the president, according to a person familiar with the matter.

  Navarro, who one year wrote a WSJ  Op-ed in which he warned that deficits “Could Put US National Security In Jeopardy”, began Mr. Trump’s presidency with broad influence and regular access to the Oval Office but his role was quickly limited after he clashed with the aides who oppose his views on trade deficits and multilateral trade agreements.

  Navarro was originally made head of a newly created National Trade Council, but was given little staff. That was eliminated in April and he was instead made head of a new Office of Trade and Manufacturing Policy that was seen as having little influence and was ultimately made to report to Gary Cohn’s NEC.

  As such, his sudden “reincarnation” within the Trump circle of trust likely indicates that the influence of Trump’s Wall Street-based globalist wing – Gary Cohn and Steven Mnuchin – is waning, and comes as the White House is nearing decisions on several high-profile trade matters (one almost smells an off the record phone call between Trump and Bannon here).

  Meanwhile, with the Trump administration facing an April deadline on whether to impose broad-based steel and aluminum tariffs in the name of national security, Navarro’s promotion will be certain to tip the scales in the direction of trade war. 

  Navarro has been a strong advocate of the view espoused by Mr. Trump—and rejected by most mainstream economists—that big trade deficits are, per se, bad, and that trade policy should be crafted to try to slash imbalances. Incidentally, Navarro may be on to something – despite the recent slide in the dollar, US net trade has failed to catch a boost, and as the chart below shows, the US Trade deficit excluding soaring petroleum exports, just hit an all time high!

  

  And with US officials also completing an investigation on widespread complaints that China improperly forces U.S. companies to turn over valuable intellectual property, a probe that is expected to result in significant economic sanctions against Beijing, it is safe to say that US-Chinese trade relations are about to hit rock bottom.

  It is unclear exactly how Mr. Navarro’s role will change, but the promotion is likely to give Mr. Navarro a more regular role in trade debates and meetings at the White House, according to the person familiar with the matter, a trade expert who has discussed the move with White House officials.

  “This gives Peter a more formal seat at the table when trade and manufacturing policies are discussed,” the WSJ source said. “That’s something that has been in question the last six months.”

  The WSJ adds that the appointment would make Mr. Navarro one of about two dozen “assistants to the president” in the Trump administration. Other officials with that title include the White House legal counsel and the heads of the various White House policy councils.

  Early in the administration, Navarro came close to persuading Trump to withdraw from the North American Free Trade Agreement with Mexico and Canada and a separate agreement with South Korea, until he was stymied by Mr. Trump’s more globalist-minded advisers, led by Gary Cohn. Both are now being renegotiated. Early in 2017, Navarro also roiled currency markets by publicly accusing Germany of unfairly manipulating the European currency to boost exports.

  “The change in his stature is a sign that the promises the president made on trade and manufacturing are more likely to be implemented,” said Michael Wessel, who advises labor unions and serves on the U.S.-China Economic and Security Review Commission, a congressional advisory panel.

  So while it took capital markets about 17 years to realize that the US has “double deficits” – the most frequent argument cited for the recent plunge in the dollar, even though the US has not had a C/A or fiscal surplus since about 2001… 

  

  … we wonder how long it will take to figure out that trade wars are coming, and that they are not exactly good for either risk assets or risk-parity and vol-targeting funds…

  

• IceCap Asset Management: "Get Ready For The 2nd Half Of Global Financial Markets"

  Submitted from IceCap Asset Management

  “The Halftime Show”

  For many, the Super Bowl football game is a rather odd event.

  To begin with, Americans claim the winner of the big game to be the world champion – despite never defeating the best from Europe, Asia, or Africa. Next, most of the Super Bowl games are duds. Aside from the crowd pleasing 5 victories by the San Francisco 49ers, and the crowd pleasing 5 losses by the New England Patriots – most games are forgettable.

  Now, this lack of competitiveness, isn’t necessarily a bad thing. After all, for most people the game is secondary to the entertainment including the commercials and the Halftime Show. The first ever Halftime Show in 1967 featured dogs leaping through hula hoops and catching Frisbees. Everyone agreed it was pretty cool.

  In 1974, the Halftime Show scored a huge win when Miss Texas, Judy Mallett, played the fiddle to the 74,000 stomping fans in Houston. THAT was a good time.

  Over the years, the Halftime Show developed into something bigger than the game itself, with the more memorable ones featuring wardrobe malfunctions and the ability of the Americans to actually make it rain while legendary rock star Prince sang about rain. And with the possibility of reuniting the Gallagher brothers and Oasis for next year’s final gig – the Halftime Show will cement itself forever as being the greatest show on turf.

  As the Halftime Show literally occurs smack dab in the middle of the game – it should signal the mid-point of the big event. Yet, in reality the 2nd half breezes by fairly quickly with the outcome usually well decided and well accepted by everyone glued to their screen.

  The irony of course, is that this year as millions prepare to enjoy the big show, millions of investors are simultaneously wondering if financial markets have also reached their very own Halftime Show.

  Naturally, with stock markets hitting all time highs, and Bond yields hitting all time lows – very good arguments are made supporting a significant change in direction for each market.

  And as life imitates art, it is reasonable to believe that the 2nd half of financial markets will zoom by just as fast as the 2nd half of the Super Bowl. So, to be safe. Buckle up. Strap on your helmet and pads. And get ready for the 2nd half of global financial markets.

  It’s a show you won’t want to miss.

  The Multiplier Effect: US Tax Cuts

  One word – ENORMOUS.

  Yes, despite all the growlings and howlings from both political rivals, and sovereign economic rivals – the recently announced American tax cuts are tremendously good for the US economy.

  This is good.

  And yes, just as proclaimed by many, these very same tax cuts will add significantly to the American debt pile.

  This is bad.

  Yes it sounds confusing, so let’s take a minute to clarify the good and the bad. Remember – here at IceCap we are not American voters, and we shed our emotions and pause our personal belief systems when assessing geopolitics (something EVERY investment manager should be doing by the way).

  First the good. From the most simplest perspective – the more money you have in your pocket the better.
  We have yet to meet anyone on this planet who would not accept more money in their pay cheque due to lower taxes. More money means more spending, more savings or faster debt pay downs.

  When this is multiplied across all of America, the aggregate amount is very, very large and significant. And, when you next consider the tax savings at the corporate level multiplied across all of America, the aggregate amount is bigger still. The two amounts together create a powerful wave of economic stimulus not only for America, but for the world.

  Some argue that the rich people are getting richer, and the wealthy companies are getting wealthier. This is irrelevant. If you are against the tax cuts and disagree, you are always welcome to pay more to the IRS than what is required. Yes, there’s no law saying you can not make extra contributions to the US Treasury.

  Any takers? Regardless if the tax savings are spent buying Budweiser, pinot noir, stock buybacks, or yachts – money begins to flow through the system creating a multiplier effect which leads to even more spending and savings. Not convinced? Consider recent comments from the world’s largest investment manager Blackrock Inc.

  

  Also consider that Blackrock is controlled, and managed by Larry Fink who squarely supports the American Democratic Party, and is certainly no fan of President Trump. The Above is captioned from Blackrock’s February 2018 Market Outlook. In other words – if one of the biggest non-supporters of the US President can check his personal political perspective at the door, then maybe your manager should do so too.

  As well, there are countless other company specific data points all supporting the same effect – people everywhere are receiving back more money due to the Trump Tax Cuts.

  Now, it’s also rather important to understand the significance of these tax cuts from a global perspective. Understand that America is a pretty big butterfly – and now that it’s flapping its enormous economic wings, the effect will absolutely be felt around the world.

  For starters, and to really gauge the effect of the US tax cuts, simply listen to the response from America’s economic competitors and you’ll find never ending cries of unfairness.

  

  * * *

  Go to where the puck will be

  President Trump may be many things. But make no mistake, he is a business person who understands the art of a competitive advantage.

  The rest of the world (and especially Europe, and Canada) pushes higher taxes on individuals and businesses as a way to pay for high-cost, government welfare states. Since all multi-national companies are profit seekers, establishing various business centers in low cost jurisdictions has always been (and always will be) a rational business strategy.

  And, depending upon your perspective, it gets better (or worse). Not only is America lowering taxes; it is also lowering the source of the biggest corporate headaches and grief in the real world – bureaucracy and regulations. And considering the European Union is the undisputed champion of rules, regulations and policies – the mere thought of operating in a jurisdiction with less (instead of more) is enough to make even the French take notice.

  It should be clear that the call for lower taxes and less regulatory/bureaucracy demands, is at the very least forcing companies to have meetings and discussions about possibly relocating or making capital investments in America.

  While Europe & Canada are really worried about being less competitive, China has a completely different reason to worry. China runs an enormous trade surplus with the United States.

  This means China sells more stuff to Americans than what Americans sell to the Chinese. And years of doing this means China has accumulated over $1.2 Trillion in US Treasury Bonds.

  Some believe China is on the verge of selling its Treasury holdings, which would cause the USD to decline sharply.  These people believe China is fearful of deteriorating American fiscal positions as well as the desire to dethrone the US and become the world’s reserve currency.

  This is wrong.

  In fact, China fears the exact opposite. The Chinese are incredibly worried that America’s new approach to trade combined with lower taxes and less regulatory hurdles make it a prime destination for foreign capital that will actually siphon even more Chinese private capital out of the country and into America.

  This of course would weaken the Yuan, and force China’s central bank to increase interest rates and impose even more strict capital controls.

  Anyone who is short USD for Yuan is sitting on a whole lotta risk.

  This is great news, unless it isn’t

  In addition to the tax cuts, the other point of contention towards America’s new trade policies focuses on protectionism. Effectively, going forward America will now do trade deals that are economically profitable.

  While this may sound like a novel concept – the European Union (EU) is especially enraged at this new positioning. In some ways you can’t blame them. After all, for over 100 years America has used economic policies to further promote and advance their foreign policies.

  Foreign economic losses to achieve foreign political agenda has become indoctrinated within the American political ideology. For America to now change this approach, is unprecedented and should of course rattle the rest of the world. After all – no one likes change.

  Of course, having the EU refer to anyone as being protectionist is perhaps the biggest irony since Alanis Morissette sang about ironies.

  Every country in the world engages in protectionism.

  The French protect their companies from foreign takeovers. Canada has been protecting and subsidizing Bombardier for years. And then there’s China and their internally promoted “Made in China 2025” industrial policy which clearly encourages domestic over foreign.

  The uproar over the paradigm shift in American trade policy is being sold as protectionism – which is branded as being politically incorrect and unacceptable. Whereas in reality, the only bad is from the perspective of non-American companies and nations who will gradually make less money from American trade.

  As investors, one should simply accept it is happening and adjust accordingly.

  In the end, with American corporate taxes now lower than that demanded in Europe and Asia – investors should expect a flood of business and investors flowing into the United States. Yes this is exciting stuff, yet don’t get too excited.

  All of this is great news, unless of course you are heavily invested in bonds, or worse still – you are a bond manager, or a company or country who is heavily dependent upon continuous borrowing to survive.

  Serious investors ask serious questions

  The tax cuts are not the panacea for all wrongs in the world. In fact, the entire act merely provides the world with one final sugar high, delaying the inevitable – a crisis in the bond market. The Debt Machine Critics of the Trump Tax cuts focus on the expectation for the American debt pile to increase further and therefore causing a debt crisis for the country.

  This view is correct. Yet, the irony here is that these very same critics of America’s debt balances are either quite ignorant of the debt balances of other countries, or worse still – they choose to ignore it. Despite anyone’s personal view of the world, they must understand, accept, and acknowledge that the entire planet runs off the same yield curve.

  What we mean by this is that all global interest rates are a function of US interest rates. When interest rates are established in Europe, Asia, South America, and anywhere else that borrows – the market interest rate is established as a spread (higher or lower) relative to interest rates offered in the US Treasury bond market.

  Next up – know that sovereign debt levels are compared to each other on a relative basis. In other words, America’s debt balances may be bad, horrible, disastrous or whatnot, but they are actually less bad, not as horrible, and slightly less disastrous than other country’s.

  Sadly, those who are bearish on the USD, ignore or have completely forgotten that the Americans have another incredible advantage over all other countries.  With the USD dominating world trade and world debt issuance, the United States Treasury has a never ending private sector AND public sector demand for all bonds that it issues.

  No other country or currency bloc has this advantage. Put another way, when discussing sovereign debt levels, the most important fact to know is how countries are funding their borrowing. In other words – if a country is borrowing all the time, someone else is lending all the time. Since we already know who is borrowing, serious investors should naturally be asking – who is lending? Knowing the answer to this question should shine light on why the USD is not headed towards zero (well, not yet anyway – other currencies go there first, thereby causing USD to eventually surge).

  

  In many ways, the absolute level of interest rates are irrelevant. What is relevant is that investors are lined up to lend money to these supposedly dead-beat borrowers. And this is where the USD dooms day hoopla is confused.

  Today around the world, there is an enormous demand for USD and American debt.

  In fact, the demand is so large – the real fear in the world is that there isn’t enough of USD to spread around.

  A recent study by Ilzetzki, Reinhart, and Rogoff shows 60% of all countries in the world use USD as their anchor currency. And better still, this 60% equals over 70% of the global economy.

  

  The amazing thing about this data point, is that it is occurring during a period where the American dominance over global GDP is shrinking. Think about that for a moment. And of even more significance is the fact that #2 in the world is not even close.

  In other words – the last days of the USD dominating the world’s financial landscape can only occur if both the global demand for USD ends AND if there is a reasonable substitute. Ironically, it is the world’s reliance upon USD and USD issued debt that will eventually cause the USD to lose its reserve status.

  This will occur – but first other currencies and sovereign debt will enter crisis first.

  As of writing – the New England Patriots have a better chance of coming back to win the big game, than the USD dominance coming to an end any time soon This isn’t to say USD won’t bounce around in the short-term – all financial markets do this from time to time.

  But it is to say – those who are so painfully focussed every minute of the day on high-lighting any real or perceived flaws in America’s economy, its politics, or its social make-up is looking in the wrong place. To further demonstrate the relative dominance of America consider the following chart which details how global businesses view the United States relative to China.

  This is a survey of 1,300 chief executives from the private sector who always seek to maximize their firm’s profits. Considering all of the negativity surrounding America over the last year, these survey results should grab your attention.

  

  Putting it Together

  To square the peg, investors must make the connection that all of this borrowing by countries, individuals and companies, is achieved by selling bonds.

  And it is the buyers of these bonds that are unknowingly sitting on top of the most explosive financial crisis to hit in our lifetime. The biggest worry and concern in the money world today isn’t tax cuts, trade wars or even the current stock market jitters.

  Instead, the greatest worry that few even know exists is the slowdown of money printing by the world’s central banks.

  In America, the Federal Reserve has already stopped printing money, and in fact now, it is actually reducing the bonds and MBS it acquired over the last 9 years.

  When this is considered, together with the relentless march higher in Fed Funds Rates (over night interest rates), it should be crystal clear why the US is a destination of choice for objective, foreign capital. Europe is a different story. And it’s a story that will not end well.

  The big Canadian, American and Australian banks and their legions of mutual fund sales people have all completely dismissed or worse still, missed, the biggest risk story in our financial lifetime.

  In some ways, they can be forgiven. After all, their relentless focus on short-term earnings, protecting margins, and meeting regulatory requirements are all to the detriment of actually seeing the risk in front of them – is a sad song that plays over and over again.

  They all missed the Tequila crisis, the Asian crisis, the Ruble crisis, the LTCM crisis, the Tech crisis, and the Housing crisis. Expecting them to see, understand and proactively protect their millions of investors exposed to the bond market is perhaps a bit too much to ask.

  In the bond world, the bad news today is that long-term interest rates have already begun to leap higher, leaving a wake of losses and despair.

  

  The good news is that IceCap’s forecast for higher long-term rates has been 100% correct. As well, anecdotal evidence shows that an increasingly higher number of other boutique investment managers now share the same view.

  Protection against near-certain losses in the bond market is available.

  There’s even better news – the current bad spell for the bond market is entirely due to the expectation that inflation will be higher. Our expectation for surging long-term interest rates will come from a re-escalation of the sovereign debt crisis. This recent bad spell for the bond market is a nothing burger.

  The real show hasn’t even started.

  Yet, to demonstrate just how sensitive bond investors are to rising long-term interest rates, consider the below chart.

  

   

  The biggest financial crime to ever occur in our lifetime wasn’t the Madoff scandal. Nor was it the scandals from Enron or WorldCom.

  Instead, the biggest (alleged) financial crime was the decision by the central banks in USA, Australia, Canada, Britain, Europe, Norway, Switzerland, Sweden, Denmark and Japan to socialise the global debt problem.

  To refresh your memory, in response to the 2008 crisis, all central banks lowered interest rates to zero or negative rates with the hope that it would stimulate economic growth.

  The financial crime with this scheme, was the negative effect it had on the traditional savers and low risk investors around the world.

  Now, nearly 10 years later we are starting to see where the risk lies, and the downside of what is to become.

  Global long-term interest rates reached record lows and have now begun to swing higher. The problem with higher long-term interest rates is that they have a significant negative effect on bond strategies and mutual funds.

  This chart shows how a mere 0.5% rise in long-term rates affects bond investors and their ability to recapture these losses with interest/coupons received. From the chart you’ll see how a 0.5% increase in long-term rates in America, and Canada will force bond investors to wait over 2 years to recover those losses with interest payments received.

  Think about that for a moment. You are a cautious investor, dependent upon bond interest to buy groceries and gas, and then suddenly you realize you just lost 2 years worth of income while invested in supposedly the safest investments in the world.

  For France, Sweden, Finland, Austria, Belgium, and the Netherlands the financial crime is even worse. In these countries, a mere 0.5% increase in long-term interest rates means 6 to 9 years to recoup your losses. Yet, this is nothing compared to the devastation awaiting the Germans.

  In Germany, the self-proclaimed bastion of conservative investing and financial management, investors here only break even after nearly 12 years of coupon clipping. And all of this assumes long-term rates ONLY increase 0.5% and stay there forever.

  Which of course, should lead you to ask – What happens if long-term rates rise more than 0.5%? Two things actually. To start, global losses from bonds will be measured in the TRILLIONS.

  To end, and this is the risk few are talking about – countless individuals, companies and worst of all – governments, will have to pay exceedingly more to borrow money from investors.

  And that’s if they are able to borrow at all.

  In fact, the threat of rising long-term interest rates has already hit markets and headline news.

  Due to the medias’ and the big bank mutual fund machines’ obsession with stock markets, one has to look a bit harder for the evidence that is lying before you in plain sight.

  More in the complete IceCap presentation (pdf)

  

• How Cryptocurrencies Spawned A New Media Industry

  In the span of just a few years, Blockchain and cryptocurrencies have taken financial markets by storm. Blockchain technology has already created new ways of financing companies. Bitcoin is gradually changing the rules of the game in the financial market: over $3.7 bln was raised by 372 ICOs between 2015 and 2017, meanwhile despite recent volatility, crypto currencies have been some of the best investments in recent years, and according to JPM, on a risk-adjusted basis, bitcoin has generated higher returns than the S&P.

  

  In the media industry where rapid changes have become part of everyday business, traditional sources were unprepared to work with the crypto community. As a result, a large field for media newcomers appeared. Crypto holders are their audience, crypto companies and ICO issuers are their clients.

  Below we take a quick look at some of the most popular new crypto media outlets.

  Blockonomi

  • Website: blockonomi.com; Twitter: @blockonomi
  • Audience: 2.4 mln visits per month according to SimilarWeb
  • History: Blockonomi was launched in 2017 by Kooc Media company. They are focused on writing reviews of companies and beginners guides, not news articles.
  • Editorial policy: No information. According to Blockonomi’s press-kit, the media accepts fiat only.
  • Business-model: Revenue from advertising.

  The Merkle

  • Website: themerkle.com; Twitter: @themerklenews
  • Audience: 4.8 mln visits per month according to SimilarWeb
  • History: San-Francisco-based The Merkle was founded in June 2014. It is led by Mark Arguinbaev who also founded TheVRBase, media source about the VR industry.
  • Mission statement: The Merkle publishes cryptocurrency news and a variety of educational articles relating to Bitcoin.
  • Editorial policy: No information. The company accepts Bitcoin for press-releases, but do it through BitPay’s service, which turns Bitcoin into dollars.
  • Business-model: Revenue from advertising.

  Bitcoin Magazine

  • Website: bitcoinmagazine.com; Twitter: @BitcoinMagazine
  • Audience: 2.3 mln visits per month according to SimilarWeb
  • History: Bitcoin Magazine was the first magazine dedicated to cryptocurrency. It was founded by  Mihai Alisie and Vitalik Buterin, the creator of Ethereum, in 2012. They published the first issue in May 2012 and later joined forces with Coin Publishing LLC. In 2015 Bitcoin Magazine was acquired by BTC Media LLC, which also publishes Bitcoin, Let’s Talk Bitcoin and Distributed. Bitcoin Magazine ceased publication of their print magazine and currently posts content online. In total 22 magazine editions were issued.
  • Editorial policy:  Bitcoin Magazine’ writers are allowed to hold cryptocurrencies, but they have to disclose the information about their crypto investments.
  • Business-model: BTC Media LLC earns money on advertising and selling crypto fans’ stuff.

  Bitcoinist

  • Website: bitcoinist.com; Twitter: @bitcoinist
  • Audience: 5.1 mln visits per month according to SimilarWeb
  • History: Bitcoinist was founded in 2014 and is based in Budapest, Hungary. The media focus on the latest news alongside interviews, reviews and op-eds. It has its own ICO listing and list of online casinos.
  • Editorial policy: All writers are paid in Bitcoin. Articles include a disclosure note if the author is a holder of the given coin. Bitcoinist accepts payment in bitcoin from its sponsors and advertisers, but do not trade or invest in cryptocurrency markets.
  • Business-model: Revenue from advertising.

  NEWSBTC

  • Website: newsbtc.com; Twitter: @newsbtc
  • Audience: 3.4 mln visits per month according to SimilarWeb
  • History: London-based NewsBTC is working since October 2013. It publishes news, interviews, technical and price analysis. The media has its own cryptocurrencies price charts, casino listing, the list of hot ICOs and the calendar of crypto events.
  • Editorial policy: No information.
  • Business-model: NEWSBTC earns money through advertising. Moreover, the company has franchise program: individuals and businesses can gain exclusive rights to use the NewsBTC brand and build up on it in their region.

  CCN (Cryptocoinsnews)

  • Website: ccn.com; Twitter: @CryptoCoinsNews
  • Audience: 16.7 mln visits per month according to SimilarWeb
  • History: Oslo-based media CryptoCoinsNews was founded in September 2013. The editorial team is composed of freelance writers. In November 2015, CryptoCoinsNews and its sister-site Hacked offered a five Bitcoin reward for information that leads to the arrest of an extortionist targeting them with a distributed denial of service attack. On Dec. 18, 2017, Cryptocoinsnews.com was redesigned and now it’s site transfer visitors on new domain name ccn.com.
  • Editorial policy: No information. The team accepts Bitcoins for advertising.
  • Business-model: Revenue from advertising. Clients can place banner, sponsored story and press release or order newsletter ad.

  Cointelegraph

  • Website: cointelegraph.com; Twitter: @Cointelegraph
  • Audience: 26.2 mln visits per month according to SimilarWeb
  • History: Cointelegraph is a London-based news site founded in October 2013. It is a source of cryptocurrency news, with its interviews and analysis of crypto market. The media has different services: Cryptocurrency Price Index, ICO calendar and exchange scanner. Cointelegraph also hosts BlockShow conferences, international events for showcasing established Blockchain solutions.
  • Editorial policy: Cointelegraph has no publicly stated policy on whether its writers can own Bitcoin. Public statements by its writers suggest at least some of them were paid in Bitcoin. The media also accepts Bitcoin for advertising.
  • Business-model:
    • Media group: Cointelegraph started from banner placements but now they have a whole media group. According to CEO Victoria Vaughan, Cointelegraph’s clients were interested in advertising on various resources, so the team started offering sales services to the owners of other sites.
    • Franchise: Cointelegraph gives local entrepreneurs the right to use its brand and editorial materials, as well as sales and marketing support.
    • Events: Cointelegraph also earns money by arranging BlockShow conferences and industry meetups.

  Bitcoin.com

  • Website: bitcoin.com; Twitter: @BitcoinCom
  • Audience: 26.9 mln visits per month according to SimilarWeb
  • History: Bitcoin.com originally is not a media source but a company that provides services, such as its own Bitcoin wallet, buying and selling cryptocurrencies and choosing a crypto wallet, Bitcoin mining pool, Blockchain explorer, Bitcoin forum, pricing charts, store and online games casino. The company also provides news, features and newcomers’ guides. It produces its own podcast. The source was founded in 2015 by Roger Ver, who is known as Bitcoin’s first angel investor. Ver is also famous for being a strong supporter of Bitcoin Cash.
  • Editorial policy: There is no information regarding the authors’ ownership of crypto. Obviously, the company is directly interested in the growth of the cryptocurrencies.
  • Business-model: Bitcoin.com earns money through services and advertising.

  Coindesk

  • Website:  coindesk.com; Twitter: @coindesk
  • Audience: 41.9 mln visits per month according to SimilarWeb
  • History: CoinDesk was started in 2013 by Shakil Khan, Student.com co-founder. The media provides news, industry research and guides for those who new to digital currencies. Bitcoin Price Index was launched in July 2013. Since 2014 the media publishes The State of Blockchain, an analysis on the growth of Blockchain technology. Coindesk also hosts Consensus summit in New York City every year since 2015. The company was acquired by Digital Currency Group (DCG) in January 2016 for an undisclosed amount. DCG owns and operates Bitcoin brokerage firm, Genesis Trading and asset management firm Grayscale Investments, which manages the public Bitcoin investment vehicle, the Bitcoin Investment Trust.
  • Editorial policy: CoinDesk employees are not restricted from owning or investing in digital currencies or Blockchain-based projects. But its contributors must disclose this information in their user bios. According to Coindesk’s Editorial Policy, the company doesn’t trade or invest in digital currency markets. However, CoinDesk accepts payment in Bitcoin. They argue that the company works with Bitcoin payment processors to instantly convert those funds to US dollars.
  • Business-model: CoinDesk earns money through events, research and advertising.

  

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• Ed Curtin: The Coming War To End All Wars

  Authored by Edward Curtin via GreanvillePost.com,

  “The compulsive hatred of Putin by many who have almost zero idea about Putin or Russian history is disproportionate to any rational analysis, but not surprising.

  Trump and Putin are like weird doppelgangers in the liberal imagination.”

  —John Steppling, “Trump, Putin, and Nikolas Cruz Walk into a Bar”

  

  The Trump and Netanyahu governments have a problem: How to start a greatly expanded Middle-Eastern war without having a justifiable reason for one.  No doubt they are working hard to solve this urgent problem.  If they can’t find a “justification” (which they can’t), they will have to create one (which they will).  Or perhaps they will find what they have already created.  Whatever the solution, we should feel confident that they are not sitting on their hands. History teaches those who care to learn that when aggressors place a gun on the wall in the first act of their play, it must go off in the final act.

  These sinister players have signaled us quite clearly what they have in store.  All signs point toward an upcoming large-scale Israeli/U.S. attack on Lebanon and Syria, and all the sycophantic mainstream media are in the kitchen prepping for the feast.  Russia and Iran are the main course, with Lebanon and Syria, who will be devoured first, as the hors d’oeuvres.  As always, the media play along as if they don’t yet know what’s coming.  Everyone in the know knows what is, just not exactly when.  And the media wait with baited breath as they count down to the dramatic moment when they can report the incident that will compel the “innocent” to attack the “guilty.”

  Anyone with half a brain can see the greatly increased anti-Russian propaganda of the past few weeks.  This has happened as the Russia-gate claims have fallen to pieces, as former CIA analyst Raymond McGovern, the late Robert Parry, Paul Craig Roberts, and others have documented so assiduously.  All across the media spectrum, from the big name corporate stenographers like The New York Times, CNN, National Public Radio, The Washington Post to The Atlantic and Nation magazines and other “leftist” publications such as Mother Jones and Who What Why, the Russia and Putin bashing has become hysterical in tone, joined as it is with an anti-Trump obsession, as if Trump were a dear friend of Putin and Russia and wasn’t closely allied with the Netanyahu government in its plans for the Middle-East.  As if Trump were in charge. “Russia Sees Midterm Elections as a Chance to Sow Fresh Discord (NY Times, 2/13), “Russia Strongman” (Putin) has “pulled off one of the greatest acts of political sabotage in modern history (The Atlantic, Jan. /Feb. 2018), “”Mueller’s Latest Indictment Shows Trump Has Helped Putin Cover Up a Crime” (Mother Jones, 2/16/18), “A Russian Sightseeing Tour For Realists” (whowhatwhy.com, 2/7/18), etc.   

  I am reminded of the turn to the right that so many “muckrakers” made during and after WW I.  Afraid of a revolt from below, bewitched by their own vision to articulate the world’s future, heady over their own war propaganda, and wanting to be on the safe side of the government crackdown on dissent (The Espionage Act, the Palmer Raids, etc.), many progressives of the era embraced a jingoism similar to the anti-Russia mania of today.

  Only someone totally lacking a sense of humor and blind to propaganda would not laugh uproariously at today’s media nonsense about Russia, but such laughter would be infused with a foreboding awareness that as the Middle East explodes and U.S./NATO backed Kiev forces prepare to attack the Donbass region of eastern Ukraine, the world is entering a very dangerous period.  And of course Trump has said, “The U.S. has great strength and patience but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea.”  Totally destroy 26 million human beings.  While his bully buddy in Israel, Benjamin Netanyahu, recently said at the Munich Security Conference that Iran is “the greatest threat to the world,” compared it to Nazi Germany, and claimed it was developing ballistic missiles to strike deep into the United States.  “Iran seeks to dominate our region, the Middle East, and seeks to dominate the world through aggression and terror,” he said.  And he vowed to act against Iran and anyone who supported it – i.e. Lebanon and Syria (Russia). 

  Putin also, like all the mythic bogeymen, is portrayed as the new Hitler intent on conquering the world.  If the American public wasn’t so “sophisticated” and adept at seeing through lies – pause and laugh – we could expect some World War I posters with Russian soldiers (like The Huns), sharp teeth glistening, gorilla strong and beastly, holding American women in preparation for the kill or rape.

  Last year, when Oliver Stone did the world the great service of releasing his four-part interview with Putin, he was bashed, of course.  Just as he was with his film JFK, the only movie in history to be reviewed and panned one year before its release by a Washington Post reviewer who didn’t see the movie but had a purloined preliminary script as his source.  The Washington Post: the object of the latest film drivel, The Post, portraying it falsely as the savior of the nation through the publication of the Pentagon Papers (which is another story).  The Washington Post – the CIA’s dear friend.

  

  In his Putin interviews, Oliver Stone, a man of truth and honor, lets viewers catch a glimpse of the real Vladimir Putin.  Of course Putin is a politician and the leader of a great and powerful nation, and one should receive his words skeptically. But watching Stone interview Putin for four hours, one comes away – but I doubt few have watched the four hours – with a reasonably good sense of the man. 

  And putting aside one’s impressions of him, he makes factual points that should ring loud and clear to anyone conversant with facts. 

  One: that the U.S. needs an external enemy (“I know that, I feel that.”).

  Two: the U.S.A. engineered the coup d’état in the Ukraine on Russia’s border. 

  Three: the U.S. has surrounded Russia with US/NATO troops and bases armed with anti-ballistic missiles that can, as Putin rightly says to Stone, be converted in hours to regular offensive nuclear missiles aimed at Russia. 

  This is a factual and true statement that should make any fair-minded person stand up in horror.  If Russia had such missiles encircling the United States from Cuba, Mexico, and Canada, what American would find it tolerable?  What would CNN and The New York Times have to say?  Yet these same people readily find it impossible to see the legitimacy in Russia’s position, resorting to name calling and illogical rhetoric. Russia is surrounded with U.S/NATO troops and missiles and yet Russia is the aggressor.  So too Iran that is also surrounded.  These media are propagandists, that’s why.  They promote war, as they always have.  They are pushing for war with Russia via Syria/Lebanon/Iran and Ukraine, and they are nihilistically demonizing North Korea (as part of Obama’s pivot toward Asia and the encircling of China, as John Pilger has brilliantly documented in his film The Coming War on China) in what can only be called a conspiracy to commit genocide, as Dr. Graeme MacQueen and Christopher Black make clear in their Open Letter to the International Criminal Court.

  We are moving toward a global war that will become nuclear if an international anti-war movement doesn’t quickly arise to stop it.  Most people bemoan the thought of such a war to end all wars, but refuse to analyze the factors leading to it. It happens step-by-step, and many steps have already been taken with more coming soon.    It’s so obvious that most can’t see it, or don’t want to.  The corporate mainstream media are enemies of the truth; are clearly part of the continuation of the CIA’s Operation Mockingbird, and those who still rely on them for the truth are beyond reach. 

  Douglas Valentine, in The CIA as Organized Crime, says the CIA has long aimed to use and co-opt the “Compatible Left, which in America translates into liberals and pseudo-intellectual status seekers who are easily influenced.”  And he adds that the propaganda is not just produced by the CIA but by the military, State Department, and red, white, and blue advertisements that are everywhere.  Nothing has changed since the Church Committee hearings in the 1970s.  Valentine adds:

  All of that is ongoing, despite being exposed in the late 1960s.  Various technological advances, including the internet, have spread the network around the world, and many people don’t even realize they are part of it, that they’re promoting the CIA line.

  “Assad’s a butcher,” they say, or “Putin kills journalists,” or “China is repressive. 

  They have no idea what they’re talking about but spout all this propaganda. 

  William Blake said it truly:

  In every cry of every Man,

  In every Infants cry of fear,

  In every voice: in every ban,

  The mind-forg’d manacles I hear 

  How to break the chains – that is our task.

  

• And America's Dirtiest Metropolis Is…

  Well, you guessed it, New York City of course – this dirty city has more pests and litter than any other large metropolis in the United States, according to newly compiled government data by the cleaning-services company Busy Bee.

  

  The cleaning company ranked 40 large cities across the United States based on data from the Environmental Protection Agency (EPA), the American Housing Survey (AHS), and the U.S. Census Bureau to create an informative infographic to determine just how shitty America really is. Factors include litter, pests such as mice and cockroaches, population density, particulate matter air pollution, and nitrogen dioxide air pollution.

  The City that Never Sleeps ranked the highest in three out of five categories, placing it as shittest-city-in-the-nation of 427.9 on Busy Bee’s “dirtiness index.” The next closest competitor for all the wrong reasons is Los Angeles, which has a dirtiness index of 317.8. To complete the top five list, the remaining dirtiest cities are Chicago, Philadelphia, and San Francisco.

  

  Busy Bee Cleaning Service is one of New York’s premier commercial cleaning services, but in their latest report, they might have angered the millennial generation who just moved out of their parent’s basements into overpriced homes across America’s inner cities, to only now discover their new environment is trash. Busy Bee does a great job tearing apart the narrative that everything is awesome in America’s inner cities, and perhaps, the ‘City that Never Sleeps’ should take a night off to realize just how much trash its citizens are living in. The report further verifies that America’s empire is rotting from within, as its culture and lifestyles from its major metropolises are producing a toxic environment that is softly killing its citizens from within.

  The New York Patch highlights just how toxic these inner cities are:

  Some 904,000 homes in the city have litter on nearby streets or properties, and nearly 2.3 million homes have seen signs of mice, rats or cockroaches in the past year, Busy Bee’s review shows. New York also ranks first for population density, with 28,000 people per square mile.

  New York has less air pollution than some other large cities. EPA figures show the city’s air has a one-hour average concentration of 60 parts per billion of nitrogen dioxide, a harmful chemical that can cause breathing problems. Los Angeles leads the nation in that category, with a one-hour average of 77 parts per billion.

  Pittsburgh is the worst city when it comes to particle pollution, which the EPA says can give harmful substances a way in to a person’s lungs or bloodstream. The Steel City shows a 24-hour average concentration of 40 micrograms of particles per cubic meter of air, double New York City’s average of 20 micrograms per cubic meter of air.

  Even if New Yorkers get used to the grime, that doesn’t change the fact that the city is still far dirtier than many others. Take Jacksonville, Florida, which was the cleanest city Busy Bee reviewed. Just 44,000 homes there reported litter and 90,000 had evidence of pests, the company’s review shows.

  

   

  

• Newsflash: Teachers Are Already Armed!

  Authored by Tom Mullen via The Foundation for Economic Education,

  Maybe we should just stop disarming them…

  

  In the wake of yet another mass shooting in a public school, a host of familiar recommendations have resurfaced about how to “prevent this from ever happening again.” Predictably, both conservatives and liberals are looking to the government for a solution.

  Americans have somehow arrived at a point where they cannot conceive of human action that is not either prohibited, mandated, or, at the very least, centrally planned.

  Just Like Drugs

  The first problem is the goal. It is absurdly unrealistic to believe any set of rules is going to prevent anything from “ever happening again.” If you doubt that, I invite you to examine the war on drugs. Many decades ago, politicians decided American citizens taking heroin was never going to happen again. They banned that drug completely. You aren’t allowed to possess or sell it under any circumstances. Not after a background check. Not with a doctor’s prescription. Not at all.

  Today, that drug is at the center of what the same government calls an opioid “epidemic.” Epidemic. So much for heroin overdoses “never happening again.”

  Yet, despite this evidence, liberals still suggest what they’ve always suggested: further restrictions on gun ownership. A good portion of them believes that only government employees charged with national defense or public safety should be allowed to carry guns. Ban them completely for the civilian population, they say, and mass shooters won’t be able to obtain them.

  You know, just like drugs.

  Arm and Train?

  The conservative answer to liberal prohibition (oxymoron?) is to “arm and train the teachers.” While no one has come out and suggested mandating teachers carry firearms or be trained in using them, every suggestion seems to suggest “we” (i.e., the government) need to do the arming and training.

  Here’s a little newsflash for both sides: the teachers are already armed.

  No, not every teacher carries firearms and perhaps not as high a percentage of teachers do so as the percentage of the general population that carries. But there are over three million teachers in public schools and some percentage of them have concealed carry permits. It would be unlikely that there aren’t at least some members of every faculty in America that have a concealed carry permit.

  It’s not a matter of arming teachers, but rather to cease disarming them when they report to work.

  To the extent conservatives acknowledge this option at all, they seem trapped in the same box as liberals in feeling the need to point out there are teachers who are also retired military, in the reserves, or former law enforcement officers. That’s probably true. But there are also tens of millions of Americans, and likely tens of thousands of teachers, who both own firearms and never served in the military or police.

  An armed civilian population constitutes that “well-regulated militia” the 2nd Amendment refers to. What makes a militia a militia is the members not being part of the regular army.

  Four Little Words

  I’ve often said the greatest danger to liberty is not a foreign army, terrorists, or even a homegrown tyrant. It is four little words. And they aren’t, “Up against the wall!” That comes later.

  They are, “Something must be done.”

  Instead of the government “doing something” about mass shootings, it should stop doing something. It should stop prohibiting teachers from carrying into school the same firearms they are licensed and trusted to carry in most other places. It is the path of least resistance to providing realistic protection for schoolchildren. It requires no one to do anything they aren’t already doing.

  No, this will not ensure that mass shootings “never happen again.” Nothing will. And not every teacher with a firearm, confronted with the pressure of an active shooter situation, will calmly dispatch the shooter. But as we saw in Parkland, FL, neither will every trained police officer.

  The Failures of Government

  Broward County Sheriff’s deputy Scot Peterson was assigned to the school as a resource officer and was on the school grounds during the entire incident. He heard the shooting inside the school, but videos show he remained outside for four minutes during the six-minute mass shooting, which claimed seventeen lives.

  Peterson wasn’t alone. Three other armed law enforcement officers were on the scene and failed to enter the school before backup arrived.

  This wasn’t the only government failure in this case. Local police had been called to Nikolas Cruz’s home thirty-nine times over the past seven years, according to documents obtained by CNN. Members of the family he lived with after his mother’s death report he routinely introduced himself as “a school shooter.”

  It wasn’t just local police who dropped the ball on Cruz. The FBI was warned multiple times about Cruz, including by “an unidentified woman close to Cruz” who called the FBI a month before the incident, warning of her fears he would “get into a school and just shoot the place up.” The FBI was also called in September 2017 by a video blogger who said a user named “nikolas cruz” had posted a comment on one of his videos, saying, “I”m going to be a professional school shooter.”

  Hopefully, this will inspire more than mere outrage at government incompetence. Americans should take a long, hard look at how much of what should be personal and private they have allowed government to become involved in and how badly it has failed them. And if government can’t run education or health care, it certainly shouldn’t be trusted with something as important as the defense of one’s own life.

  Let’s Try Freedom

  Thomas Paine began his pamphlet, Common Sense, widely credited with convincing a critical mass of colonists to support American independence, by making a crucial distinction:

  “SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins.”

  He went on to say, “Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state an intolerable one.”

  It’s time Americans remembered the miracles possible within that blessing called society and the limitations of an institution based on nothing more than consolidated brute force. Mass shootings are horrible situations under any circumstances, but they may be rendered less horrible if the victims have options other than to call the government and wait.

  Repealing the federal Gun-Free School Zones Act will at least let states consider giving the right and the responsibility for self-defense back to teachers and other school employees. Allowing them the option to carry firearms will both act as a deterrent to future shooters and give teachers a reasonable chance to defend their students and themselves the next time the need arises.

  The government has had its chance. It has failed. It’s time to try a little freedom.

  

• Breaking Ground? Trump Border Wall Begins Construction In Calexico

  U.S. Customs and Border Protection (CBP) officers started construction Wednesday to replace a decaying stretch of a 2.25-mile Mexico–United States barrier, swapping it out for a new and improved 30-foot high bollard style wall.

  This is the first border wall contract awarded in the Trump administration outside the eight prototypes that were built last year near Tijuana, Mexico.

  

  According to CBP Public Affairs, the 2.25-mile project will stretch from the Calexico West Port of Entry extending westward beyond the Gran Plaza Outlets and include all-weather roads paralleling the new wall.

  KESQ-TV, an ABC-affiliated television station for the Coachella Valley licensed to Palm Springs, used their Newsdrone to survey the area where the new wall construction is underway.

  

  CBP states that the construction is located in the El Centro Sector, which is one of the “Border Patrol’s highest priority projects.”

  The current barrier in Calexico was erected several decades ago from recycled scraps of metal and has been proven to be widely ineffective in preventing illegal cross-border activities.

  

  The unlawful cross-border activities in the El Centro Sector are stunning. CBP provides a breakdown of seizures made by officers for the fiscal year 2017:

  The El Centro Sector apprehended 18,633 illegal aliens, seized 5,554 pounds of marijuana, 483 pounds of cocaine, and 1,526 pounds of methamphetamine and 2,521 ounces of heroin. During that fiscal year, there were 21 assaults against El Centro Sector agents.  

  CBP spokesman Carlos Diaz told the Washington Examiner on Wednesday, the project was fully funded by fiscal 2017 appropriations, which will also fund projects in Southern California, New Mexico, and in the Rio Grande Valley in Texas.

  Back in November, the Trump administration awarded the $18 million contract to replace the barrier in Calexico to SWF Constructors of Omaha, Nebraska.

  And lastly, the administration is trying to find $18 billion in funding to extend and complete the Mexico-United States border wall. Recent funding efforts to pay for the entire stretch failed last week in the Senate.

  The one question we ask: Will the Trump administration have the border walls erected in time to thwart a Mexican drug cartel war spillover into the United States? Don’t be shocked if the Trump administration labels the drug cartel wars just south of the border as a national security threat. Perhaps, that would be enough to spur emergency funding to pay the entire stretch…

  

• Venezuela's Petro: Stable Coin For Crypto-Economy Or Illegal Oil Futures?

  Authored by Thomas Meyer via CoinTelegraph.com,

  Starting in late 2017 Venezuela’s President Nikolas Maduro began expanding heavily into media space in an attempt to promote a new payment instrument– the government-issued cryptocurrency Petro.

  On Feb. 20 the pre-sale of Petro was launched and has already raised $735 mln, according to Maduro’s Twitter. Total amount of PTR issued for sale is 100 mln and is worth $6 bln. The pre-sale will end on March 19.  

  The following questions are raised by this controversial project: what is Petro in an economic context and what would be its possible real use in the global economy? Is it a cryptocurrency, a stable coin, oil futures, new government debt instrument or something else? What is its possible economic impact? Which legal issues could follow?

  

  image courtesy of CoinTelegraph

  Having carefully studied the Petro white paper and other data available, we present below the results of the analysis.

  Venezuela now

  According to Maduro, Petro being backed by the Venezuelan crude oil is one of the best ways to use new technologies to restore the financial condition of Venezuela. For many years, the country has been suffering from hyperinflation by thousands of percent per year, while US sanctions cut off Venezuela from international capital markets.

  A huge deficit of US dollar monetary supply has led to the absence of basic goods and a tenfold price discrepancy between official and black market currency exchanges for the Venezuelan bolivar and US dollar. That said, this financial catastrophe coincides with Venezuela’s status as possessing the largest volume of readily retrievable proved oil reserves as assessed by OPEC, being well ahead of well-known oil producers such as Saudi Arabia, Kuwait, and others.

  But it seems even more alarming news are boiling up. The US administration was urged to impose a full embargo on Venezuelan oil in the near future. According to export statistics, US is the main market for Venezuelan oil and a primary source of ‘hard currency’- US dollars. The excluding of the market from the oil export structure could lead to an even more dramatic economic situation in the country.

  The idea of issuing cryptocurrency by the government has been suggested before (Japan, UAE, Russia, and some others), but has so far fallen short of authorization by top officials and practical implementation.

  Petro has received official recognition from the Venezuelan government. President Maduro has signed a white paper clearly specifying the conditions and dates of the tokensale. Its activity is aimed at both internal and external markets and carried out at ALBA (Bolivarian Alliance for the Peoples of Our America) and OPEC (Organization of the Petroleum Exporting Countries) levels as well.

  El Petro white paper

  The original white paper, published on the official website of Venezuela’s government describes the process of issuing Petro. The initial disbursement will be made on the Ethereum platform as a standard ERC20 token. It also states that the Petro price will be correlated with one barrel of Venezuelan crude oil.

  

  The basic items of Petro are mentioned in the white paper as follows: (all the information in this table is the white paper summary and the details are stated as they are in the original document):

  ---

  Petro: general information

  Petro is not solely a token equal to the raw oil barrel price. They are looking at more broad functioning:

  • A transitory asset for exchange to goods and services, and also fiat money
  • A digital platform for emittance and trade of stable crypto assets backed up by raw minerals
  • A store of savings and an investment tool

  Unfortunately, the Whitepaper is drafted in common language without any detail on an assumed technological base to launch a full-stack digital platform. Plans to develop such a platform are also absent.

  ---

  Petro: initial emission and distribution information

  100 mln coins will be emitted at launch. Their initial distribution is planned as follows:

  • 38.4% presale
  • 44% public sale
  • 17.6% will be stored in possession of Venezuela’s Superintendence of Cryptocurrencies and Related Activities (SUPCACVEN)

  El Petro’s minimum unit is called the ‘mene’ and equals 10-8 Petro. ‘The total emission of El Petro is to be carried out at the initial coin offering,’ further down in the document we find that ‘an additional emission can be made as per the result of El Petro holders vote: 1 coin equals one vote.’

  ---

  Petro: economic use cases

  The project’s architecture is aimed at El Petro’s maximum involvement into settlements between economic agents. The main use cases are as follows:

  • As means of payment for Venezuelan oil via direct exchange of cryptocurrency to real oil dispatch
  • As a legal means of payment on the territory of Venezuela, which allows for tax payments, exactions, duties and official acceptance as the settlement by individuals and businesses. To intensify the use there is a special discount index (Dv)**:

  Acceptance price of petro = PriceOil/Bolivar*(1-Dv)

  **Dv will be at least 10%

  Apparently, this means that paying taxes and any other settlements with state bodies would be at least 10 percent cheaper in El Petro at the current exchange rate than in traditional currency (i.e. in Bolivars).

  In the future, the use of Petro is planned to be expanded into other payment markets promoting its use in the world as a stable currency backed up by a real resource.

  ---

  Petro: legal aspects

  As the document states, Petro will fully comply with Venezuela’s legislation. However, the opposition in the National Assembly publicly claimed that issuing Petro was illegal. Some operations with Petro, such as initial sales, subsequent exchange to oil and other assets at ‘authorized exchange sites’ will be carried out in strict compliance with KYC/AML, yet the standards for these are not stated in the document.

  ---

  Overall the document goes well beyond the scope in which Petro was covered by the media in late December and early January. Earlier it was considered to be simply a cryptocurrency backed up by oil. However, over the course of deeper investigation into the white paper, one could see that it also announces future creation of a platform for e-commodities (digital representation of goods/raw materials), greatly expanding the concept.

  At the same time, some parts of the Whitepaper lack fine details, and some statements are not backed by any sufficient explanation. Some items feature information that could seem contradictory. A more thorough white paper with extra technical details would probably spark much more interest and trust in global crypto community.

  Economic aspects

  Petro could be described as ‘a legal payment instrument’ or ‘a legal tender’ applicable by the government. The concept raises the question of determining the use of a single currency as a legal payment instrument for goods and services to businesses, individuals and the government. This leads to several basic assumptions:

  • Any individual or business must accept this medium of settlement as payment in a private or public transaction

  • All taxes, levies, duties and excise duties as well as other payments to state bodies can be made solely in this currency (currencies)

  In the case of Petro, the government, businesses, and individuals can (but are not obliged) to accept it as the currency for all the payments and levies. Despite the fact that the whitepaper declares the maximum intensification of Petro use – up to the discount index, which actually makes it more beneficial for use on the market compared to the Bolivar – we still cannot confirm that Petro fully corresponds to the concept of a legal means of payment. It is a payment instrument that has the attributes of a legal means of payment but is not necessarily such.

  In reality, the value of emitted currency is to be ‘secured’ by the liability of Venezuelan government on providing the goods, i.e. the oil, and by its acceptance as the payment to state bodies. In theory, Petro looks more like the currency of the gold-standard period that is technically implemented by virtue of Blockchain technology.

  Petro concept

  The concept of Petro seems to be both simple and complicated. Up until now, there has been no precedent of issuing cryptocurrencies with such broad functionality to the mass market by the government. Petro is the ‘intersection’ of several familiar concepts from the world of conventional finance.

  In Venezuela, Petro stands close to the concept of a legal settlement medium, and in global trade, it is basically a conditionally-stable crypto asset (oil also has specific volatility) that is in fact an oil future without a specific delivery date. Petro could also be assessed as an instrument for tax and levies payment with discounts in a concrete jurisdiction (in the ICO world: a token discount on the unique goods or service of the project). From the investors perspective, at the time of running the crowd sale, the purchase of future oil delivery (the futures) is made with the nominal discount.

  New monetary aggregate

  That being said, Petro can be conventionally viewed as a new monetary aggregate in the structure of Venezuelan monetary mass. Unlike the Bolivar, it is expected to be easily converted into the US dollar as well as other currencies, which will help Venezuela in export trade.

  Therefore, it all comes down to ‘a special monetary aggregate for international payments’. Since it is planned to issue 100 mln coins with each coin equal to one oil barrel (~$60), its total capitalization will amount to $6 bln.

  This cost will be actually created during the initial offering with the Venezuelan government receiving several billion of real US dollars from investors. Taking into account the correlation with the oil price and based on the price range starting from 2008 ($30-$150 BBL), we could claim that this monetary aggregate will amount to somewhere between $3 bln and $15 bln. The white paper doesn’t have any grounding on why this specific amount of coins is issued. However, this amount should probably be calculated according to the country’s demand in US dollars and foreign trade transactions.

  Payment in Petro

  From now on by order of Nicolás Maduro the oil state corporation PDVSA is obliged to carry out transactions in Petro. Moreover, all public and private services like hotels or services of the Venezuelan consulates can now legally accept Petro as means of payment. At the same time, the circulation of digital currency has not even started yet, but Maduro is already preparing a full-fledged legislative and actual infrastructure for future acceptance of Petro.

  Questions arise

  Many questions arise upon scrutinizing the project, and finding answers to them might clear up the future of Petro. Here we’d like to list some major concerns:

  1. Is it a currency or an oil future? And to what extent is it legal? Taking into account Venezuela’s condition under economic sanctions, it’s highly unlikely that this monetary tool will be easily accepted by the global community. And if it is not, Petro investors and users could get into trouble with the law in jurisdictions outside Venezuela.

  2. Whats are the risks of money laundering through Petro? There’s a clear possibility that it could be purchased with the funds that were received illegally at crypto exchanges or privately, and then exchanged to oil that can be ‘laundered’ and documented to eventually be sold under above-board business practices in various jurisdictions.

  3. Taking into consideration the political and economic situation in Venezuela and the level of corruption, it’s very likely that KYC/AML could become a rather byzantine procedure. Another question is whether major crypto exchanges would agree to list a token that is contradictory in terms of legal compliance.

  4. The project is initially issued at a digital platform. However, there is zero information on the technical parameters of the future blockchain system.

  5. What is the discount index going to be like? The white paper states that ‘no less than 10 percent’ will be available. This could be a point of leverage for Petro’s popularity in the country.

  6. It should be noted that introduction of Petro could put Venezuelan national currency Bolivar into even more miserable condition.

  7. The issue of additional issuance is not fully transparent. If it is done with consideration to holders’ votes, then apparently the government will profit from accumulating >50 percent of the coins and sooner or later start disseminating whichever amounts it chooses. On the one hand, it is useful for Venezuela’s economy: it could actually put into full swing the printing of ‘hard currency,’ on the other hand, a trust issue could arise.

  To be continued…

  Petro has set a precedent of bringing a cryptocurrency to the market which was created by and government and secured by a physically tangible resource. This instrument features broad functionality that is close to regular money and conventional financial instruments.

  However, at the moment the project raises a lot of concerning questions and provides few answers. It still looks more like a beautifully crafted concept than a real and viable financial instrument which could operate worldwide.

  It should be noted that initially, the cryptocurrency world is in the state of post-industrial economy, i.e. an economy of communities which independently emit the values determining cost on their own. Therefore, any attempt to secure the cost by virtue of some kind of liabilities is pretty risky.  As history shows, the emitters of money like to renege on financial liabilities. Taken Venezuela’s negative reputation on world financial markets, one might think twice about the promise of Petro.

  So the big question is still there: is Petro a stable coin for the world’s crypto economy or merely an illegally emitted oil future? It remains to be seen.

  

• How Long Before Rising Inflation Leads To A Recession: Deutsche Answers

  While inverse vol funds were the immediate catalyst for the February 5 market crash, the market’s recent jittery behavior has coincided, and often been blamed on, the recent uptick in inflation. That said, as Deutsche Bank’s Binky Chadha writes, whether this was cause and effect is debatable. Nonetheless, late in the business cycle with a tight labor market, “strong coordinated growth”, a lower dollar, higher oil prices and a fading of one off factors, all point to inflation moving up.

  As a result, two key questions have emerged: What does higher inflation mean for equities? And how long until higher inflation translates into a recession.

  Here, Deutsche Bank makes some preliminary observations. First, and conceptually, higher inflation is ambiguous.

  From a pricing vs cost perspective, whether higher inflation leads to higher or lower margins depends on the relative strengths of price vs wage and other input cost inflation. It depends on the relative importance of variable vs fixed costs. And on the extent to which corporates can increase productivity in response to cost pressures. It is notable that while markets seem to have been surprised by the recent uptick in wage inflation, corporates have been noting it for at least a year. Finally, inflation does not occur in a vacuum. The drivers of higher inflation matter and when it reflects strong growth, it implies not only higher sales but operating leverage from fixed costs can raise margins and amplify the impact on earnings.

  

  

  In other words, inflation in itself is not a death sentence to bull markets. What is just as important is overall economic growth (rising inflation is benign if overall economic growth is higher), as well as the impact of inflation on profit margins – i.e. the ability to pass inflation through to the end consumer – and most importantly, how the Fed reacts to inflation, or namely does the Fed think it is behind the curve.

  Ultimately, it all boils down to whether future inflation will be higher (or much higher) than currently.

  Here one of the reasons why the Fed has been gingerly hiking rates at a glacial pace in recent years is that persistent inflationary pressures have largely been absent during this bull market cycle. However, recent data points indicate that any inflation surprises over the coming months will most likely be to the “upside.” And, judging by its quotes, the Fed is also taking noticing as well, potentially realizing that it is behind the curve, as highlighted by the change of tone in the quotes below:

  • Nov 1, 2017: “…the Committee is monitoring inflation developments closely”
  • Dec 13, 2017: “…the Committee is monitoring inflation developments closely.”
  • Jan 31, 2018: “The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal.“

  Making matters worse, while the Fed has raised rates 4 times since Sept. 2016, increasing the discount rate by 1.00%, the 2Y Tsy has increased by 1.70% over the same period, suggesting that bond vigilantes see the Fed as behind the curve, literally.

  Furthermore, as Investec points out in a recent note, although both headline and core inflation appear tame – a key leading indicator from the New York Fed, the Underlying Inflation Gauge (UIG), is pointing towards increased risks ahead, having hit 3.00% in January, up from 2.94% in December and the highest level since 2007.

  

  Furthermore, as Investec adds, the UIG has proven especially useful in detecting turning points in inflation trends, and has shown high forecast accuracy when compared with core inflation measures. As shown in the chart below, the UIG has been indicating far higher levels of inflationary pressure relative to Core CPI since over the past year.

  

  The divergence between the core CPI and UIG is notable, and reached a differential in excess of 1% in recent months. Based on historical patterns, such a wide divergence has been followed by increasing pressures in official inflation statistics, prompting the Federal Reserve to become more aggressive in their actions.

  And while one can argue whether higher inflation is bad, one thing is guaranteed: rising interest rates are the nemesis of an aging bull market. Nothing has killed more bull markets than a deteriorating monetary climate with a relentless uptrend in interest rates; in fact, as we have shown previously, virtually every single Fed tightening cycle has always ended with a recession or some “event.”

  

  Once started down the track of tightening, the conclusion seems all but inevitable. Out of 11 past tightening cycles, nine have resulted in a recession while only two created a soft landing that allowed the Fed to ease and avoid a recession.

  Here another observation from the historical record: the Fed has a dismal track record of slowing the economy and at the same time avoiding a full blown recession. As investec ominously points out, “while each cycle has its own unique characteristics, the odds are not favorable that the current Fed tightening cycle is going to end happily for investors.”

  * * *

  Which brings us back to the key question: how long before rising inflation results in a recession?

  For the answer, we go back to Deutsche Bank, which looks at the role inflation has a leading indicator of recession. Specifically, the German bank asks “Is the inflection in inflation a leading indicator of the end of the cycle? How
  long is the lead?” It answer: On average 3 years… but the Fed’s reaction is key. Here are the details:

  If the recent uptick marks the typical mid-to late-cycle inflection up in inflation, how long after did the next recession typically occur? On average 3 years, which would put it in late 2020. But the timing is likely determined critically by the Fed’s reaction.

  Historically, a Fed rate-hiking cycle preceded most recessions since World War II, with recessions occurring only after the Fed moved rates into contractionary territory. Arguably the Fed did this only after it was convinced the economy was overheating and it continued hiking until the economy slowed sufficiently or went into recession.

  

  At the current juncture, core inflation has remained below the Fed’s target of 2% for the last 10 years and several Fed officials have argued for symmetry in inflation outcomes around the target, i.e., to tolerate inflation above 2%. It is thus likely that the Fed will welcome the rise in inflation for now and simply stick to its current guidance, possibly moving it up modestly. It also means that if indeed the Fed intends on running the economy hot, equity investors may want to consider jogging quietly for the exits, especially before the vol-targeting, inverse vol, Risk parities, CTAs and the rest of the systematic funds decide to make another sprint for it.

  

• Eight Sacrilegious Reflections On Russiagate

  Authored by Paul Street via Counterpunch.org,

  The Russians were…flocking to Bernie Sanders Facebook sites, and they were saying to Bernie Sanders supporters… ’if you voted for Sanders, you have to understand Hillary Clinton is crazy, she’s a murderer, she is terrible,’ all kinds of horrible, horrible things, about Hillary Clinton…it was an effort to undermine American democracy and to really say horrible things about Secretary Clinton…we have to say to the Russians. You are doing something to undermine American democracy; you are not going to get away with it. This is a major assault. If you do that there will be severe, severe consequences.

  — Bernie Sanders, Face the Nation (NBC), February 18, 2018

  Neo-McCarthyite liberals and other dismal Democrats are clucking about how Robert Mueller’s indictment of 13 untouchable Russians for “defrauding” the U.S. by buying some Facebook ads and employing some Internet trolls to “say horrible things” (imagine!) about Hillary Clinton (a horrifically bad politician who was accurately described as a “lying neoliberal warmonger” by a leading U.S. left intellectual trying to get leftists to hold their noses and vote “for” her as the lesser evil) “proves” that Russia engaged in relevant meddling to undermine U.S. “democracy” on Donald Trump’s behalf during the 2016 U.S. presidential election.

  

  Please note eight things you will not hear from the Russia-mad Democrats and their many media allies at places like the Washington Post, the New York Times, CNN, and MSDNC:

  1. There is No Real Democracy to Subvert in the United States.

  As the distinguished political scientists Benjamin Page (Northwestern) and Marin Gilens (Princeton) show in their important new volume Democracy in America? What Has Gone Wrong and What We Can Do About It (Chicago: University of Chicago Press, November 2017):

  “the best evidence indicates that the wishes of ordinary Americans actually have had little or no impact on the making of federal government policy. Wealthy individuals and organized interest groups—especially business corporations—have had much more political clout. When they are taken into account, it becomes apparent that the general public has been virtually powerless . . . The will of majorities is often thwarted by the affluent and the well-organized, who block popular policy proposals and enact special favors for themselves . . . Majorities of Americans favor . . . programs to help provide jobs, increase wages, help the unemployed, provide universal medical insurance, ensure decent retirement pensions, and pay for such programs with progressive taxes. Most Americans also want to cut ‘corporate welfare.’ Yet the wealthy, business groups, and structural gridlock have mostly blocked such new policies [and programs].”

  Mammon reigns in the United States, where “government policy . . . reflects the wishes of those with money, not the wishes of the millions of ordinary citizens who turn out every two years to choose among the pre-approved, money-vetted candidates for federal office.”

  Thanks to this American “oligarchy” ( Page and Gilens’ term),  the United States ranks at or near the bottom of the list of rich nations when it comes to key measures of social health: economic disparity, inter-generational social mobility, racial inequality, racial segregation, infant mortality, poverty, child poverty, life expectancy, violence, incarceration, depression, literacy/numeracy, and environmental sustainability and resilience.

  It’s a vicious circle. “When citizens are relatively equal [economically],” Page and Gilens write, “politics has tended to be fairly democratic. When a few individuals hold enormous amounts of wealth, democracy suffers.” Savage inequality and abject plutocracy are two sides of the same class-rule coin in New Gilded Age America.

  Some political scientists have argued that regular elections that generate competitive contests for citizens’ votes are all that is required for a nation to be a democracy. But “elections alone,” Page and Gilens note, “do not guarantee democracy” in a nation where the electoral and policy processes run in grooves made and greased to serve an unelected dictatorship of concentrated wealth.

  Russia didn’t “undermine American democracy” in 2016. There was no real system of popular self-rule in place to subvert. This is, and has long been, a corporate and financial oligarchy.

  2. Interference Made Obvious Sense for Russia.

  Insofar as Russia interfered in the 2016 election (and it did to a minor degree), there was nothing remotely shocking about its intervention. What was all that surprising, strange, or nefarious about the Russians wanting to see Hillary Clinton defeated? Mrs. Clinton was and remains an arch-imperialist Russo-phobic warmonger determined to provoke and humiliate Russia in Eastern Europe and the Middle East.  She has long been a strong advocate of NATO‘s ever more menacing and eastward presence on Russian’s long-invaded western border. She is a strong backer of right-wing, neo-Nazi, and anti-Russian coup regime the Obama administration helped create in Ukraine.

  Let’s say the tables were turned.  Would a weaker United States seek to influence national elections in a foreign global superpower that helped engineer a coup that gave rise to a viciously anti-U.S., government in Canada – and that was placing deadly military hardware, personnel, and alliances in alliances in Canada, Mexico, and the Caribbean?  Would Washington try to do whatever it could to favor actors inside the foreign superpower who seemed least disposed to threaten the U.S. “homeland”?   Would the U.S. scheme to weaken that superpower’s legitimacy and influence on the global stage?

  The answer to all three questions is “you betchya!” One doesn’t have to be any kind of fan (I’m certainly not) of the corrupt state-capitalist autocrat Vladimir Putin to understand his obvious realpolitik interest in the defeat of the blood-soaked Queen of Chaos (sorry for “saying horrible things” about her, Bernie!) Hillary Clinton.

  Insofar as Putin “interfered” in “our democratic elections,” his “meddling” should be understood as predictable and fairly modest electoral “blowback” elicited by U.S. global aggression and empire.

  3. The Rest of the World Has a Frankly Legitimate Interest in U.S. Politics.

  Why shouldn’t other nations try (however imperfectly) to influence the political process inside the U.S.? For seven-plus decades now, big bad Uncle Sam has stomped and strode across the planet as a criminal, arrogant, gun- and mass-murderous bomb-slinging imperial hegemon, convinced of his own special God- and/or History-ordained mission to run the world as his own possession. Millions upon millions have been murdered and maimed by “exceptional” America’s “benevolent” agents of “peace” and “freedom.” Still by far and away world history’s most extensive Empire, the U.S has at least 800 military bases spread across more than 80 foreign countries and “troops or other military personnel in about 160 foreign countries and territories.”  The U.S. accounts for more than 40 percent of the planet’s military spending and has more than 5,500 strategic nuclear weapons, enough to blow the world up 5 to 50 times over.

  Think it’s all in place to ensure peace and democracy the world over, in accord with the standard boilerplate rhetoric of U.S. president, diplomats, and senators? Seriously? Do you know any other good jokes?

  The world knows better.  Of course other nations seek to have some kind of say within the belly of the beast of the planet’s only global-reach Superpower.

  Please see my latest Truthdig and Common Dreams essay, titled “The World Will Not Mourn the Decline of U.S. Global Hegemony” – a chilling and I hope useful reflection on savage and authoritarian, “democracy-deterring” (Noam Chomsky) U.S. imperial arrogance and criminality since 1945.

  4. Russian Interference Was Nothing Compared to that of the Superpower’s Homegrown Oligarchy.

  Russian interference in U.S. politics is a tiny drop in the bucket compared to the regular authoritarian intervention of the United States’ own homegrown “deep state” corporate and financial oligarchy. I don’t pretend to know that Russian intervention was completely irrelevant in a race that was ultimately by decided by under 78,000 votes in the swing states of Pennsylvania, Wisconsin and Michigan. We can be quite sure, however, that Russian and Russia-duped trolls and activists were infinitesimal factors balanced against the influence wielded by the leading financial institutions and corporations in “America, the best democracy money can buy.”

  Here I am thinking less of the money that Trump got from renegade right-wing moguls like Robert Mercer and Sheldon Adelson than of how Mrs. Clinton’s longstanding allegiance and captivity to Wall Street helped make her a loser in an anti-establishment election colored by deep popular outrage at American hyper-inequality and plutocracy.

  Also relevant is the $5 billion worth of free media exposure that the despicable orange beast got from the U.S. corporate media during the 2016 election cycle. Russia didn’t do that.  CNN and the rest of the commercial media’s news and entertainment empire did.

  6. Republican Vote Suppression was a Much Bigger Deal.

  Russian interference was a minor matter compared also to the impact of the reactionary and racist voter suppression laws and practices passed and conducted by Republican authorities in key swing states.

  7. Other Noxious but Officially U.S.-Allied States Invest in U.S. Politics and Policy.

  There’s a revealing contrast between the endless outrage the Democrats and liberals express over Russia’s real and alleged engagement in the U.S. political process and their comparative silence about the longstanding political influence exercised by vicious U.S.-allied states like Israel and Saudi Arabia. Where’s the liberal and Democratic outrage over Israel’s big-time interference in our great democracy? In a recent excellent Counterpunch report, professor Mel Gurtov writes that:

  Saudi Arabia has played the influence game just as aggressively as the Russians, and for much longer. Saudi money has effectively lobbied in Washington for many years, often relying on former members of Congress. The Saudis also seek to influence US politics by funding NGOs (e.g., the Clinton Foundation), think tanks, law firms, social media, and even political action committees. Saudi investors, including members of the royal family, may have as much as a half-trillion dollars invested in US real estate, the stock market, and US treasury bills. At the time of Trump’s visit in May the Saudi leadership committed to another $40 billion in infrastructure investments, though whether or not that will actually happen is another matter….The payoff for the Saudis is arms acquisitions that have usually put Saudi Arabia first on the US arms export list. The $110 billion arms deal announced while Trump was in Saudi Arabia came on top of billions more weapons sold during the Obama years—and consistent US political support since before World War II of the royal family’s authoritarian rule. The Saudis have also bought continued US support of the Saudi air war in Yemen—a humanitarian disaster that probably amounts to war crimes. For the US, cultivating Saudi Arabia yields not only low oil prices and a reliable arms customers but also an easing of Arab pressure on Israel and leadership in Sunni confrontation of Shiite Iran and Iran’s partner, Hezbollah.

  When does Robert Mueller’s Saudigate investigation begin?

  7. The Russians Did Not Make the Deplorable, Dollar-Drenched Democratic Party Establishment Rig the Primaries against Bernie Sanders

  …thereby undermining the only one of the two top Dem candidates who (as I freely admit despite my left criticisms of Sanders) could have defeated Dolt45 (even I would have had to forego third-party voting if Sanders had been allowed to defeat horrid Hillary). What about the Hillary campaign and the Clintonite DNC’s “meddling” against Bernie? (Sadly but predictably, Sanders has aligned himself [see this essay’s opening quote] with the neo-McCarthy-ite Russia-gate narrative. This validates his early Left critics, who took significant undeserved abuse from fellow progressives for having the elementary decency to note that Bernie the Bomber was a stealth Democratic Party company man and a dedicated Empire Man)

  Russian interference wasn’t a complete “nothing burger,” but it was sorely skimpy fare compared to the immeasurably bigger and beefier servings of democracy-killing intervention  delivered by American Big Business, Republican-controlled states, and the Democratic Party establishment.

  Where’s the beef stroganoff? Scattered on the margins of a much bigger plate of homegrown prime ribs.

  8. “We” (the U.S.) Interfere(s) in Elections Around the World for “Our” Own Authoritarian Purposes.

  In a recent remarkable report titled “Russia Isn’t the Only One Meddling in Elections. We Do It, Too,” the nation’s imperial newspaper of record, The New York Times, made and reported what might have seemed like some startling admissions about Uncle Sam’s longstanding and ongoing history of interfering in other nations’ elections.  Lengthy quotation is merited:

  Most Americans are understandably shocked by what they view as an unprecedented attack on our political system. But intelligence veterans, and scholars who have studied covert operations, have a different, and quite revealing, view.

  “If you ask an intelligence officer, did the Russians break the rules or do something bizarre, the answer is no, not at all,” said Steven L. Hall, who retired in 2015 after 30 years at the C.I.A., where he was the chief of Russian operations. The United States “absolutely” has carried out such election influence operations historically, he said, “and I hope we keep doing it.”

  Loch K. Johnson, the dean of American intelligence scholars, who began his career in the 1970s Investigating the C.I.A. as a staff member of the Senate’s Church Committee, says Russia’s 2016 operation was simply the cyber-age version of standard United States practice for decades, whenever American officials were worried about a foreign vote.

  “We’ve been doing this kind of thing since the C.I.A. was created in 1947,” said Mr. Johnson, now at the University of Georgia. “We’ve used posters, pamphlets, mailers, banners — you name it. We’ve planted false information in foreign newspapers. We’ve used what the British call ‘King George’s cavalry’: suitcases of cash.”

  …the Russian campaign in 2016 was fundamentally old-school espionage, even if it exploited new technologies. And it illuminates the larger currents of history that drove American electoral interventions during the Cold War and motivate Russia’s actions today.

  A Carnegie Mellon scholar, Dov H. Levin, has scoured the historical record for both overt and covert election influence operations. He found 81 by the United States and 36 by the Soviet Union or Russia between 1946 and 2000, though the Russian count is undoubtedly incomplete….. “We had bags of money that we delivered to selected politicians, to defray their expenses,” said F. Mark Wyatt, a former C.I.A. officer, in a 1996 interview.

  Covert propaganda has also been a mainstay. Richard M. Bissell Jr., who ran the agency’s operations in the late 1950s and early 1960s, wrote casually in his autobiography of “exercising control over a newspaper or broadcasting station, or of securing the desired outcome in an election.” A self-congratulatory declassified report on the C.I.A.’s work in Chile’s 1964 election boasts of the “hard work” the agency did supplying “large sums” to its favored candidate and portraying him as a “wise, sincere and high-minded statesman” while painting his leftist opponent as a “calculating schemer.”

  C.I.A. officials told Mr. Johnson in the late 1980s that “insertions” of information into foreign news media, mostly accurate but sometimes false, were running at 70 to 80 a day. In the 1990 election in Nicaragua, the C.I.A. planted stories about corruption in the leftist Sandinista government, Mr. Levin said. The opposition won.

  …For the 2000 election in Serbia, the United States funded a successful effort to defeat Slobodan Milosevic, the nationalist leader, providing political consultants and millions of stickers with the opposition’s clenched-fist symbol and “He’s finished” in Serbian, printed on 80 tons of adhesive paper and delivered by a Washington contractor.

  Vince Houghton, who served in the military in the Balkans at the time and worked closely with the intelligence agencies, said he saw American efforts everywhere.

  Similar efforts were undertaken in elections in wartime Iraq and Afghanistan, not always with success. After Hamid Karzai was re-elected president of Afghanistan in 2009, he complained to Robert Gates, then the secretary of defense, about the United States’ blatant attempt to defeat him, which Mr. Gates calls in his memoir “our clumsy and failed putsch.”

  At least once the hand of the United States reached boldly into a Russian election. American fears that Boris Yeltsin would be defeated for re-election as president in 1996 by an old-fashioned Communist led to an overt and covert effort to help him, urged on by President Bill Clinton. It included an American push for a $10 billion International Monetary Fund loan to Russia four months before the voting and a team of American political consultants (though some Russians scoffed when they took credit for the Yeltsin win).

  In recent decades, the most visible American presence in foreign politics has been taxpayer-funded groups like the National Endowment for Democracy, the National Democratic Institute and the International Republican Institute, which do not support candidates but teach basic campaign skills, build democratic institutions and train election monitors….The National Endowment for Democracy gave a $23,000 grant in 2006 to an organization that employed Aleksei Navalny, who years later became Mr. Putin’s main political nemesis, a fact the government has used to attack both Mr. Navalny and the endowment. In 2016, the endowment gave 108 grants totaling $6.8 million to organizations in Russia for such purposes as “engaging activists” and “fostering civic engagement.” The endowment no longer names Russian recipients, who, under Russian laws cracking down on foreign funding, can face harassment or arrest.

  What the C.I.A. may have done in recent years to steer foreign elections is still secret and may not be known for decades. It may be modest by comparison with the agency’s Cold War manipulation. But some old-timers aren’t so sure.

  “I assume they’re doing a lot of the old stuff, because, you know, it never changes,” said William J. Daugherty, who worked for the C.I.A. from 1979 to 1996 and at one time had the job of reviewing covert operations. “The technology may change, but the objectives don’t.”

  Wow.  Radical truth-telling at The New York Times?

  No, not really.

  There’s a catch. It’s very simple.  The caveat is that “we” (U.S. foreign policymakers and their supposedly benevolent institutions – the CIA, the IMF, the NED, the Carnegie Endowment, etc. – are good and only interfere to advance democracy, while they are bad and interfere for authoritarian reasons.  We good.  They bad.  Get it?

  It’s kind of like how we killed 3-5 million Southeast Asians out of “good intentions” between 1962 and 1975 but the Soviet Union crushed internal dissent and waged war in Afghanistan out of purely evil designs.

  When Washington kills civilians in Syria it’s for good reasons.  When Moscow does the same it’s for bad reasons.

  “Equating” U.S. interference in other nations’ elections with the Russians’ (much more minor) interference in the 2016 U.S. election, Steven Hall told Times reporter Scott Shane, “is like saying cops and bad guys are the same because they both have guns — the motivation matters.” (Imagine thinking that cops could be bad guys!).

  “It’s not just apples and oranges,” Kenneth Wollack informed Shane, “It’s comparing someone who delivers lifesaving medicine to someone who brings deadly poison.” Wollack is president of the National Democratic Institute, a key non-profit engaged in U.S. “democracy promotion” and election interference abroad.

  Shane fails to subject these transparently absurd assertions to the slightest hint of critical scrutiny.  That’s because he and/or his editors have had their brains marinated in the toxic, mind-numbing doctrinal sauce of nationally narcissistic American Exceptionalism.  As a result, they take it as a matter of self-evident truth that “we” are noble and benevolent, far-seeing agents of popular sovereignty. “We” are healers and “good cops.” “They” are nefarious “bad guy” bearers of authoritarian poison.

  You must be a gullible victim of American state propaganda to believe something as patently preposterous as this, of course. Today as in previous decades. U.S. foreign policy, including election interference operations, is all about advancing perceived U.S. national interests, strongly conflated with the imperatives of U.S. and global capitalism.  It is about defending and expanding U.S. global primacy by any means deemed necessary. It has nothing whatsoever to do with spreading democracy.  Indeed, it is fundamentally about “deterring democracy” (the title of Noam Chomsky’s masterpiece volume on the basic underlying continuity in U.S. foreign policy as the post-Cold War era dawned) since most of the world’s politically cognizant populace has no interest in subordinating themselves to U.S. dominance and the selfish imperatives of American transnational corporations.

  Sadly, untold thousands of U.S. liberals open the Times to drink up American Exceptionalist doctrine along with their daily Starbucks each morning. Too many of them are being fed the related neo-McCarthyite notion that serious dissent and conflict within the U.S. reflects “outside” (Russian) interference, not established steep and domestic modes of inequality, oppression, and authoritarian rule. This is dangerous messaging indeed, great fuel for the expansion of the military police state and its ever-burgeoning cybernetic surveillance apparatus.

  The fact that so many Democrats and Democratic Party-affiliated groups and media organs are helping spread this conspiratorial and xenophobic madness is yet another reminder that the radically regressive Republicans and the deplorable dollar Democrats are “two wings of the same bird of [corporate and imperial] prey” (Upton Sinclair, 1904) – both lethal, murderous, plutocratic, and authoritarian in their own different ways.

  Think Bernie represents some portside exit from this state-capitalist and imperialist nightmare? Dream on.

  Still, it is perhaps worth it to pressure him to speak up against plans for a possible U.S. war on Venezuela, whose great populist hero (Hugo Chavez) Bernie insultingly described as a “dead communist dictator”  in March of 2016.

  Hillary, by the way, is a murderer, terrible to say.

  *  *  *

  Please help Street keep writing here.

  

• PCR Asks: Does The ACLU No Longer Defend Civil Liberty?

  Authored by Paul Craig Roberts,

  There are many signs of American collapse. One of the most scary is the fact that the American Civil Liberties Union no longer knows what are the civil liberties it purports to defend. Identity Politics has transformed civil rights into privileges for victim groups.

  

  Yesterday (February 22, 2018) I received a 50-state survey from the ACLU. The envelope in which the questionnaire arrived said the survey was about how “to protect civil liberties during the Trump Presidency.” However, the survey (essentially a fundraiser) did not mention a single civil liberty contained in the Bill of Rights and added as amendments to the US Constitution.

  Nothing about the sweeping away by the criminal Bush regime of habeas corpus with indefinite detention. No mention of the criminal Obama regime’s kill list, which swept away due process by executing US citizens on allegation alone without trial, evidence, and conviction. Nothing about the sweeping away by both criminal regimes of the prohibition against spying on citizens without warrants. No mention of the shutdown of free speech and protest or of the destruction of civil liberties by unaccountable police who brutalize, rob, and murder Americans at will.

  In place of civil liberties, the ACLU has Identity Politics. The ACLU “civil rights” survey is concerned with the civil rights of illegal aliens, of women to have abortions and publicly financed birth control, the “fundamental rights of LGBT people,” and Muslim bans. The civil liberties listed in the Constitution do not qualify for concern; only invented rights that are not listed in the Bill of Rights.

  The letter accompanying the questionnaire does mention the First Amendment and suppression of free speech “emanating from the White House.” I mean, really, the Bush and Obama regimes decimated free speech and imprisoned whistleblowers. Julian Assange has been imprisoned for years in the Ecuadoran embassy in London for publishing leaked material revealing criminal and deceitful behavior of the US government. By the time of Trump’s election, the First Amendment was a dead letter civil right.

  In the ACLU’s Identity Politics, white people, especially white heterosexual males, have no rights. They are not protected by quotas, political correctness, or hate speech prohibitions. No one has to worry about offending a white by destroying statures of white males or church plaques commemorating George Washington and Robert E. Lee. Try destroying a stature of Martin Luther King. A white person can be called every name in the book, and is. White DNA is said to be an abomination. Anyone who said black DNA or homosexual DNA was an abomination would face hate crime charges.

  Even men-hating white feminists jump on the anti-white bandwagon, denouncing white heterosexual–not homosexual–males as misogynist. The feminists reserve their hate for the men attracted to women.

  War is the greatest destroyer of civil liberty. Indefinite detention, execution without due process, spying without warrants, suppression of the First Amendment are all consequences of the use of 9/11 to put the US on a war basis. The replacement of civil liberty with a police state is said to be necessary in order to protect us from Muslim terrorists, expanded to include undefined “domestic extremists.” Currently the US is being put on an even greater war basis with Russia, China, Iran, North Korea, and even Venezuela declared as threats to America.

  The ACLU shares responsibility for the explosion of the threat level from al Qaeda to every country that “threatens” America by having its own independent foreign policy and insisting on its sovereignty. It was Trump who said he was going to normalize relations with Russia, and it was the ACLU and the entirety of the liberal/progressive/left who jumped on the anti-Trump bandwagon and went after him with the orchestrated conspiracy of Russiagate. What the liberal/progressive/left did was to drive Trump into the arms of the military/security complex.

  Clearly, the liberal/progressive/left and the ACLU are a greater menace to the Bill of Rights than Donald Trump.

  

• Here's How Regulators Are Inadvertently Laying The Groundwork For The Next Housing Crisis

  Only a few weeks ago, we pointed out a remarkable development in the US mortgage market that has significant implications not only for mortgage borrowers, but perhaps the broader economy as a whole: Wells Fargo, formerly America’s foremost mortgage lender, had seen its share of the market eclipsed by Quicken Loans – the Detroit-based, nonbank lending behemoth that pioneered applying for mortgages on the Internet with its now-famous Rocket Mortgage (readers will remember RM’s celebrity-packed SuperBowl spot).

  Many factors (aside from Wells’ own criminality, which recently drew a strong, but ultimately meaningless, rebuke from the Fed) have contributed to this shift, as Bloomberg points out.

  But as it turns out, the rising dominance of nonbank lenders like Quicken could portend a massive, bad-debt fueled binge reminiscent of the circumstances that led up to the housing crisis. That is to say, a wave of bad debt could create a cascading wave of defaults with repercussions far beyond the housing market.

  Considering all the restrictions that Dodd-Frank and other post-crisis regulations slapped on mortgage lenders, one might wonder how this might be possible.

  

  Of course, as Bloomberg explains, instead of making the market safer, regulators are inadvertently enabling the rise of lenders like Quicken who aren’t bound by many of the rules that restrict banks’ mortgage-lending practices. As a result, Quicken Loans is effectively free from many of the regulations that have forced some of the biggest mortgage lenders into a period of retrenchment…

  Make no mistake, regulators have done plenty to rein in the mortgage business since the 2000s. New rules require that lenders carefully assess borrowers’ ability to pay, and that mortgage servicers — which process payments and manage other relations with borrowers — give troubled customers plenty of opportunity to renegotiate their debts before resorting to foreclosure. The Federal Reserve performs regular stress tests to ensure that banks have enough capital to weather defaults.

  Problem is, the requirements have weighed most heavily on traditional, deposit-taking banks. The added hand-holding required in mortgage servicing, for example, has roughly quadrupled the cost of handling delinquent loans, turning them into major loss-makers. Together with stringent capital requirements, this has all but guaranteed that banks will lend only to people with the most pristine credit. In some cases, they have given up the business entirely: Late last year, Capital One announced it was exiting mortgage origination because it was “structurally disadvantaged.”

  Because they’re not FDIC-backed, the shadow (aka “nonbank”) mortgage lenders have much more latitude to approve mortgages to borrowers with lower credit scores. This is a huge advantage in a market where supply is limited, which has helped squeeze home prices to their highest levels on record – surpassing even the pre-crisis peak from June 2006.

  As we’ve pointed out many times  (but most recently last month), with home prices in 80% of US cities growing twice as fast as wages, American working- and middle-class families are finding it increasingly difficult to support their families – let alone afford a home.

  

  Just the other day, we highlighted the cognitive dissonance between data showing US household debt of about $13.15 trillion, of which nearly $1 trillion is the credit card debt alone. Households, it seems, are truly on a dangerous debt binge. Yet, as the economists keep telling us, the US economy has almost never been in better shape…

  …Of course, the reality is that the economy looks just peachy if you’re a wealthy individual who owns lots of financial securities…

  

  …This has accounted for the bulk of assets gained during the recovery, as the hart above illustrates…

  Meanwhile, nonbank lenders are happily courting these already debt-burdened borrowers by signing the up for mortgages with higher interest rates, even though many banks – who will now only deal with borrowers with the most pristine records – won’t touch these customers. This has caused the average FICO score for loan originations at these lenders to fall precipitously, as Bloomberg adds.

  The non-banks’ growth has been breathtaking. At the end of 2016, such unaffiliated mortgage companies accounted for more than 40 percent of new conventional mortgages (those eligible for sale to government-controlled guarantors Fannie Mae and Freddie Mac), twice the share they accounted for just eight years earlier. They’re also responsible for a decline in credit standards: The average FICO score at origination stood at 730 at the end of 2017, down from 750 five years earlier. For loans guaranteed by the Federal Housing Administration — an area where the non-banks’ share is greatest — the average FICO score has fallen to 680.

  And the shift has been even more extreme among companies that provide mortgage-servicing…

  The shift has been even more extreme in mortgage servicing. Non-banks now service about 51 percent of all loans packaged into new Freddie Mac securities, according to mortgage analytics firm Recursion Co. That’s more than double the share of just five years ago. For securitized FHA loans, the share stands at a staggering 83 percent. Again, banks are leaving the business: Last year, CitiMortgage announced it would exit by the end of this year, transferring the servicing rights for about 780,000 mortgages.

  Quicken Loans and its ilk might argue that their gains are a result of their cutting-edge technology (offering mortgages over the Internet?, the banks say. Why didn’t we think of that!). But this simply isn’t true.

  What accounts for the non-banks’ appetite? They might argue that their processes and technologies give them greater confidence in their underwriting. But one can’t ignore the reality that, thanks to relative lax regulation, they also have less at stake. By operating with less capital, they can reap very large returns in good times. In bad times, however, they might not have the capacity to withstand losses or deal with the servicing burden created by widespread delinquencies. As a result, a large swathe of the country’s lending and servicing system could implode when the next crisis hits.

  The only sensible solution, Bloomberg posits, would be to level the playing field by adopting additional regulations specifically aimed at these non-bank lenders. But this, too, would come with risks that could potentially harm consumers…

  The only solution is to level the regulatory playing field between the banks and the non-banks. This means raising capital requirements for the latter, and subjecting them to stress tests. Difficult as this might sound, the Dodd-Frank financial reform legislation actually created an institution tailor-made to handle such systemic issues: the Financial Stability Oversight Council. The council should put non-bank mortgage lenders at the top of its agenda this year.

  Of course, given what looks like a market peak, this might not be such a bad thing…

  * * *

  Another factor enabling this expansion is the continued dominance of Fannie Mae and Freddie Mac. All together, Fannie and Freddie guarantee some $4 trillion in residential mortgages, accounting for some 40% of the US market. And as we pointed out late last year, the hope that the two mortgage giants – which were nationalized during the crisis following a $187 billion taxpayer bailout – could be wound down under federal oversight has all but vanished.

  Today, Senators on both sides of the aisle have concluded that they are too big and too risky to replace. Proposed legislation in 2018 will see them maintain their position as the beating heart of the US mortgage industry, rather than replacing them, like the Senate tried and failed to do four years ago.

  Once again, government regulations – that were intended to protect consumers – are instead creating the unintended consequence of making consumers increasingly vulnerable to the same types of predatory lending practices the regulations were initially designed to stamp out.

  Make sense?

  We didn’t think so…

  

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• What Would An "America First!" Security Policy Look Like?

  Authored by James George Jatras via The Strategic Culture Foundation,

  Republicans love to caricature Democrats as big spenders whose only approach to any problem is to throw money at it. As with most caricatures, it is made easy by the fact that it is mostly true. At least when it comes to domestic entitlement programs, nobody can top the party of FDR and JFK when it comes to doling out goodies to favored constituencies paid for by picking someone else’s pocket.

  However, Republicans are hardly the zealous guardians of the public purse they would have us believe. While quick to trash their partisan opponents for making free with taxpayers’ money, they are no less happy to do the same – at least when it’s called “national defense.”

  Over the next five years, the Trump administration will spend $3.6 trillion on the military. The GOP-controlled Congress’s approved, with Republicans voting overwhelmingly in the affirmative, the “Bipartisan Budget Act of 2018” (HR 1892) and the “National Defense Authorization Act for Fiscal Year 2018” (HR 2810). With respect to the former, the watchdog National Taxpayers Union urged a No vote:

  ‘An initial estimate of approximately $300 billion in new spending above the law’s caps barely scratches the surface in terms of total spending. The two-year deal also includes $155 billion in defense and non-defense Overseas Contingency Operations (OCO) spending, $5 billion in emergency spending for defense, and more than $80 billion in disaster funding. $100 billion in proposed offsets are comprised of the same budget gimmicks taxpayers have seen used as pay-fors over and over and are unlikely to generate much of a down-payment on this new spending.’  

  Senator Rand Paul (R-Kentucky) poses the question that few in Washington – and certainly few Republicans – are willing to ask: “Is our military budget too small, or is our mission too large?” He notes:

  ‘Since 2001, the U.S. military budget has more than doubled in nominal terms and grown over 37% accounting for inflation. The U.S. spends more than the next eight countries combined.

  It’s really hard to argue that our military is underfunded, so perhaps our mission has grown too large. That mission includes being currently involved in combat operations in Iraq, Syria, Afghanistan, Somalia, Niger, Libya, and Yemen. We have troops in over 50 of 54 African countries. The wars in Iraq and Afghanistan have cost over a trillion dollars and lasted for over 15 years.’

  Defense spending is about survival, right? If you need to spend it, you spend it. But realistically, how does one assess whether spending is too much or too little without looking at the strategy the military is tasked with carrying out, and whether it makes any sense?

  

  Proponents of increased – always increased – spending, like Defense Secretary James Mattis, point to real problems with increased accident rates due to poor training or equipment maintenance or the fact that most army brigades and navy planes are not ready for combat. But is that a symptom of too little money or of a force stretched beyond its limits by conducting operations anywhere and everywhere with little regard for actual U.S. interests?

  That doesn’t matter politically, though. The message is, if you don’t support giving more money, you are guilty of neglecting the nation’s security and of killing service personnel. No wonder only a brave handful of Republican legislators consistently are willing to say No, like Senator Paul and a few House members: Justin Amash (Michigan), John Duncan (Tennessee), Walter Jones (North Carolina), Raul Labrador (Idaho), and Thomas Massie (Kentucky).

  Here’s a crazy idea. What if instead of taking for granted a national security policy that seeks to maintain U.S. supremacy over every square inch of the globe we figure out what our real defense needs are – protecting our own country, not mucking about in the rest of the world – and then structure and fund the forces we need? What would that look like?

  To start with, we know what it doesn’t look like: the policies followed by Presidents and Congresses of both parties for the past three decades since the Berlin Wall came down.  While the Trump administration’s new National Security Strategy (NSS) takes a commendable but befuddled nod toward genuine American interests – Pillar I (defense of American borders and tightening immigration controls to keep dangerous people out) and Pillar II (ending unfair trade practices and restoring America’s industrial base) – the real meat and potatoes is in Pillar III (“Preserve Peace Through Strength”), which could have been drafted by any gaggle of George W. Bush retreads – and no doubt was – or for that matter by Obama holdovers.

  The NSS’s Pillar III is little more than a rehash of the usual litany of “threats” from China, Russia, North Korea, Iran, etc. It’s symptomatic that these are clustered under “Strategy in a Regional Context” as Indo-Pacific (a perfectly ridiculous concept that could best be summed up as “China – bad!”), Europe (“Russia – bad!”), Middle East (“Iran – bad!”), and South and Central Asia.  Next comes the region that should be our first concern, but isn’t: the Western Hemisphere (“Cuba and Venezuela – bad!”).  Last comes Africa (well, at least we can agree on something), but we still need a dedicated Africa Command (which for some reason is located not in Africa but in Stuttgart, Germany).

  Still, just suppose that by some wild unpredictable accident we ended up with a strategy that in some way resembled the “America First!” prioritization Donald Trump promised us? Here’s a possible broad sketch:

  1. Western Hemisphere comes first, not last. As they say in New England, “Good fences make good neighbors.” Presumably good walls make even better neighbors. Whatever happened to controlling our own border with Mexico, which was the cornerstone of President Donald Trump’s campaign? That remains hostage to political horse-trading and a budgetary game of chicken in the Washington Swamp. As far as the political class is concerned, the Wall can wait until mañana.

  At the same time, the U.S. is all too happy to meddle in our neighbors’ internal affairs under the justification of “democracy promotion.” Recently Secretary of State Rex Tillerson claimed such meddling was an expression of the Monroe Doctrine, which he said “clearly has been a success, because… what binds us together in this hemisphere are shared democratic values.” Really? That would have been big news to President James Monroe, who promulgated the Doctrine back in 1823 when no other country in the Americas could be described as a democracy and when even most of the U.S. Founding Fathers would have disputed that label for the Republic they sought to create. Monroe’s declaration had nothing to do with democracy. Rather, its core was a warning to other powers not to establish colonies in our hemisphere, an exclusion which we have considered essential to our security for almost two centuries. Even as a relative infant on the international scene, long before our young nation had emerged as a power on a par with those of Europe, the United States considered it reasonable to ask other powers not to step on our toes in our own neighborhood.

  2. Respecting the “Monroe Doctrines” of other powers: The regional deference the United States has demanded in our own area for nearly 200 years is precisely the one we today refuse to accord to other respectable powers, namely China and Russia, by conceding the primacy of their security interests in, respectively, the former Soviet space and in the western Pacific. Instead – as under Bill Clinton, Barack Obama, George W. Bush – the Trump administration still rejects the principle of “spheres of influence,” which in practice means not only asserting mastery in the Western Hemisphere but over every square inch of the globe. Today not a single sparrow falls to the ground anywhere but that a divinely omniscient and omnipotent Washington must have the last word about it – generously lubricated with rhetoric about democracy, human rights, rule of law, and other invocations of “universal principles.”

  Despite suggestions from the foreign policy establishment, neither China nor anyone else is threatening the sea lanes in the South China Sea. Even America’s closest regional partners do not want to be pushed into a military confrontation with China to suit the agenda of “indispensables” in Washington. American concerns about North Korea can only be solved with Beijing’s security respected – and without the presence on the peninsula of almost 30,000 American “tripwire” troops and tens of thousands more in Japan.

  In Europe, NATO forces should stand back from Russia’s borders and territorial waters.  NATO expansion should be ended – even after the Trump administrations ill-advised decision to induct tiny and corrupt Montenegro – while a new security architecture in Europe takes shape. The Alliance’s 2008 pledge to bring in Georgia and Ukraine should be withdrawn. Better yet, get us out of NATO entirely! We and our European friends should be finding a way to cooperate with Russia on pulling Ukraine out of its political and economic crisis as a united, neutral state, not pumping in lethal weapons so touch off renewed large-scale fighting.

  An American accord with Russia and China is the stable tripod of any rational global peace, and no one else really matters at the moment. Russia boasts the world’s greatest landmass and natural resources unrivalled by any other country. She also has the only nuclear arsenal comparable to America’s. China is the most populous country in the world, with an economy achieving a par with ours and a burgeoning military sector. If American policy had been designed to alienate both of these giants and drive them to cooperate against us – and maybe it was designed to do that – it could not have been more successful.

  3. Get the hell out of the Middle East and Central Asia. The NSS risibly refers to the undesirability of America’s earlier “disengagement” from the region, evidently a reference to the Obama administration’s not being quite as bellicose as its authors might prefer (for example, only supporting terrorists in Syria, not invading the place outright), Of dubious value even in its time, President Jimmy Carter’s 1980 declaration that the Persian Gulf region lies within thevital interests of the United States is only a dangerous absurdity now.  The entire region designated under the goofy moniker “Greater Middle East” is a welter of ethnic and religious antagonisms and unstable states that for America have only two things in common: (1) they ain’t us, and (2) they ain’t nowhere near us. It’s not America’s job to sort the place out, via such fool’s errands as nation-wrecking in Libya and Syria, nation-building in Afghanistan and Iraq (after wrecking them), and “mediating” to “solve the problem” of the Israelis and the Palestinians.

  The sole interest the U.S. and the American people have in the region is to ensure that jihad terrorism doesn’t achieve a sufficient foothold as to present a threat to us here. However, our regional efforts have instead served to increase and import that threat, not diminish it. American policy toward the region should rest on two pillars: (1) limiting our contact with it, above all drastically cutting down immigration from the area and, hence, the prospect of importing more terrorists; and (2) instead of favoring terrorism-supporting regimes like Saudi Arabia and Pakistan, defer to countries with more direct interests in the region but who also have a fundamentally anti-jihad outlook, principally Russia, China, and India. Let them babysit Afghanistan.

  Other than that – include us out.

  Granted, this is only an outline, but it’s a start.

  Back to the matter of Republicans’ penchant for overspending on the military, the force needed for this concept of “America First!” – one that focuses first of all on defending our territory and people – could only be a fraction of what we spend now.

  Wouldn’t it be great to finally get that “Peace Dividend” we were promised until George H.W. Bush decided he’d rather build a New World Order starting in Kuwait?

  

• It's Not Just The Homicides: Commercial Robberies In Baltimore Are Up 88%

  We now have supporting evidence that Baltimore is the “nation’s most dangerous city,” according to a new report issued by USA Today’s crime desk. The implosion of Baltimore’s inner city comes as little surprise to us, considering our recent reporting of out of control murders and violent crime plunging the town into turmoil after the Ferguson effect (2015).

  

  “Baltimore is the big city with the highest per capita murder rate in the nation, with nearly 56 murders per 100,000 people. At 343 murders in 2017, the city tallied the highest per capita rate in its history,” USA Today wrote on Sunday.

  The newspaper analyzed 2017 law enforcement crime data from the 50 largest cities across the nation and discovered that Baltimore had a higher per capita murder rate than Detroit, Memphis, Chicago, Philadelphia, and New Orleans.

  Back in December, we detailed how Baltimore’s murder rate is more than 4x the average of large cities, and to make matters worse— tied with Venezuela.

  Looking at homicides per capita in 2017, Baltimore is clearly the most dangerous large city in the U.S. with a murder rate that is more than 4x the average of other large cities and some 40% higher than the second most dangerous city of Detroit. To put things in perspective, the murder rate in Baltimore is now exactly tied with Venezuela at 57.2 murders per 100,000 residents. 

  

  Surprisingly, the newspaper’s crime desk says the overall homicide rate for the 50 largest cities started to decline in 2017.

  However, the drop was not by much roughly 1 percent, which was produced by a rapid decline in murders for cities like Chicago (14.7 percent), New York City (13.4%) and Houston (11%).

  Meanwhile, in Baltimore, the region added 25 homicides in 2017 (343) up from the prior year (318).

  On the chart below, Baltimore logged the nation’s second highest homicides for large cities in 2017, only behind Chicago with 650 homicides in 2017, down from 762 the prior year, a town with a population of 2.7 million, verse Baltimore’s population of 620,000. For Baltimore’s small size, the city had more homicides in 2017, than New York, Los Angeles, and Philadephia, where populations are astronomically higher.

  

  “Where they rank us is very alarming,” Commissioner Designate Darryl De Sousa told WBAL Radio.

  He added: “But I know Baltimore in another way…I know the moms and dads that struggle each and every day that try and make the city better.”

  De Sousa said the new violence reduction initiative that he and Mayor Catherine Pugh have implemented across the city is working; he further stated homicides are down 37 percent and nonfatal shooting are down 46 percent as compared to this time last year.

  There have been 32 homicides as of February 21, 2018, according to The Baltimore Sun; at this time last year, police reported around 47 murders.

  

  Crime is “trending downward in every single category” in 2018, Pugh said at a Tuesday press conference.

  The mayor described Baltimore’s violence prevention initiative as “very data-driven.”

  Said Pugh: “Are we satisfied yet? No. Are we trending in the right direction? Yes.”

  Baltimore’s law enforcement officers have already arrested some 200 violent repeat offenders in recent weeks on outstanding warrants, De Sousa said on WBAL Radio. The city’s violence prevention strategy is about “putting resources in the right places at the right times,” he said.

  “We know our problematic areas,” said De Sousa, who proposed diverting more energy and time to districts that are considered troubled areas, such as Sandtown-Winchester, a neighborhood in West Baltimore, Maryland where Freddie Gray was arrested and ultimately died– triggering the 2015 Baltimore riots.

  Dr. Nicole Gonzalez Van Cleve, a criminology expert and professor at Temple University in Philadelphia, tells the Baltimore Patch that citizens should ignore USA Today’s rankings of the city.

  “We kind of throw around these rankings and it makes it sound like everyone is equally vulnerable to violence, when really, in most cities, especially a city like Chicago for instance, violence is mostly concentrated in areas that are most socially neglected. Areas with the highest rates of poverty. Failing schools,” Van Cleve said.

  “Major American cities with high levels of segregation, poverty and inequality will often see high rates of violence, she says. But crime statistics and rankings don’t paint an accurate picture of where that violence actually happens. Violence is concentrated within communities, and individual blocks within neighborhoods see vastly different levels of violence than others,” she added.

  “Literally, one side of the street will have less crime in the same neighborhood than the other side of the street,” she says.

  USA Today cited some crime experts and law enforcement officials believe the fracturing of community and law enforcement relationships could have had some impact on elevated homicides in areas like Baltimore and Chicago.

  While it is only day 53 into 2018, Mayor Catherine Pugh has already indicated success in her new crime-fighting strategies. Homicides in Baltimore tend to be a seasonal thing, which, perhaps, the recent split of the polar vortex could signal homicides will increase from here due to warmer weather. As for now, Pugh and her PR firm are merely spreading propaganda…

  Something tells us that the implosion of Baltimore is far from over, as the opioid crisis is fueling the next wave of turmoil. The Baltimore Sun identifies the next wave of chaos to be originating from an explosion of commercial robberies. This will further complicate the situation for the police department, who is already stretched thin with out of control murders. In the last five years, commercial robberies have risen 88 percent, from 560 in 2013 to more than 1,000 last year. 

  The explosion of commercial robberies started on April 18, 2015, just six days after Baltimore Police officers arrested Freddie Gray, a 25-year-old African American resident of Baltimore, Maryland. Gray sustained injuries to his spine while being transported in a police vehicle, where he later passed away. In return, residents spurred city-wide riots that targeted commercial stores. The National Guard was called in and shut down the town for a week in a variant form of Martial law.

  

  Business owners in the inner city are panicking about the threats outside their stores: drug dealing, intimidation, stabbings, and shootings, said the Baltimore Sun. Businesses have adapted to the warzone like environment by hiring guards, installing bullet-resistant glass, door buzzer systems, and basically turning their shop into a mini-fortress. Some businesses are just shutting down, as the warzone like climate is not producing a sustainable atmosphere for a healthy economy.

  “Our members are very concerned,” said Cailey Locklair Tolle, president of the Maryland Retailers Association. “Unfortunately, a lot of our members don’t relocate. It’s a massive endeavor. A lot of times they just go out of business.”

  

  Baltimore is a mess. America is a shithole. Do we have your attention now? 

  

• Is The CIA So Bad That Even When It Tells The Truth It Adds-In Lies?

  Authored by Eric Zuesse via The Strategic Culture Foundation,

  On Sunday, February 17th, I was surprised to see in the reliably neoconservative newspaper, New York Times, an ‘opinion’-article headlined with the distinctively non-neoconservative title, “Russia Isn’t the Only One Meddling in Elections. We Do It, Too.”

  But, then, I got to the neocon core, in the article itself: 

  But in recent decades, both Mr. Hall and Mr. Johnson argued, Russian and American interferences in elections have not been morally equivalent. American interventions have generally been aimed at helping non-authoritarian candidates challenge dictators or otherwise promoting democracy. Russia has more often intervened to disrupt democracy or promote authoritarian rule, they said.

  Equating the two, Mr. Hall says, “is like saying cops and bad guys are the same because they both have guns — the motivation matters.”

  That’s just a typical neocon lie — reality turned upside-down, black-is-white and white-is-black.

  When the CIA hired Iranian mercenaries to rebel against and overthrow the progressive democratically elected Iranian Prime Minister Mohammed Mosaddegh in 1953 and installed there a dictatorship (which lasted till 1979); and did the same to overthrow and replace the progressive democratically elected Guatemalan President Jacobo Arbenz in 1954; and, more recently, in 2009, helped Honduras’s aristocracy to overthrow that country’s progressive democratically elected President Manuel Zelaya, and to cement and make permanent their new and fascist regime; and, in 2014, perpetrated a brutal coup in Ukraine overthrowing that country’s democratically elected but corrupt (like all prior post-communist Ukrainian Presidents were) President Viktor Yanukovych — even the Soviets (including the pre-1991 and pre-independent Russians) weren’t that bad; and a 1992 classic BBC documentary about the CIA’s having set up in Western Europe during the Cold War numerous deadly terrorist incidents which were designed so as to be blamed on ‘communists’, makes clear, that the US CIA is a spiritual implant into the US Government, of Adolf Hitler’s Nazi (but now American) Gehlen Organization — a darling of the CIA Director Alan Dulles, and which is still today the CIA’s spirit.

  But, even that hypocrisy misses the essentially fascist nature of America’s secret-police agencies, because America’s Presidents are now reliably pro-fascist, and on many occasions are even pro-racist-fascist, or pro-“nazi” (standing out to defend the nazi ideology itself). At the U.N., both President Obama and President Trump have stood America up publicly as being one of only three countries (in Obama’s case) and then of only two countries (in Trump’s case) publicly defending nazism. Furthermore, on one day (31 October 2015), twice in close succession, the U.N. Secretary-General publicly criticized Obama, though not by name, for opposing and insisting on blocking, democracy in Syria. Whereas Russia insists upon a democratic and united — instead of ethnically broken-up — Syria, and polls amongst Syrians consistently show that the vast majority of Syrians insist upon the same thing, the US Government not only does everything possible to block it, but has the gall to deny the blatant fact that it’s seeking to replace Syria’s secular non-sectarian Government, by a fundamentalist-Sunni Government that will do the Sauds’ bidding (and the bidding of America’s oil-giants).

  However, that February 17th New York Times article is deceptive not merely on account of its holier-than-thou admission of the CIA’s supposedly ‘past history’ of badness and its presumption of today’s Russia being almost as bad as was the Soviet Union.

  Actually, the article includes several other lies, such as are exposed in these three articles about how American billionaires systematically robbed Russia during the 1990s:

  “Russia’s Fiscal Whistleblower”

  “The Summers Conundrum”

  “Soros and His CIA Friends Targeted USSR/Russia in 1987”

  Those articles offered at least some of the explanation as to why America’s billionaires (at least the ones who care about this matter at all) hate Vladimir Putin: they had loved Boris Yeltsin because he allowed them to rape Russia, but Putin put a stop to it.

  

  So, while millions of Americans, who subscribe to the New York Times, will learn the lie, that (and here is the regime’s basic message) internationally ‘we’re the good guys against the bad guys’, there’s no more reason to trust that, than there was when the same lies came from Joseph Goebbels’s shop, at which time, the US itself was a progressive country, heading in progressive directions, under President FDR.

  Bill Clinton and the post-Clinton Democratic Party have repudiated that direction for their Party; and, now, in international relations, the US is solidly fascist, in both Parties. The CIA lies, as usual, indistinguishably differently when it’s run by a Democratic President and Congress, than when it’s run by a Republican President and Congress. 

  In international relations, it’s the same regime, regardless: full of the same lies. And that historical fact, and ongoing but unpublished news, is not to be found to be accepted in the Times’s masthead-lie, “All the News That’s Fit to Print” — or else the truth itself, just isn’t “Fit to Print.” It’s fit to print here (and without paying a subscription), but how many people even read here? This explains how the regime protects itself, against democracy — by hiding what’s essential.

  

• Meet Liu He – The Hyper-Interventionist Frontrunner To Lead China's Central Bank

  As the People’s Bank of China’s longtime leader Zhou Xiaochuan prepares for retirement in March, speculation about who Chinese leader Xi Jinping might choose to succeed him is mounting – and according to Reuters, a formerly dark horse candidate is now being viewed with increasing certainty as Xi’s likely pick. 

  His name is Liu He, and he’s both a senior government bureaucrat and longtime friend of Xi. Insiders say Liu has leapfrogged two other candidates as part of the wide-ranging government reshuffle that has accompanied Xi’s elevation to supreme leader during November’s Congress.

  If he is, in fact, chosen to succeed Zhou, Liu could become one of the  most powerful central-bank governors in modern Chinese history.

  Liu may be in a position to become one of China’s most powerful economic and financial officials ever, as he is already top adviser to Xi on economic policy and is also expected to become vice premier overseeing the economy.

  Liu would replace current PBOC chief, 70-year-old Zhou Xiaochuan, who is China’s longest-running head of the central bank, having taken the job in 2002. Zhou is expected to retire around the time of the annual session of parliament in March, sources previously told Reuters.

  The change would be part of a wider government reshuffle following the 19th Communist Party Congress in October last year, during which Xi laid out his vision for China’s long-term development, and elevated his key allies.

  Speculation has been rife for months over the choice of the next central bank governor. Xi will have the final say, and the sources noted that while Liu is clearly the frontrunner he is not yet certain to get the job.

  …

  Just before last October’s Congress, sources told Reuters that China’s banking regulator head Guo Shuqing and veteran banker Jiang Chaoliang were leading contenders for the PBOC job.

  Not only would Liu – who was educated at Harvard and speaks fluent English – be responsible for running the central bank, Reuters  says he is also set to become one of China’s four vice premiers who would oversee the economy and financial sector.

  Reuters sources previously said that Liu was in line to become one of China’s four vice premiers, and that he would oversee the economy and financial sector. Whether he might hold both positions concurrently is unclear. As Reuters points out, only Zhu Rongji in the early-1990s held both the posts of vice premier and central bank governor simultaneously. Zhu later went on to become China’s premier from 1998-2003.

  

  As Reuters points out, the PBOC is different from Western central banks in that it doesn’t have control over monetary policy – decisions on interest rates and the yuan are still governed by policies determined by the Party leadership. In a strategy that has repeatedly been employed by Chinese officials, Liu dangled the prospect of an open, internationalized economy in front of his audience at Davos last month, saying the country might soon roll out market-opening measures that would exceed “international expectations.”

  But the next leader of the central bank will face tough challenges as he will have to walk a tightrope between ensuring economic stability and pushing reforms to rein in debt risks.

  But perhaps most importantly of all, Liu has one key advantage over his rivals that, in addition to his friendship with and support of Xi Jinping, would probably aid his oversight of one of the world’s largest economies: He currently heads a government office in charge of preserving financial stability, and as a result almost undoubtedly had a hand in last night’s shocking news that Chinese regulators had decided to take control of Anbang Insurance – one of the country’s “big four” hyperleveraged conglomerates. That move was first announced by the China Insurance Regulatory Commission.

  He was also widely seen by political analysts as being behind the voice of an unnamed “authoritative person” who wrote in the People’s Daily, the party’s mouthpiece, in May 2016 warning about risks from the country’s debt-driven growth model.

  Liu, like Zhou, stands out among Chinese bureaucrats because of his grey hair. Many top officials dye their hair jet-black.

  Liu, who currently heads the General Office of the ruling Communist Party’s Central Leading Group for Financial and Economic Affairs, is also set to become the head of the cabinet-level Financial Stability and Development Committee (FSDC), sources previously told Reuters.

  He has been closely following Xi on regional tours and meetings with foreign leaders. When then-U.S. National Security Adviser Tom Donilon visited Beijing in 2013, Xi introduced Liu as “very important to me”, according to the Wall Street Journal.

  The PBOC also recently shut down VIX trading, purportedly to halt market turbulence. Liu and Xi share a uniquely Chinese family history: that is, both their families were purged during the 1966-76 Cultural Revolution, and both their fathers were senior government officials.

  “Without the reflection on the catastrophe of the Cultural Revolution, it is impossible for China to have today’s economic growth,” Liu said in an article published in 2017.

  Amazingly, sources tell Reuters that Liu and Xi have been friendly since their teens, and have always kept in touch.

  

• LA Has Criminalized Poverty By Making It Illegal To Sleep In Cars And RVs

  Authored by John Vibes via The Mind Unleashed blog,

  Raising rent prices and low wages have resulted in thousands of people across the city of Los Angeles becoming homeless, many of them now living in cars and RVs if they were able to keep it together that well.

  

  According to the most recent counts by the KPCC, there are at least 7,000 people live in their cars in Los Angeles.

  Many of these people still maintain jobs and try to live the most fulfilled lives that they can, but they are constantly facing problems from authorities.

  It is such a common issue that many churches have opened up their parking lots to people living out of their cars. For example, the New Beginnings Counseling Center opened up their parking lot for a “Safe Parking program,” which was intended to provide a safe and welcome parking place for people living out of their cars. Unfortunately, under new legislation passed in Los Angeles, programs like this will be illegal, because sleeping in cars and RVs have been entirely outlawed.

  Under the new laws, it is illegal to sleep in a car or RV that is parked in a residentially zoned area from 9 p.m. to 6 a.m. Areas within one block of a park, daycare, or school are entirely off limits. Fines will range anywhere from $25 to $75 which is impossible to pay for most people in these situations.

  In 2014, LA lawmakers attempted to pass a similar bill but it was shot down in a federal appeals court. The judge in the case ruled that the legislation was “broad enough to cover any driver in Los Angeles who eats food or transports personal belongings in his or her vehicle. Yet it appears to be applied only to the homeless.”

  The policy is up for debate and reconsideration in July, where homeless advocates are expected to strongly protest for an appeal.

  Policies like this can have disastrous consequences, in Canada where laws like this have been implemented for some time, one man racked up over $110,000 worth of fines for essentially being homeless.

  Last year, The Mind Unleashed reported that the city of Seattle was planning to set up razor-wire fencing to keep homeless populations from camping. Then, earlier this year we reported that San Francisco was using Robots scare homeless people away from encampments and report them to police.

  Not soon after that, the city of San Francisco spent $8,700 installing large boulders under overpasses to prevent homeless people from setting up camps. There were numerous homeless encampments in the area until they were recently forced out of the area, and now the City’s government is doing everything they can to keep the camps out of the area.

  

• "There Was A Mistake Made" – FBI's No. 2 Refuses To Provide Details On How Cruz Tips Were Fumbled

  After admitting last week that “protocol was not followed” when at least two individuals called the FBI’s anonymous tip line to warn that Nikolas Cruz, the 19-year-old suspected of murdering 17 of his former classmates, the No. 2 FBI official said Thursday that he had visited the FBI’s call center this week as part of his review of why the tip wasn’t followed.

  He also addressed, in the most detail yet, the mounting criticisms facing the bureau, according to the Washington Post.

  The remarks followed NRA spokeswoman Dana Loesch’s assertion that the FBI was primarily to blame for not preventing the shooting.

  Shortly before Bowdich spoke Thursday, NRA chief executive Wayne LaPierre, who was speaking at the same event, said the FBI’s leaders had gone “rogue.”

  

  Acting deputy director David Bowdich said he believes the biggest threat to the FBI is “losing the faith of the American people”

  “Look, I don’t want to get into who says what, but I do want to project out to the public, is when I look through the prism of risk for our organization, I find the number one risk for our organization is losing the faith and confidence of the American people. Number one,” Bowdich said when asked about the criticism from the NRA and others.

  FBI Director Christopher Wray – who was appointed by Trump – has come under fire, with several prominent Republicans, including Florida Gov. Rick Scott, calling for him to resign. President Trump has said the bureau’s handling of the matter was “not acceptable.”

  Still, while Bowdich provided some details about his visit to the FBI call center, he offered no new insight into why or how the tip wasn’t followed up on. The FBI is actively investigating why the tip wasn’t passed on to its Miami field office.

  Bowdich said Thursday that he had visited the call center Monday with a team and sat in on some calls. He called the center “a professional operation” but added: “Now let me be clear that there was a mistake made. We know that. But it is our job to make sure that we do everything in our power to ensure that does not happen again.”

  Bowdich did not directly address a question about why the tip on Cruz was not passed to agents in the field, though he hinted that those in the call center might have made a judgment error.

  “People make judgments out on the streets every day. Every now and then, those judgments may not have been the best judgment based on the information they had at the time,” Bowdich said.

  Last year, the FBI received about 765,000 calls, in addition to about 750,000 Internet tips, and 9 out of 10 did not produce leads that could be followed. He said the bureau was going back through its “holdings”  to make sure there aren’t any other similar tips that have slipped through the cracks.

  Wray has held on so far, and speculation is mounting that he might stay on to supervise the internal probe into why, exactly, these tips weren’t followed up on.

  

• American Media's 'Big Bot' Conspiracy Exposed

  Authored by Daniel Greenfield via Sultan Knish blog,

  Bots. Is there anything they can’t do?

  

  The Internet Research Agency indictment accuses a troll bot farm of trying to influence the election in what the media claims is the worst attack on America since Pearl Harbor. 9/11 need not apply.

  Bots are everywhere.

  “Bots Are Trying to Help Populists Win Italy’s Election,” claims Bloomberg. “Russian Bots Are Using 2016 Tactics to Hijack the Gun Debate,” shrieks Vanity Fair. ABC spins that bots are trying to make Black Panther look bad. “Rampaging Twitter ‘bots’ bred in Suffolk farmhouse,” the London Times asserts.

  This media madness might make you think that bots are some sort of new and advanced technology. But you can see them in the comments and they’ve been around forever. Automated programs that log into social media accounts are not a new technology. Internet users of a bygone era remember seeing them in chat rooms and on bulletin boards without ever rampaging around Suffolk farmhouses.

  Bots have become a convenient media scapegoat. The new formula is “Bots + Thing We Disagree With = Proof We’re Right”. That’s why there are stories claiming that Russian bots are tweeting against gun control or Islamic migration. And it explains the “Russian Bots Rigged the Election for Trump” meme.

  Bots are an informational technique. Media spin reverse engineers the technique to discredit the idea. Not only is that a fallacy, but bots just piggyback on popular trends to gain influence. Russian bots don’t tweet about gun control because they care about guns, but because they get retweeted. The same was true of the bots promoting Bernie Sanders and Donald Trump. There are a million brands doing the same thing with bots and influencers. But that’s okay because they push politically correct messages.

  And that’s the bot double standard.

  

  When Russian bots and trolls push Black Lives Matter, Bernie Sanders or Dakota Access Pipeline protests, their programmed actions don’t reflect on leftist causes, organizations and politicians. But the revelation that Russian bots and trolls tweeted about the Bill of Rights, Islamic migration or Trump is spun by the media into a conspiracy that indicts the ideas and discredits the previous election.

  The latest example of the Big Bot Conspiracy is a bizarre Newsweek article by Nina Burleigh blaming Senator Franken’s problems on bots. Some might have thought that Franken had been forced to resign for groping women across America. But according to Burleigh, it was the fault of the Japanese bots.

  The feminist activist was already infamous for putting her allegiance to Democrats ahead of sisterhood.

  “I would be happy to give him a b_____ just to thank him for keeping abortion legal,” Nina Burleigh had said of Bill Clinton. “I think American women should be lining up with their Presidential kneepads on to show their gratitude.” Now Burleigh has brought her kneepads to the raided offices of Newsweek.

  Nina Burleigh’s article blames Franken’s problems on “fake news sites, an army of Twitter bots and other cyber tricks”. The Democrat Senator’s original accuser is dismissed as a “Hooters pinup girl and lad-mag model”. So there was either nothing wrong with groping her or no reason to believe her.

  That’s what leftists denounce as ‘slut-shaming’, but, as with Bill Clinton, it’s okay when Democrats do it.

  Burleigh mentions the “release of a picture of a Tweeden and Franken” (editors are one of the casualties of Newsweek’s troubles), but neglects to mention that it’s a picture of Franken groping Tweeden. None of the other many accusers rate a mention from this feminist Franken activist.

  There was the feminist choir member and book editor who accused Franken of groping her at the Women’s Political Caucus. It’s really hard to write her off as a “right-wing plant” or a “lad-mag model”.

  Especially since she then voted for Senator Franken.

  Another accuser was groped at the Loft Literary Center in Minneapolis and claimed that Franken wanted to join her in the bathroom. Nina Burleigh would have probably told her to go along and bring her senatorial kneepads in gratitude for his support of Planned Parenthood.

  A Democrat congressional aide remembers Franken trying to give her an open mouth kiss while he was still a radio host with Air America. “It’s my right as an entertainer,” she recalls Franken telling her.

  An Army vet on a USO tour described being groped by Franken during the Iraq War. “When he put his arm around me, he groped my right breast. He kept his hand all the way over on my breast.”

  Jezebel, a hard left feminist site, offered an account from a liberal “former elected official in New England” who remembers Franken trying to plant a “wet, open-mouthed kiss” on her, on stage.

  Instead of addressing the many accounts of Franken’s liberal accusers who supported him and, many of whom indicated they didn’t want him to quit, Burleigh, like most Frankentruthers from Tom Arnold to Richard Silverstein, smears Leeann Tweeden while ignoring Franken’s numerous other accusers.

  After silencing the women who came out against Franken, Nina Burleigh surreally claims that the Franken accusations had served to “silence the testimonies of eight former female staffers who defended the Minnesota Democrat”.

  Presenting testimonies from the few women you didn’t grope is not considered a compelling argument.

  But instead of talking about any of this, Burleigh talks about bots. A “bot army” made the Franken accusations go viral. And then there was “a developer named Atsufumi Otsuka” who “registered a web domain in Japan” that hosted “Japanese-registered fake-news sites”. But, “by November 17, the trending of ‘Al Franken’ was officially also a Russian intelligence operation.”

  The Japanese and the Russians had teamed up against the Minnesota groper. This wasn’t just worse than Pearl Harbor. It was WW2 and the Cold War combined in one hashtag.

  “Researchers have found that each bot account had 30 to 60 followers, all Japanese. The first follower for each account was either Japanese or Russian,” Burleigh breathlessly relates.

  Now that the Russian and Japanese bots had teamed up, all hope for humanity was lost.

  Burleigh’s article has more international locations than a Tom Clancy novel. It also completely ignores the question of whether Franken groped his victims to discuss the bots who tweeted about it.

  That’s not accidental. Burleigh doesn’t want to talk about whether Franken is guilty; she wants to write a progressive thriller in which international bots caused the problem by talking about it. And if it can be shown that bots amplified a scandal, then the facts somehow no longer matter. In the same way that if it can be shown that bots amplified Trump’s message, the 2016 election results were illegitimate.

  But shooting the messenger bot doesn’t tell us anything the truth of the inconvenient message.

  Since the election, these types of articles are everywhere. They rely on the work of “researchers” who are usually partisan activists, often amateurs with no actual technical training, to spread conspiracy theories. These conspiracy theories confuse correlation and causation. If a foreign bot retweets Trump, he works for the bot’s masters. If a bot tweets any conservative story, it’s a right-wing global bot plot.

  Anyone who knows anything about how the internet works knows that this is nonsense.

  Bots imitate to amplify. In this comments section, a bot will show up sooner or later, it will copy a comment that someone else made and post it in order to get likes so that it resembles a real account. For every stupid bot telling you how much it makes by working online, there’s a smarter bot leaving legitimate comments to blend in. And so bots tweet, comment and chat about everything popular.

  If there’s a trending topic, the bots will quickly show up. And everyone uses them.

  Rachel Maddow feeds the left’s appetite for bot conspiracy nonsense. But in 2013, MSNBC personalities, including Maddow, were being promoted by Chinese bots. Does that mean Maddow is a Chinese spy?

  

  Bots are ads that pretend to be people. Tracking how they’re deployed can be interesting, but it’s dangerous to read too much into that.

  Correlating bots with narratives isn’t actually causation.

  The bot paranoia is being used to delegitimize real stories and candidates. If you can connect bots to a point of view you don’t like, then no one really believes it. Link it to a candidate you don’t like and he was never really elected. Hook it up to a serial predator in the Senate and you can ignore his victims.

  But if you believe that, then MSNBC must be a Chinese informational warfare operations.

  

• Misconduct, Manipulation, Or Malfeasance? – US Regulators Begin Probe Of VIX Funds

  Ten days after the reality of “rampant manipulation” in VIX was exposed yet again, perhaps because this time the market went down, US regulators are reportedly escalating their investigations into whether any wrongdoing occurred within VIX ETPs.

  

  Following previous reports that The Financial Industry Regulatory Authority (FINRA) was scrutinizing whether traders placed bets on S&P 500 options in order to influence prices for VIX futures, and a whistleblower’s detailed explanation of how easy it is to spoof VIX’s tail to wag the market’s dog; Bloomberg reports that The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, several people familiar with the matter said.

  As a reminder, according to his letter, the whistleblower blames this VIX manipulation as the driver of last week’s volatility complex collapse:

  “We contend that the liquidation of the VIX ETPs last week was not due solely to flaws in the design of these products, but instead was driven largely by a rampant manipulation of the VIX index,”

  And, Bloomberg notes that after the losses, SEC officials reached out to Credit Suisse, a person with direct knowledge of the conversations said. Neither Credit Suisse nor ProShares have been accused of any wrongdoing. The regulators’ examinations are at an early stage and won’t necessarily lead to sanctions or new rules.

  As another reminder, in May of last year we academic confirmation of the rigged nature the US equity market’s volatility complex, when a scientific study found “systemic VIX auction settlement manipulation.”

  Two University of Texas at Austin finance professors found “large transient deviations in VIX prices” around the morning auction, “consistent with market manipulation.”

  

  ​Griffin and Shams calculate that “the size of VIX futures with open interest at settlement is on average 5.7 times the size SPX options traded at settlement, and it is 7.3 times for VIX options that are in-the-money at settlement.”

  *  *  *

  Bloomberg concludes that there is no indication thus far that specific companies, including Credit Suisse, are being probed, and an SEC spokesman declined to comment, while CFTC officials didn’t respond to requests for comment; but with losses now piling up, allegations of market manipulation are getting more attention and government watchdogs face questions about why small-time investors were permitted to buy such products in the first place.

  While we certainly won’t be holding out breath for any regulatory crackdown on these products (as they are the mothers’ milk of the stock market), it is at least a positive that there is finally some scrutiny on the volatility complex (that may, just may, prompt some retail investors to be at least a little less willing to pile all their investments into the short-vol trade once again).

  

• "What Just Hit Us?" – Bay Area Rattled By Unusual Quake Swarm, Trains Delayed

  Following “strained” magma chamber concerns at Yellowstone, Bay Area residents have grown increasingly concerned this week as a swarm of well over 50 earthquakes has struck in recent days…

  

  Culminating in at least 32 quakes in the last 24 hours as large as magnitude 3.6 which struck the East Bay town of Danville around 3pmET today.

  

  “It’s been nuts. It wakes us up every night. We have a little dog, sleeps on the bed with us, and he freaks out all the time,” said Danville resident Christian Sommer.

  https://www.nbcbayarea.com/portableplayer/?cmsID=475010323&videoID=YenvjVvPVD8F&origin=nbcbayarea.com&sec=news&subsec=local&fullWidth=y

  Bay Area Rapid Transit (BART) trains were impacted by the quakes with trains delayed.

  

  

  “Looking in that general region, I’m counting 55 quakes just in the last week,” said Amy Vaughan, a geophysicist with the Geological Survey.

  8 fault lines run through the bay.

  

  Several more significant temblors then shook up Diablo area businesses at midday – the strongest being a 3.6.

  “I was sitting at my desk when the first one hit,” said Danville resident Brenda Hammer. “And I thought something hit the building was my initial reaction. What just hit us?”

  There was another swarm of quakes just three days ago on Tuesday.Some in the East Bay are busy retrofitting for a bigger quake.

  This swarm comes just a few weeks after a 4.4 quake jolted much of Bay Area awake in January.

  

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• USA, USA, USA: America's 4G Network Is Ranked 62nd 'Best' In The World (Behind Macedonia)

  The United States takes pride in being a technological leader in the world. Companies such as Apple, Alphabet, IBM, Amazon and Microsoft have shaped our (digital) lives for many years and there is little indication of that changing anytime soon.

  But, as Statista’s Felix Richter notes, when it comes to IT infrastructure however, the U.S. is lagging behind the world’s best (and many of its not-so-best), be it in terms of home broadband or wireless broadband speeds. According to OpenSignal’s latest State of LTE report, the average 4G download speed in the United States was 16.31 Mbps in Q4 2017.

  

  You will find more infographics at Statista

  That’s little more than a third of the speed that mobile device users in Singapore enjoy and ranks the U.S. at a disappointing 62nd place in the global ranking.

  

  While U.S. mobile networks appear to lack in speed, they are on par with the best in terms of 4G availability. According to OpenSignal’s findings, LTE was available to U.S. smartphone users 90 percent of the time, putting the United States in fifth place.

  

• Paul Craig Roberts Rages "Russiaphobia Is Out Of Control"

  Authored by Paul Craig Roberts,

  As has been made perfectly clear, Mueller’s “indictment” of 13 Russians and 3 companies is just another hoax.

  Robert Mueller discredited himself and his orchestrated Russiagate investigation today (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.”

  What pathetic results to come from a 9 month investigation!

  And as Moon of Alabama explained:

  The published indictment gives support to our long held believe that there was no “Russian influence” campaign during the U.S. election. What is described and denounced as such was instead a commercial marketing scheme which ran click-bait websites to generate advertisement revenue and created online crowds around virtual persona to promote whatever its commercial customers wanted to promote. The size of the operation was tiny when compared to the hundreds of millions in campaign expenditures. It had no influence on the election outcome.

  The indictment is fodder for the public to prove that the Mueller investigation is “doing something”. It distracts from further questioning  the origin of the Steele dossier. It is full of unproven assertions and assumptions. It is a sham in that none of the Russian persons or companies indicted will ever come in front of a U.S. court.

  All Mueller has found is a click-bait commercial marketing scheme that had nothing to do with election interference.

  Why is Mueller comfortable bringing a transparently false indictment?

  The answer is, as Glenn Greenwald makes clear, that Mueller knows there are large numbers of warmongering politicians and media whores who will seize on the fake indictment as proof that Russia has “committed an act of war equivalent to Pearl Harbor and 9/11.”

  The fact that what Mueller has indicted is only a click-bait marketing scheme will never be mentioned by politicians and presstitutes shouting the military/security complex’s slogan that “Russia must be punished.”

  Greenwald supplies the names of some of these reckless and irresponsible people who are willing to bring on war with their rants: politicians Hillary Clinton, John McCain, Jeanne Shaheen, Jerry Nadler, Marco Rubio—indeed almost all of Congress—Clinton aides such as Philippe Reines and John Podesta, and the legions of presstitutes such as Karen Tumulty, David Frum, Chuck Todd, Tom Friedman—indeed, the entirety of the print and TV media with the exceptions of Tucker Carlson and Pat Buchanan.

  *  *  *

  When a country armed to the teeth with nuclear weapons and overwhelmed by its own exceptionalism and indispensability has political and media lunatics equating a click-bait commercial marketing scheme with Pearl Harbor, that country is a recipe for the end of the world.

  *  *  *

  Note: Two presstitutes at Bloomberg, Lauren Etter and Ilya Arkhipov think that filming disadvantaged Americans in order to cast the US in a bad light is the same as interfering in the presidential election, and they think that a Russian food caterer is heading a Russian disinformation campaign.

  This shows how utterly stupid the US media is. The entire article is based on nothing, just what some people say they think. Prigozhin’s business is a bait-click marketing scheme. What the utterly dishonest Mueller and the presstitutes are doing is turning a click-bait marketing scheme into an election interfering scheme. The only way this “indictment” could succeed in a court would be if no evidence could be presented, only Mueller’s absurd “indictment.”

  Mueller’s “indictment” is not meant to go to court. It is just a propaganda device, and that is how the presstitutes are using it.

  

  As Glenn Greenwald reports, three CNN “journalists” had to resign for their fake news “Russia threat” stories.

  In actual fact, the entirely of the US print and TV media should have to resign.

  

• Beijing To New York In 2 Hours: Chinese Researchers Reveal Hypersonic Plane

  The era of hypersonic tech has arrived. Unbeknownst too many, a race for hypersonic aircraft and weapons has flourished among global superpowers (China, Russia, and the United States), who realize that the first to possess these technologies will revolutionize their civilian and military programs.

  In Beijing’s bid for the first place, Chinese researchers have revealed a novel design for an ultra-fast plane they say will be able to take dozens of people and tonnes of cargo – “anything from flowers to bombs, and likewise, passengers could be tourists or military special forces” – from Beijing to New York in about two hours.

  The plane would travel around 6,000km/h (3,700mph) or about five times faster than the speed of sound, according to the team, which is also “involved in China’s top-secret hypersonic weapons programme,” according to the South China Morning Post. Today’s current journey from Beijing to New York depending on the jet stream is roughly 13 to 14 hours. An 80% reduction in travel time is a game changer for civilian aviation, but also a red flag if the aircraft is converted into a hypersonic heavy bomber.

  

  “It will take only a couple of hours to travel from Beijing to New York at hypersonic speed,” head of hypersonic research Cui Kai wrote in a paper this month in Physics, Mechanics and Astronomy, published by Science China Press.

  The team said they had tested a scaled-down prototype of the hypersonic plane in a wind tunnel at the Chinese Academy of Sciences in Beijing. Researchers carried out aerodynamics evaluations on the aircraft pushing it to 8,600km/h (5343 mph) and discovered it performed exceptionally well, with low drag and high lift.

  Cui and his crew, who hail from the academy’s Key Laboratory of High-Temperature Gas Dynamics, under the Institute of Mechanics, have dubbed their hypersonic plane the “I-plane” (so far Apple has not launched a trademark infringement suit against the team’s “I-Plane”). The South China Morning Post explains the “name comes from the shadow cast by the aircraft on the ground – in the shape of a capital “I” – when it is bearing down like a dive-bomber.”

  

  The South China Morning Post discussed why the radical design of the I-Plane is a game changer for aeronautical engineering but stresses the aircraft is still in the experimental stage and many years out from actual development.

  With two layers of wings, the I-plane design resembles that of biplanes used during the first world war. The earliest type of aircraft, most biplanes disappeared after the 1930s as plane designers pursued higher speeds and fuel efficiency.

  Fast-forward to 2018, and China’s latest hypersonic vehicle features lower wings that reach out from the middle of the fuselage like a pair of embracing arms. A third flat, bat-shaped wing meanwhile extends over the back of the aircraft.

  The researchers said this biplane design means the aircraft will be able to handle significantly heavier payload than existing hypersonic vehicles that have a streamlined shape and delta wings.

  At extremely high speeds, they said the double layer of wings works together to reduce turbulence and drag while increasing the aircraft’s overall lift capacity.

  The amount of lift generated by the new hypersonic vehicle was about 25 per cent that of a commercial jet of the same size, according to the study. That means an I-plane as big as a Boeing 737 could carry up to five tonnes of cargo, or 50 passengers. A typical Boeing 737 can carry up to 20 tonnes of cargo or around 200 passengers.

  While Cui’s design has provided an answer to the aerodynamic configuration problem encountered by previous hypersonic plane models, many issues still need to be tackled for this to move beyond the conceptual stage.

  All known hypersonic vehicles being developed worldwide are still in the experimental stage because of the many technological challenges that exist, and none of them can take passengers yet.

  Existing hypersonic vehicles – such as the US Air Force’s X-51 Waverider and China’s WU-14 hypersonic glide vehicle – have capacity for just a small, lightweight payload such as a compact nuclear warhead. This has severely limited the application of the technology.

  Travelling at hypersonic speed will also generate a huge amount of heat, possibly exceeding 1,000 degrees Celsius (1,800 Fahrenheit), and if that heat cannot be insulated or dispersed effectively, it could prove fatal. Although researchers have found potential solutions to this problem – such as using heat-resistant materials and a liquid-cooling system to push the heat out – this aspect again is still experimental.

  The I-plane, however, could be a game changer, according to a Chinese aircraft designer working on military research who said Cui’s team also worked on the development of China’s most advanced hypersonic weapons, so the tests would likely move from wind tunnel to open field.

  He added that the hypersonic vehicle could potentially be used to transport anything from flowers to bombs, and likewise, passengers could be tourists or military special forces.

  “We’re talking about something like a hypersonic heavy bomber,” he said. The paper has sent ripples through the hypersonic research community, he added. “It’s a crazy design, but somehow they’ve managed to make it work,” the researcher said.

  The project reflected China’s ambition to overtake the US on developing new strategic weapons, according to the researcher.

  “This will require original rather than knock-off designs,” he said, adding that the I-plane was part of a new family of aircraft in development that had not been reported until now. “It could lead to a huge step forward in hypersonic technology,” he said.

  China has tested various types of hypersonic vehicles over the Gobi Desert in recent years, some capable of reaching 10 times the speed of sound.

  It is also building the world’s fastest wind tunnel to simulate hypersonic flight at speeds of up to 12 kilometres per second (or 43,200km/h). At such velocity, a Chinese hypersonic vehicle could reach the west coast of the United States in less than 14 minutes.

  * * *

  Last Wednesday, Admiral Harry Harris, who heads the military’s Pacific Command, warned lawmakers  that, “China’s hypersonic weapons development outpaces ours … we’re falling behind.”

  “We need to continue to pursue that and in a most aggressive way to ensure that we have the capabilities to both defend against China’s hypersonic weapons and to develop our own offensive hypersonic weapons.”” Harris added.

  And so, perhaps for the first time since World War II, as a radical, game-changing new military technology arrives, it is not the US that is at the forefront.

  For those unfamiliar, below is a documentary by the Rand Corporation on the dangers and opportunities of hypersonic weapons.

  

• "Deeply Misguided" New York Times Writer Calls For Financial Firms To Block Gun Sales

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  What Sorkin is suggesting is more of the same, although perhaps with worse consequences. If banks take action where policymakers do not or cannot, they are essentially putting themselves above the law. And if banks start playing that role, where does it end?

  What if, for example, banks and credit card companies decided to stop processing payments for any retail purchase of cigarettes? After all, cigarettes are demonstrably bad for all consumers, and secondhand smoke can harm innocent people. Should banks step in to help protect society at large?

  Or what if banks decided to stop processing payments for abortion clinics because they believed the practice was immoral? Is it fair for financial institutions to make abortion effectively illegal? What if President Trump called on financial firms to cut off access to environmental groups he believed were delaying projects that could bring jobs to local economies? Maybe banks should freeze Colin Kaepernick’s checking account until he stops kneeling during the national anthem?

  Many of these examples are extreme, but you get my point. Just because banks can be used to have a dramatic impact on our society doesn’t mean they should be.

  – From the American Banker piece: Call for Bank Crackdown on Gun Sales Is Deeply Misguided

  Even in today’s world replete with plutocrat public relations masquerading as journalism, it’s rare to encounter an article simultaneously pandering, authoritarian, childish and dumb. Nevertheless, I found one, and it was unsurprisingly published in The New York Times.

  The title of the piece more or less says it all, How Banks Could Control Gun Sales if Washington Won’t, but let’s go ahead and examine some of the author’s suggestions in greater detail.

  For instance:

  Here’s an idea.

  What if the finance industry — credit card companies like Visa, Mastercard and American Express; credit card processors like First Data; and banks like JPMorgan Chase and Wells Fargo — were to effectively set new rules for the sales of guns in America?

  Collectively, they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand.

  PayPal, Square, Stripe and Apple Pay announced years ago that they would not allow their services to be used for the sale of firearms.

  If Visa and Mastercard are unwilling to act on this issue, the credit card processors and banks that issue credit cards could try. Jamie Dimon, chief executive of JPMorgan Chase, which issues credit cards and owns a payment processor, has talked about how he and his bank have “a moral obligation but also a deeply vested interest” in helping “solve pressing societal challenges.” This is your chance, Mr. Dimon.

  Let me interrupt your regularly scheduled programming for a quick moment to remind you of JP Morgan’s post-financial crisis criminal track record. Via Wall Street on Parade:

  

  Now back to The New York Times article…

  And here’s a variation on the same theme: What if the payment processing industry’s biggest customers — companies like McDonald’s, Starbucks, Apple, Amazon, AT&T, CVS and others that regularly talk about “social responsibility” — collectively pressured the industry to do it? There’s a chance that some of the payment processors would stop handling gun sales. Perhaps their voices would help push one of the banks to step out and lead?

  Is all of this a pipe dream? Maybe, but I spent the last 72 hours calling and emailing a handful of chief executives to discuss these ideas. None wanted to speak on the record, because it’s a hot-button topic. But all applauded the idea and some said they had already been thinking about it. A few, I discovered later, called their peers to begin a conversation. 

  Critics of using the finance industry to influence gun sales might argue that such a move would be discriminatory against gun retailers. But gun sellers are not a protected class, like age, race, gender, religion or even political affiliation. This would be a strictly commercial decision.

  That last line is a good example of why Andrew Ross Sorkin writes nonsense for The New York Times as opposed to say running a financial services company. If he thinks this would be a smart commercial decision, versus a potentially catastrophic one, he might want to get out of his bubble world for a couple of moments.

  Although there’s a concerted effort to have the public believe otherwise, there’s simply no national consensus on this issue at all — even after the recent Florida shooting. As The Hill recently reported:

  Fewer Republicans now support a ban on assault weapons than they did nearly two decades ago, according to a Washington Post/ABC News poll released Tuesday.

  The number of independents who support such a ban has also dropped starkly since 1999, according to the survey.

  Only 29 percent of Republicans said they would back a ban on assault weapons in the U.S., while 45 percent of independents said the same. That’s down significantly from 1999, when more than 7 in 10 Republicans and independents supported the prohibition.

  A solid majority of Democrats – 71 percent – still supports such a proposal.

  The Washington Post/ABC News poll was conducted following the shooting at Marjory Stoneman Douglas High School in Parkland, Fla., roughly 25 miles northwest of Fort Lauderdale. That attack left 17 people dead and 14 injured…

  Overall, about half of Americans support a ban on assault weapons, according to the new Washington Post/ABC News poll, compared with 46 percent who oppose such a ban. That shows little change from 2016, when 51 percent support a prohibition on assault weapons.

  There simply isn’t overwhelming national support for more gun control. As such, if the mega banks that wrecked the economy a decade ago and consumed massive bailouts to survive, decided to use their power to shadow legislate it will not go over well. I can promise you that much.

  While media coverage might make you think everyone is yelling for gun control, here’s some more of what we learned from The Washington Post poll:

  

  

  

  If we’re looking for some kind of national consensus, it appears to be centered around the view that mental health issues lie at the core of mass shooting events. Any bank CEO foolish enough to start a fight and ban customers from buying what they want to legally purchase could very quickly regret it. Moreover, irrespective of your stance on the issue, it’s dangerous and irresponsible to call for shadow public policy by crooked mega banks.

  Interestingly enough, as a huge Bitcoin proponent, I wouldn’t mind it at all if the banks listen to Sorkin. I couldn’t come up with a more effective marketing campaign to demonstrate clearly to the entire planet why Bitcoin is so incredibly important to a free society. It’s not as if mega banks are especially popular as things stand, so anything that makes a censorship resistance payment system look even better compared to the legacy financial system is perfectly fine by me. Bitcoin’s ability to fund Wikileaks in the face of a financial system blockade is what sparked my interest in the protocol in the first place. If banks want to signal to an entirely new demographic the important of permissionless money, be my guest.

  *  *  *

  If you liked this article and enjoy my work, consider becoming a monthly Patron, or visit our Support Page to show your appreciation for independent content creators.

  

• 'Green' Rush: Visualizing How Cannabis Legalization Will Impact California

  Across the United States, there’s a seemingly unstoppable movement gaining ground.

  The legalization of cannabis for adult use – first passed in the states of Washington and Colorado in 2012 – is now approved in a total of nine states and the District of Columbia; and as Visual Capitalist’s Jeff Desjardins notes, by the end of the year, that total could be in the mid-teens as states vote on cannabis-related ballots in the upcoming mid-term elections.

  CALIFORNIA’S GREEN RUSH

  States are legalizing the adult use of cannabis for various reasons, but there’s no doubt that one of the primary ones is the potential impact on both the economy and government coffers.

  Today’s infographic comes from cannabis royalty company FinCanna Capital, and it helps to contextualize the possible effects of cannabis legalization on the country’s largest state economy: California.

  

  Courtesy of: Visual Capitalist

  Experts say the current cannabis market (including unregulated sales) in California is already worth about $8.5 billion, making cannabis quite the cash crop to start with. In fact, it’s an amount that’s bigger than the current three largest agricultural markets in the state: milk and cream ($6.1B), grapes ($5.6B), and almonds ($5.2B).

  With the passing of Proposition 64 in November 2016 and legalization officially taking effect January 1, 2018, the state of California is now the world’s largest regulated cannabis market.

  To take advantage of this growing opportunity, entrepreneurs are rushing to the Golden State from far and wide.

  SIZING UP THE GREEN RUSH

  In 2016, the regulated market for cannabis, which only included medical marijuana at the time, was worth $2.81 billion in California.

  However, Arcview Market Research predicts that California will see regulated sales grow at a 23.1% annual pace between 2016-2020 as adult use sales come into play. By 2020, the total regulated industry will be worth $6.5 billion.

  Meanwhile, it’s expected that the state government will be pocketing from the rush as well, picking up $1 billion or moreper year from taxes. That includes a 15% levy on all cannabis sales, as well as cultivation taxes applied to buds and trimmings.

  THE MEDICAL COMPONENT

  As the largest legal market on the planet, California could see less expected green shoots, as well.

  Because of its federal classification as a Schedule I substance, cannabis is extremely under-researched globally. With wider state acceptance of cannabis in California, it may be possible to foster an environment where more could be learned about the vast medical potential of the plant through the state’s powerful universities and institutions. This could lead to increased innovation, investment, and medical discoveries that could have an additional economic impact.

  Such a track would follow in the footsteps of Israel, which is the world’s leader in marijuana research. In the country, there are 120 ongoing studies, $100 million in foreign and U.S. funds invested into patents, startups, and delivery devices, and ten-fold growth in investment expected between 2017-2019.

  

• Prohibition Never Works: Banning Alcohol Didn't Work, And Banning Guns Won't Either

  Authored by Mac Slavo via SHTFplan.com,

  They say those who don’t pay attention to history are destined to repeat it…

  

  It seems like even though humans have paid attention, they somehow think the same things that failed in the past, like prohibition and communism, will magically work now.

  

  Alcohol kills almost three times as many Americans as guns. Last year, about 33,000 people died of gunshot-related injuries, including those who shot themselves; suicide. When removing those who killed themselves only (again, suicide), that number drops to 15,549, by even anti-gun activists estimates.  To put that in perspective, this year’s flu and the vaccine to “prevent” said flu is more deadly. So far, it’s been killing an estimated 4,000 Americans per week. That’s roughly 16,000 per month, a number already higher than last year’s total “gun deaths” which include justified homicides (or self-defense.) You don’t have to be a genius at math to understand that “gun violence” isn’t really the epidemic the media wants you to believe.

  

  By comparison, alcohol abuse killed nearly 88,000 people in 2015 in the United States. So why not ban booze? Because the United States tried that.  It was called prohibition, and it didn’t work.

  It resulted in the government poisoning their own people: yes, the US government.  The same government that the anti-gun activists say wouldn’t do that to us. Rational humans would rather not see the government get a monopoly on guns. But the US has strayed rather far from logic, relying on emotional outbursts and teenage angst temper tantrums. 

  Joe Joseph from the Daily Sheeple also brings an interesting point to consider. “Did you know, that alcohol is the number one underlying cause and factor behind crime in the US?” Alcohol is alone causes more harm to society than heroin, cocaine, and marijuana combined.

  So where’s society’s outrage over alcohol abuse?  Why aren’t kids marching for alcohol control? Because prohibition doesn’t work.

  People who want to break the law and drink will do so.  People snort cocaine regardless of the fact that it’s illegal.  Where is society’s outrage at the right thing?

  “Where are all the millions of dollars and campaign contributions and television ads trying to save people’s lives from the dangers of alcohol?” Joseph asks.

  “This is huge because we have to look at the facts. And the facts are: while it’s awful that these events take place, they’re anomalies in the grand scheme of things. Alcoholism is not an anomaly. It’s very present, ever present in our society and substance abuse is getting worse and worse and worse because the root cause isn’t being tackled.”

  The root cause is pain and voids within a person. The problem is that social engineering has created a god for people and that god is the government. And it’s a very poor substitute for actual spirituality, says Joseph.

  Americans don’t “pull themselves up by their own bootstraps” and rely on their ingenuity and faith and individual strengths.  Americans now rely on the god created by social engineering: government. Simply suggest that humans could run their own lives just fine without a government, and most people will act as if you actually insulted their god.

  “Freedom is not free,” says Joseph. “Freedom comes at a great cost. It takes a lot to maintain freedom….people are being pushed to the point of rebellion in this country and on purpose.”

  Follow Joe Joseph and his News Shots here, on The Daily Sheeple’s YouTube channel. 

  

• "I Haven't Eaten Meat In 2 Months" – Venezuelan Oil Workers Are Collapsing From Hunger On The Job

  Those who are unfamiliar with Venezuela’s unprecedented economic collapse might be surprised to learn that the country’s oil production has only slowed, even as the price of a barrel of crude has risen in most international markets.

  Unsurprisingly (it’s Venezuela), there’s a macabre explanation for this phenomenon: The workers at PDVSA – Venezuela’s state-owned oil company, which once showered Venezuelans with oil wealth – are literally collapsing due to hunger and exhaustion as workers defy their government handlers and flee their jobs in their desperation as the value of their pay has been completely erased.

  Bloomberg spoke with several workers in Venezuela’s oil industry about the harsh conditions they face on a daily basis.

  

  Of course, oil workers aren’t the only ones suffering: The situation in Venezuela is getting so dire that ordinary Venezuelans are losing tons of body weight because of the food shortages. Many can no longer afford to buy meat.

  One worker told Bloomberg about how his weekly salary barely pays for the corn flour he mixes with water and drinks every morning.

  At 6:40 a.m., Pablo Ruiz squats at the gate of a decaying refinery in Puerto La Cruz, Venezuela, steeling himself for eight Sisyphean hours of brushing anti-rust paint onto pipes under a burning sun. For breakfast, the 55-year-old drank corn-flour water.

  Ruiz’s weekly salary of 110,000 bolivares — about 50 cents at the black-market exchange rate — buys him less than a kilo of corn meal or rice. His only protein comes from 170 grams of canned tuna included in a food box the government provides to low-income families. It shows up every 45 days or so.

  “I haven’t eaten meat for two months,” he said. “The last time I did, I spent my whole week’s salary on a chicken meal.”

  Hunger is hastening the ruin of Venezuelan’s oil industry as workers grow too weak and hungry for heavy labor. With children dying of malnutrition and adults sifting garbage for table scraps, food has become more important than employment, and thousands are walking off the job. Absenteeism and mass resignations mean few are left to produce the oil that keeps the tattered economy functioning.

  Researchers at three Venezuelan Universities reported losing on average 11 kilograms (24 lbs) in body weight last year and almost 90% now live in poverty, according to a new university study on the impact of a devastating economic crisis and food shortages. That annual survey has become a key barometer of the country’s economic stress since the government stopped releasing reliable economic data, as Reuters reports.

  Per Reuters, over 60% of Venezuelans surveyed said that during the previous three months they had woken up hungry because they did not have enough money to buy food. About a quarter of the population was eating two or less meals a day.

  After winning the presidency in 1999, leftist President Hugo Chavez was proud of improving Venezuela’s social indicators as the country’s economy was bolstered by oil-fueled welfare policies.

  But his successor President Nicolas Maduro, who has ruled since 2013, has allowed corruption to flourish. And his political allies have mismanaged the economy to such a degree that the collapse in the price of oil during 2014 had ruinous consequences.

  Even as the price of crude has begun to creep materially higher, the situation in Venezuela is only getting worse.

  In contemporary Venezuela, currency controls restrict food imports, hyperinflation eats into salaries, and people line up for hours to buy basics like flour.

  As a result, 90% of Venezuelans live in poverty.

  In what appears to be a last-ditch effort to rescue the country’s economy and his regime, President Nicolas Maduro yesterday began sales of the Petro, Venezuela’s oil-backed cryptocurerency. The launch was so successful, Maduro has assured the public, that he is considering launch a “Petro Oro” – a cryptocurrency backed by gold reserves.

  

  But perhaps even more shocking than the dire circumstances under which PDVSA’s remaining employees go to work every day is the contrast with the country’s prosperous past, as Bloomberg describes it…

  For decades, PDVSA was a dream job in a socialist petro-state. The company supplied workers not only with a good living and revolutionary-red coveralls, but cafeterias that served lunches with soup, a main course, dessert and freshly squeezed juice. Now, the cafeterias are mostly bare, the children are hungry and employees are leaving to work as taxi drivers, plumbers or farmers. Some emigrate. Some hold out as long as they can.

  …Now, instead of enjoying the trappings of a comfortable, middle-class life (not to mention freshly squeezed fruit juice), desperate employees are risking the government’s wrath – and possibly sacrificing their chance at a government pension someday – to escape not only from their jobs, but from Venezuela.

  Those who quit without notice risk losing their pensions, as bureaucrats refuse to process paperwork. Many managers live in terror of arrest since the Maduro regime purged the industry, imprisoning officials from low-level apparatchiks to former oil ministers. In one human resources office, a sign advertised a limit of five resignations a day.

  “Management is holding them back to stop brain and technical drain,” said Jose Bodas, general secretary of United Federation of Venezuelan Oil Workers. He estimates 500 employees have resigned at the Puerto La Cruz refinery and nearby processing facilities in the past 12 months – even though superiors have labeled them “traitors to the homeland,” a phrase that often precedes arrest. In the streets, families sell their boots and the red coveralls.

  “They’re giving up because of hunger,” Bodas said. “They’re leaving because they get paid better abroad. This is unheard of, a catastrophe.”

  In a nightmarish reflection of what life must’ve been like in some of the most poverty stricken areas of the Soviet Union, widespread adsenteeism is forcing those who stay behind to work long hours at the state’s insistence – without any additional compensation.

  Sitting in the living room of his house, on his day off, Endy Torres says he has lost 33 pounds over the past 18 months. He shows his PDVSA identification photo as proof: a chubby-cheeked man, weighing 176 pounds.

  Ten years ago, he joined the company expecting an ample salary and comfortable pension. Today, his 700,000 bolivars per month, plus a food bonus of 1.6 million bolivars (about $9.50 altogether) can’t fill the fridge at his grandmother’s house, where he lives.

  About 10 people from his department resigned in January. There are 263 plant operators remaining and 180 vacancies at the Puerto La Cruz refinery, he said.

  Absenteeism forces those who show up to work extra hours and burn precious calories. The lack of investment in equipment and maintenance has increased technical failures, almost all in the early hours of the morning, he said. When they occur, workers are too fatigued to act quickly, and accidents occur.

  And the worst part of it all is: Even if oil prices make a surprise comeback, years of favoritism, corruption and – now – international sanctions mean it’s unlikely Venezuela’s oil industry will suddenly blossom once again: For those who stay behind, the formerly wealthiest country in Latin America will probably remain mired in poverty, for as long as it’s ruled by a corrupt autocracy.

   

  

• America's Election Meddling Would Indeed Justify Other Countries Retaliating In Kind

  Authored by Caitlin Johnstone via The Strategic Culture Foundation,

  There is still no clear proof that the Russian government interfered with the 2016 US elections in any meaningful way. Which is weird, because Russia and every other country on earth would be perfectly justified in doing so.

  

  Like every single hotly publicized Russiagate “bombshell” that has broken since this nonsense began, Mueller’s indictment of 13 Russian social media trolls was paraded around as proof of something hugely significant (an “act of war” in this case), but on closer examination turns out to be empty. The always excellent ‘Moon of Alabama’ recently made a solid argument that has also been advanced by Russiagate skeptics like TYT’s Michael Tracey and Max Blumenthal of The Real News, pointing out that there is in fact no evidence that the troll farming operation was an attempt to manipulate the US election, nor indeed that it had any ties to the Russian government at all, nor indeed that it was anything other than a crafty Russian civilian’s money making scheme.

  The notion that a few Russian trolls committed a “conspiracy to defraud the United States” by “sowing discord” with a bunch of wildly contradictory posts endorsing all different ideologies sounds completely ridiculous in a country whose mainstream media spends all its time actively creating political division anyway, but when you look at it as a civilian operation to attract social media followers to sock puppet accounts with the goal of selling promoted posts for profit, it makes perfect sense. James Corbett of The Corbett Report has a great video about how absolutely bizarre it is that public dialogue is ignoring the fact that these trolls overwhelmingly used mainstream media like the Washington Post in their shares instead of outlets like RT and Infowars. As a scheme to acquire followers, it makes perfect sense. As a scheme to subvert America, it’s nonsensical.

  There is currently no evidence that the Russian government interfered in the US election. But it is worth pointing out that if they did they had every right to.

  

  “Whataboutism” is the word of the day. At some point it was decreed by the internet forum gods that adding “-ism” to a description of something that someone is doing makes for a devastating argument in and of itself, and people have hastened to use this tactic as a bludgeon to silence anyone who points out the extremely obvious and significant fact that America interferes in elections more than any other government on earth.

  

  “Okay, so America isn’t perfect and we’ve meddled a few times,” the argument goes. “So what? You’re saying just because we’ve done it that makes it okay for Russia to do it?”

  Actually, yes. Of course it does. Clearly. That isn’t a “whataboutism”, it’s an observation that is completely devastating to the mainstream Russia narrative. If it’s okay for the CIA to continuously interfere in the elections of other countries up to and including modern times, it is okay for other countries to interfere in theirs. Only in the most warped American supremacist reality tunnel is that not abundantly obvious.

  Every country on earth is absolutely entitled to interfere in America’s elections. America is responsible for the overwhelming majority of election interferences around the world in modern times, including an interference in Russia’s elections in the nineties that was so brazen they made a Hollywood movie about it, so clearly an environment has been created wherein the United States has declared that this is acceptable.

  

  It amazes me that more people aren’t willing to call this like it is. No, it would not be wrong for Russia to interfere in America’s elections. Yes, what America did to Russia absolutely would make a proportionate retaliation okay. Of course it would.

  Imagine this:

  A guy in a cowboy hat runs into a bar and starts punching people. Most of them just rub their sore jaws and hunch over their drinks hoping to avoid any trouble, but one guy in a fur cap sets down his vodka and shoves the man in the cowboy hat.

  The man in the cowboy hat begins shrieking like a little girl. All his friends rush to his side to comfort him and begin angrily shaking their fists at the man in the fur cap.

  “Hey, he punched me!” says the man in the fur cap.

  “That’s a whataboutism!” sobs the man in the cowboy hat.

  Can you imagine anything more ridiculous?

  

  Seriously, how do people think this is a thing? How does anyone think it’s legitimate to respond to my article about a former CIA Director openly admitting that the US still to this day interferes with elections around the world babbling about “whataboutisms”? What a doofy, indefensible monkey wrench to throw into the gears of political discourse.

  Yes, obviously by asserting that it is acceptable for the CIA to meddle in other countries’ elections, the US has created an environment where that sort of thing is acceptable. If Americans just want to embrace their American supremacist bigotry and say “Yeah we can do that to you but you can’t do it to us cuz we have big guns and we said so,” that’s at least a logically consistent position. Crying like little bitches and behaving as though they’ve been victimized by some egregious immorality is not.

  

  Channel 4 News reported on the research of the Institute for Politics and Strategy at Carnegie Mellon University’s Don Levin back in November, writing the following:

  Dov Levin, an academic from the Institute for Politics and Strategy at Carnegie Mellon University, has calculated the vast scale of election interventions by both the US and Russia.

  According to his research, there were 117 “partisan electoral interventions” between 1946 and 2000. That’s around one of every nine competitive elections held since Second World War.

  The majority of these – almost 70 per cent – were cases of US interference. And these are not all from the Cold War era; 21 such interventions took place between 1990 and 2000, of which 18 were by the US.

  If Americans don’t like election meddling, they need to demand that their government stops doing it. As long as it remains the very worst offender in that department, the US is entitled to nothing other than the entire world meddling in its elections.

  I shouldn’t even have to say this. Do unto others as you would have them do unto you. Don’t dish it out if you can’t take it.

  Duh.

  

• Why The Market's Most Important Correlation Has Flipped

  Two days before the February 5 volmageddon, and before everyone became an overnight expert on inverse VIX ETFs, CTAs an risk parity funds, we showed two chart which we explicitly said presaged a turning point for markets, vol-targeting funds, and hinted at an imminent risk-parity tantrum.

  The first showed the unmistakable correlation shift between 10Y yields and the S&P, which we said is “considerably worrisome for investors.”

  

  Meanwhile, we also showed that the bond-equity correlation, which has been predominantly negative since the Lehman crisis, had started creeping up towards positive territory. Specifically, we said that “the 90-day correlation between stock (SPY) and bond (TLT) markets has surged ominously in the last few weeks.”

  

  Three weeks later, Bank of America – in response to “many interest rate questions from investors” – published a 50 page report which looks at the relationship between rising rates and stocks to conclude, after tortured and convoluted logic and several goalseeked examples, that rising rates are not bad for stocks.

  Actually, they are, and here is the simplest reason why in just 9 words: “Every market crash has been preceded by Fed tightening.“

  

  Still, BofA did have some interesting observations on the long-term historical relationship and rolling 3 year correlation between the S&P and 10Y yields, to wit:

  Over the past 64 years, stocks have exhibited a weak and inconsistent correlation with interest rates (-11%).

  

  Over this period, the correlation has seen a wide range from -63% to 75%. The relationship was generally negative for most of the 1960s through the 1990s (higher yields bad for stocks), a period during which the average level of rates was 7.5%. But since the turn of the century, the relationship was generally positive (higher yields good for stocks) a period during which the average level of rates was 3%. The relationship with rates and stock returns peaked about five years ago, but has remained positive and has been trending higher since the recent trough of 13% in late 2015 (Chart 2).

  

  And now it’s flipped again… and it’s not the only one: as the following bloombergchart show, the 6-month rolling correlation between stocks and the dollar, which was also positive for the past 4 years, has turned sharply negative.

  

   

  So why is this (or rather these) most critical market correlation inverting as yields creep ever higher? Overnight, Blackrock’s Russ Koesterich gave an elegant explanation, highlighting three things: i) the reversal in the correlation sign, ii) the nonlinear relationship between the two key asset classes, and iii) the relative interest rate.

  First, why the correlation turns negative:

  Financial theory does suggest that equity valuations, i.e. the price you pay for a dollar of earnings, should drop as the interest rate used to discount that earning rises. Empirical evidence supports this. A simple linear regression of stock multiples versus interest rates demonstrates that over the very long term, rates and market multiples are negatively correlated. Since 1954, for every one percentage point increase in 10-year Treasury yields the price-to-earnings ratio (P/E) on the S&P 500 contracts by approximately 0.70 points.

  Another way of showing this is the following chart from BofA which shows the impact of the change in the real risk free rate on S&P fair value. The higher rate, the lower the S&P, or as BofA explains, “every 50bp increase in the normalized real risk-free rate reduces the fair value of the S&P 500 by roughly 6-8%”

  

  To offset the gloomy message some – like Blackrock – try to extrapolate a non-linear relationship between yields and multiples:

  However, if you allow for a more complex expression of the relationship, things look somewhat different. Rather than a straight line, a better description of the relationship between rates and multiples is nonlinear, i.e. the relationship changes depending on the level of rates. Allowing for this nuance, interest rates explain nearly 30% of the variation in S&P 500 earnings multiples (see the accompanying chart).

  

  Finally, there is the special case of low rates: here again is Kosterich:

  Rates and multiples are more likely to rise in tandem when interest rates are rising from unusually low levels, as is the case today. Under these circumstances, faster growth is treated as a positive as it alleviates recession and deflation fears. In addition, faster nominal growth is also associated with faster earnings growth.

  Unfortunately, there is a caveat. Rates and valuations can rise together—to a point. At some point the negative relationship between rates and valuations reasserts itself. In other words, at a certain level higher bond yields create real competition for stocks, particularly dividend stocks, and put downward pressure on multiples.

  What that point is, is of course the $64 trillion question: while some have suggested 2.75%, some 3.0% the latest and greatest estimation of this inflection point came from Credit Suisse this week, which calculated that the day of reckoning for stocks will take place just as the 10Y yield hits 3.50%.

  

  Of course, by the time the 10Y actually does hit 3.5% it will be far too late as anticipating traders will have been busy frontrunning this event… and selling; it explains why the closer we get to 3.00%… or 3.50%, the greater the divergence between the 10Y and the S&P, and why the higher yields go, the more negative the correlation, until it eventually snaps back when stocks finally capitulate and the next crash hits.

  

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• "We Primed Ourselves For Discord" – The Dangers Of Exaggerating Russia's Role In The 2016 Election

  As we’ve pointed out time and time again, anybody who has read the Mueller indictment would likely assume that Russian agents were orchestrating a sophisticated psy-op against the American people during the run-up to the 2016 vote – and that their meddling had a demonstrable impact on the outcome.

  As if anybody expected the 2016 campaign season to be a placid affair, with two of the most controversial candidates in US electoral history going head-to-head?

  

  In today’s New York Post, columnist Rich Lowry highlights how exaggerating the impact that the 13 Russians and 3 Russian entities charged by Mueller had on the election risks doing more harm than good. The Post also reported that it couldn’t find any evidence that pro-Trump and anti-Hillary rallies that were purportedly organized by the Russians in New York — not exactly a swing state — in June and July of 2016 had ever taken place.

  The Russia campaign was a shockingly cynical violation of our sovereignty. President Trump would do himself and the country a favor by frankly denouncing it.

  But the scale of the operation shouldn’t be exaggerated. In the context of a hugely expensive, obsessively covered, impossibly dramatic presidential election, the Russian contribution on social media was piddling and often laughable.

  The Russians wanted to boost Trump, but as a Facebook executive noted, most of their spending on Facebook ads came after the election. The larger goal was to sow discord, yet we had already primed ourselves for plenty of that ourselves.

  Lowry’s column comes at an opportune time. Earlier this week, two interesting stories published this week by the New York Times and Wall Street Journal fleshed out new details of the suspected Putin-linked Russian bots’ activities. And in both instances, though the content was salacious, alarmist and crude, almost none of it pertained directly to candidates for American office.

  Which reminds us of the fact that Mueller has said there’s no proof the Russians had a material impact on the election – though he has unequivocally allowed – even encouraged via the fusillade of leaks out of his office – the unfounded suspicion of unalterable wrongdoing to linger.

  First, the New York Times published a story about Russia-linked bots spreading misinformation and hysteria following last week’s school shooting in Parkland, Fla.

  Any news event – no matter how tragic has become fodder to spread inflammatory messages in what is believed to be a far-reaching Russian disinformation campaign. The disinformation comes in various forms: conspiracy videos on YouTube, fake interest groups on Facebook, and armies of bot accounts that can hijack a topic or discussion on Twitter.

  Those automated Twitter accounts have been closely tracked by researchers. Last year, the Alliance for Securing Democracy, in conjunction with the German Marshall Fund, a public policy research group in Washington, created a website that tracks hundreds of Twitter accounts of human users and suspected bots that they have linked to a Russian influence campaign.

  That’s right: These accounts are meticulously tracked, and, researchers have proven that the vast majority of the content they produce has nothing to do with American politics. They have one trait in common: They are salacious and often include disinformation. But rarely are they political.

  

  And, as the Wall Street Journal demonstrates in a deeply researched piece published yesterday, this is not a new strategy. These accounts have been active for years. In citing incidents that have been identified by investigators as coordinated disinformation campaigns, the aim appears more toward impacting markets and spreading hysteria than any expressly political aim.

  The story begins with a recounting of how Russian trolls spread a swiftly discredited story about food poisoning being spread by Wal-Mart turkeys. While there’s no evidence the hoax impacted the stock, it’s easy to imagine that this was it’s aim.

  WSJ says most of the bots identified by the US government first became active in 2014.

  The Journal’s data shows a small number of Russian tweets before 2014, but it was a deadly plane crash that year that brought out the strongest early response. On July 17, 2014, an anti-aircraft missile shot down Malaysia Airlines Flight 17 over Ukraine, killing all 298 passengers and crew.

  …Some of the false stories spread by the bots were intended to discredit the Ukrainian government…

  Russian-linked Twitter users at first tweeted news of the tragedy, but within hours they were raising questions about who was responsible. By the next morning, they had latched onto a hashtag blaming the Ukrainian government: КиевСбилБоинг – Kiev shot down the airliner.

  Despite this, Mueller insists that he’s still investigating links between the Trump campaign and Russia – though, at this point, it appears that the investigation’s primary achievement will be a lengthy prison sentence for former campaign executive Paul Manafort, who has been a long-time target of the FBI, beginning back in the early 2000s, around the time that Mueller’s tenure as head of the bureau began.

  After all, one shouldn’t exaggerate the role Russians played in the election – if only to avoid sowing more partisan fear and division in a system that’s already rife with both.

  

• Syria's Afrin Move: "Artful Assistance To Allies" Or "Armageddon In The Making"?

  Authored by Andrew Korybko via Oriental Review,

  Syria reportedly agreed to the Kurdish PYD-YPG “federalist” militia’s request to enter Afrin and stop the Turks’ military advance, though it still remains to be seen whether Damascus will actually carry through on this decision or not.

  

  There have been conflicting reports on this topic all across the past week, but the official “Syrian Arab News Agency” (SANA) confirmed that the “Popular Mobilization Units” (PMU) will deploy to the region in order to thwart the Turks, debunking earlier claims that the Syrian Arab Army (SAA) will directly do so instead. Even so, this would b e a very dangerous development if it actually happens because it could quickly lead to the Syrian Arab Army (SAA) entering the fray in support of their pro-government partners and thus sparking a conventional state-to-state war with Turkey. Syria has every sovereign right to deploy its own forces and those of its allies anywhere within its territory, but taking a step back from principled idealism and soberly assessing the reality of the situation, this might not be the wisest decision at the moment.

  The Turkish Foreign Minister warned in no uncertain terms that his country’s military forces will not be stopped by the SAA or its allied PMU if they intervene on behalf of the PYD-YPG “federal” Kurds that Ankara equates with the terrorist-designated PKK, and it’s very likely that the war-weary and completely exhausted Syrian military might be routed by the much more powerful Turks if “push comes to shove”. Not only that, but there’s close to no possibility that Russia would get involved in “saving Syria” either since its military mandate is strictly for anti-terrorist purposes and President Assad’s closest advisor Ms. Bouthaina Shaaban confirmed that Moscow withdrew all of its ground forces except for a few remaining aircraft.

  In addition, Dr. Vitaly Naumkin – Russia’s premier Mideast expert and the man who’s playing a crucial role in organizing Moscow’s peacemaking efforts in Syria – wrote in the position paper released at the beginning of the prestigious Valdai Club’s two-day conference earlier this week that “part of the government elite may have greater hopes for military victory than the dividends that negotiations would eventually pay”. This is the strongest statement yet of Moscow’s growing impatience with Damascus’ refusal to enter into the “compromises” that President Putin suggested that the authorities make back in November in order to facilitate an internationally brokered peace to the conflict. On top of that, Damascus rejected the outcome of the “Syrian National Dialogue Congress” just last week, which may have prompted Naumkin’s stark warning about so-called ‘hardliners’ who might prospectively impede the peace process.

  Bearing in mind this high-level official’s words and the fact that Russia withdrew most of its military forces from Syria, as well as Moscow’s visibly growing dissatisfaction with the Syrian government’s procrastination on making any tangible progress towards a “political solution”, there are concrete grounds for predicting that Russia would not support the SAA if they enter into conflict with the Turks, further amplifying the existential risk that Damascus faces if it allows the Kurds to “play them like a fiddle” and falls for this disastrous scenario. It might be for this reason why the authorities never carried through on their implied threat to dispatch conventional military units to Afrin, begrudgingly realizing after President Putin’s phone call with President Erdogan that Russia would “hang them out to dry” as they initiate what might have amounted to an act of “national suicide”.

  Nevertheless, the situation is still highly combustible right now and a larger war could break out at any time due to even the slightest miscalculation by the Syrian side, thus leaving the whole world watching with bated breath to see what happens next.

  

• "Wow, That's Weird" – FOIA Exposes FAA Tapes From Oregon UFO Incident

  On October 25, an unidentified flying object (UFO) was detected on radar, which turned into a series of eyewitness accounts made by commercial airline pilots over the skies of Northern California and Oregon. Even the U.S. Air Force scrambled their McDonnell Douglas F-15 Eagles as part of the military’s protocol to combat threats of an intruding aircraft penetrating deep inside America’s airspace. By the time the interceptor fighter jets arrived, the mysterious aircraft became invisible and disappeared from radar.

  

  Last November, “The War Zone” blog of the automotive website The Drive, posted an exclusive story detailing the mysterious white object buzzing around the skies near commercial airliners in Northern California and Oregon. The blog tracked down various accounts of what happened that day from pilots and also obtained confirmation about the F-15 Eagles launch to intercept the intruding aircraft that has left so many people puzzled.

  Now, through the Freedom of Information Act (FOIA), The War Zone presents a mindblowing and insightful account of official documentation surrounding what really happened on October 25 over the skies of Northern California and Oregon. The FOIA includes “fascinating audio recordings of radio transmissions and phone calls made as the incident was unfolding, as well as pilot interviews, and conversations between FAA officials made in the aftermath of the highly peculiar incident,” said The War Zone.

  The first video is a brief overview of the entire incident:

  Full radar obtained from the FAA via FOIA for Northern California and Oregon from 4:34 pm to 5:25 pm PST on October 25.

  The War Zone indicates that Oakland Center controllers first spotted the mysterious aircraft on radar moving “very fast at 37,000” feet near sector 31 and bordering sectors 13/14.

  Oakland Center Sector 31 first detected the target around 4:30pm PST. Below is a chart showing where Oakland Center’s high altitude sectors are situated around Northern California. Sector 31 spans roughly from Sacramento up towards Redding, before its northern edge, which is near the border with Oregon, terminates and Seattle Center’s airspace begins. To the east, the airspace sits along the California-Nevada border. This makes sense as the craft was eventually tracked by airline pilots as it made its way up over Crater Lake and towards the Willamette Valley.

  In the audio, the Oakland Center controller notes that it is near his boundary, so it seems the aircraft’s first appearance officially occurred near the border of Oakland Center Sector 31 and Seattle Center Sector 13 or 14. The target was moving “very fast at 37,000” feet when it was first detected.

  

  As the mysterious aircraft disappeared from radar, numerous reports from different airline crews began radioing into the air traffic controller of an unidentifiable white aircraft. Shortly after, F-15 fighter jets were scrambled to intercept the mysterious white aircraft, but it had turned on “stealth mode,” said one controller.

  The “intruder” quickly dropped off radar and that’s when the visual sightings made by airline crews began. They continued for roughly half an hour and over hundreds of miles. The exchanges between nearby pilots and air traffic control regarding the unidentified aircraft were constant in the audio, with the same description coming back time and again—that of a white aircraft cruising at around 37,000 feet that is too far away to tell the type or if it has markings of any kind on it.

  At roughly 27:30 into the video we get our first indication that the F-15s out of PDX are about to scramble, with the air traffic controller noting this while talking to another FAA controller, during which the controller also reiterates that there has still been no radar contact with the aircraft. The controller also repeatedly asks aircrews nearby to check their Traffic Collision Avoidance Systems (TCAS) for the aircraft, which all come back negative.

  The F-15s first appear on radar as they climb out of Portland to the south at time index 33:33 as “Rock” flight—a common callsign used for the alert F-15s stationed at PDX. Alaska 439 asks for an update on the unidentified aircraft and the controller notes they still have nothing on him, saying colloquially that it must be in a kind of “stealth mode or something.” It’s also interesting that the F-15s first went south when it seems as if the object would have been north of PDX by the time they finally launched.

  Next, the FOIA request uncovered very interesting recordings demonstrating how FAA officials were in contact with the Western Air Defense sector of NORAD.

   Aside from that, the audio is unedited by us, although we cannot be certain if parts were redacted by the FAA or not. There were a few strange areas where conversations went mute and it’s not clear if this was edited or just an anomaly. The primary person talking in most of these calls is the Operations Manager In Charge for Seattle Center at the time that the incident took place.  

  The first call is to Oakland Center, and it occurs early on after the initial radar detection and as pilots began spotting the craft visually. He also mentions that “air defense” is looking for the target now too (on radar), so it shows how early the military was involved in the encounter.

  You will notice that the term “DEN” is referred to repeatedly in these recordings. That is the Domestic Events Network, a sort of hotline system that is used to bridge the FAA with federal authorities, namely the military, during a number of circumstances which you can read about here. You will also hear the term “WADS” and the nickname/callsign “Bigfoot.” This refers to the Western Air Defense sector of NORAD that monitors the airspace over a huge swath of territory in the United States and Canada. Based out of McChord AFB in Washington, WADS scrambles the fighters when needed and works to direct them to their targets of interest during domestic air sovereignty missions, among other responsibilities.

  When the Manager In Charge is asked if he was asking for military assistance by another FAA controller, the tape goes blank. The same inquiry is heard moments later, and it goes silent again before another call begins. Although it really doesn’t have much impact on the greater mystery, who asked for the F-15s to scramble and when, comes up in the next video in an exchange between the same manager and an FAA official.

  In the final set of calls in the video we hear controllers talking about how the Air Force wants to set up an air patrol over Battle Ground, Washington, which is a dozen miles directly north of PDX. We know the F-15s headed south initially, so it isn’t clear if this call came after they initially headed in that direction or before they were even airborne and the plan changed later on for some reason. Once again “Rock” refers to the callsign of the alert fighters.

  

  The next round of audio is from Seattle Center’s Manager In Charge of Operation, in which he investigates the incident minutes after it happened. He is heard talking with airline pilots who had visual contact on the mysterious white aircraft.

  First we hear about the big question as to who “requested” the scramble, as according to the call, it has to come from FAA headquarters. The manager floats the idea, in retrospect, of having the airliners keep a visual on the craft instead of allowing them to descending into PDX, at least until the F-15s show up, but the FAA official swats that down as they didn’t know what the aircraft was, “if they are equipped with anything” or its intentions. She reiterates that getting the military involved was a good idea but that it should have come from FAA headquarters over the DEN. The manager reminds her again that he doesn’t know who requested military assistance and that Oakland Center told him to call WADS initially.

  Next we hear from Oakland Center again, at first discussing who ordered the scramble, but then the conversation goes into talking about what actually happened. Both agree that there was “definitely something out there” with the Oakland Center controller saying the aircraft first appeared going southbound at high speed before executing an abrupt maneuver and then “took off northbound.” Even figuring out how to report the encounter seems totally foreign to both higher ranking controllers, with one stating “I have a feeling someone is going to go through this with a fine-tooth comb.”

  Then we get into the pilot interviews over the phone, with the manager’s intention being for each crew to write up a report detailing their individual perspective of the incident. During the call with United 612 there are some odd dropped moments, but the pilot describes the encounter, stating that he was too far away to make out the type. The next call, with Alaska Airlines 525, also doesn’t reveal much as the crew says they never were able to see it, but the crew of Skywest 3478 did, although he didn’t have much to add.

  The call with the pilot of Southwest 4712 was by far the most interesting. He immediately notes how strange the encounter was and how he has never seen an incident like it in nearly 30 years of flying jets. The pilot noted, “if it was like a Lear (private jet) type airframe I probably would not have seen it this clear. This was a white airplane and it was big. And it was moving at a clip too, because we were keeping pace with it, it was probably moving faster than we were… It was a larger aircraft yeah.” He also said they watched the object from Northern California all the way to their descent into Portland.

  The manager’s final call, was with the FAA’s Quality Assurance Group, who is taken by surprise by the details surrounding the event, and especially with the fact that nobody still knew what the aircraft was or where it ended up. “Wow that’s weird” is the operative quote by the FAA official, which is insightful to say the least as these people deal with unique incidents that occur in American airspace on a daily basis. The manager agreed with the sentiment and noted that it wasn’t some small aircraft and it was moving fast, outpacing a 737 cruising nearby. The official also says that the incident should be classified as “potentially significant” on reporting documents. She even said that this was “a weird enough thing that there is not a set procedure… It’s not often we hear about an unknown guy up at that altitude.”

  And lastly, The War Zone concludes:

  Collectively these materials give us incredible insight not only into this incident, but also into how such an event is actually handled in real-time by those who are responsible for the safety of those in the air and those on ground below. What they don’t offer is any sort of an explanation for what happened on that fall evening. But really, the fact that all those involved, from air traffic controllers, to Air Force radar operators, to airline pilots, and even special FAA officials tasked with responding to all types of out of the ordinary incidents that occur in the sky on a daily basis seem just as puzzled with this event as we are makes the story all that much more intriguing.  

  The FOIA request of FAA audio and video provides an interesting view of what government officials saw and heard during the incident over the skies of California and Oregon on October 25.

  

  While there is no definitive answer of what and where the mysterious aircraft came from. We should point out that the United States is in a fierce race for hypersonic technologies against China and Russia. Considering Area-51 is some 500-miles away from the incident, it would not of shocked us that the mysterious aircraft is, in fact, a hypersonic airplane from DARPA.

  

  Nevertheless, some speculate the aircraft was likely to be the top-secret B-21 “Raider” of the US Air Force, a next-generation stealth bomber.

  

• Brandon Smith: Mass Shootings Will Never Negate The Need For Gun Rights

  Authored by Brandon Smith via Alt-Market.com,

  Though the media often attempts to twist the gun rights debate into a web of complexity, gun rights is in fact a rather simple issue — either you believe that people have an inherent right to self defense, or you don’t. All other arguments are a peripheral distraction…

  

  Firearms are a powerful epoch changing development. Not because they necessarily make killing “easier;” killing was always easy for certain groups of people throughout history, including governments and organized thugs. Instead, guns changed the world because for the first time in thousands of years the common man or woman could realistically stop a more powerful and more skilled attacker. Firearms are a miraculous equalizer in a world otherwise dominated and enslaved by everyday psychopaths.

  The Founding Fathers understood this dynamic very well. Despite arguments from the extreme left falsely insinuating that the founders are essentially barbarians from a defunct era that were too stupid to understand future developments and technology, the fact is that they knew the core philosophical justification for an armed citizenry was always the most important matter at hand. Today’s debates try to muddle meaningful discourse by swamping the public in the minutia of background checks, etc. But the following quotes from the early days of the Republic outline what we should all really be talking about:

  “The laws that forbid the carrying of arms are laws of such a nature. They disarm only those who are neither inclined nor determined to commit crimes…. Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man.”
  – Thomas Jefferson, Commonplace Book (quoting 18th century criminologist Cesare Beccaria), 1774-1776

  “To disarm the people…[i]s the most effectual way to enslave them.”
  – George Mason, referencing advice given to the British Parliament by Pennsylvania governor Sir William Keith, The Debates in the Several State Conventions on the Adoption of the Federal Constitution, June 14, 1788

  “Before a standing army can rule, the people must be disarmed, as they are in almost every country in Europe. The supreme power in America cannot enforce unjust laws by the sword; because the whole body of the people are armed, and constitute a force superior to any band of regular troops.”
  – Noah Webster, An Examination of the Leading Principles of the Federal Constitution, October 10, 1787

  “Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are ruined…. The great object is that every man be armed. Everyone who is able might have a gun.”
  – Patrick Henry, Speech to the Virginia Ratifying Convention, June 5, 1778

  “The right of the citizens to keep and bear arms has justly been considered, as the palladium of the liberties of a republic; since it offers a strong moral check against the usurpation and arbitrary power of rulers; and will generally, even if these are successful in the first instance, enable the people to resist and triumph over them.”
  – Joseph Story, Commentaries on the Constitution of the United States, 1833

  “On every occasion [of Constitutional interpretation] let us carry ourselves back to the time when the Constitution was adopted, recollect the spirit manifested in the debates, and instead of trying [to force] what meaning may be squeezed out of the text, or invented against it, [instead let us] conform to the probable one in which it was passed.”
  – Thomas Jefferson, letter to William Johnson, 12 June 1823

  The inborn right to self defense and the ability of the people to maintain individual liberties in the face of tyranny supersedes all other arguments on gun rights. In fact, nothing else matters. This key point is so unassailable that anti-gun lobbyists have in most cases given up trying to defeat it. Instead of trying to confiscate firearms outright (which is their ultimate goal), they attempt to chip away at gun rights a piece at a time through endless flurries of legislation. This legislation is usually implemented in the wake of a tragedy involving firearms, for gun grabbers never let a good crisis go to waste. Exploiting the deaths of innocent people to further an ideological agenda is a common strategy for them.

  This leads us to the recent mass shooting at a high school in Parkland, Florida. The narrative being constructed around this event is the same as usual — that stronger “gun control and background checks” are needed to prevent such things from ever happening again.

  Of course, Nikolas Cruz, the alleged perpetrator of the shooting, obtained his firearms legally and by passing existing background checks. Being that these background checks have been highly effective in stopping the vast majority of potential criminals from purchasing firearms through legal channels, one wonders what more can be done to make these checks somehow “foolproof.”

  Around 1.5 million 4473 forms (background checks) have been rejected by the ATF in the two decades since more stringent background checks were instituted. As many as 160,000 forms are denied each year for multiple reasons, including mental health reasons.

  So, the question is, did background checks fail in the case of Nikolas Cruz? And would any suggested amendments to current 4473 methods have made any difference whatsoever in stopping Cruz from purchasing a weapon? The answer is no. No suggested changes to ATF background checks would have made a difference. But there are stop-gaps to preventing mass shootings other than the ATF.

  The FBI, for example, had been warned on multiple occasions about Cruz, including his open threats to commit a school shooting. Yet, the FBI did nothing.

  Could the FBI have prevented the killings in Parkland by following up repeated warnings on Nikolas Cruz? I would say yes, it is possible they could have investigated Cruz’s threats, verified them and prosecuted for conspiracy to commit a violent crime, or at the very least, they could have frightened him away from the idea.

  Was the Parkland shooting then a failure of background checks or a failure of the FBI? And, if it was a failure of the FBI, then shouldn’t anti-gun advocates focus on revamping the FBI instead of pushing the same background check and gun show “loophole” rhetoric they always do?

  They aren’t interested in instituting changes at the FBI because this could help solve the problem, and they do not care about solving the problem, they only care about pursuing their ultimate goal of deconstructing the 2^nd Amendment for all time.

  Gun control advocates will conjure up a host of arguments for diminishing gun rights, but just like the background check issue and Nikolas Cruz, most of them are nonsensical.

  They’ll make the claim that guns for self defense are fine, but that high capacity military grade weapons were never protected under the Constitution. “The founding fathers were talking about single shot muskets when they wrote that…” is the commonly regurgitated propaganda meme. This is false. High capacity “machine guns” (like the Puckle gun and the Girandoni rifle) and even artillery were actually common during the time of the founders and were indeed protected under the 2^nd Amendment. In fact, the 2^nd Amendment applies to all firearms under common military usage regardless of the era.

  They’ll claim that high capacity “assault weapons” are not needed and that low capacity firearms are more practical for self defense. They obviously are ignoring the circumstances surrounding any given self defense scenario. What if you are facing off with multiple assailants? What if those assailants are mass shooters themselves and obtained their weapons on the black market as the ISIS terrorists in Paris did in 2015? What if the assailant is a tyrannical government? Who is to say what capacity is “practical” in those situations?

  They’ll claim that tougher gun laws and even confiscation will prevent mass shootings in the future, yet multiple nations (including France) have suffered horrific mass shootings despite having far more Orwellian gun laws than the U.S.

  Criminals and terrorists do not follow laws. Laws are words on paper backed up by perceived consequences that only law abiding people care about.  The vast majority of successful mass shootings take place in “gun free zones,” places where average law abiding citizens are left unarmed and easy prey.

  So, what is the solution that gun grabbers don’t want to talk about? What could have stopped the shooting in Parkland? What is the one thing that the mainstream media actively seeks to avoid any dialogue about?

  The solution is simple — abolish all gun free zones. If teachers at the high school in Parkland had been armed the day Nikolas Cruz showed up with the intent to murder, then the entire event could have gone far differently. Instead of acting helplessly as human shields against a spray of bullets, teachers and coaches could have been shooting back, actually stopping the threat instead of just slowing it down for a few seconds. Or, knowing that he might be immediately shot and killed before accomplishing his attack, Cruz may have abandoned the attempt altogether. There is no way to calculate how many crimes and mass shootings have been prevented exactly because private gun ownership acted as a deterrent.

  Most gun grabbers are oblivious to this kind of logic because they are blinded by ideological biases. Some of them, however, understand the truth of this completely, and they don’t care. They are not in the business of saving lives; they are in the business of exploiting death. They want something entirely different from what they claim they want. They are not interested in life, they are interested in control.

  

• U.S. Embassy In Montenegro Attacked, One Dead

  The US Embassy in Montenegro came under attack in the early hours of Thursday morning after a group of attackers threw several grenades into the compound at approximately 12:30 a.m.

  One of the attackers reportedly died in the explosion. 

  #BREAKING: Here is the scene of the Security situation at the US Embassy in Podgorica, Montenegro. (Photos: @MundoEConflicto) pic.twitter.com/TVobMPwn1k

  — BreakingNNow (@BreakingNNow) February 22, 2018

  https://platform.twitter.com/widgets.js

   

  

  

  

  

  The State Department has issued a warning advising citizens to “avoid the embassy until further notice.” 

  ***

  Location: Podgorica, Montenegro

  Event: The U.S. Embassy in Podgorica advises U.S. citizens there is an active security situation at the U.S. Embassy in Podgorica. Avoid the Embassy until further notice.

  Actions to Take:

  • Avoid the area around the U.S. Embassy.
  • Monitor local media for updates.
  • Avoid large gatherings and demonstrations, and follow the instructions of local authorities.
  • Employ sound security practices.

  ***

  The last attack on an U.S. Embassy was in September 2015 when the American office in Uzbekistan was firebombed, leading to the temporary closure of the compound. Prior to that, of course, was the September 11, 2012 attack on two U.S. government facilities in Benghazi, Libya – the origins of which the Obama administration lied about and faced no consequences. 

   

  

• Democrats Want $300 Million To "Counter Russian Operatives" Ahead Of 2018 Midterms

  It’s been barely a week since Special Counsel Robert Mueller unveiled indictments of 13 Russians and 3 Russian entities – including one close associate of Russian President Vladimir Putin – and already Democrats are asking Congress for exorbitant sums of money to stop Russia’s army of internet trolls from “sowing discord” ahead of the US election – even though anybody who reads the New York Times and the Wall Street Journal is by now no doubt well-acquainted with the reality that these suspected trolls aren’t really all that interested in US politics.

  According to Reuters, Nancy Pelosi and Chuck Schumer are asking Congress for $300 million for the FBI to combat purported Russian disinformation campaigns ahead of the 2018 midterms in November. The big ask comes about a week after leaders of the US intelligence community testified to a Senate committee about the serious of the purported threat.

  

  Democrats are asking that the money be included in the next continuing resolution, which must be signed into law before the March 23 deadline to avert another government shutdown. Republican leaders have been noncommittal.

  Of course, the Reuters story fails to point out that $300 million is 3,000 times more than the Russian agents allegedly spent on Facebook ads ahead of (and after) the November 2016 vote.

  Citing warnings from intelligence agencies that Russia is trying to influence the upcoming vote, Senate Democratic Leader Chuck Schumer and House of Representatives Democratic Leader Nancy Pelosi asked that the additional funds be included in a bill to fund the government which Congress aims to pass by March 23.

  “This additional funding should be targeted to ensure the resources and manpower to counter the influence of hostile foreign actors operating in the U.S., especially Russian operatives operating on our social media platforms,” Schumer, Pelosi and the top Democrats on the Senate and House Appropriations Committees wrote in a letter.

  They sent the letter to Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan. Republican aides said the proposal, along with many others, would be considered as the spending legislation is written.

  Leaders of U.S. intelligence agencies warned a Senate committee last week that Russia is trying to interfere in the 2018 midterm elections, when control of Congress is up for grabs, much as it did during the 2016 U.S. campaign.

  And on Friday, the office of Special Counsel Robert Mueller charged 13 Russians and 13 Russian companies with conspiracy to tamper with the 2016 race.

  Moscow has repeatedly denied meddling in US politics, calling Mueller’s indictments absurd. In addition to this $300 million, Democrats also want a “substantial” increase in funding for the Department of Homeland Security and Election Assistance Commission to upgrade state election systems, which somebody (maybe the Russians?) tried to infiltrate.

  Meanwhile, Schumer is also demanding that the White House write its own report on how Russia might try to interfere in the upcoming vote – because apparently a special counsel and three concommitant Congressional investigations isnt’ enough.

  Democratic Senator Amy Klobuchar said on a conference call with reporters that she would back $386 million for states.

  Members of Congress have repeatedly decried what they see as federal officials’ failure to do more to work with states to protect the election system.

  Homeland Security said last year that 21 states had experienced initial probing of their systems from Russian hackers and a small number of networks were compromised.

  But three U.S. intelligence officials said protecting sources of information about the use of cyberspace to meddle in elections are a major obstacle to closer cooperation with state officials because much of the intelligence is so classified that it cannot be shared with anyone who does not have a high-level security clearance.

  Schumer also said Democrats want Trump administration officials to issue a public report detailing how Russia might interfere in the 2018 U.S. vote.

  They also want a classified report for state officials and relevant congressional committees.

  Given the FBI’s recent track record of stopping major crimes, we imagine this $300 million – assuming it makes it into the final appropriation – will be put to good use.

  What do you think?

   

   

   

   

  

• YouTube Apologizes For Promoting Video That Fueled "Florida Shooting Conspiracy"

  Alphabet proved once again on Wednesday that the algorithms it relies on to promote “credible” content while burying videos produced by “unreliable” (read: conservative or antiestablishment) sources are far from perfect.

  As Bloomberg reported, gun-control advocates heaped criticism upon YouTube after it promoted a video with a title that suggested a teenage survivor of last week’s school shooting in Parkland, Fla. was a paid actor. The teen, David Hogg, has been making the media rounds since the shooting, even turning down an invitation to meet with President Donald Trump in favor of attending a CNN-hosted town hall.

  The video shows David Hogg, a student who has spoken out for gun control after the attack that killed 17 in Parkland, Florida, in a Los Angeles TV news clip from last summer. A description of the video read, “DAVID HOGG THE ACTOR….” Below the video, YouTube’s algorithm suggested viewers watch a clip with similar claims. The first video spent several hours at the top of YouTube’s “Trending” section before being removed on Wednesday.

  But not only did the video make it into the trending section, it was briefly the No. 1 top trending video in the entire US.

  This video suggesting that David Hogg is a paid actor is now the No. 1 trending video on YouTubehttps://t.co/lOJodxi8NV pic.twitter.com/AeuJX5ylTU

  — maxwell (@maxwellstrachan) February 21, 2018

  https://platform.twitter.com/widgets.js

   

  “This video should never have appeared in Trending. Because the video contained footage from an authoritative news source, our system misclassified it,” a spokeswoman for Alphabet Inc.’s YouTube wrote in an emailed statement. “As soon as we became aware of the video, we removed it from Trending and from YouTube for violating our policies. We are working to improve our systems moving forward.”

  Of course, Congress last year exacted promises from Google, Facebook and Twitter to do a better job cracking down on suspicious or disingenuous content after discovering that a Russian troll farm that has since been indicted spent less than a quarter million dollars to “sow chaos” by posting hysterical or otherwise salacious content on their platforms that OCCASIONALLY included posts with a pro-Trump slant.

  Since then, Google in particular has implemented several policy changes aimed at stamping out misinformation – or at least information that doesn’t agree with the dominant cultural assumptions in Silicon Valley. It also introduced what the company described as measures that would help more credible news sources become more visible.

  The footage in the Hogg video that triggered YouTube’s algorithm first appeared on CBS, though it was uploaded as part of an apparently unauthorized video.

  Of course, just because claims that Hogg is a paid actor have been effectively debunked, doesn’t mean observers should take every word uttered by the teenage survivor as gospel. Just like all people, Hogg has biases and – in this case – he has several that deserve to be pointed out.

  As Hogg revealed to CNN (and SHTFplan pointed out) the anti-gun activist’s father is a former FBI agent.

  “I think it’s disgusting, personally. My father’s a retired FBI agent and the FBI are some of the hardest working individuals I have ever seen in my life,” proclaimed David Hogg to CNN. “It’s wrong that the president is blaming them for this.”

  Knowing this paints his anti-Trump advocacy in a whole new light.

  As SHTFplan says…

  Our job is not to tell you what to think, but to present information so you can come to your own conclusions. Does this look like a child of a former FBI agent is being used as a pawn in the war against the people to curb the rights of those who literally committed no crime?  You decide.

  Hogg will appear on CNN tonight with several of his classmates to debate the NRA’s Dana Loesch and several other anti-gun control activists.

  

• Chinese Companies Forced To Halt Trading Amid Avalanche Of Stock Loan Margin Calls

  Back in the summer of 2017, just when we thought there were no more surprises left in the arsenal of the world’s foremost incubator of “financial engineering” – i.e., China – we got a stark lesson in never underestimating Chinese market manipulating ingenuity. The reason, as readers may recall, is that last June we reported, that according to Caixin, over two dozen Chinese companies had offered their employees a deal: buy company shares while guaranteeing that any losses would be covered.

  The reason was simple: company founders and major shareholders had found themselves engaging in partial cash outs by pledging large batches of their stock as loan collateral and pocketing (and spending) the loan proceeds immediately, a practice that according to Reuters’ estimates had quadrupled in China over the past two years, and which worked great as long as stocks were rising, but once they started falling – as Chinese equities did early last summer – those who had taken out stock-collateralized loans were subject to escalating margin calls, forcing them to liquidate. Or rather, liquidating would have been the honorable thing to do, what they did instead was the most unethical and illegal option: shareholders and management encouraged their own employees to bail them out by buying the stock while guaranteeing to cover the downside – pushing the stock price higher, boosting the value of the pledged underlying asset, and stopping the margin calls if only briefly.

  As we also noted at the time, while employees were lied to believe they were getting an unbeatable deal – who can say no when your own employer guarantees you all the upside and no downside if you just buy the company stock – the reality is that participants in such scheme were merely locking in their fates with that of their soon to be insolvent employers, who desperately needed to raise the price of their stock to fend off terminal margin calls. Furthermore, as analysts noted at the time, the promise to take any losses wasn’t legally binding and depended on big shareholders’ “virtue” which in China does not exist.

  Calling this process yet another bootstrapped ponzi scheme, we said that it unveiled a deeper threat facing China’s smaller publicly-traded companies:

  If markets continue to slide, there could be a surge in margin calls on these loans, potentially triggering a vicious cycle of share selling, increasing the risk of broader financial instability. “If stock prices fall, but shareholders don’t have enough capital to replenish their collateral, the pledged shares would face forced selling,” said Meng Shen, director of Chanson & Co, a Beijing-based boutique investment bank.  “That would develop into a negative spiral; as the more you sell, the lower the stock price, which would then trigger more forced selling.”

  Fast forward to today, and that’s pretty much where we are.

  And while regulators have long since halted the practice of management being able to ask employees for a bailout, the problem with Chinese loans pledged against stock has only deteriorated, and as the FT reports, “listed Chinese companies are being forced to halt trading as their owners attempt to unwind risky bets they have made pledging company stock for loans.“

  This is precisely the contingency that we said would happen if the broader Chinese market did not rebound sharply. Well, it did not, and in fact Chinese stocks – especially in recent weeks – have been some of the worst performers in the world. The result now is a brewing market crisis, as countless shareholders face self-reinforcing margin calls, which force liquidations, which send stocks lower, which prompt even more liquidations, which send stocks even lower, and so on.

  The basis for this toxic loop first emerged in early 2017, when China tightened access to credit to address its mounting corporate debts; finding many of their traditional “shadow funding” pathways blocked, controlling shareholders in many smaller listed companies used their shares as collateral for credit. Then, following the market swoon late last spring, we got the first indication of just how bad the pledged loan problem could get in China, when the story described above took place.

  It is now time for round 2, because just like last June, market jitters since the start of this month have pushed companies to warn their shareholders that they could face margin calls as share prices fall.

  And since this time around, no simple “100% guaranteed” Ponzi schemes are available to bail shareholders out, companies are doing the only thing they can: halting trading to avoid further liquidations and even more margin calls.

  That’s what happened to Shenzhen-listed Shenwu Environmental Technology, which is one of at least 20 groups in February that has stopped trading because of the risk of a margin call, where a share price decline triggers a demand to top up any money borrowed to buy the stock.

  Some statistics from the FT:

  China’s tighter controls over credit last year led to a wave of share pledges by listed groups: as of mid-December, shareholders in 317 Shanghai and Shenzhen-listed companies had pledged at least 40 per cent of their stock, compared with 224 companies a year earlier.

  But why engage in such risky behavior as pledging shares? Mostly because as a result of Beijing’s crackdown on shadow banking, there are few other unregulated ways of extracting cash that do not involve actual selling.

  The FT confirms as much, noting that “pledged shares for loans is one means that the companies have to access funding outside the traditional banking sector. Many others have borrowed from “shadow” lenders, often at high costs.”

  “This is all part of the deleveraging campaign,” said Hong Hao, head of research in Bocom International in Hong Kong. “The owners of these companies have had to pledge shares just to get access to capital.”

  In the case of the abovementioned Shenwu, the company announced that its controlling shareholder has pledged more than 40% of the group’s shares and was now in discussion with the margin lender.

  * * *

  Meanwhile, almost a year after we first warned that the practice of extensive stock pledging would have an unhappy ending, China’s securities regulator has finally started looking into the use of stock as collateral for loans, the Securities Times reported. In some cases, companies have simply noted in regulatory filings that the securities regulator is investigating the shareholders that have pledged the stock.

  Making matters worse are two tangential issues:

  • Fisrt, many of the smaller listed companies in China – those where share pledging dominates – are facing a slowdown in growth, alongside that of China itself, which due to its aggressive deleveraging campaign will see its GDP decline to in 2018, a factor that has weighed on the performance of many of Shenzhen’s small-cap companies;
  • Second, whether due to liquidations – or their frontrunning – Shenzhen’s tech-focused ChiNext index has been falling gradually since 2015, but fell around 12% between January 25 and February 9. And as a result of the declining collateral value, the Loan To Value on the pledged loan keeps rising until it hits and/or surpasses 100%, at which point it’s game over.

  “Some of these companies are heading toward dangerous territory,” a Shanghai-based analyst at a global bank told the FT, adding that it was not normal for companies to halt trading because they faced the risk of margin calls, and yet that’s precisely what is going on.

  Still, some managed to find a silver lining: Bocom’s Hong said that the halting of trading to deal with problems could be a good sign. You see, he explained “in the past, shareholders facing margin calls would likely have been forced to sell off the stake without warning, he said. But China’s securities regulator has recently given companies permission to allow shareholders to work through problems with debtors instead of selling up to pay back loans.”

  Which of course, is an odd definition of a “good sign”: because instead of facing reality, and selling, the entire market simply becomes hijacked by a handful of greedy executives. Meanwhile, the money of anyone who invested alongside them, well, as South Park put it best “it’s gone… it’s all gone.”

  

• This Is What Extreme Security In "America's Safest School" Looks Like

  Welcome to Southwestern High School in suburban Indiana, where the classrooms door are bullet-resistant…

  

  …ceilings have built-in smoke-bombs…

  

  …cameras are everywhere, and the Sheriff’s department – only 10 miles away – can track an intruder in real-time.

  Additionally, as The Daily Signal reports, the school has a top-of-the-line security system – which can be activated in the event of an emergency by teachers who wear special key fobs – that has been called “revolutionary” and is reported to have cost $400,000. It was installed after the Indiana Sheriff’s Association selected the school as a test site.

  “I think that Newtown, Sandy Hook, really made people understand, made us all understand that this could happen to us,” Dr. Paula Maurer, Southwestern Consolidated Schools superintendent, told local affiliate Fox59.

  “Now is the time to do something about it. We have some answers. We have the technology. We have ways to make our kids safer and we have to do it.”

  The system came at no cost to Southwestern High School after Net Talon, the Virginia security company behind the design, offered to fund the installation. The school also used grant money to cover some costs. It raises the question of whether such a system could be implemented elsewhere and, perhaps more glaringly, how it would be funded.

  

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• History Lessons From Years Under Islamism

  Authored by Majid Rafizadeh via The Gatestone Institute,

  In Iran, my generation, the first after Islamism came to power, is called the Burnt Generation (Persian: Nasl-e Sukhteh). Our generation earned this name for having to endure the brutality of the Islamist and theocratic regime from the time we were born, to adulthood.

  This brutality included the regime’s merciless efforts, such as mass executions, to establish its power, impose its barbaric and restrictive rules, and brainwash children and indoctrinate the younger generation with its extremist ideology through various methods including elementary schools, universities, state-controlled media outlets, imams and local mosques, and promoting chants such as “Death to America” and “Death to Israel”.

  Women and men were segregated. Teenagers were prevented from performing daily activities considered harmless by most of the world. Any kind of enjoyable social activities were barred, including listening to music, dancing, drinking, dating, women participating in a chess championship unless you were wearing a hijab or attending a football match or other sporting event if men were playing in it. If it made you smile, if it gave you hope, it was probably against the law, such as what could be worn, whom you were allowed to talk to, what you could listen to, and whether or not you pray or fast during Ramadan. Even the most personal and private issues became the business of the regime’s forces.

  The main purpose of these restrictions and the intense control of the people, especially youths, was for the regime to expand its Islamist agenda domestically and abroad. These laws were enforced with cruel and violent punishments such as public flogging along with the threat of even more dire consequences, including stoning, public hanging and amputations. My generation was raised in an atmosphere of terror. While the rest of the world became more modern and developed, we were left to grapple with following Islamist laws and restrictions that were impossible to obey.

  My generation in Iran should be seen as a lesson for the West. Almost every state (and non-state actors) underestimated the power that these Islamists could wield. Warning signs were overlooked. No one believed that such a massive change could occur and be enforced. Many underestimated the crimes that these Islamists were willing to commit to maintain their power once they came into control. To this day, they continue to prove that there are no limits to the cruelty and lack of humanity that they will engage in, such as conducting mass executions, executing children and pregnant women, stoning, amputations, public hanging, flogging, torture, and rape just to maintain this power.

  Jahangir Razmi’s Pulitzer Prize-winning photograph of the execution of Kurdish men and others by the Iranian Islamic regime in 1979.

   

  Many underestimated the smooth-talking strategy that these Islamists were using for decades to seize power. The radical group of Ayatollah Khomeini deceived many Iranians and the international community into believing that they were peaceful and divine people. Once they had power, the truth was revealed; by then it was too late to prevent the abuse that unfolded.

  My father’s generation in Iran lived in an environment in which the Islamist party of the country’s clergy cunningly depicted themselves as intending no harm, supportive of the people, and not interested in power. So, before the revolution, many Iranians did not think that Khomeini’s party would be committing the atrocities that they are committing now or that they would have such an unrelenting hunger for power.

  Instead, the country thought it was on a smooth path towards democracy, with no expectation of returning to a barbaric era. Even then-US President Jimmy Carter viewed Khomeini as a good religious holy man. According to recently declassified documents, the Carter administration even paved the way for Khomeini to return to Iran. Many internationally known scholars such as Michelle Foucault thought highly of the Islamic revolution. Foucault’s enthusiasm can be seen in his articles in European newspapers, written right before and after the revolution.

  They portrayed themselves as leaders of the people, as spiritual and peaceful. However, once the Islamists rose to the top, all hell broke loose. As soon as they had a stranglehold on the country, they shifted gears to become one of the most ruthless regimes in history. Once in power, their true face was revealed; at that point, there was no way to turn back.

  Thousands upon thousands of people were executed simply for voicing their opinion. Many also died for crimes they likely did not commit. The Islamic law (sharia) of the ruling Shiite party was imposed on everyone. Women were forced to wear a hijab and were stripped of their rights. They could no longer leave the country without the permission of their husbands. A women could not work in any occupation if her husband did not agree to it. Women’s testimony in court, under sharia, is worth half a man’s testimony. Women are banned from pursuing certain educational fields or occupations, such as being judges. Women are prohibited from entering sports stadiums or watching men’s sports. Women are entitled to receive half as much inheritance as their brothers or other male relatives.

  Many were shocked that this political party, which spoke about the religion of peace, would do such things. Iranians, however, did not just submit to these new laws; they rose up in protest. This uprising was met with torture, rape, and death. With the regime eager to wipe out anyone who dared to resist, the people had no choice but to surrender. Everyone’s daily activities were now under the scrutiny of the Islamists.

  In a four month period, some 30,000 political prisoners were hanged simply for suspected loyalties to anti-theocratic resistance groups, mainly the PMOI — incidents largely ignored by media outlets.

  These are only few examples of the Islamists’ atrocities that took hold of a once thriving and modernizing country. Information about their crimes against humanity would fill several books. As bad as you may think all this is, you must understand that the reality is far, far worse. The Islamist Republic of Iran, according to Human Rights Watch, became the world leader in executing children. The legal age for girls to marry was reduced to 9. Women needed the approval of their parents to marry, and girls could not object to their guardian’s decision in marrying them off.

  It may be hard to believe that such a murderous force could come into power so easily and fast. What is important to understand is that the Islamists and their followers work covertly in a society for decades to deceive the people and reach the top. Iran’s was a meticulously planned takeover that no one saw coming. The Islamists’ willingness to be patient to complete their control of the society cannot be underestimated.

  Despite openly reading about all this, many will still think it is impossible for something like this to happen in their country. What they fail to understand is that Iran is an example of exactly how successful this meticulous grab for power can be.

  Seeing these shrewd and calculating strategies, Islamists in other countries including the West are pursuing the same techniques on the path to seizing power. It is a quiet, subtle process, until the moment you wake up with no rights, a culture of fear, and no promise that you will live in freedom or even to see the next day.

  Now, those Islamists, whom almost everyone made light of, have not only been in power for almost four decades; they have expanded their expansionist ideology to other nations and taken first prize as being the world’s leading state sponsor of terrorism and among its leading executioners.

  This is a history lesson that Western and non-Islamist countries cannot afford to ignore. It is not just about history; it is about what can happen at any moment, in any country. It is about what is happening right now, beneath our noses — in East Asia, Canada, South America and Europe. The only defense is to recognize it and confront it at its roots, before it has the opportunity to woo your politicians. Once they worry more about their popularity with voters than about the future of the country you are electing them to run, you are done. Once there is control of the ballot box, there will be more and more control over every aspect of your life, destroying any future you had planned and leaving the country you once had loved in ruins.

  

• India To Build Major Overseas Military Base Off Africa To Combat China

  India is preparing to construct a significant overseas military base on an island in Seychelles, an archipelago of 115 islands in the Indian Ocean, off East Africa to counter growing Chinese influence in the Indian Ocean.

  

  Last month, Seychelles and India signed a twenty-year agreement, permitting the Indian military to build an airbase and naval installations on Assumption Island, a small island in the Outer Islands of Seychelles north of Madagascar, said Seychelles News Agency.

  “This [agreement] reinforces our commitment to not only further deepen India-Seychelles relations, but to also take our partnership to another level,” Indian Foreign Secretary Subrahmanyam Jaishankar said in a statement.

  “The [mutual] co-operation is exemplified by the operationalization of the Coastal Surveillance Radar System [CSRS] in March 2016, and our commitment to augment the defense assets and capability of Seychelles,” he added.

  The agreement enhances India’s military capabilities and maritime surveillance of Seychelles’ Exclusive Economic Zone (EEZ) of 1.37 million square km. Assumption Island will serve as a strategic staging area for the Indian military, as the island chain resides between crucial global shipping lanes.

  

  This is key as in 2016 alone, “approximately 40 million barrels of oil per day — equivalent to just under half of the world’s total oil supply — traveled through Indian Ocean entry and exit points, including the Straits of Hormuz, Malacca, and Bab el-Mandeb,” said CNN.

  The EIA classifies the region as a significant chokepoint for maritime transit of oil. More specifically, the EIA calculates roughly 5.8 million barrels per day travels directly by Seychelles, which then ultimately flows to the West. This would indicate India does not just recognize Seychelles as a critical part of its global energy security, but perhaps, India’s push to control the island is a proxy of Washington.

  

  All estimates in million barrels per day. Includes crude oil and petroleum liquids. Based on 2016 data. Source: U.S. Energy Information Administration

  India has already provided Seychelles with military aircraft, helicopters, and naval boats. It has installed a coastal surveillance radar system on one of Seychelles’ islands to conduct intelligence gathering activities. Throughout the years, the waters around Seychelles have seen an abundance of Indian warships conducting anti-piracy patrols

  Senior Indian naval officials have stated that the development of military installations on Seychelles is to offset China’s maritime Silk Road strategy in the Indian Ocean.

  As CNN notes, India is attempting to better posture itself in the Indian Ocean despite its neighbor and long-standing rival China, who is already situated with military installations in the region.

  Under Chinese President Xi Jinping, China’s naval reach has grown considerably, expanding far beyond its immediate coastline into areas not previously considered within its sphere of influence.

  In July last year China established its first overseas military base in Djibouti, near the Bab el-Mandeb Strait, among the world’s busiest shipping lanes and one of three crucial Indian Ocean arteries.

  The strait, which is only 29 kilometers (18 miles) wide at its narrowest point, connects the Mediterranean Sea via the Suez Canal, and the Red Sea to the Gulf of Aden and the Indian Ocean beyond.

  The opening of the Djibouti base was followed several months later by the country’s controversial acquisition of the Hambantota port in Sri Lanka, just 22.2 kilometers (13.8 miles) by some estimates from the primary Indian Ocean sea lane that links the Malacca Straits to the Suez Canal.

  Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Sydney, described the Hambantota deal — which saw Sri Lanka grant China a 99-year lease on the port to service some of the billions in debt it owes to Beijing — as part of a “determined strategy by China to extend its influence across the Indian Ocean at the expense of India.”

  “That port then gives them not only a strategic access point into India’s sphere of influence through which China can deploy its naval forces, but it also gives China an advantageous position to export its goods into India’s economic sphere, so it’s achieved a number of strategic aims in that regard,” said Davis.

  Indian military officials said Seychelles and Assumption Island are a powerful combination in extending the reach of India’s naval operations, which it intends to rotate aircraft and ships throughout the region.

  

  “The development is a clear indicator that India’s geostrategic frontier is expanding in tandem with China’s growing strategic footprint in the Indo-Pacific,” Captain Gurpreet Khurana, of the Indian Navy’s National Maritime Foundation, said.

  As India fears encirclement by militarist China in the Indian ocean, it only leaves us to believe that these nuclear-armed neighbors could be headed for another military conflict. The last time this occurred it was the war of 1962, which India is making the needed preparations on Seychelles’ chain of islands that will ensure another defeat is not an option.

  

• Brandon Smith: New Fed Chairman Will Trigger A Historic Stock Market Crash In 2018

  Authored by Brandon Smith via Alt-Market.com,

  Ever since the credit and equities crash of 2008, Americans have been bombarded relentlessly with the narrative that our economy is “in recovery”. For some people, simply hearing this ad nauseam is enough to stave off any concerns they may have for the economy. For some of us, however, it’s just not satisfactory. We need concrete data that actually supports the notion, and for years, we have seen none.

  In fact, we have heard from officials at the Federal Reserve that the exact opposite is true. They have admitted that the so-called recovery has been fiat driven, and that there is a danger that when the Fed finally stops artificially propping up the economy with constant stimulus and near zero interest rates, the whole farce might come tumbling down.

  For example, Richard Fisher, former head of the Dallas Federal Reserve, admitted a few years ago that the U.S. central bank has made its business the manipulation of the stock market to the upside:

  What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.

  It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow.

  I’m not surprised that almost every index you can look at … was down significantly.

  Fisher went on to hint at the impending danger (though his predicted drop is overly conservative in my view), saying: “I was warning my colleagues, don’t go wobbly if we have a 10-20% correction at some point…. Everybody you talk to … has been warning that these markets are heavily priced.”

  One might claim that this is simply one Fed member’s point of view. But it was recently revealed that in 2012, Jerome Powell made the same point in a Fed meeting, the minutes of which have only just now been released:

  “I have concerns about more purchases. As others have pointed out, the dealer community is now assuming close to a $4 trillion balance sheet and purchases through the first quarter of 2014. I admit that is a much stronger reaction than I anticipated, and I am uncomfortable with it for a couple of reasons.

  First, the question, why stop at $4 trillion? The market in most cases will cheer us for doing more. It will never be enough for the market. Our models will always tell us that we are helping the economy, and I will probably always feel that those benefits are overestimated. And we will be able to tell ourselves that market function is not impaired and that inflation expectations are under control. What is to stop us, other than much faster economic growth, which it is probably not in our power to produce?

  When it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $20 billion a month. That is a very doable thing, it sounds like, in a market where the norm by the middle of next year is $80 billion a month. Another way to look at it, though, is that it’s not so much the sale, the duration; it’s also unloading our short volatility position.”

  Keep in mind, that Jerome Powell is now the CHAIRMAN of the Federal Reserve. In 2012, he was well aware of the exact effects that the removal of stimulus (which includes low interest rates) would have on the false recovery in stock markets. He continues…

  “My third concern — and others have touched on it as well — is the problems of exiting from a near $4 trillion balance sheet. We’ve got a set of principles from June 2011 and have done some work since then, but it just seems to me that we seem to be way too confident that exit can be managed smoothly. Markets can be much more dynamic than we appear to think.

  When you turn and say to the market, “I’ve got $1.2 trillion of these things,” it’s not just $20 billion a month — it’s the sight of the whole thing coming. And I think there is a pretty good chance that you could have quite a dynamic response in the market.

  I think we are actually at a point of encouraging risk-taking, and that should give us pause.

  Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”

  If Powell was fully conscious in 2012 of what would happen in markets due to the Fed’s balance sheet reductions, the question is, will he be honest about it now? My suspicion is that he will not, given that his very first interaction with the American public after becoming head of the Fed was to regurgitate the same nonsensical talking points that we heard from Janet Yellen for years.

  

  The mainstream media is desperately attempting to suggest that Powell may “surprise investors” with a change in rate hike policies and the reduction of the balance sheet, but so far the markets are not buying this.

  Powell’s first day as Chairman was greeted with the sharpest drop in U.S. equities in years. Yellen’s parting gift to investors in January was an $18 billion reduction in the Fed balance sheet, $6 billion more than the Fed originally claimed would occur. It is clear to me that just as stocks climbed in direct correlation to the Fed balance sheet, so too will they fall in direct correlation to the Fed balance sheet. Only a week after the balance sheet was cut more than expected, stocks fell by nearly 10%.

  So, the question now is, will Powell continue this trend of rate hikes and balance sheet reductions, being that he is recorded as knowing what the results will be? I believe that this is exactly what he will do. Why? Because the Fed’s goal is the deliberate controlled demolition not only of U.S. markets but also U.S. debt instruments and the dollar.

  If I am wrong, then Powell, knowing the threat, will reverse rate hike policies and stop dumping the balance sheet in an effort to prop up the system. If I am right, then we will see Powell continue these policies over the course of 2018 and allow the system to implode.

  How will this influence the price of gold? Well, in the near term we could see a measured decline or a stagnant metals market as we have seen so far this month. That said, when the real equities crisis kicks in, expect metals to skyrocket as investors rush to safety. The psychology of the markets will come into play far more than fundamentals for a time. One must account for willful ignorance and how long it can be maintained before facts take over.

  There are a few major issues that come into play in terms of interest rate hikes and the balance sheet, including the fact that corporate debt is now at levels far beyond that held just before the crash of 2008. We are also witnessing the highest consumer debt levels in history, while personal savings have plunged.

  Treasury yields are also spiking to 10 year highs, decoupling from stocks and suggesting that balance sheet reductions might be contributing to a flight from equities.

  Stock buybacks, fueled by low interest rates, have helped pump up stocks for years. However, most companies are prohibited from buybacks right before they report their earnings.  Not to mention, the amount of debt companies have accumulated is reducing their ability to purchase stocks. Without buybacks, we have seen what happens – complete market mayhem. If this is what takes place in a month of reduced buybacks, what will happen when interest rates are raised high enough to make borrowing capital from the Fed prohibitive (ie, too expensive)?

  What does all this translate into? The reality that there is NO MECHANISM within our economy that is buoyant enough to keep markets afloat when the Fed backs away. Nearly everyone is in massive debt, there is no one left to buy at the level needed except the Fed.

  We are only standing at the beginning of this apparent new trend in equities, but it will be interesting to see what the reaction will be within the system as the Fed continues hiking rates and reducing the balance sheet. Will the beginning of every month in 2018 be met with a brand new storm of selling and panic? It’s hard to say. However, the math certainly does not support a bull market through the rest of this year.

  In the meantime, it is likely that blind faith in positive returns will spark intermittent buying events in the short term, and unaware investors (and algorithms) will see this as vindication that buying will always be the answer. But, these buying events so far seem to be met with even more severe downturns. It will not take very many Fed meetings to discern whether or not the central bank will continue to back up stocks. To me, it appears that the decision to pull the plug has already been made.

  

• Russian "Troll Farm" Indictment Shredded By Journalist Who First Profiled It In 2015

  Following Special Counsel Robert Mueller’s indictment of 13 Russian nationals and three entities behind a Russian “troll farm” said to have meddled in the 2016 U.S. election (admittedly, with zero impact), two people familiar with both the ads purchased by Russians on Facebook, and the “troll farm” in question have refuted Mueller’s narrative over the course of four days. Indeed, things don’t seem to be going well for the Russia investigation, which started out with serious claims of Collusion between the Trump campaign and the Kremlin, and has been reduced to CNN diving through the garbage of a Russian troll farm.

  About that troll farm…

  Adrian Chen, staff writer for The New Yorker – who first profiled the indicted Russian troll farm in 2015, sat down with MSNBC’s Chris Hayes, where he proceeded to deflate Mueller’s big scary indictment to nothing.

  “Tried to tamp down the troll farm panic on @chrislhayes show last night,” Adrian Chen tweeted. “It’s 90 people with a shaky grasp of English and a rudimentary understanding of U.S. politics shitposting on Facebook.“

  Watch: 

  OMG, a sober/informed Russia take on MSNBC! @AdrianChen , who profiled indicted Russian troll farm in 2015, tells @chrislhayes that what other MSNBC guests have compared to Pearl Harbor “is essentially a social media marketing campaign” and maybe not worthy of a national freakout pic.twitter.com/UkUaK2XRPe

  Aaron Mati (@aaronjmate) February 20, 2018

  https://platform.twitter.com/widgets.js

  Chen then responded to a tweet saying the IRA has 300-400 individuals. “That was the entire Internet Research Agency,” Chen wrote.” The American department had ~90 people, according to the Russian journalists who did the most in-depth investigation.”

  Chen links to a Washington Post article which profiles Russian journalists who also investigated said troll farm.

  That was the entire Internet Research Agency. The American department had ~90 people, according to the Russian journalists who did the most in-depth investigation. https://t.co/tfSfvjiYQs https://t.co/G2bkrzeWpl

  Adrian Chen (@AdrianChen) February 20, 2018

  https://platform.twitter.com/widgets.js

  A brief review:

  • The former director of the FBI has assembled a “dream team” of investigators for his Special Counsel probe and concluded that 13 Russians and 3 entities tried to meddle in the election after an entire year of investigation.
  • Those efforts had zero impact on the election
  • Facebook’s VP of ads is on record saying “I have seen all of the Russian ads and I can say very definitively that swaying the election was *NOT* the main goal
  • The same FB Exec noted that most of the ads were purchased after the election.
  • Suggesting that the real, underlying narrative is one of US media propaganda, he was then made to walk back his comments and apologize for his “uncleared thoughts” 
  • CNN is rooting around in the trash outside the troll farm.

  And for all of this, Obama and Congress slapped sanctions on Russia, evicted two diplomatic compounds, and launched several Congressional investigations over.

  But at least the US Military Industrial Complex is happy, while the stock of Boeing has never been higher.

  

  

• Nancy Pelosi Caught Off Guard By Heckler: "How Much Are You Worth Nancy?"

  During a Tuesday stop-off in Phoenix to trash talk the “disastrous” GOP tax cuts at the Arizona Center for Economic Progress, House Minority Leader Nancy Pelosi was startled at a question over her net worth by an audience member who couldn’t stomach the top Democrat’s ivory-tower oratory over wealth inequality. 

  Pelosi has embarked on a 100-city taxpayer funded junket organized by Democrats to frame the Republican tax cuts as an assault on low income Americans.

  “It can’t possibly be a statement of values for us to talk about, as Martin Luther King said, … ‘God never intended for one group of people to live in superfluous inordinate wealth while others live in abject deadly poverty,’” Pelosi pontificated, hypocritically.

  “So these are kitchen table issues for most of America’s families. Most people are not in deadly poverty, but some are. But most people have to struggle to …”

  Pelosi’s needle skips as an audience member asked the richest woman in Congress:

  “How much are you worth, Nancy?” 

  A flustered Pelosi shot back:

  “No, we’re not talking about that … In any event … I can out … I’m a mother of five, I can speak louder than anybody.” 

  Watch:

  Of note, the 77-year-old Pelosi is estimated to have a net worth of $100,643,521 according to OpenSecrets.org, making her the 6th richest member of the House in 2015.  We wonder if Pelosi’s San Francisco pizza parlor is included in the calculation?

  Pelosi, of course, wants to pay as little tax as possible

  And here we arrive at the heart of why wealthy ivory-tower Democrats are the penultimate hypocrites. While spending her career espousing higher taxes for the rest of us and denouncing income inequality, Pelosi has engaged in a series of complex tax schemes to avoid paying as much tax as possible. 

  As the Washington Free Beacon reports: 

  House Minority Leader Nancy Pelosi (D., Calif.), who often rails against income inequality and calls on the wealthy to pay its “fair share” in taxes, took pains in late December to try to preserve tax breaks for two of her multi-million-dollar homes one last time before the new tax law kicked in.

  Largely thanks to her husband Paul, a real-estate and venture-capital investor, Pelosi is the wealthiest woman in Congress with a net worth of more than $100 million and the seventh wealthiest member overall, according to the Center for Responsive Politics.

  Just days after President Trump signed the sweeping tax bill into law late last month, Pelosi and her husband tried to preserve $64,000 in property tax breaks, known as the state and local taxes (SALT) deductions, for her two California homes. The new tax law limits the deduction to $10,000 and went into effect Jan. 1.

  Seems like Nancy’s little propaganda junket is off to a bad start… 

  

• Florida Teachers' Pension Fund Is Long AR-15 Gunmaker Stock

  On Tuesday afternoon, Bloomberg  was surprised to learn that as it was going through the 2,416 equity investments of the Florida state pension plan, which amount to over $37 billion in market cap, it found a surprising entry: 41,129 shares in American Outdoor Brands (valued at a meager $528,000, including $306,000 in unrealized profits) according to a Dec. 31 securities filing  listing the plan’s holdings. The company, formerly known as Smith & Wesson, is the market of the semiautomatic AR-15 assault rifle that was used in the Valentine’s Day shooting on the Marjory Stoneman Douglas High School in Parkland, Florida.

  In other words, as Bloomberg puts it, “as Florida teachers grieve over the mass shooting that left 17 students and colleagues dead last week, some of them may be surprised to learn they’ve been helping fund the firearms industry—including the company that made the gun used that bloody Wednesday.”

  In addition to American Outdoors, the filing showed that the Florida Retirement System Pension Plan also invested in gun company stock issued by Sturm & Ruger, Vista Outdoor and Olin Corp. All of these companies manufacture firearms or ammunition, including assault rifles.

  We expect that these holdings will be liquidated promptly in the aftermath of the highly politicized shooting, and that the anticipation of said liquidation is why AOBC tumbled 5% today.

  

  Students at the school who escaped have been calling for gun control measures on social media and in news interviews all day Tuesday, and were scheduled to attend a gun-safety reform rally Tuesday in Tallahassee, the state capital, hosted by the Florida Coalition to Prevent Gun Violence. The Florida State Board of Administration, or SBA, which manages the teachers’ pension fund, is also based there.

  “As fiduciaries, the SBA must act solely in the interest of the participants and beneficiaries,” John Kuczwanski, a spokesman for the agency, said in an emailed statement. “As primarily passive investors, we essentially own the entire market subject to any legal limitations.”

  True, but that does not matter: after the 2012 Sandy Hook Elementary School shooting in Connecticut, in which 26 elementary school students and teachers were gunned down, CalSTRS and the California Public Employees’ Retirement System sold off their stakes in both Sturm Ruger and Smith & Wesson.

  The same will take place over the coming days as the political scandal over the Parkland shooting peaks, and numerous pension systems seek to put pressure on gunmakers by dumping their stock.

  Tangentially, speaking of passive investors owning the “entire market”, one wonders when the “central bank” that is the Swiss National Hedge Fund Bank will decide that its ownership of tens of billions in FAANG stocks is starting to have a pronounced market impact.

  The good news for the Florida pension fund is that its sale of AOBC shares will hardly have an impact on its P&L, or the market; meanwhile its top holdings – like of most other pension funds – remain the 4 megatechs: AAPL, MSFT, AMZN and FB. And until the tidal wave of anti-monopolist/media resentment is unleashed, they have little to worry about.

  

  

• The Military-Industrial Complex Is Winning The "Guns Vs. Butter" War In America

  Authored by Major Danny Sjursen via TimDispatch.com,

  Think of it as the chicken-or-the-egg question for the ages: Do very real threats to the United States inadvertently benefit the military-industrial complex or does the national security state, by its very nature, conjure up inflated threats to feed that defense machine? 

  Back in 2008, some of us placed our faith, naively enough, in the hands of mainstream Democrats — specifically, those of a young senator named Barack Obama.  He would reverse the war policies of George W. Bush, deescalate the unbridled Global War on Terror, and right the ship of state. How’d that turn out? 

  In retrospect, though couched in a far more sophisticated and peaceable rhetoric than Bush’s, his moves would prove largely cosmetic when it came to this country’s forever wars: a significant reduction in the use of conventional ground troops, but more drones, more commandos, and yet more acts of ill-advised regime change.  Don’t get me wrong: as a veteran of two of Washington’s wars, I was glad when “no-drama” Obama decreased the number of boots on the ground in the Middle East.  It’s now obvious, however, that he left the basic infrastructure of eternal war firmly in place. 

  Enter The Donald.

  For all his half-baked tweets, insults, and boasts, as well as his refusal to read anything of substance on issues of war and peace, some of candidate Trump’s foreign policy ideas seemed far saner than those of just about any other politician around or the previous two presidents.  I mean, the Iraq War was dumb, and maybe it wasn’t the craziest idea for America’s allies to start thinking about defending themselves, and maybe Washington ought to put some time and diplomatic effort into avoiding a possibly catastrophic clash or set of clashes with Vladimir Putin’s Russia. 

  Unfortunately, the White House version of all this proved oh-so-familiar.  President Trump’s decision, for instance, to double down on a losing bet in Afghanistan in spite of his “instincts” (and on similar bets in Somalia, Syria, and elsewhere) and his recently published National Defense Strategy (NDS) leave little doubt that he’s surrendered to Secretary of Defense James Mattis and National Security Advisor H.R. McMaster, the mainstream interventionists in his administration.

  In truth, no one should be surprised.  A hyper-interventionist, highly militarized foreign policy has defined Washington since at least the days of President Harry Truman — the first in a long line of hawks to take the White House.  In this context, an ever-expanding national security state has always put special effort into meeting the imagined needs (or rather desires) of its various component parts.  The result: bloated budgets for which exaggerated threats, if not actual war, remain a necessity. 

  Without the threat of communism in the previous century and terrorism (as well as once again ascendant great powers) in this one, such bloated budgets would be hard to explain.  And then, how would the Army, Navy, Air Force, and Marines get all the weaponized toys they desired?  How would Congressional representatives in a post-industrial economy get all those attractive “defense” jobs for their districts and how would the weapons makers get the government cash they crave?

  The 2-2-1 Threat Picture

  With that in mind, let’s take a look at the newly released National Defense Strategy document.  It offers a striking sense of how, magically enough, the Pentagon’s vision of future global policy manages to provide something for each of its services and their corporate backers.

  Start with this: the NDS is to government documents what A Nightmare on Elm Street is to family films; it’s meant, that is, to scare the hell out of the casual reader.  It makes the claim, for instance, that the global “security environment” has become “more complex and volatile than any we have experienced in recent memory.”  In other words, be afraid, very afraid.  But is it true?  Is the world really more volatile now than it was when two nuclear superpowers with enough missiles to destroy the planet several times over faced off in a not-so-Cold War?

  Admittedly, the NDS does list and elaborate some awesome threats — and I think I know just where that list came from, too. When I went through the document, I realized that I had heard it all before.  Back in 2015, when I taught history at West Point, a prominent departmental alumni — a lieutenant general by the name of H.R. McMaster who, today, just happens to be President Trump’s national security advisor — used to drop by occasionally.  Back then, he commanded the Army Capabilities Integration Center, which was basically a future-planning outfit that, in its own words, “develops concepts, learns, and integrates capabilities to improve our Army.” 

  In 2015, McMaster gave us history instructors a memorable, impromptu sermon about the threats we’d face when we returned to the regular Army.  He referred, if memory serves, to what he labeled the two big threats, two medium threats, and one persistent threat that will continue to haunt our all-American world.  In translation: that’s China and Russia, Iran and North Korea, and last but not necessarily least Islamist terrorism. And honestly, if that isn’t a lineup that could get you anything you ever dreamed of in the way of weapons systems and the like, what is? 

  So can we be surprised that, in the age of McMaster and Mattis, the new NDS just happens to lay out the very same lineup of perils? 

  The Two Bigs: “Revisionist Powers”

  The document kicks off with a pivot of sorts: forget (but not forever!) the ongoing war on terror.  The U.S. military is on to even more fearsome things.  “Inter-state strategic competition [which, in Pentagonese, means China and Russia], not terrorism, is now the primary concern in U.S. national security,” the document insists.  Those two countries are — the Pentagon’s most recent phrase of eternal damnation — “revisionist powers” that “want to shape a world consistent with their authoritarian model.”  In other words, they have the staggering audacity to actually want to assert global influence (the very definition of evil in any power other than you-know-who).   

  This section of the NDS reads like a piece of grim nostalgia, a plunge back into the pugnacious language of the long-gone Cold War.  It’s meant to be scary reading.  It’s not that Russian irredentism or Chinese bellicosity in the South China Sea aren’t matters for concern — they are — but do they really add up to a new Cold War?

  Let’s begin, as the document does, with China, an East Asian menace “pursuing” that most terrifying of all goals, “military modernization” (as, of course, are we), and seeking as well “Indo-Pacific Regional hegemony” (as, of course, has… well, you know which other country).

  The National Defense Straregy isn’t, however, keen on nuance.  It prefers to style China unambiguously as a 10-foot-tall military behemoth.  After all, countering a resurgent China in the Taiwan Straits and the South China Sea ensures a prominent role for the Navy and its own air force of carrier-based naval aviators.  In fact, the military’s latest “AirSea Battle” doctrine hinges on a potential conflict in a place that bears a suspicious similarity to the Taiwan Straits (and thanks to the catchy name, the Air Force gets in on the action as well).  Consider all of this a formula for more blue-water ships, more advanced fighter planes, and maybe even some extra amphibious Marine Corps brigades.

  But what about the poor Army?  Well, that’s where that other revisionist power, Russia, comes in.  After all, Putin’s government is now seeking to “shatter” the North Atlantic Treaty Organization.  No point, naturally, in reminding anyone that Washington was the country that expanded what was, by definition, an anti-Russian military alliance right up to Russia’s borders, despite promises made as the Soviet Union was collapsing.  But this is no time to split hairs, so bottom line: the Russian threat ensures that the Army must send more combat troops to Europe.  It may even have to dust off all those old Abrams tanks in order to “deter” Vladimir Putin’s Russia.  Ka-ching!  (Consider this, by the way, a form of collusion with Russia that Robert Mueller isn’t investigating.) 

  If you look at the Pentagon’s 11 “defense objectives” included in the National Defense Strategy document, you get a sense of just how expansive the one great non-revisionist power on the planet actually is.  Yes, the first of those sounds reasonable enough: “defending the homeland from attack.” Skip down to number five, though — “Maintaining favorable regional balances of power in the Indo-Pacific, Europe, the Middle East, and the Western Hemisphere” — and you’re offered a vision of what an expansionist attitude really is.  Although the NDS claims this country is threatened by the rise of Russia or China in just two of these areas (the Indo-Pacific and Europe), it asserts the need for favorable “balances of power” just about everywhere! 

  By definition, that’s an urge for hegemony, not defense!  Imagine if China or Russia staked out such claims.  An unbiased look at that set of objectives should make anyone (other than a general or an admiral) wonder which is really the “rogue regime” on this planet.

  The Two Mediums: “Rogue States”

  Now, on to the next group of threats, Uncle Sam’s favorite bad boys, North Korea and Iran.  North Korea, we’re told, is a land of “outlaw actions” and “reckless rhetoric” (never to be compared to the statesmanlike “fire and fury” comments of President Donald Trump). And indeed, Kim Jong-Un’s brutal regime and the nuclear weapons program that goes with it are cause for concern — but they also turn out to be deeply useful if you want to provide plenty of incentive for the funding of the Air Force’s and the Navy’s trillion dollar nuclear “modernization” effort (that already looks like it may actually cost more like $1.7 trillion).  In other words, more nuclear subs, heavy bombers, and intercontinental ballistic missiles, not to speak of the immense cost of recent investments in such missile defense systems as Terminal High Altitude Area Defense (THAAD) and Ground-Based Midcourse Defense (GMD).

  In this way, “rogue states” couldn’t be more helpful.  Take Iran, which, according to the NDS, “remains the most significant challenge to Middle East stability.”  Hmmm.  It’s hard not to wonder why ISIS, Bashar al-Assad’s rump Syria, Saudi terror bombing in Yemen, even old-fashioned al-Qaeda (and its new-fashioned affiliates) don’t give Iran at least a run for its money when it comes to being the clearest-and-presentest danger to the region and to the United States.  (And that’s assuming that, in the Middle East, the U.S. hasn’t been the greatest danger to itself.  Exhibition one being the decision to invade Iraq in 2003.) 

  No matter.  Anti-Iranian hysteria sells fabulously in Washington, so who wouldn’t want to run with it?  In fact, the alleged Iranian threat to us is the gift that just keeps giving inside the Beltway.  Iran’s nuclear threat — though there’s no evidence that the Iranians have cheated on the nuclear deal President Obama signed with them in 2015 and that President Trump is so eager to abrogate — guarantees yet another windfall for all the services.  The Army’s air defense programs, for example, should get a long-needed shot in the arm; the Navy will clamor for more Aegis cruisers (with anti-ballistic systems on board); and the Air Force will certainly need yet more bombers for the potential preemptive strike against the nuclear threat that isn’t there.  Everyone wins (except perhaps the Iranian people)!

  One “Persistent Condition”: Terrorism

  And then, of course, there’s terrorism or, to be more exact, Islamist terrorism, that surefire funder of the twenty-first century.  It may no longer officially be the military’s top priority, but the National Defense Strategy assures us that it “remains a persistent condition” as long as terrorists “continue to murder the innocent.” The proper question, though, is: How big of a threat is it?  As it turns out, not very big, not for Americans anyway.  Any of us are so much more likely to choke to death or die in a bicycle or car accident than lose our lives at the hands of a foreign-born terrorist. 

  And here’s another relevant question: Is the U.S. military actually the correct tool with which to combat persistent terrorism?  The answer, it seems, is no.  Though U.S. Special Operations forces deployed to 75% of the world’s countries in 2017, the number of Islamist threat groups has only risen in certain areas like Africa thickest with those special operators.  It turns out that all the advising and assisting, all the training and coaching, has only made matters worse.  As for those overstretched forces, relentless deployments are evidently breaking them down as reports indicate that rates of mental distress and suicide are again on the rise among them.

  Still, here’s the positive part of the NDS’s continuing emphasis on “degrading” terrorist groups and “countering extremism”: it ensures a financial and manpower bonanza for U.S. Special Operations Command (SOCOM).  In the Obama years, that “elite” set of forces already experienced a leap in numbers to almost 70,000. (By the way, at what point in the escalation game do such troops stop being so “special”?)  Since SOCOM, a joint command that’s home to personnel from all the services, hadn’t yet been dealt into this NDS version of largesse, it’s lucky that terrorism and the war on it isn’t going anywhere anytime soon, which means that SOCOM will never want for funds or stop growing.

  Guns Versus Butter

  In 1953, Republican President Dwight Eisenhower, a West Point graduate and retired five-star general, gave a speech that couldn’t have been more unexpected from a career military man.  He reminded Americans that defense and social spending were always in conflict and that the “guns” versus “butter” tradeoff couldn’t be a more perilous one.  Speaking of the growth of the defense budget in that tense Cold War moment, he asserted that:

  “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed… This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”

  Those words still seem salient today.  As Americans experience acute income inequality, the rising cost of a college education, and ongoing deindustrialization in the heartland, the country’s runaway spending continues to rise precipitously.  The planned 2019 Pentagon budget is now expected to hit a staggering $716 billion — more than much of the rest of the world’s defense spending combined.

  

  The battle between “guns and butter” is still raging in the United States and, if the new NDS is any indicator, the guns are winning.

  *  *  *

  Major Danny Sjursen, a TomDispatch regular, is a U.S. Army officer and former history instructor at West Point. He served tours with reconnaissance units in Iraq and Afghanistan. He has written a memoir and critical analysis of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. He lives with his wife and four sons in Lawrence, Kansas.  Follow him on Twitter at @SkepticalVet and check out his new podcast Fortress on a Hill, co-hosted with fellow vet Chris “Henri” Henrikson.

  [Note: The views expressed in this article are those of the author, expressed in an unofficial capacity, and do not reflect the official policy or position of the Department of the Army, the Department of Defense, or the U.S. government.]

  

• China's "New Silk Roads" Reach Latin America

  Authored by Pepe Escobar via The Asia Times,

  Beijing is turbo-charging its infrastructure connectivity across the region and the Caribbean…

  

  A sharp, geoeconomic shift took place last month in Santiago, Chile at the second ministerial meeting of a forum grouping China and the 33-member Community of Latin American and Caribbean States. 

  The Chinese Foreign Minister, Wang Yi, told his audience that the world’s second-largest economy and Latin America should join efforts to support free trade. This was about “opposing protectionism” and “working for an open world economy,” he said.

  After encouraging Latin American and Caribbean nations to participate in a major November expo in China, Wang delivered the clincher – Latin America should play a “meaningful” role in the ‘New Silk Roads’, known as the Belt and Road Initiative. The Chinese media duly highlighted the invitation.

  The Latin American stretch of the Belt and Road project may not turn out to be as ambitious as the Eurasia program. Yet the trend is now clear with Beijing turbo-charging its infrastructure connectivity drive across the region and the Caribbean, with more deals on the way.

  The strategic imperative is to build smooth connections across the continent, converging on its Pacific coastline – and forward through maritime supply lines to the Chinese seaboard. You could call it the Pacific Maritime Silk Road. 

  Last year, Chinese banks and institutions invested US$23 billion in Latin America – the biggest surge since 2010. And they are all in for the long haul.

  Predictably, fellow BRICS member Brazil is the largest recipient of Chinese foreign investment for the past 10 years at about $46.1 billion, plus more than $10 billion in acquisitions. Russia, Indian and South Africa are the other nations that make up the BRICS bloc.

  Costs plummeted

  Marcos Troyjo, the director of the BricLab at Columbia University, has broken down the numbers. Up to mid-2010, Brazil was very expensive. Then suddenly costs plummeted because of the exchange rate or devaluation of companies.

  Large Brazilian groups were badly damaged by the incredibly complex ‘Operation Car Wash’ corruption investigation. The infrastructure industry depended on state funds, which suddenly dried up and a wild privatization spree followed with Chinese, American and European groups taking advantage.     

  China is already the top trading partner of Brazil, Argentina, Chile and Peru. Others will inevitably follow. This is not only because China’s imports of commodities, such as iron ore, soy and corn tend to rise, but also because the Asia Infrastructure Investment Bank will increase lending. 

  China’s master plan for Latin American trade and investment follows what is dubbed the “1+3+6” framework, mapped out by President Xi Jinping in July 2014 at a summit in Brasilia. 

  The “1” refers to the cooperation plan itself, guiding specific projects and ranging from 2015 to 2019 as Beijing aims for $250 billion in direct investment and around $500 billion in trade.

  The “3” is about the key areas of cooperation – trade, investment and finance.

  And the “6” prioritizes cooperation in energy and resources, and infrastructure construction, as well as agriculture, manufacturing, scientific and technological innovation, alongside information technology.

  The top three Latin American powers, Brazil, Argentina and Mexico, who also happen to be G20 members, are all into major infrastructure expansion, which fits into Beijing’s plan.

  Of course, there will be serious snags along the way, such as the $50 billion Nicaragua Inter-Oceanic Canal, now competing with a surge in Panama-China relations after the country broke ties with Taiwan. And the game-changing, transcontinental, Atlantic-Pacific railway between Brazil and Peru is also a long way away. 

  But Foreign Minister Wang was been careful to explain how this proposed Latin Belt and Road program will benefit the Latin American region. “It has nothing to do with geopolitical competition,” he said. “It follows the principle of achieving shared growth through discussion and collaboration. It is nothing like a zero-sum game.”

  In the end, China’s geopolitical rewards will end up positively riling the Trump administration, which has taken its eye off the ball in its own backyard. Rex Tillerson, the Secretary of State, decided to hit the road a few days after the China-Latin America summit in Santiago with pit stops in Mexico, Argentina, Peru, Colombia, and Jamaica.

  He underlined the Monroe Doctrine a cornerstone of US policy in the region. “[It] clearly has been a success, because … what binds us together in this hemisphere are shared democratic values.”

  ‘Imperial powers’

  Tillerson then bashed China, saying Latin America “does not need new imperial powers.”  The Global Times stressed how Tillerson  “showed disdain” to China’s “constructive approach.” “China has no military bases in the region and has dispatched no troops to any of the Latin American countries,” it said.

  Tillerson most of all bashed Venezuela. He suggested sanctions aimed at “the regime” and not “the Venezuela people,” and claimed that President Nicolas  Maduro could face a military coup even though Washington was not gunning for a regime change.

  In fact, doubts persist on whether President Donald Trump will even show up at the next Summit of the Americas in April in Peru. The contrast is stark with President Xi, who has visited three times since 2012.

  Still, a rash of academic papers has shown how Brazil and Argentina have reoriented their foreign policy from a “pro-South” stance towards a pro-US neoliberal view. Yet, China keeps advancing – geoeconomically and geopolitically.

  And that appears to be a trend. Washington will need to invest in a much more sophisticated game if it is to compete economically against China. That would turn out to be the ideal trade and investment scenario which would profit Latin America the most.

  Public opinion seems to have made up its mind. Across Latin America, according to a Gallup poll, approval of US foreign policy has dropped from 49% in 2016 to 24% last year. Approval of President Trump stands at a dismal 16%.

  In sharp contrast, China’s investment through the Belt and Road Initiative has given President Xi a distinct advantage. 

  

• FOMC Minutes Preview: "The Most Likely Surprise Is 4 Rate Hikes In 2018"

  The Dollar is suddenly rising and rate hike expectations are now at their highest of the cycle – 2.76 hikes in 2018 are priced in – (despite stocks still not being anywhere near back to pre-Powell-put-implied levels).

  

  But as Rafiki Capital Management’s Steven Englander notes, the most likely surprise in the Fed Minutes tomorrow is that they may be leaning to four hikes in 2018, but the biggest surprise would be growing support to aim for above two percent inflation temporarily to make up for previous misses to the downside.

  

  The three versus four hike debate is already in the open with several FOMC participants referring to the possibility of four hikes.

  About 70bps are now priced in, versus around 65bps just before the meeting. The FOMC meeting occurred before high AHE and inflation prints, but in recent meetings the Minutes’ discussion has become more confident that inflation is picking up.  I think the risk is much greater that they signal growing confidence on inflation moving towards target more quickly than any indication that two hikes might be more appropriate than three.  

  This would not mean a strong, overt signal of four hikes but it is likely they could convey ‘three, maybe four’ as their stance. 

  They are unlikely to go full hawkish in the Minutes as there have been only moderate hawkish signals since, and monetary policy was probably discussed in between tinkling champagne glasses at Fed Chair Yellen’s last meeting.

  The problem for the inflation doves is that even if they are ultimately proved right, there haven’t been any recent data releases that would support the view that inflation will persist below two percent. The characterization of the dovish stance in the December Minutes now reads too aggressive:

  ‘With core inflation readings having moved down this year and remaining well below 2 percent, some participants observed that there was a possibility that inflation might stay below the objective for longer than they currently expected. Several of them expressed concern that persistently weak inflation may have led to a decline in longer-term inflation expectations; they pointed to low market-based measures of inflation compensation, declines in some survey measures of inflation expectations, or evidence from statistical models suggesting that the underlying trend in inflation had fallen in recent years.”

  Many of the factors the doves cite had turned before the FOMC (and have continued to move in that direction) so the discussion of downside inflation risk will become more tentative, and of upside risk, more concrete. 

  The bigger issue is whether they want to temporarily aim for inflation above two percent.  That discussion is simmering but with the January 31 meeting having been Fed Chair Yellen’s last, I doubt that they wanted to stir that pot just yet, given that they are in no position to make a decision.

  Recent Fed Statements have referred to the ‘symmetric inflation goal’ and The Statement on Longer term Goals and Monetary Policy Strategy, released at the January meeting, also refers to  ‘symmetric’ targeting of two percent inflation. 

  To most of us a symmetric inflation target means that we are as grieved by missing 0.2 percentage point to to the downside as to the upside. If you wanted to make up for past misses, it would be more correct to refer to a price level target. However, the June 2017 Minutes said:

  “It was also suggested that the symmetry of the Committee’s inflation goal might be underscored if inflation modestly exceeded 2 percent for a time, as such an outcome would follow a long period in which inflation had undershot the 2 percent longer-term objective.”

  which looks as if ‘symmetric’ could be seen as meaning making up for downside inflation misses with upside misses, at least in part. And some FOMC participants have used symmetric in a similar context.

  So far the Minutes have been coy about this possibility. The Minutes to the Dec. 2017 meeting stated:

  “…a few participants suggested that further study of potential alternative frameworks for the conduct of monetary policy such as price-level targeting or nominal GDP targeting could be useful.”

  I doubt there would be much change in this language until they have a good idea where they are headed and that is not the case now.  The mention in recent speeches has been casual, more discussed as a possible tweak, than pushed as a full-fledged policy alternative, so even it there are good arguments for it, I doubt that tomorrow’s Minutes is where it would be introduced as a full-fledged alternative. If I am wrong and the Minutes sound as if this target shift is under serious consideration, the USD would come under significant renewed pressure. 

  We would probably see some curve steepening as the shift is digested. 

  Bottom line: I go in with a hawkish lean, thinking that 75-80bps of 2018 hikes is closer to accurately pricing in the fed tilt and the current economic/inflation outlook.

  

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• Why Washington Struck Russian Contractors In Syria

  Submitted by Nauman Sadiq,

  On February 7, the US B-52 bombers and Apache helicopters struck a contingent of Syrian government troops and allied forces in Deir al-Zor that reportedly killed and wounded dozens of Russian military contractors working for the Russian private security firm, the Wagner group.

  

  In order to understand the reason why the US brazenly attacked the Russian contractors, we need to keep the backdrop of seven-year-long Syrian conflict in mind. Washington has failed to topple the government of Bashar al-Assad in Syria.

  After the Russian intervention in Syria in September 2015, the momentum of battle has shifted in favor of Syrian government and Washington’s proxies are on the receiving end in the conflict. Washington’s policy of nurturing militants against the Syrian government has given birth to the Islamic State and myriads of jihadist groups that have carried out audacious terror attacks in Europe during the last couple of years.

  Out of necessity, Washington had to make the Kurds the centerpiece of its policy in Syria. But on January 20, its NATO-ally Turkey mounted Operation Olive Branch against the Kurds in the northwestern Syrian canton of Afrin. In order to save its reputation as a global power, Washington could have confronted Turkey and pressured it to desist from invading Afrin. But it chose the easier path and vented its frustration on the Syrian government forces in Deir al-Zor which led to the casualties of scores of Russian military contractors hired by the Syrian government.

  Another reason why Washington struck Russian contractors working in Syria is that the US-backed and Kurdish-led Syrian Democratic Forces (SDF) – which is mainly comprised of Kurdish YPG militias – have reportedly handed over the control of some areas west of Euphrates River to Deir al-Zor Military Council (DMC), which is the Arab-led component of SDF, and have relocated several battalions of Kurdish YPG militias to Afrin and along Syria’s northern border with Turkey in order to defend the Kurdish-held areas against the onslaught of Turkish armed forces and allied Free Syria Army (FSA) militias.

  More significantly, an understanding between the Syrian government and the Kurdish leadership has recently been reached, according to which the government will deploy Syrian troops in the northwestern Kurdish enclave of Afrin in order to augment the defenses of the canton against the Turkish-led offensive.

  One of the main reasons why Washington bombed the pro-government forces, which included the Russian military contractors, on February 7 in Deir al-Zor was to preempt the likelihood of such an accord between the US-backed Kurdish forces and the Russia-backed Syrian government from materializing in the wake of Turkish-led Operation Olive Branch in Afrin on January 20.

  It’s worth noting here that the ethnic and sectarian conflict in Syria and Iraq is actually a three-way conflict between the Sunni Arabs, the Shi’a Arabs and the Kurds. Although after the declaration of war against a faction of Sunni Arab militants, the Islamic State, the US has also lent its support to the Shi’a-led government in Iraq, the Shi’a Arabs of Iraq are not the trustworthy allies of Washington because they are under the influence of Iran.

  Therefore, Washington was left with no other choice but to make the Kurds the centerpiece of its policy in Syria after a group of Sunni Arab jihadists overstepped their mandate in Syria and overran Mosul and Anbar in Iraq in early 2014, from where the United States had withdrawn its troops only a couple of years ago in December 2011.

  The so-called Syrian Democratic Forces (SDF) are nothing more than Kurdish militias with a token presence of mercenary Arab tribesmen in order to make them appear more representative and inclusive in outlook.

  Regarding the Kurdish factor in the Syrian civil war, it would be pertinent to mention here that unlike the pro-US Iraqi Kurds led by the Barzani family, the Syrian PYD/YPG Kurds as well as the Syrian government have been ideologically aligned because both are socialists and have traditionally been in the Russian sphere of influence.

  Moreover, as I have already described that the Syrian civil war is a three-way conflict between the Sunni Arab militants, the Shi’a-led government and the Syrian Kurds, and the net beneficiaries of this conflict have been the Syrian Kurds who have expanded their areas of control by aligning themselves first with the Syrian government against the Sunni Arab militants since the beginning of the Syrian civil war in August 2011 to August 2014, when the US policy in Syria was “regime change” and the CIA was indiscriminately training and arming the Sunni Arab militants against the Shi’a-led government in the border regions of Turkey and Jordan with the help of Washington’s regional allies: Turkey, Jordan, Saudi Arabia, Qatar and Kuwait, all of which belong to the Sunni denomination.

  In August 2014, however, the US declared a war against one faction of the Sunni Arab militants, the Islamic State, when the latter overran Mosul and Anbar in early 2014, and Washington made a volte-face on its previous “regime change” policy and started conducting air strikes against the Islamic State in Iraq and Syria. Thus, shifting the goalposts in Syria from the impossible objective of “regime change” to the realizable goal of defeating the Islamic State.

  After that reversal of policy by Washington, the Syrian Kurds took advantage of the opportunity and struck an alliance with the US against the Islamic State at Masoud Barzani’s bidding, thus further buttressing their position against the Sunni Arab militants as well as the Syrian government.

  More to the point, for the first three years of the Syrian civil war from August 2011 to August 2014, an informal pact existed between the Syrian government and the Syrian Kurds against the onslaught of the Sunni Arab militants until the Kurds broke off that arrangement to become the centerpiece of Washington’s policy in the region.

  In accordance with the aforementioned pact, the Syrian government informally acknowledged Kurdish autonomy; and in return, the Kurdish militias jointly defended the areas in northeastern Syria, specifically al-Hasakah, alongside the Syrian government troops against the advancing Sunni Arab militant groups, particularly the Islamic State.

  Finally, in order to understand Washington’s objective that why it dared to bomb pro-government forces in Deir al-Zor on February 7 that included private Russian military contractors, bear in mind that it would be a nightmare scenario for Washington in Syria if its only trust-worthy allies, the Syrian Kurds, broke off their arrangement with Washington and once again entered a mutually beneficial alliance with Russia-backed Syrian government – a scenario which is quite likely after Washington’s NATO-ally Turkey’s repeated invasions of Kurdish-held areas in Syria, first the invasion of Jarabulus and Azaz in northern Syria during the Operation Euphrates Shield that lasted from August 2016 to last March, and now the military intervention in the Kurdish enclave of Afrin on January 20.

  Washington’s primary objective of bombing the pro-government troops on February 7 – that led to dozens of Russian casualties – was to create divisions between the US-backed Kurds and Russia-backed Syrian government. Clearly, one can’t negotiate and reach a defensive accord with a party whose backers are bombing you at the same time. But Russia has sagaciously downplayed the brazen atrocity and moved on with its efforts to reconcile the divergent interests of competing forces in the Syrian proxy war.

  *  *  *

  Nauman Sadiq is an Islamabad-based attorney, columnist and geopolitical analyst focused on the politics of Af-Pak and Middle East regions, neocolonialism and petro-imperialism.

  

• Anti-Immigrant AfD Now The Second Most Popular Party In Germany

  In a historic first, a poll published on Monday by German newspaper Bild put the anti-immigrant, Alternative for Germany (AfD) party at 16%, showing that they are currently the second most popular political organization in Germany and more popular than Germany’s Social Democrats (SPD), Merkel’s “Grand Coalition” allies. The poll, conducted by INSA put the AfD on 16%, just ahead of the SPD on 15.5%.

  

  The poll marks the lowest support ever achieved by the SPD, traditionally one of the two major parties of German politics.

  According to the poll Angela Merkel’s Christian Democrats are the most popular party in the country and would secure 32 percent of the vote were elections to be held tomorrow.

  Environmentalists can take heart from the poll too, as it confirms a trend of blooming support for the Green party. The Greens won 8.9 percent of the vote in September’s election but are now polling at 13 percent.

  Germany, INSA poll:

  CDU/CSU-EPP: 32% (+2)
  SPD-S&D: 16%
  AfD-EFDD: 16% (+1)
  GRÜNE-G/EFA: 13%
  LINKE-LEFT: 11%
  FDP-ALDE: 9% (-1)

  Field work: 16/02/18–18/02/18
  Sample size: 2,040#GroKo #NoGroKo #SPD #AfD pic.twitter.com/jlIsl8hBwz

  — Europe Elects (@EuropeElects) February 19, 2018

  https://platform.twitter.com/widgets.js

  The popularity of the right-wing AfD has been creeping up in recent weeks, with polls consistently putting them on 14% or above.

  They entered the Bundestag for the first time in September after winning 12.6% of the vote. The party was set up in 2013 and fought the election of that year on an anti-Euro platform, but failed to make it over the five percent hurdle needed to make it into parliament. Last year they ran a campaign fiercely critical of the government’s refugee policy, which had led to over a million people applying for asylum in Germany since 2015.

  According to The Local, the leadership of the AfD rejects the label of “far-right”, preferring to describe themselves as conservative. However, they remain highly controversial due to various statements by senior party members which have challenged a political consensus concerning how Germany treats its Nazi past.

  
  AfD federal chairman Jörg Meuthen

  Björn Höcke, the AfD leader in Thuringia, has lambasted Germany’s culture of remembrance of the Holocaust, labeling the Holocaust Memorial in central Berlin a “memorial of shame.”

  Party leader Alexander Gauland, meanwhile, said during election campaigning last year that Germany should be proud of the service of its soldiers in two world wars.

  On the other hand the popularity of the SPD has plummeted as they look set to join a third grand coalition with Merkel as a junior partner. Germany‘s oldest party – around the late 19th century – scored their worst post-war result in 2017 at 20.5% and have only seen their support crumble since then.

  

• The Three Global Super-Powers & The End Of M.A.D.

  Authored by Eric Zuesse via The Strategic Culture Foundation,

  There are currently three global super-powers, three nations that lead the world: China, Russia, and US.

  

  After World War II, until recently, the US clearly dominated the world, not only culturally, with more influence over the world’s other cultures than any other single nation possessed, but also economically, with product-dominance throughout the world, and also militarily tied with the Soviet Union during the Cold War, and, then, after the Cold War, still possessing such military dominance, so that in 2006, America’s billionaires — as represented by the most-prestigious two agencies that represent their collective interests against the public, the Council on Foreign Relations and Harvard University — were actively promoting, broadly amongst foreign-policy academics, the idea that the US should seek to occupy a position of such extreme military superiority over Russia, so that since 2006 the concept of “Nuclear Primacy” is reflected, by America’s power-centers, as being the correct goal for America, going forward, replacing the prior nuclear-strategic paradigm (since the 1950s) of “Mutually Assured Destruction,” or “M.A.D.,” in which nuclear weapons were (and, by Russia, still are) seen as purely defensive strategic military assets between the two nuclear superpowers, weapons whose only actual purpose, for either country, is to ward off a WW III — no usefulness at all in an actual aggressive military context.

  

  Thus, M.A.D. became replaced in America by Nuclear Primacy, nuclear weapons that are put in place to serve not only to ward off a nuclear attack, but also, ultimately, to win a nuclear war against the other nuclear super-power, Russia — nukes as aggressive weapons, by which the US will (it has been expected, ever since 2006) soon be able to demand, and to receive, Russia’s capitulation, surrender, or else Russia will be destroyed by a US nuclear first-strike, while US casualties, from any presumably few Russian weapons that might make it through this ABM-BMD shield, will be kept to an “acceptably low” level, by virtue of that then-functioning ABM-BMD system, combined with increases in US nuclear striking-power. This nuclear-primacy paradigm aims for America (its billionaires) to take over the entire world, including ultimately the world’s largest land-mass: Russia. 

  But, now, twelve years later, America’s presumed early lead in such ‘defensive’ strategic weaponry has become, instead, ever more clearly, just a figment of America’s military-industrial complex’s (MIC’s) fervid marketing-campaign for the development and sale of such weapons, ever since US President Ronald Reagan’s promised “Star Wars” program during the 1980s got the effort, toward a winnable nuclear war, started, as an alleged ‘defensive’ measure — not yet overtly the end of M.A.D. 

  Soon after Reagan, the Soviet Union, and its communism, and its Warsaw Pact counter to America’s NATO military alliance, all simultaneously ended, in 1991, as a consequence of which, the US military-industrial complex (MIC), and especially the large US manufacturers of nuclear-weapons systems, the companies that dominate the MIC, were becoming stranded, because the market for their costliest wares was now in limbo. Though elimination of the Cold War wouldn’t have been an existential threat to these manufacturers, an end to the Cold War on the US side would have threatened the market-values of those US companies, which are controlled by US billionaires, who have lots of clout in Congress. Thus, though the Cold War ended in 1991 on the Russian side, it secretly continued on the US side (that is, amongst America’s super-wealthy, the people who control the US Government — the main market for the MIC); and America’s strategic switch, away from M.A.D. to Nuclear Primacy (so as to unshackle their market from the prior politically imposed demand to maintain a nuclear balance between the two sides), has been a significant part of this secret continuation, by America, of the Cold War, while Russia’s Government continued instead to think in terms of the M.A.D. paradigm. (Russia’s weapons-manufacturers are still owned by the Government — socialized — so, there’s no need to grow their ‘market value’.)

  In a strictly capitalist country, weapons-manufacturing is a major area of investment for billionaires, whose fortunes there rise to the extent that governments are buying their planes and bombs and missiles, especially those of the most sophisticated types, which are strategic weaponry, such as nuclear systems, which are the most profitable ones of all. Growth-at-all-costs has meant (and means) that the MIC is a cancer upon the entire world. (Eisenhower’s Farewell Address, on 17 January 1961, understated the problem.) Either the entire military will be a public entity, or else there will be (because of its privatized weapons-manufacturing) a tendency for the military to destroy everything else in order to continue to grow, like investors expect and demand — grow like cancer.

  A major source of America’s decline was US President George W. Bush, who came into office in 2001 when the Cold War could no longer excite the American public as being a threat (since the Soviet Union and its communism and its military alliance were now long gone), and a new demon thus needed to be brought before the American people, as warranting increased ‘defense’ expenditures. 9/11 came along just in time to fill this interim lack of a cause de guerre, to attack now Al Qaeda and other (as today’s US President famously tags it) “radical Islamic terrorists.”However, America’s spending on strategic weaponry requires instead focus against the other nuclear super-power as being the ‘enemy’, and this is what the end of M.A.D. and the start of Nuclear Primacy (which is manna from heaven for the ‘Defense’ contractors) have been all about: re-defining ‘the enemy’, from being a country with which peace must be maintained (M.A.D.), to becoming instead a country that should be outright conquered. And, amongst the lies which are necessary in order to sustain this switch (from M.A.D. to Nuclear Primacy), is the lie that ABMs have no aggressive function, but are ‘purely for defense’. This lie will enable the public to accept the spending of trillions of dollars of federal money on weapons whose sole real use will be conquering Russia — or, at least, the attempt to do so. 

  Nobody makes public the identities of the individuals, in the US and in its allied countries, who comprise the suddenly booming market for luxurious nuclear-proof deep-underground bunkers. But whomever these owners are, three things about them are obvious: they’ve got lots of money; they think that the prospect of a nuclear war is very real — worth their pre-paying for suitably luxurious long-term temporary accommodations deep underground; and they aren’t themselves one of the high government officials for whom the government’s taxpayers have already built such bunkers. (Or, perhaps, some of them do belong to the last of those three categories, but they’ve got so much extra money that they can easily afford to pay for more luxurious quarters than the taxpayers have already supplied them with.)

  Quite similar to Donald Trump, but far more overtly faith-based than the hyper-secular former Miss Universe Pageant owner, George W. Bush had a confidence like the Taliban and Al Qaeda do, that “God is on our side”, and so Bush acted as if he had no reason to test-out America’s ABM weapons before ordering and buying them (at the public taxpayer’s expense, and private billionaires’ profits, of course). Or, perhaps alternatively, Bush didn’t even care whether these weapons would work, but only whether the owners of the companies that would be manufacturing them would be satisfied with their profits, from the decisions that he was making, which so powerfully affected their profits. In any case, Bush’s focus on rushing forward with a US ABM system demonstrated his strong commitment to the replacement of M.A.D., by Nuclear Primacy. The whole idea of Nuclear Primacy rests upon there being an effective US ABM system installed so as to make the enemy’s retaliatory weapons ineffective. Bush pushed the ABM into production even before there was any indication that it would work. He did this even before the very concept of “Nuclear Primacy” was publicly introduced by the two chief agents for America’s aristocracy in 2006. What Harvard and the CFR promoted, was already the Government’s policy. While there were criticisms of Bush’s execution of the plan, there was no significant scholarly opposition against the Nuclear Primacy concept itself.

  All subject-areas of expertise (and this refers to scientists, not to scholars) despised the religious faith-based President George W. Bush, much like they despise the secular faith-based President Donald Trump. For example, everyone knows that Trump has great difficulty finding experts who are willing to serve in his Administration. Similarly, in the October 2004 “Poll of Academic Economists” by the Economist, 59% of them answered “no” when asked “If you had a chance to work in a policy job in Washington, would you take it?” And when queried “For whom would you rather work?” Bush or his then electoral opponent Senator John Kerry, 81% chose Kerry — notwithstanding that, as a predominantly conservative lot, the economists did like one thing about George W. Bush: “Outsourcing of jobs overseas,” which 86% of them rated to be either good or very good. (Of course, Trump claims to oppose that; so, in this regard, he’s even less acceptable to economists than Bush was.)

  Under Bush, experts were even trying, with no success, to inform this conservative faith-based President about areas in the federal budget where substantial funds were being simply wasted, but his blind faith caused him to ignore such scientific warnings, and enormous federal waste resulted. For example, the science reporter William Broad headlined in The New York Times on 24 September 2003, “Report Sees Risks in Push for Missile Defense”, and opened, “The Bush administration’s push to deploy a $22 billion missile defense system by this time next year could lead to unforeseen cost increases and technical failures that will have to be fixed before it can hope to stop enemy warheads, Congressional investigators said yesterday. The General Accounting Office, in a 40-page report, said the Pentagon was combining 10 crucial technologies into a missile defense system without knowing if they can handle the task [and subsequently the same thing happened in order to produce the scandalously overpriced and insanely multi-functional F-35 jets], often described as trying to hit a bullet with a bullet.” The article quoted a former Pentagon weapons testing chief, who said that to deploy such an anti-ballistic missile (ABM) system just a year hence as planned, would be to deploy “no more than a scarecrow, not a real defense” — in other words, a system that would almost certainly fail in any actual use — because so many parts of the system wouldn’t have been tested sufficiently to be designed functionally that soon. The prior (Bill Clinton) Administration, more attentive to such concerns, had established a schedule for testing the various parts of this complex system prior to any possible deployment. However, one of G.W. Bush’s first actions coming into office was to deploy an ABM system, even if it might not work, and to do the testing afterward. Bush, it seems, possessed the faith that if science were to fail to supply the system’s functionality, then God would certainly do so, for the benefit of “God’s People.” 

  Jackson Diehl of the Washington Post thus headlined on 26 April 2004, “Dubious Threat, Expensive Defense” and closed: “Bush would spend twice as much on missile defense as on customs and border protection,” yet gain only “a rudimentary and uncertain defense against an unlikely long-range missile attack.” Diehl opined that, despite the transformed defense needs after 9/11, “The president who never admits error will stay the course.” 

  Bush did stay the course: by the time of 14 February 2005, as The New York Times reported the next day, “The nation’s fledgling missile defense system suffered its third straight test failure.” Commented one scientist there, “It’s as if Henry Ford started up his automobile production line and began selling cars without ever taking one for a test drive.” But not quite: Bush had now taken his third ‘test drive’ — and all three failed. 

  On 4 April 2005, the AP reported, “Congress is weighing how much to invest in the fledgling ballistic missile defense system, which has suffered setbacks and whose cost could easily top the $150 billion partial price tag the Bush administration has estimated.” Some congressional proponents of the ABM system were even quoted as saying that it had to be deployed in order to prevent future terrorist attacks, such as had occurred on 9/11. Of course, that allegation is absurd — 9/11 couldn’t have been stopped by an anti-missile defense system. But members of Congress aren’s so stupid as not to know this. That allegation was probably just a marketing-ploy sponsored in back-rooms by corporations such as Lockheed Martin, who might reflect their satisfaction with the statement, by donating to the ‘appropriate’ PACS.

  Meanwhile, the Bush Administration and the Republican Congress were financially shortchanging many of the nation’s authentic anti-terrorist needs. This $150 billion+ could have gone a long way toward achieving real protection (and/or toward serving non-defense needs), if it had been scientifically allocated. 

  Were Al Qaeda to have been voting directly in the US Congress, the ABM system would have had an easier time passing unchanged, exactly as Bush wanted. Al Qaeda would have been fervent Republicans — they were just as religious, and just as faith-obsessed, though in a different ‘inerrant Scripture’. If Donald Trump has faith in any ‘inerrant Scripture’, nobody knows what it is. But, he seems to have lots of faith in himself, even if experts in the respective subject-fields don’t.

  By the present time, the failure of America’s entire ABM-BMD gamble — which was started under Reagan, begun being operationalized under G.W. Bush, and finally being installed by Barack Obama and now under Trump — is painfully clear. But success was never its actual goal: restoring the government’s growth in ‘defense’ spending (even while cutting now the government’s non-‘defense’ spending) is its real purpose. Those billionaires and centi-millionaires must be served, or else Congress-members will lose their seats to well-funded competitors in their own Party’s next primary. The system succeeds marvelously at doing what it’s intended to do: to serve the people who buy the Government — to serve the actual patrons of this ‘democracy’. Instead of being a democracy, it’s a government that’s bought and sold.

  While America thus spends itself into becoming increasingly a third-world country, China and Russia pursue different objectives. Specifically in the case of Russia, its military spending is one-tenth of America’s, but, because Russia cannot afford to allow billionaires’ demands for private profit to constitute the incentive-system that drives the Russian Government’s military decisions, Russia has gone militarily from strength to strength, while post-WW-II America (spending ten times as much) has gone from Vietnam to Afghanistan to Iraq to Libya to Syria, and yet America’s ‘news’-media have cheered all of these evil billionaires’ invasions of those countries we wrecked, as if companies such as General Dynamics owned companies such as the Washington Post, and thus (with all that propaganda) the American public continue to respect America’s military higher than any other US institution — despite such a long string of military failures by this country, despite spending ten times what Russia does on its military, and despite America’s military being the most corrupt part of the US federal Government.

  But, actually, America’s military spending is probably much higher than just ten times Russia’s, because America’s official figures — what SIPRI and others use, which is just the ‘Defense’ Department — excludes much of America’s military expenses, as a consequence of which, America’s official $617.1 billion FY 2019 expenditure for the Department of ‘Defense’ masks an actual annual military expense of $1,135.7 billion. That’s $1.36 trillion per year, to do things such as destroy Afghanistan, destroy Iraq, destroy Syria, destroy Libya, perpetrate coups such as in Ukraine, assist coups such as in Honduras, etc. But even that’s not the total ‘defense’ expenditure which taxpayers have bought for the billionaires, because, throughout its existence, the US CIA has been getting unrecorded off-the-books billions from the international narcotics trade, starting in 1948, when it perpetrated a coup in Thailand and installed there a brutal regime that helped establish the CIA’s off-the-books funding-system, as I had mentioned in a prior article, where I discussed US relations with Syria, in broader histrical context,

  starting in 1949, when the US CIA, under President Harry S. Truman, did its second coup d’etat, overthrowing a democratically elected progressive Government (the first having been Thailand 1948, where the CIA had installed an extremely barbaric dictator replacing the democratically elected government that had been headed by a staunch anti-fascist, and simultaneously set up the CIA’s off-the-books supplementary funding mechanism from the international narcotics-trade — a CIA practice which has continued till perhaps the present; and, furthermore, the infamous Nugan-Hand affair, which involved Thailand, definitely involved the CIA’s Michael Hand and William Colby; so, clearly, the CIA is funded off-the-books from the narcotics business, and America’s anti-narcotics laws thus are actually keeping narcotics-drug prices and resultant burglaries and CIA profits artificially high, funneling that illicit money into CIA coffers; and any method to defund the CIA down to its core intelligence-gathering function and to eliminate its coup-function, which is the function that took control in Thailand and Syria and then Iran and many more, would need to regulate — instead of to continue outlawing — drugs, which might be the main reason why it hasn’t yet been done: illegal drugs provide wealth to the CIA and other gang-lords, including some US Government officials).

  Another significant milestone in the development of the American elite’s plan to conquer Russia has been the overwhelming — more than 90% of the votes in both the US Senate and House — support for the imposition in 2012 of economic sanctions against Russia, to punish the Russian Government for the alleged 2009 murder of one alleged anti-corruption whistleblower in a Russian prison, Sergei Magnitsky — the Magnitsky Act was passed, and was the first set of economic sanctions against Russia. (The evidence that Magnitsky had been a ‘whistleblower’, and the evidence that he was ‘tortured’ in prison, and the evidence that he wasn’t instead the American Bill Browder’s tax-accountant who had helped Browder in a complex tax-evasion scheme that had defrauded the Russian Government of $232 million, are all themselves fraudulent, and even are easily verified as being fraudulent, but both the US Government, and the EU, ignored and continue to ignore all of it.) In order to have a ‘justification’ to attack Russia, an excuse is needed; and, since the ideological one — communism — ended in 1991, Russia needs to be at least a ‘dictatorship’; so, something such as the Magnitsky Act was necessary in order to get the military-industrial complex’s (MIC’s) PR ball rolling toward even-higher annual US ’defense’ spending. However, that excuse, being a ‘dictatorship’ (with elections that are at least as honest as America’s are), isn’t enough. Russia also needs to be officially declared to be an ‘aggressor’ — an aggressive dictatorship — such as to have grabbed portions of its adjoining country, Ukraine. So, America’s Obama regime secretly started in 2011 planning, and then in February 2014 it carried out, a coup against and overthrowing the democratically elected and Russia-friendly Government of Ukraine, and installed there a fascist regime to replace the one that had received 75% of the vote in the Crimean region of Ukraine, and 90% of the vote in the Donbass region of Ukraine, so that both regions refused to be ruled by the Obama-installed rabidly anti-Russian Ukrainian regime, and Russia helped both of those two separatist regions on its borders, and even protected and accepted Crimea’s referendum-vote of over 90% to rejoin Russia, of which Crimea had historically been a part until the Soviet dictator in 1954 arbitrarily transferred it to Ukraine. So, now, the US MIC has the excuses it wants, in order to place — and thus did place — its weapons and troops onto and near Russia’s borders, just a ten-minute missile flight-time to Moscow. 

  This plan is moving forward, but nobody can yet say whether, or even when, the US regime will invade. However, the US regime and its NATO allies now also have the excuses that Russia has been holding ‘aggressive’ military exercises near its borders ‘threatening’ NATO countries on its border that might invade Russia, and Western ‘news’media have alarmed their publics against Russia’s ‘aggressive’ moves after its having ‘stolen’ Crimea and ‘attacked’ Ukraine in Donbass. And then there is yet more Russian ‘aggression’ when Syria requested and received Russia’s military assistance against the US-backed jihadists who, since 2012, have poured, by the tens of thousands, from around the world, into Syria, to be led by the US-backed Al Qaeda there, to overthrow the Syrian Government, which is allied with Russia. So, that too (the Syrian war) could produce a war between the US and Russia; it could start over Syrian territory, where the US insists on regime-change, but claims only to be ‘fighting terrorists’ there. Of course, regardless of whether the invader of Syria (the US), or else the defender of Syria (Russia), wins, the loser in Syria, especially if it turns out to be the US invader (i.e., if Syria remains one country instead of breaking apart, and if Assad becomes re-elected as President there), could then use that superpower-defeat in Syria, as constituting an excuse to invade the winning superpower there.

  This would be WW III, starting in Syria, instead of in Ukraine. The US regime has set up those two scenarios. 

  1984 has come in the real world, but the declining and former leading superpower, America (“Oceania” in George Orwell’s uncannily prophetic description of the future that he prematurely set to occur in 1984), is apparently determined to stay ‘on top’, even if it’s the last thing that anybody does.

  Can it really be that if the world of the future won’t be led by America’s billionaires, then it won’t exist at all? Do they really demand “My way, or the highway” — really? Are America’s billionaires (despite any ‘humanitarian’ pretenses they individually so often hypocritically express, both in the fictionalized and in the real version) so stunningly united in their actual psychopathy (likewise in both versions — “Big Brother,” and today’s reality)? Thus far, it seems that they are. None of them — not a one of these people who have the financial resources to bring the world’s most pressing issue honestly to the American public — is speaking out against the others on it, and devoting major funds to exposing the others for their pumping lies against Russia, and to exposing the truths about such things as ABMs and the MIC. And collectively they’ve got the American public fooled into admiring the MIC (“the Military”) above all other US institutions. But whether America’s billionaires will carry their collective evil to the extreme, isn’t yet clear. They are the actual decision-makers regarding US Government policy, but they are playing their cards — as usual — privately and secretly, until their game (whatever it may turn out to be) will already be finished.

  Meanwhile, Russia and China each proceeds forward on its own priorities, which aren’t necessarily similar to those of the conquest-obsessed American Government.

  

• The Flu Is Ravaging America This Year

  The U.S. has been gripped by its worst flu season in years.

  Experts have been surprised by the intensity of the current outbreak, which Statista’s Niall McCarthy notes, with the infection rate around eight percent, is as bad as the swine flu epidemic from 2009. During that season, 60.8 million people contracted the virus with 274,304 hospitalized and 12,469 dying.

  Even though that outbreak was bad with President Obama declaring it a national emergency, the 2014-2015 flu season was far more lethal. According to the Centers for Disease Control and Prevention (CDC), 710,000 people were hospitalized that season with 56,000 deaths recorded.

  

  You will find more infographics at Statista

  The current situation is alarming with the hospitalization rate per 100,000 people already hitting 59.9 after 18 weeks, according to the CDC.

  It took 25 weeks for the hospitalization rate to reach that point during the deadly 2014-2015 season. During a mild year, an average of 12,000 Americans die due to the flu and judging by the current trend, 2017-18 is on course to surpass 2014-15 in lethality. More than 80 percent of flu deaths usually occur among the elderly and people with underlying health problems.

  This year, seemingly healthy individuals are being infected and hospitalized at higher rates than the historical average. The CDC has reported that 63 children have already died during the current season.

  

• Paul Craig Roberts Sums Up The Result Of Mueller's Investigation: "Nothing!"

  Authored by Paul Craig Roberts,

  Robert Mueller discredited himself and his orchestrated Russiagate investigation last week (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.”

  What pathetic results to come from a 9 month investigation!

  

  Note that the hyped Russian hacking of Hillary’s emails that we have heard about every day is nowhere to be found in Mueller’s charges. In its place there is “use of social media to sow discord.” I mean, really! Even if the charge were correct, considering the massive discord present in the last presidential election, with the Democrats calling Trump voters racist, sexist, homophobic white trash deplorables, how much discord could a measly 13 Russians add via social media?

  Note also that the Trump/Putin conspiracy is also not present in Mueller’s charges. Mueller’s charges say that the Russians’ plan to sow discord began in 2014, before there was any notion that Trump would run for president in 2017. The link of the plot to Putin is reduced to the allegation that the plot was financed by a St. Petersburg restaurateur whose connection to Putin is that his business once catered official dinners between Russian officials and foreign dignitaries.

  Finally, note that Mueller’s release of his charges in the face of dead news weekend means that Mueller knows that he has nothing to justify the massive propaganda onslaught against Trump for conspiring with Putin with which the presstitutes have regaled us. If the charges amounted to anything, they would have been released on Monday morning, and the presstitutes would have been handed by the FBI and CIA the news stories to file with their papers.

  How did the 13 Russians go about sowing discord? Are you ready for this?

  They held political rallies posing as Americans and they paid one person (unidentified) to build a cage aboard a flatbed pickup truck and another person to wear a costume portraying Hillary in prison clothes.

  How much money was lavished on this plot.

  A monthly budget of $1.2 million, a sum far too small to be seen in the $2.65 billion spent by Hillary and Trump and the $6.8 billion spent by all candidates for federal elective offices in the last election.

  Mueller claims to have emails from some of the 13 Russians. If the emails are authentic, they sound like a few kids pretending to friends that they are doing big things. One of the emails brags that the FBI got after them so they got busy covering up their tracks.

  House Speaker Paul Ryan has fallen for Mueller’s ruse.

  Remember what William Binney, the person who designed the NSA spy program, said: If any such Russiagate plot existed, NSA would have the evidence. No investigation would be necessary.

  One can conclude that Mueller and Rosenstein are fighting for their lives now that it is known that their spy requests for FISA court approval were based on deception. Mueller has produced this silly indictment of individuals who are not the Russian government in the hope that it will keep the attention off the FBI’s deception of the FISA court.

  As a special prosecutor Mueller has demonstrated the same lack of integrity that he demonstrated as FBI director.

  

• Munich Conference: "For The First Time In Decades We Are Facing Threat Of Nuclear Conflict"

  Over the past fifty years, the Munich Security Conference (MSC) has traditionally reflected the current state of world military affairs. Each February, more than 450 senior decision-makers from around the globe descend into Munich, Germany, to discuss current and future security challenges.

  And while there have been times in recent years when the MSC demonstrated signs of hope and optimism, none of that was evident this year. This year’s motto “To the Brink – and Back?”- which seems to be an accurate portrayal of the current geopolitical situations in most regions. After several days of senior decision-makers bickering back and forth, the negativity in the atmosphere only means one thing: A global conflict between nuclear superpowers is lingering.

  “I was hoping when I opened this conference on Friday that, in concluding the conference, I would be able to say we can delete the question mark. In other words: ‘We are back from the brink,’” former German diplomat Wolfgang Ischinger said in closing remarks of the MSC. “I’m actually not sure we can say that,” he added.

  The dangers of nuclear proliferation and talk of a “dire” global security situation dominated the security conference: from the ongoing war in eastern Ukraine, to U.S. allegations of Russia’s election-meddling, to territorial disputes between ex-Soviet republics, and even discussions about the escalating tensions between Israel and Iran: geopolitical doom and gloom was not short in all conversations during the meeting.

  And, in the latest escalation, Bloomberg reports that the most fiery subject of the conference were the tensions surrounding Russia and the U.S over nuclear arms controls.

  Addressing a conference hall in Munich packed with dignitaries, UN Secretary-General Antonio Guterres warned of the risks emanating from North Korea’s nuclear activities, which have ratcheted up tensions between Pyongyang and Washington.

  “For the first time since the end of the Cold War, we are now facing a nuclear threat, a threat of a nuclear conflict,” Guterres told the gathering in the southern Bavarian city.

  

  Conference Chairman Wolfgang Ischinger opened the event by warning that the world has moved too close to a “major interstate conflict” and faces a “dire reality.”

  “We have too many unresolved crises, instabilities, and conflicts,” Ischinger warned.

  Russian Foreign Minister Sergei Lavrov fired a shot at President Trump’s new 74-page nuclear doctrine calling for a modernization of America’s nuclear arsenal.

  #Russia’s Foreign Minister speaks at the Munich Security conference in Germany. https://t.co/kvuJP0nCyC

  — Rudaw English (@RudawEnglish) February 17, 2018

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  U.S. National Security Adviser H.R. McMaster shot back at Lavrov’s statements defending the U.S. nuclear posture, which calls for more low-yield atomic bombs and outlines explicitly Russia and China are the primary sources of security concern for the Pentagon.

  A great speech “Munich Security Conference 2018. National Security Advisor H.R. McMaster” https://t.co/ksFXRfgCWj

  — Ali Mohammad Ali (@Ali_CRPA) February 18, 2018

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  “We will not allow Russia any of the power to hold the populations of Europe hostage,” he declared Saturday in Munich, appearing on stage minutes after Russian Foreign Minister Sergei Lavrov sounded the alarm on the U.S. military-industrial complex expansion since the collapse of Communism.

  While the two countries have fulfilled the terms of another landmark nuclear weapons reduction treaty, New START, that accord expires in 2021 and there’s political pressure on President Donald Trump to let it expire because of the alleged Russian non-compliance with the INF treaty. Moscow in turn accuses Washington of itself breaking the intermediate-range pact.  So far, no formal negotiations are taking place on either issue.

  And as the world devolves to another potential nuclear arms race, Javier Solana, NATO’s former secretary-general, and Sigmar Gabriel, Germany’s acting foreign minister, expressed alarm: “The most likely theater for nuclear conflicts would once again be here, in the center of Europe,” Gabriel told the conference.

  Meanwhile Graham Allison, a Pentagon adviser under former U.S. President Ronald Reagan when the two superpowers were negotiating arms control, said he’s skeptical momentum will be found to revive START and the INF.

  Arms control was developed primarily to prevent the “insane” possibility that Russia and the U.S. would annihilate each other due to miscalculation or accident, despite not even wanting to go to war, said Allison, now a professor of government at Harvard University. “Those risks remain today.”

  Needless to say, a return to the nuclear arms race is the worst possible outcome:”according to Sergei Karaganov, a former Kremlin foreign policy adviser, the situation could get “much more dangerous” than during the Cuban missile crisis in 1962, when the world was on the brink of nuclear war.”

  Under New START, which followed from the 1991 START treaty and was signed in 2010, the Russian and U.S. arsenals are restricted to no more than 1,550 deployed strategic warheads on no more than 700 deployed strategic missiles and bombers.

  

  And, if that long-range missile pact isn’t prolonged and the INF collapses, “you have a situation where there are no limits on Russian and American nuclear forces,” said Steven Pifer, a former top State Department official and arms control expert, quoted by Bloomberg. In addition, Russia and the U.S. would stop exchanging data on each other’s nuclear arsenals and permitting regular inspections. “It would be less predictable, less secure, less stable,” Pifer said.

  Russia would then likely respond to any U.S. move to station land-based intermediate-range missiles in Europe by deploying similar missiles to target “all the bases where these weapons will be,” said Igor Korotchenko, director of the Center for Analysis of World Arms Trade in Moscow.

  “And the U.S. can’t stay safe over the ocean – we’ll create the same risk for the U.S. as they do for us in Europe,” he said.

  In short: a full blown nuclear arms race coupled with Cold War 2.0.

  * * *

  Some experts,  such as Thomas Graham, ex-White House adviser under George W. Bush, remain optimistic, and believe Russia and the U.S. will blink when faced with the prospect of stepping into a void without the security of arms control.

  Russia has proposed a 5-year extension to New START, to 2026, though it’s tying that to fixing complaints about the way the U.S. has complied with the treaty, the Interfax news service reported Feb. 16.

  Others are not: “The chances are diminishing every day,’’ said Konstantin Kosachyov, head of the foreign affairs committee of the Russian upper house of parliament.

  Ian Bremmer, the founder of the Eurasia Group told Handelsblatt that, “We’re in trouble, because, you know, pretty much every geopolitical conflict out there is escalating, none of them are getting fixed, and no one has any solutions. This was not a good meeting.”

  

• "Their Objective Is To Create Fear…"

  Authored by Jeff Thomas via InternationalMan.com,

  The Social Justice trend has appeared in recent years, and has rapidly gained momentum.

  

  It appeared first on college campuses, where students accused a professor or, indeed, another student, of making a statement or using a word that was deemed socially unacceptable. The premise by the accuser was that a campus must be a safe space, where people should not be exposed to comments that may possibly make anyone feel demeaned or uncomfortable.

  The accusers have earned the name “snowflakes,” as they tend to melt down at the slightest provocation. However, the Social Justice trend has given snowflakes considerable power, a power that’s often used recklessly.

  Importantly, whether the offensive comment is correct or incorrect is not an issue. The “offense” is that the speaker has stated something that should not ever be mentioned, as it might upset the listener in some way. The “justice” that takes place is that one or more people file a formal complaint with a person or body that holds power over the speaker and demand that he be punished for his “wrongdoing.”

  This has led to teachers and professors being warned, suspended, or fired from their positions, based merely on the existence of a complaint. In addition, “offending” students have been warned, suspended, or expelled, again, without what might be regarded as due process.

  A related form of Social Justice is the vigilantism seeking to destroy those who are prominent. Former Miss Americas demanded that the entire board of the Miss America Pageant be dismissed for making disparaging remarks about pageant contestants. Several have been forced to resign in disgrace.

  And, of course, we’re seeing the rise of complaints against actors, politicians, and other prominent individuals regarding alleged sexual denigration of women, even if it’s merely verbal. In each case, witnesses are “bravely coming forward,” en masse, although they often were silent for decades (if, indeed, the individual incidents ever occurred at all).

  Whether a given individual has actually committed a crime or not seems immaterial in the new Social Justice trend. The focus is on vehement condemnation of an individual, usually by a host of others. Importantly, regardless of what process is used to prosecute (or persecute) those accused, a general assumption of the Social Justice trend is that, once someone is accused, he’s guilty and punishment must take place.

  But, in fact, this trend is not new. Rabid groups of accusers appear throughout history, generally during times of existing social tension.

  The Salem Witch Trials: 1692-1693

  In 1692, several young girls claimed to be possessed by witches and group hysteria ensued. Some 150 men, women and children were ultimately accused and nineteen were hanged. Governor William Phips ordered that an end be put to the show trials in 1693. In the process, his wife was accused of being a witch.

  The Nazi Sondergerichte: 1933-1945

  In Nazi Germany, kangaroo courts were held for those deemed to have committed “political crimes,” resulting in 12,000 deaths. Germans were encouraged to report on each other. (If your neighbor annoyed you, a good recompense was to report him as being disloyal.) The persecution only ended when Nazi Germany was defeated.

  The Great Soviet Purge: 1936-1938

  Joseph Stalin ran many successful purges against clergymen, wealthy peasants, and oppositionists, but the foremost of them was the Great Purge, which included anyone with a perceived stain on his record. Denunciation was encouraged. The purge was highly successful and, although the show trials ended in 1938, the threat of accusation remained until the fall of the Soviet Union in 1991.

  The Red Scare – McCarthyism: 1947-1956

  US Senator McCarthy accused countless people in Hollywood of being communists. Thousands lost their jobs. McCarthyism ended when he accused the Protestant Church as being a communist support group. He also attacked the US Army as having communists within it. The Army lashed back, exposing McCarthy as cruel, manipulative, and reckless and the public fervor against communists subsided.

  The Spanish Inquisition: 1478-1834

  The Spanish Inquisition lasted for over 350 years. It was originally conceived by King Ferdinand II as a way to expose and punish heretics and suppress religious dissent.

  It was preceded by the French Inquisition and spread to other countries in Europe. At its height, it investigated, prosecuted, and sometimes burned alive some 150,000 people. The last execution was in 1826 – for teaching deist principles (deism, not Christianity, was the predominant religious belief of America’s founding fathers).

  Crimes committed included blasphemy, witchcraft, immorality, and behavior unbecoming to a woman. (A woman’s role was seen as being limited to raising a family.) False denunciations were frequent and defendants were only rarely acquitted. The auto-da-fé, or public punishment, including groups of people being burned alive, provided an effective demonstration and satisfied the public’s desire for spectacle.

  The inquisition finally ended when King Ferdinand VII and others came to regard the church’s power as being a threat to the government’s power and abolished it.

  Others that used the Social Justice approach to great effect were China, Hungary, Romania, Czechoslovakia, Egypt (as recently as 2014), and Turkey (as recently as 2016).

  And there are many more examples, far too numerous to mention.

  In 1970, Monty Python did a series of sketches in which Michael Palin plays a cleric, saying, “Nobody expects the Spanish Inquisition.”

  And, of course, this is true. The Spanish Inquisition, the Salem witch trials, the McCarthy hearings, and the present Social Justice trend, are so over-the-top that their very existence is clearly absurd.

  However, historically, whether it be a political leader like Stalin or Hitler, or a religious organisation, like the Catholic Church, or the present-day, self-styled “Social Justice Warriors,” such campaigns begin through the desire for power over others. What they have in common is that anyone can be targeted, group accusations carry greater weight than individual accusations, and the punishment invariably exceeds the level of the offense, if, indeed, there is any unlawful offense at all.

  The objective is to create fear. The initiative begins with finger-pointing and mild punishment, such as the loss of a job. But it evolves into a circus that often grows to include more serious punishment, sometimes including execution.

  Vigilantism grows out of troubled periods when frustrations and resentment run high. Because it’s emotionally driven, not logic-driven, it almost invariably morphs into irrational victimisation… and is always destructive in nature.

  *  *  *

  Fortunately, there are practical ways to escape the fallout of dangerous groupthink. Doug Casey has turned it into an art form. Find out more in Doug’s special report, Getting Out of Dodge.

  

• Chinese Official Tackled By US Secret Service Agent In Nuclear Football Scuffle

  A Chinese security official was tackled by a US Secret Service agent in an incident involving the U.S. “nuclear football” during President Donald Trump’s visit to Beijing last year, according to a Sunday report by Axios.

  

  The “football” or “president’s emergency satchel” is an 45-lb aluminum-framed Zero Halliburton briefcase inside a black leather “jacket,” in which a plastic card with the nuclear launch codes called the “nuclear biscuit” can be found. It also contains the procedures for the Emergency Broadcast System, a “black book” with a “menu” of pre-planned strike options, and a book of classified bunkers where the President can be sheltered. The football is always carried by a military aide who is required to remain nearby the President at all times.

  

  

  Five people familiar with the matter described what went down to Axios’s Jonathan Swan:

  • When the U.S. military aide carrying the nuclear football entered the Great Hall, Chinese security officials blocked his entry.
  • A U.S. official hurried into the adjoining room and told Kelly what was happening. Kelly rushed over and told the U.S. officials to keep walking — “We’re moving in,” he said — and the Americans all started moving.
  • Then there was a commotion. A Chinese security official grabbed Kelly, and Kelly shoved the man’s hand off of his body. Then a U.S. Secret Service agent grabbed the Chinese security official and tackled him to the ground.

  The whole incident was reportedly over in a flash, and U.S. officials were told to keep quiet about it (good job guys). 

  Trump’s team reportedly conducted a routine security briefing with the Chinese prior to their visit to Beijing, so there was either a breakdown in communications on the Chinese end, or the scuffle was intentional.

  

  At no point did the Chinese take possession of the nuclear football, nor even touch the briefcase – and the head of the Chinese security detail is said to have apologized to the Americans following the incident.

  

• Florida's 'Teacher Of The Year' Bluntly Explains Why School Violence Is Out Of Control

  Authored by Daisy Luther via The Organic Prepper blog,

  Kelly Guthrie Raley has been teaching for 20 years and currently educates kids at Eustis Middle School in Lake County, Florida. Just last month she was named the 2017-2018 Teacher of the Year.

  

  The day after the horrific shooting that took place at Marjorie Stoneman Douglas High School in Parkland, Florida, she posted a rant on Facebook that has since gone viral. In the post, she talked about parental responsibility, compassion, and respect…and more than 823,000 people have “liked” the post and agreed with it, while more than 649,000 have shared it with others.

  Here’s what Mrs. Raley had to say.

  Okay, I’ll be the bad guy and say what no one else is brave enough to say, but wants to say. I’ll take all the criticism and attacks from everyone because you know what? I’m a TEACHER. I live this life daily. And I wouldn’t do anything else! But I also know daily I could end up in an active shooter situation.

  Until we, as a country, are willing to get serious and talk about mental health issues, lack of available care for the mental health issues, lack of discipline in the home, horrendous lack of parental support when the schools are trying to control horrible behavior at school (oh no! Not MY KID. What did YOU do to cause my kid to react that way?), lack of moral values, and yes, I’ll say it-violent video games that take away all sensitivity to ANY compassion for others’ lives, as well as reality TV that makes it commonplace for people to constantly scream up in each others’ faces and not value any other person but themselves, we will have a gun problem in school. Our kids don’t understand the permanency of death anymore!!!

  I grew up with guns. Everyone knows that. But you know what? My parents NEVER supported any bad behavior from me. I was terrified of doing something bad at school, as I would have not had a life until I corrected the problem and straightened my ass out. My parents invaded my life. They knew where I was ALL the time. They made me have a curfew. They made me wake them up when I got home. They made me respect their rules. They had full control of their house, and at any time could and would go through every inch of my bedroom, backpack, pockets, anything! Parents: it’s time to STEP UP! Be the parent that actually gives a crap! Be the annoying mom that pries and knows what your kid is doing. STOP being their friend. They have enough “friends” at school. Be their parent. Being the “cool mom” means not a damn thing when either your kid is dead or your kid kills other people because they were allowed to have their space and privacy in YOUR HOME. I’ll say it again. My home was filled with guns growing up. For God’s sake, my daddy was an 82nd Airborne Ranger who lost half his face serving our country. But you know what? I never dreamed of shooting anyone with his guns. I never dreamed of taking one! I was taught respect for human life, compassion, rules, common decency, and most of all, I was taught that until I moved out, my life and bedroom wasn’t mine…it was theirs. And they were going to know what was happening because they loved me and wanted the best for me.

  There. Say that I’m a horrible person. I didn’t bring up gun control, and I will refuse to debate it with anyone. This post wasn’t about gun control. This was me, loving the crap out of people and wanting the best for them. This was about my school babies and knowing that God created each one for greatness, and just wanting them to reach their futures. It’s about 20 years ago this year I started my teaching career. Violence was not this bad 20 years ago. Lack of compassion wasn’t this bad 20 years ago. And God knows 20 years ago that I wasn’t afraid daily to call a parent because I KNEW that 9 out of 10 would cuss me out, tell me to go to Hell, call the news on me, call the school board on me, or post all over FaceBook about me because I called to let them know what their child chose to do at school…because they are a NORMAL kid!!!!!

  Those 17 lives mattered. When are we going to take our own responsibility seriously?

  What do you think?

  I would have loved for my children to have been in Mrs. Raley’s class because not only is it obvious that she really cares, but also that she has an abundance of common sense, something that has been notably absent in our politically correct school systems.

  I raised my kids in much the same way Mrs. Raley refers to having grown up: with rules, curfews, and consequences for their actions. My girls weren’t totally sheltered – they saw violence on television and in movies – but we discussed it. I taught them empathy for other human beings and all creatures. They too, have had access to guns, and know how to use them, but I’ve never once been worried that they’d use them on another human being for any other reason than self-defense in a life-or-death situation.

  Like every other parent, I now worry every time my daughters walk out to door to attend their college classes. Because, honestly, it can happen anywhere.

  But I sincerely agree with Mrs. Raley.

  Guns aren’t the problem. The current culture is the problem.

  

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• The US Is Executing A Global War Plan

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  Washington is moving inevitably on a global war plan. That’s the grim conclusion one has to draw from three unfolding war scenarios.

  

  Ultimately, it’s about American imperialism trying to assert hegemony over the international order for the benefit of US capitalism. Russia and China are prime targets for this global assault.

  

  The three unfolding war scenarios are seen in Syria, North Korea and Ukraine.

  These are not disparate, disassociated conflicts. They are inter-related expressions of the American war plans. War plans which involve the moving of strategic military power into position.

  Last week’s massacre of over 100 Syrian government forces by American warplanes near Deir ez-Zor was an audacious overt assault by the US on the Syrian state. The US, along with other NATO allies, have been up to now waging a seven-year proxy war for regime change against Russia’s ally, President Assad. The massacre last week was certainly not the first time that US forces, illegally present in Syria, have attacked the Syrian army. But it seems clearer than ever now that American forces are operating on the overt agenda for regime change. US troops are transparently acting like an occupation army, challenging Russia and its legally mandated support for the Syrian state.

  Heightening international concerns are multiple reports that Russian military contractors were among the casualties in the US-led air strike near Deir ez-Zor last week.

  Regarding North Korea, Washington is brazenly sabotaging diplomatic efforts underway between the respective Korean leaderships in Pyongyang and Seoul. While this inter-Korean dialogue has been picking up positive momentum, the US has all the while been positioning nuclear-capable B-52 and B-2 bombers in the region, along with at least three aircraft carriers. The B-2s are also reportedly armed with 14-tonne bunker-buster bombs – the largest non-nuclear warhead in the American arsenal, designed to destroy North Korean underground missile silos and “decapitate” the Pyongyang leadership of Kim Jong-un.

  American vice-president Mike Pence, while attending the Winter Olympics in South Korea, opening last week, delivered a blunt war message. He said that the recent detente between North Korea and US ally South Korea will come to an end as “soon as the Olympic flame is extinguished” – when the games close later this month. This US policy of belligerence completely upends Russia and China’s efforts to facilitate inter-Korean peace diplomacy.

  Meanwhile, the situation in Eastern Ukraine looks decidedly grim for an imminent US-led invasion of the breakaway Donbas region. Pentagon military inspectors have in the past week reportedly arrived along the Contact Zone that separates the US-backed Kiev regime forces and the pro-Russian separatists of the Donetsk and Lugansk People’s Republics. Donetsk’s military commander Eduard Basurin warned that the arrival of Pentagon and other NATO military advisors from Britain and Canada indicate that US-armed Kiev forces are readying for a renewed assault on the Donbas ethnic Russian population.

  Even the normally complacent observers of the Organization for Security and Cooperation in Europe (OSCE), charged with monitoring a nominal ceasefire along the Contact Zone, have lately begun reporting serious advancement of heavy weapons by the Kiev forces – in violation of the 2015 Minsk Peace Accord.

  If the US-led Kiev forces proceed with the anticipated offensive next month in Donbas there are real fears for extreme civilian casualties. Such “ethnic cleansing” of Russian people by Kiev regime forces that openly espouse Neo-Nazi ideology would mostly likely precipitate a large-scale intervention by Moscow as a matter of humanitarian defense. Perhaps that is what the US planners are wagering on, which can then be portrayed by the dutiful Western news media as “another Russian aggression”.

  US-based political analyst Randy Martin says: “It is undeniable that Washington is on a war footing in three global scenarios. Preparation for war is in fact war.”

  He added:

  “You have to also consider the latest Nuclear Posture Review published by the Pentagon earlier this month. The Pentagon is openly declaring that it views Russia and China as targets, and that it is willing to use nuclear force to contest conventional wars and what the Pentagon deems to be asymmetric aggression.”

  Martin says that it is not clear at this stage what Washington wants exactly.

  “It is of course all about seeking global domination which is long-consistent with American imperialism as expressed for example in the Wolfowitz Doctrine following the end of the Cold War,” says the analyst.

  “But what does Washington want specifically from Russia and China is the question. It is evidently using the threat of war and aggression as a lever.

  But it is not clear what would placate Washington.

  Perhaps regime change in Russia where President Putin is ousted by a deferential pro-Western figure.

  Perhaps Russia and China giving up their plans of Eurasian economic integration and abandoning their plans to drop the American dollar in trade relations.”

  One thing, however, seems abundantly clear. The US is embarking on a global war plan, as can be discerned from the grave developments unfolding in Syria, the Korean Peninsula and Ukraine. Each scenario can be understood as a pressure point on Moscow or China to in some way acquiesce to American ambitions for global dominance.

  To be sure, Washington is being reckless and criminal in its conduct, violating the UN Charter and countless other international laws. It is brazenly acting like a rogue regime without the slightest hint of shame.

  Still, Russia and China are hardly likely to capitulate. Simply because the US ambition of unipolar hegemony is impossible to achieve. The post-Second World Order, which Washington was able to dominate for nearly seven decades, is becoming obsolete as the international order naturally transforms into a multipolar configuration.

  When Washington accuses Moscow and Beijing of “trying to alter the international order to their advantage” what the American rulers are tacitly admitting is their anxiety that the days of US hegemony are on the wane. Russia and China are not doing anything illegitimate. It is simply a fact of historical evolution.

  So, ultimately, Washington’s war plans are futile in what they are trying to achieve by criminal coercion. Those plans cannot reverse history. But, demonically, those plans could obliterate the future of the planet.

  The world is again on a precipice as it was before on the eve of the First and Second World Wars. Capitalism, imperialism and fascism are again center stage.

  As analyst Randy Martin puts it:

  “The American rulers are coming out of the closet to show their true naked nature of wanting to wage war on the world. Their supremacist, militarist ideology is, incontrovertibly, fascism in action.”

  

• Peter Thiel's Move To LA Is Inspiring A "Conservative Renaissance" In The City

  Peter Thiel isn’t the only conservative to flee the Bay Area over its increasingly systematic repression of ideas and values that are incompatible with the community’s commitment to identity politics, multiculturalism and other liberal economic and social values.

  Per the Wall Street Journal, other conservatives in the tech community have said they plan to leave the area because of the proliferation of groupthink and homogeneity, which they feel are making it a worse place to live and work.

  Tom McInerney, an angel investors who moved to Los Angeles a decade ago – and is now being followed their by Thiel – said Trump’s election proved how out of touch the Bay Area is.

  “I think the politics of San Francisco have gotten a little bit crazy,” said Tom McInerney, an angel investor who moved a decade ago to Los Angeles from the Bay Area.

  “The Trump election was super polarizing and it definitely illustrated – and Peter [Thiel] said this – how out of touch Silicon Valley was,” said Mr. McInerney, who describes himself as fiscally conservative, but socially liberal.

  Even some people who wouldn’t describe themselves as committed conservatives are finding the atmosphere in the Bay Area hostile. Tim Ferriss, the tech investor and best-selling author of the “4 Hour Workweek,” moved to Austin, Texas, in December, after living in the Bay Area for 17 years for reasons similar to Thiel’s.

  Thiel, who backed Trump’s presidential campaign but describes himself as a libertarian, will move into the home he already owns in Hollywood and shift Thiel Capital and Thiel Foundation into new headquarters in the City of Angels, as we pointed out last week. It’s also been rumored that Thiel is considering quitting the board of Facebook – a company that represents one of Thiel’s most lucrative investments, though he also reportedly made a killing on the long-vol trade recently.

  And as the Guardian adds, Thiel’s decision to leave for LA is rallying the city’s small community of conservatives, who are increasingly seeking to market LA as a hospitable home for conservative media brands.

  The Guardian even went so far to declare Thiel’s move the inspiration for a “conservative renaissance” in LA.

  Indeed, Thiel is reportedly working to start his own media company – a company that he will eventually build to rival Fox.

  

  Thiel’s decision to move to LA comes at a time when conservatives in the Bay Area are feeling increasingly squeezed by what they perceive to be liberal groupthink. Google’s decision to fire James Damore for publishing a memo arguing against the company’s decision to pursue diversity in hiring was a watershed moment for both Thiel and the small but vibrant conservative contingent within tech.

  “Silicon Valley is a one-party state,” said Thiel at Stanford University last month. “That’s when you get in trouble politically in our society, when you’re all in one side.”

  The firing of James Damore by Google in August last year amplified conservative fears that Silicon Valley companies had become ideological echo chambers intolerant to their viewpoints.

  Thiel’s decision to support Trump was unpopular among many of his progressive peers in the technology industry, with some calling for him to be dumped from the Facebook board. Although the social network’s CEO Mark Zuckerberg disagreed, the Journal reports that Thiel – one of Facebook’s earliest investors – has discussed resigning.

  “Silicon Valley has become less tolerant and that’s very troubling,” said Garrett Johnson, co-founder of conservative think tank Lincoln Network. “There’s a trend of monoculture and closed-mindedness.”

  Unsurprisingly, few in Silicon Valley are sad to see him leave, with one community “activist” quoted by the Guardian jokingly questioning why Thiel hasn’t retreated all the way to his soon-to-be adopted home of New Zealand.

  Maciej Cegłowski, a prominent San Francisco web developer and leader of the grass-roots activist group Tech Solidarity, agreed, but expressed surprise that “in his search for safety” Thiel wasn’t fleeing to his adoptive home of New Zealand.

  “They were so eager to make him a citizen, and he’s already got a bunker there,” he said.

  “Overall, I believe him leaving the Bay Area is a win. More young blood for the rest of us,” he added, in reference to Thiel’s alleged interest in injecting himself with young people’s blood.

  But as anybody who has traveled to LA can attest, there’s plenty of young blood to go around…

  

• Kim Dotcom: "Let Me Assure You, The DNC Hack Wasn’t Even A Hack"

  Kim Dotcom has once again chimed in on the DNC hack, following a Sunday morning tweet from President Trump clarifying his previous comments on Russian meddling in the 2016 election. 

  I never said Russia did not meddle in the election, I said “it may be Russia, or China or another country or group, or it may be a 400 pound genius sitting in bed and playing with his computer.” The Russian “hoax” was that the Trump campaign colluded with Russia – it never did!

  — Donald J. Trump (@realDonaldTrump) February 18, 2018

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  In response, Dotcom tweeted “Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why,” adding “Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!” alluding of course to Trump’s “400 pound genius” comment. 

  Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why. Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!https://t.co/AGRO0sFx7s https://t.co/epXtv0t1uN

  — Kim Dotcom (@KimDotcom) February 18, 2018

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  Dotcom’s assertion is backed up by an analysis done last year by a researcher who goes by the name Forensicator, who determined that the DNC files were copied at 22.6 MB/s – a speed virtually impossible to achieve from halfway around the world, much less over a local network – yet a speed typical of file transfers to a memory stick.

  

  The local transfer theory of course blows the Russian hacking narrative out of the water, lending credibility to the theory that the DNC “hack” was in fact an inside job, potentially implicating late DNC IT staffer, Seth Rich.

  

  John Podesta’s email was allegely successfully “hacked” (he fell victim to a phishing scam) in March 2016, while the DNC reported suspicious activity (the suspected Seth Rich file transfer) in late April, 2016 according to the Washington Post.

  On May 18, 2017, Dotcom proposed that if Congress includes the Seth Rich investigation in their Russia probe, he would provide written testimony with evidence that Seth Rich was WikiLeaks’ source.

  If Congress includes #SethRich case into their Russia probe I’ll give written testimony with evidence that Seth Rich was @Wikileaks source.

  — Kim Dotcom (@KimDotcom) May 19, 2017

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  On May 19 2017 Dotcom tweeted “I knew Seth Rich. I was involved”

  I knew Seth Rich. I know he was the @Wikileaks source. I was involved. https://t.co/MbGQteHhZM

  — Kim Dotcom (@KimDotcom) May 20, 2017

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  Three days later, Dotcom again released a guarded statement saying “I KNOW THAT SETH RICH WAS INVOLVED IN THE DNC LEAK,” adding:

  “I have consulted with my lawyers. I accept that my full statement should be provided to the authorities and I am prepared to do that so that there can be a full investigation. My lawyers will speak with the authorities regarding the proper process.

  If my evidence is required to be given in the United States I would be prepared to do so if appropriate arrangements are made. I would need a guarantee from Special Counsel Mueller, on behalf of the United States, of safe passage from New Zealand to the United States and back. In the coming days we will be communicating with the appropriate authorities to make the necessary arrangements. In the meantime, I will make no further comment.”

  Dotcom knew.

  While one could simply write off Dotcom’s claims as an attention seeking stunt, he made several comments and a series of tweets hinting at the upcoming email releases prior to both the WikiLeaks dumps as well as the publication of the hacked DNC emails to a website known as “DCLeaks.” 

  In a May 14, 2015 Bloomberg article entitled “Kim Dotcom: Julian Assange Will Be Hillary Clinton’s Worst Nightmare In 2016“: “I have to say it’s probably more Julian,” who threatens Hillary, Dotcom said. “But I’m aware of some of the things that are going to be roadblocks for her.”

  Two days later, Dotcom tweeted this: 

  Hillary Clinton is raising a mountain of cash for her Presidential bid. I think it might turn into ash. pic.twitter.com/Nh8wnyj5AJ

  — Kim Dotcom (@KimDotcom) May 16, 2015

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  Around two months later, Kim asks a provocative question

  Will hackers 0wn the U.S. presidential election and prevent Hillary Clinton? #Wikileaks

  — Kim Dotcom (@KimDotcom) July 12, 2016

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  Two weeks after that, Dotcom then tweeted “Mishandling classified info is a crime. When Hillary’s emails eventually pop up on the internet who’s going to jail?” 

  Mishandling classified info is a crime. When Hillary’s emails eventually pop up on the Internet who’s going to jail? http://t.co/zuUNiq26bR

  — Kim Dotcom (@KimDotcom) July 26, 2015

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  It should thus be fairly obvious to anyone that Dotcom was somehow involved, and therefore any evidence he claims to have, should be taken seriously as part of Mueller’s investigation. Instead, as Dotcom tweeted, “Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied.“

  pic.twitter.com/ZJRReVDq0f

  — Kim Dotcom (@KimDotcom) February 18, 2018

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• Only 73% OF Americans Are "Likely To Adhere To The Law"

  Many factors influence how effectively a government is able to uphold the rule of law and some of them include access to courts, lack of corruption, effective policing and institutional competence.

  While some governments are able to combine these efficiently, resulting in strong adherence to the law, Statista’s Niall McCarthy notes that others tend to struggle.

  Research from The World Justice Project measured rule of law adherence in 113 countries around the world, focusing on eight factors: constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, and criminal justice.

  

  You will find more infographics at Statista

  Since 2016, 34 percent of countries saw their rule of law decline, 20 percent improved and 37 percent stayed the same.

  Western Europe dominates the top of the ranking with Scandinavia first in the world for adherence to the law. Denmark and Norway were top with a score of 0.89, followed by Finland and Sweden with 0.87 and 0.86 respectively.

  Outside Europe, New Zealand, Canada and Australia also made the top-10 while the U.S. came 19th with a score of 0.73.

  Venezuela is rock bottom of the ranking with a score of 0.29. The bottom-five is rounded off by Cambodia, Afghanistan, Egypt and Cameroon. Since 2016, The Philippines was the biggest mover, falling 19 places to 88th.

  The biggest improvers were Burkina Faso, Kazakhstan and Sri Lanka with each nation moving up nine positions since the last edition of the index was published.

  

• China Threatens To Retaliate If US Imposes Metal Tariffs

  It’s not like anyone expected otherwise.

  Just hours after the Trump administration received a green light from the Commerce Department to impose steep tariffs on aluminium and steel imports on national security grounds across the board, but especially on China and Russian, China threatened with immediately retaliation in the latest escalation of the growing trade war between the two superpowers.

  In an unexpected announcement on Friday, commerce secretary Wilbur Ross recommended a possible global tariff of at least 24% on imports of steel and 7.7% on aluminum after investigations into trade in both metals determined that import surges seen in recent years “threaten to impair [US] national security.”

  Responding to the unprecedented Commerce recommendation which many interpreted as the first official salvo in global trade wars, Wang Hejun – chief of the trade remedy and investigation bureau at China’s Ministry of Commerce – said imposing tariffs on such grounds was reckless.

  Quoted by the FT,  he said that “The spectrum of national security is very broad and without a clear definition it could easily be abused,” and added that “if the final decision from the US hurts China’s interests, we will certainly take necessary measures to protect our legitimate rights.”

  For now the threat of “nuclear” trade war seems to be contained: analysts say Beijing is wary of escalating any trade disputes for fear of damaging its export-dependent economy, and so will focus any retaliation on specific sectors — most likely particular agricultural goods such as soybeans, for which China is the US’ largest export market. Earlier this month, Beijing launched an anti-dumping investigation into US exports of sorghum, an animal feed.

  For the moment I think China will just put out harsher rhetoric,” said Bo Zhuang, an economist at consultancy Trusted Sources. “Agricultural sector retaliation is more likely since (China’s) food price inflation is low. The next possible step will be going on further with a soybean and corn investigation.”

  Still, expectations of only a “cold” trade war may soon be dashed, as Friday’s action shows that trade hardliners in the Trump administration are eager to take action against China “after months of internal debate” according to the FT.

  One option presented by the commerce department on Friday was a targeted tax on steel and aluminium imports from China and other countries like Brazil and Vietnam. A third option would impose quotas to reduce metals imports from all countries to far below the level of 2017.

  But the recommendations illustrate how Mr Trump’s desire to hit China, which the US steel industry blames for a collapse in metal prices in recent years, may result in collateral damage for US allies and invite retaliation.

  Meanwhile, as China plans its response, European officials in Brussels are already drafting their retaliatory measures aimed at politically sensitive US products like Kentucky bourbon and Wisconsin dairy products, which will be implemented if Trump opts for a global quota or tariff system.

  As a reminder, Trump has until April to decide whether to adopt any of the recommendations, Ross said. The long-awaited results of the “Section 232” investigations into aluminium and steel imports caused shares in major US producers to rise sharply on Wall Street on Friday, while companies in the materials sector slumped.

  In what appeared to be a jusitification of imminent trade wars, Trump said he was convinced that imposing tariffs would “create a lot of jobs” during a meeting with members of Congress, and dismissed warnings that such measures in the past had hurt more than they had helped by causing higher costs for many companies.

  “I want to keep prices down but I also want to make sure that we have a steel industry and an aluminium industry and we do need that for national defence,” Mr Trump said. “If we ever have a conflict we don’t want to be buying steel [from] a country we are fighting.”

  In its report, the commerce department stated that Canada is the top supplier of both metals to the US, suggesting the NAFTA member may – ironically – suffer the most from any new protectionist measures. The northern US neighbour has long been treated as part of the US defense industrial base along with countries like the UK and Australia. But whether Canada or any other allies would be exempted from the proposed tariffs remains unclear, according to the FT.

  As for China, it was “only” the fourth-largest supplier of aluminum to the US in 2017, and accounted for less than 10% of imports; it was also the 11th-largest steel supplier over the same period, with a roughly 2% share of US imports.

  The US commerce department argued that the rapid rise in China’s production of steel and aluminium in recent years — it now produces more than half of global output of both metals — has depressed international prices.

  While the threat of a sharp escalation in trade tensions remains low for now, in commentary from SMBC Nikko Securities, the bank said that the proposal to restrict steel imports “could lead to a chain of higher tariffs imposed by other nations” resulting in dramatic imbalances in global commodity trade and prices.

  While the brokerage expects direct impact on Japanese steel industry to be limited, it admits it is difficult to gauge the effect on international markets given details yet to be decided, and adds that the risk is that other countries shipping steel to U.S. begin selling cheaply on Japan’s export markets; in effect a sharp escalation to trade wars in which countries not targeted by the US scramble to take away market share from dominant trade partners.

  

• "Now, The Reckoning Comes" – The Media-Created Russia-Collusion Story Collapses

  Authored by Lee Smith via TheFederalist.com,

  The press has played an active role in the Trump-Russia collusion story since its inception. It helped birth it…

  

  Half the country wants to know why the press won’t cover the growing scandal now implicating the Federal Bureau of Investigation and Department of Justice, and threatening to reach the State Department, Central Intelligence Agency, and perhaps even the Obama White House.

  After all, the release last week of a less-redacted version of Sens. Charles Grassley and Lindsey Graham’s January 4 letter showed that the FBI secured a Foreign Intelligence Surveillance Act warrant to search the communications of a Trump campaign adviser based on a piece of opposition research paid for by the Clinton campaign and the Democratic National Committee. The Fourth Amendment rights of an American citizen were violated to allow one political party to spy on another.

  If the press did its job and reported the facts, the argument goes, then it wouldn’t just be Republicans and Trump supporters demanding accountability and justice. Americans across the political spectrum would understand the nature and extent of the abuses and crimes touching not just on one political party and its presidential candidate but the rights of every American.

  That’s all true, but irrelevant. The reasons the press won’t cover the story are suggested in the Graham-Grassley letter itself.

  Steele Was a Media Informant

  The letter details how Christopher Steele, the former British spy who allegedly authored the documents claiming ties between the Trump campaign and Russia, told the FBI he wasn’t talking to the press about his investigation. In a British court, however, Steele acknowledged briefing several media organizations on the material in his dossier.

  According to the British court documents, Steele briefed the New York Times, Washington Post, Yahoo! News, The New Yorker, and CNN. In October, he talked to Mother Jones reporter David Corn by Skype. It was Corn’s October 31 article anonymously sourced to Steele that alerted the FBI their informant was speaking to the press. Grassley and Graham referred Steele to the Department of Justice for a criminal investigation because he lied to the FBI.

  The list of media outfits and journalists made aware of Steele’s investigations is extensive. Reuters reported that it, too, was briefed on the dossier, and while it refrained from reporting on it before the election, its national security reporter Mark Hosenball became an advocate of the dossier’s findings after November 2016.

  BBC’s Paul Wood wrote in January 2017 that he was briefed on the dossier a week before the election. Newsweek’s Kurt Eichenwald likely saw Steele’s work around the same time, because he published an article days before the election based on a “Western intelligence” source (i.e., Steele) who cited names and data points that could only come from the DNC- and Clinton-funded opposition research.

  A line from the Grassley-Graham letter points to an even larger circle of media outfits that appear to have been in contact with either Steele or Fusion GPS, the Washington DC firm that contracted him for the opposition research the Clinton campaign and Democratic National Committee commissioned. “During the summer of 2016,” the Grassley-Graham letter reads, “reports of some of the dossier allegations began circulating among reporters and people involved in Russian issues.”

  Planting the Carter Page Story

  Indeed, it looks like Steele and Fusion GPS founder Glenn Simpson may have persuaded a number of major foreign policy and national security writers in Washington and New York that Trump and his team were in league with Russian President Vladimir Putin. Those journalists include New Yorker editor David Remnick, Atlantic editor Jeffrey Goldberg, former New Republic editor Franklin Foer, and Washington Post columnist Anne Applebaum.

  A Foer story published in Slate on July 4, 2016 appears to be central. Titled “Putin’s Puppet,” Foer’s piece argues the Trump campaign was overly Russia-friendly. Foer discusses Trump’s team, including campaign convention manager Paul Manafort, who worked with former Ukrainian president Victor Yanukovich, a Putin ally; and Carter Page, who, Foer wrote, “advised the state-controlled natural gas giant Gazprom and helped it attract Western investors.”

  That’s how Page described himself in a March 2016 Bloomberg interview. But as Julia Ioffe reported in a September 23, 2016 Politico article, Page was a mid-level executive at Merrill Lynch in Moscow who played no role in any of the big deals he boasted about. As Ioffe shows, almost no one in Moscow remembered Page. Until Trump read his name off a piece of paper handed to him during a March interview with the Washington Post, almost no one in the Washington foreign policy world had heard of Page either.

  So what got Foer interested in Page? Were Steele and Simpson already briefing reporters on their opposition research into the Trump campaign? (Another Foer story for Slate, an October 31, 2016 article about the Trump organization’s computer servers “pinging” a Russian bank, was reportedly “pushed” to him by Fusion GPS.) Page and Manafort are the protagonists of the Steele dossier, the former one of the latter’s intermediaries with Russian officials and associates of Putin. Page’s July 7 speech in Moscow attracted wide U.S. media coverage, but Foer’s article published several days earlier.

  The Slate article, then, looks like the predicate for allegations against Page made in the dossier after his July Russia trip. For instance, according to Steele’s investigations, Page was offered a 19 percent stake in Rosneft, one of the world’s energy giants, in exchange for help repealing sanctions related to Russia’s 2014 incursion into Ukraine.

  Building an Echo Chamber of Opposition Research

  Many have noted the absurdity that the FISA warrant on Page was chiefly based, according to a House intelligence committee memo, on the dossier and Michael Isikoff’s September 23, 2016 news story also based on the dossier. But much of the Russiagate campaign was conducted in this circular manner. Steele and Simpson built an echo chamber with their opposition research, parts of the law enforcement and intelligence communities, and the press all reinforcing one another. Plant an item in the open air and watch it grow—like Page’s role in the Trump campaign.

  Why else was Foer or anyone so interested in Page? Why was Page’s Moscow speech so closely watched and widely covered? According to the Washington Post, Page “chided” American policymakers for an “often-hypocritical focus on democratization, inequality, corruption and regime change” in its dealings with Russia, China, and Central Asia.

  As peculiar as it may have sounded for a graduate of the Naval Academy to cast a skeptical eye on American exceptionalism, Page’s speech could hardly have struck the policy establishment as shocking, or even novel. They’d been hearing versions of it for the last eight years from the president of the United States.

  In President Obama’s first speech before the United Nations General Assembly (UNGA), on September 23, 2009, he insisted that no country, least of all America, has the right to tell other countries how to organize their political lives. “Democracy cannot be imposed on any nation from the outside,” said Obama. “Each society must search for its own path, and no path is perfect. Each country will pursue a path rooted in the culture of its people and in its past traditions.”

  Obama sounded even more wary of American leadership on his way out of office eight years later. In his 2016 UNGA speech, the 2009 Nobel laureate said: “I do not think that America can — or should — impose our system of government on other countries.” Obama was addressing not just foreign nations but perhaps more pointedly his domestic political rivals.

  In 2008 Obama campaigned against the Iraq War and the Republican policymakers who toppled Saddam Hussein to remake Iraq as a democracy. All during his presidency, Obama rebuffed critics who petitioned the administration to send arms or troops to advance U.S. interests and values abroad, most notably in Ukraine and Syria.

  In 2016, it was Trump who ran against the Republican foreign policy establishment—which is why hundreds of GOP policymakers and foreign policy intellectuals signed two letters distancing themselves from the party’s candidate. The thin Republican bench of foreign policy experts available to Trump is a big reason why he named the virtually unknown Page to his team. So why was it any surprise that Page sounded like the Republican candidate, who sounded like the Democratic president?

  Why Didn’t the Left Like Obama’s Ideas from a Republican?

  On the Right, many national security and foreign policy writers like me heard and were worried by the clear echoes of Obama’s policies in the Trump campaign’s proposals. Did those writing from the left side of the political spectrum not see the continuities?

  Writing in the Washington Post July 21, 2016, Applebaum explained how a “Trump presidency could destabilize Europe.” The issue, she explained, was Trump’s positive attitude toward Putin. “The extent of the Trump-Russia business connection has already been laid out, by Franklin Foer at Slate,” wrote Applebaum. She named Page and his “long-standing connections to Russian companies.”

  Even more suggestive to Applebaum is that just a few days before her article was published, “Trump’s campaign team helped alter the Republican party platform to remove support for Ukraine” from the Republican National Committee’s platform. Maybe, she hinted, that was because of Trump aide Manafort’s ties to Yanukovich.

  Did those talking points come from Steele’s opposition research? Manafort’s relationship with Yanukovich had been widely reported in the U.S. press long before he signed on with the Trump campaign. In fact, in 2007 Glenn Simpson was one of the first to write about their shady dealings while he was still working at the Wall Street Journal. The corrupt nature of the Manafort-Yanukovich relationship is an important part of the dossier. So is the claim that in exchange for Russia releasing the DNC emails, “the TRUMP team had agreed to sideline Russian intervention in Ukraine as a campaign issue.”

  The reality, however, is that the Trump campaign team never removed support for Ukraine from the party platform. In a March 18, 2017 Washington Examiner article, Byron York interviewed the convention delegate who pushed for tougher language on Russia, and got it.

  “In the end, the platform, already fairly strong on the Russia-Ukraine issue,” wrote York, “was strengthened, not weakened.” Maybe Applebaum just picked it up from her own paper’s mis-reporting.

  For Applebaum, it was hard to understand why Trump would express skepticism about the North Atlantic Treaty Organization, except to appease Putin. She referred to a recent interview in which Trump “cast doubt on the fundamental basis of transatlantic stability, NATO’s Article 5 guarantee: If Russia invades, he said, he’d have to think first before defending U.S. allies.”

  The Echoes Pick Up

  In an article published the very same day in the Atlantic, Jeffrey Goldberg made many of the very same observations. Titled “It’s Official: Hillary Clinton is Running Against Vladimir Putin,” the article opens: “The Republican nominee for president, Donald J. Trump, has chosen this week to unmask himself as a de facto agent of Russian President Vladimir Putin.” What was the evidence? Well, for one, Page’s business interests.

  Trump’s expressed admiration for Putin and other “equivocating, mercenary statements,” wrote Goldberg, are “unprecedented in the history of Republican foreign policymaking.” However, insofar as Trump’s fundamental aim was to find some common ground with Putin, it’s a goal that, for better or worse, has been a 25-year U.S. policy constant, across party lines. Starting with George W.H. Bush, every American commander-in-chief since the end of the Cold War sought to “reset” relations with Russia.

  But Trump, according to Goldberg, was different. “Trump’s understanding of America’s role in the world aligns with Russia’s geostrategic interests.” Here Goldberg rang the same bells as Applebaum—the Trump campaign “watered down” the RNC’s platform on Ukraine; the GOP nominee “questioned whether the U.S., under his leadership, would keep its [NATO] commitments,” including Article 5. Thus, Goldberg concluded: “Donald Trump, should he be elected president, would bring an end to the postwar international order.”

  That last bit sounds very bad. Coincidentally, it’s similar to a claim made in the very first paragraph of the Steele dossier — the “Russian regime,” claims one of Steele’s unnamed sources, has been cultivating Trump to “encourage splits and divisions in the western alliance.”

  The West won the Cold War because the United States kept it unified. David Remnick saw it up close. Assigned to the Washington Post’s Moscow bureau in 1988, Remnick witnessed the end of the Soviet Union, which he documented in his award-winning book, “Lenin’s Tomb.” So it’s hardly surprising that in his August 3, 2016 New Yorker article, “Trump and Putin: A Love Story,” Remnick sounded alarms concerning the Republican presidential candidate’s manifest affection for the Russian president.

  Citing the “original reporting” of Foer’s seminal Slate article, the New Yorker editor contended “that one reason for Trump’s attitude has to do with his business ambitions.” As Remnick elaborated, “one of Trump’s foreign-policy advisers, has longstanding ties to Gazprom, a pillar of Russia’s energy industry.” Who could that be? Right—Carter Page. With Applebaum and Goldberg, Remnick was worried about Trump’s lack of support for Ukraine and the fact that Trump “has declared NATO ‘obsolete’ and has suggested that he might do away with Article 5.”

  Where Did All These Echoes Come From?

  This brings us to the fundamental question: Is it possible that these top national security and foreign policy journalists were focused on something else during Obama’s two terms in office, something that had nothing to do with foreign policy or national security? It seems we must even entertain the possibility they slept for eight years because nearly everything that frightened them about the prospects of a Trump presidency had already transpired under Obama.

  The Trump team wanted to stop short of having the RNC platform promise lethal support to Ukraine—which was in keeping with official U.S. policy. Obama didn’t want to arm the Ukrainians. He ignored numerous congressional efforts to get him to change his mind. “There has been a strong bipartisan well of support for quite some time for providing lethal support,” said California Rep. Adam Schiff. But Obama refused.

  As for the western alliance or international order or however you want to put it, it was under the Obama administration that Russia set up shop on NATO’s southern border. With the Syrian conflict, Moscow re-established its foothold in the Middle East after 40 years of American policy designed to keep it from meddling in U.S. spheres of influence. Under Obama, Russia’s enhanced regional position threatened three U.S. allies: Israel, Jordan, and NATO member Turkey.

  In 2012, Moscow’s Syrian client brought down a Turkish air force reconnaissance plane. According to a 2013 Wall Street Journal article, “Turkish Prime Minister Recep Tayyip Erdogan raised alarms in the U.S. by suggesting that Turkey might invoke NATO’s Article V.” However, according to the Journal, “neither the U.S. nor NATO was interested in rushing to Article V… NATO was so wary of getting pulled into Syria that top alliance officials balked at even contingency planning for an intervention force to protect Syrian civilians. ‘For better or worse, [Syrian president Bashar al- Assad] feels he can count on NATO not to intervene right now,’ a senior Western official said.”

  Whatever one thinks of Obama’s foreign policy, it is hardly arguable that he—wisely, cautiously, in the most educated and creative ways, or unwisely, stupidly, cravenly, the choice of adjectives is yours—ceded American interests and those of key allies in Europe and the Middle East in an effort to avoid conflict with Russia.

  When Russia occupied Crimea and the eastern portion of Ukraine, there was little pushback from the White House. The Obama administration blinked even when Putin’s escalation of forces in Syria sent millions more refugees fleeing abroad, including Europe.

  Was Anyone Paying Attention When This Happened?

  Surely it couldn’t have escaped Applebaum’s notice that Obama’s posture toward Russia made Europe vulnerable. She’s a specialist in Europe and Russia—she’s written books on both. Her husband is the former foreign minister of Poland. So how, after eight years of Obama’s appeasement of a Russia that threatened to withhold natural gas supplies from the continent, did the Trump team pose a unique threat to European stability?

  What about Goldberg? Is it possible that he’d never bothered to research the foreign policy priorities of a president he interviewed five times between 2008 and 2016? In the last interview, from March 2016, Obama told him he was “very proud” of the moment in 2013 when he declined to attack Assad for deploying chemical weapons. As Obama put it, that’s when he broke with the “Washington playbook.” He chose diplomacy instead. He made a deal with Russia over Assad’s conventional arsenal—which Syria continued to use against civilians throughout Obama’s term.

  Again, regardless of how you feel about Obama’s decisions, the fact is that he struck an agreement with Moscow that ensured the continued reign of its Syrian ally, who gassed little children. Yet only four months later, Goldberg worried that a Trump presidency would “liberate dictators, first and foremost his ally Vladimir Putin, to advance their own interests.”

  Remnick wrote a 2010 biography of Obama, but did he, too, pay no attention to the policies of the man he interviewed frequently over nearly a decade? How is this possible? Did some of America’s top journalists really sleepwalk through Obama’s two terms in office, only to wake in 2016 and find Donald Trump and his campaign becoming dangerously cozy with a historical American adversary?

  All’s Fair in War and Politics

  Of course not. They enlisted their bylines in a political campaign on behalf of the Democratic candidate for president and rehearsed the talking points Steele later documented. But weren’t the authors of these articles, big-name journalists, embarrassed to be seen reading from a single script and publishing the same article with similar titles within the space of two weeks? Weren’t they worried it would look like they were taking opposition research, from the same source?

  No, not really. In a sense, these stories weren’t actually meant to be read. They existed for the purpose of validating the ensuing social media messaging. The stories were written around the headlines, which were written for Twitter: “Putin’s Puppet”; “It’s Official: Hillary Clinton is Running Against Vladimir Putin”; “Trump and Putin: A Love Story”; “The Kremlin’s Candidate.” The stories were vessels built only to launch thousands of 140-character salvos to then sink into the memory hole.

  Since everyone took Clinton’s victory for granted, journalists assumed extravagant claims alleging an American presidential candidate’s illicit ties to an adversarial power would fade just as the fireworks punctuating Hillary’s acceptance speech would vanish in the cool November evening. And the sooner the stories were forgotten the better, since they frankly sounded kooky, conspiratorial, as if the heirs to the Algonquin round table sported tin-foil hats while tossing back martinis and trading saucy limericks.

  Yes, the Trump-Russia collusion media campaign really was delusional and deranged; it really was a conspiracy theory. So after the unexpected happened, after Trump won the election, the Russiagate campaign morphed into something more urgent, something twisted and delirious.

  Quick, Pin Our Garbage Story on Someone

  When CNN broke the story – co-written by Evan Perez, a former colleague and friend of Fusion GPS principals—that the Obama administration’s intelligence chiefs had briefed Trump on the existence of the dossier, it not only cleared the way for BuzzFeed to publish the document, it also signaled the press that the intelligence community was on side. This completed the echo chamber, binding one American institution chartered to steal and keep secrets to another embodying our right to free speech. We know which ethic prevailed.

  Now Russiagate was no longer part of a political campaign directed at Trump, it was a disinformation operation pointed at the American public, as the pre-election media offensive resonated more fully with the dossier now in the open. You see, said the press: everything we published about Trump and Putin is really true—there’s a document proving it. What the press corps neglected to add is that they’d been reporting talking points from the same opposition research since before the election, and were now showcasing “evidence” to prove it was all true.

  The reason the media will not report on the scandal now unfolding before the country, how the Obama administration and Clinton campaign used the resources of the federal government to spy on the party out of power, is not because the press is partisan. No, it is because the press has played an active role in the Trump-Russia collusion story since its inception. It helped birth it.

  To report how the dossier was made and marketed, and how it was used to violate the privacy rights of an American citizen – Page – would require admitting complicity in manufacturing Russiagate. Against conventional Washington wisdom, the cover-up in this case is not worse than the crime: Both weigh equally in a scandal signaling that the institution where American citizens are supposed to discuss and debate the choices about how we live with each other has been turned against a large part of the public to delegitimize their political choices.

  This Isn’t the 27-Year-Olds’ Fault

  I’ve argued over the last year that the phony collusion narrative is a symptom of the structural problems with the press. The rise of the Internet, then social media, and gross corporate mismanagement damaged traditional media institutions. As newspapers and magazines around the country went bankrupt when ownership couldn’t figure out how to make money off the new digital advertising model, an entire generation of journalistic experience, expertise, and ethics was lost. It was replaced, as one Obama White House official famously explained, by 27-year-olds who “literally know nothing.”

  But the first vehicles of the Russiagate campaign were not bloggers or recent J-school grads lacking wisdom or guidance to wave off a piece of patent nonsense. They were journalists at the top of their profession – editors-in-chief, columnists, specialists in precisely the subjects that the dossier alleges to treat: foreign policy and national security. They didn’t get fooled. They volunteered their reputations to perpetrate a hoax on the American public.

  That’s why, after a year of thousands of furious allegations, all of which concerning Trump are unsubstantiated, the press will not report the real scandal, in which it plays a leading role. When the reckoning comes, Russiagate is likely to be seen not as a symptom of the collapse of the American press, but as one of the causes for it.

  

• Waymo's "Uber-Killer" Robo-Taxi Set For Arizona Rollout

  Waymo, a unit of Alphabet, is set to launch a ride-sharing service similar to Uber, but with no human driver behind the wheel. Officials in Arizona granted Waymo a permit to operate as a transportation network company (TNC) across the state on Janurary 24, following the company’s initial application on Janurary 12, Bloomberg  reported.

  The imminent release of a robotic fleet of fully autonomous Chrysler Pacifica minivans could be flooding the highways of Arizona, causing major headaches for Uber.

  Since April of last year, Waymo has been experimenting with its self-driving fleet on the human guinea pigs of Phoenix, offering residents 24/7 access to the free ridesharing service. TNC status is a significant step for Waymo, because it now authorizes the company to start charging its passengers.

  Waymo’s vehicles in the Phoenix area have driven more than 4 million miles on public roads. In November, the company said a portion of its cars in the Phoenix area were operating in fully autonomous mode, what’s known in industry parlance as level four autonomy.

  “A fully self-driving fleet can offer new and improved forms of sharing,” Waymo said at the time, adding that in coming months it would invite members of the public to ride in the fully autonomous vehicles, beginning with those already in the early rider program.

  

  “As we continue to test drive our fleet of vehicles in greater Phoenix, we’re taking all the steps necessary to launch our commercial service this year,” a Waymo spokesman said in an emailed statement.

  As Quartz notes, driverless cars are widely believed to be the “silver bullet” that will make ride-hailing profitable by eliminating the main cost: wages paid to human drivers.

  In the fourth quarter of 2017, Uber paid about $8 billion to drivers in earnings and bonuses, or about 72% of its gross revenue for the quarter. As a result, Uber lost $4.5 billion last year on $7.5BN in net revenue ($37BN gross revenue).

  

   

  Waymo has yet to discuss driving rates for the Phoenix area, let alone provide plans to operate across other cities in the United States.

  The threat from Google could prove existential to Uber: none other than former Uber CEO and co-founder Travis Kalanick said that the evolutionary process of ridesharing will ultimately transition to fully autonomous vehicles.

  “The minute it was clear that Google was getting into the ride-sharing space, we realized we needed to make sure there was an alternative, because if there is not, we will be out of business,” Kalanick told Bloomberg in 2016.

  As has been widely publicized, the fierce competition between Waymo and Uber to be the first to launch driverless ridesharing grew so intense, that Waymo sued Uber for stealing its trade secrets. On February 9, court found Uber guilty, ruling it would have to pay Waymo hundreds of millions of dollars for trade secrets theft, along with promising not to use the technology in any of its autonomous vehicles.

  Quartz describes the fierce competition between Waymo and Uber to launch driverless ridesharing vehicles across the United States:

  Arizona granted the TNC permit a week and a half before Waymo commenced its trade secrets trial against Uber in San Francisco, alleging Uber stole Waymo’s knowledge on how to build self-driving cars. The two companies reached a settlement on Feb. 9, five days into the trial, which includes Uber paying Waymo a 0.34% equity stake and agreeing not to incorporate Waymo’s confidential information into its software or hardware. But nothing prevents Waymo from competing in the ride-hailing arena.  

  Uber’s worst nightmare is almost here.

  

  While Saudi Arabia’s Council of Economic and Development Affairs (CEDA)’s Public Investment Fund (PIF) might have top-ticked the top in Uber’s valuation back in 2016, Waymo’s imminent rollout of its driverless cars for commercial use in Arizona could prick Uber’s valuation and send it into a sharp contraction.

  In its rush to preserve market share, Uber will now be forced to roll out driverless vehicles of its own. This could trigger Uber to unleash a tech-induced surge of driver unemployment leading into the Presidential elections of 2020.

  Two days ago, we reported a big rollout of burger-flipping robots in California is set to hit 50 locations by 2019; next it could be the part-time driver’s turn. And so, as millennials praise the tech leaders in Silicon Valley, they do not realize that AI-controlled robots are coming for their jobs.

  

• A Key Inflation Indicator To Watch, Part 1

  Authored by Daniel Nevins via FFWiley.com,

  

  “Inflation is always and everywhere a monetary phenomenon.”
  —Milton Friedman

  Have you ever questioned Milton Friedman’s famous claim about inflation?

  Ever heard anyone else question it?

  Unless you read obscure stuff written for the academic community, you’re probably not used to Friedman’s quote being challenged. And that’s despite a lousy forecasting record by economists who bought into his Monetarist methods.

  Consider the following:

  • When Friedman’s strict Monetarism fizzled in the 1980s, it was doomed partly by his own forecasts. Instead of the disinflation the decade delivered, he expected inflation to reach 1970s levels, publicizing that prediction in 1983 and then again in 1984, 1985 and 1986. Of course, years earlier he foresaw the 1970s jump in inflation, but the errant forecasts that came later left him wide open to a “clock twice a day” dismissal.

  • Monetarists suffered an even harsher blow in 2012, when the Conference Board finally threw in the towel on Friedman’s favorite indicator, removing M2 from its Leading Economic Index (LEI). Generally speaking, forecasters who put M2 in their models are like bachelors who put “live with mom” in their dating profiles—they haven’t been successful.

  • The many economists who expected quantitative easing (QE) to wreak havoc on inflation are, of course, on the defensive. Nine years after QE began, core inflation remains below the Fed’s 2% target, defying their Monetarist beliefs.

  When it comes to explaining inflation, Monetarism hasn’t exactly nailed it. Then again, neither has Keynesianism, whose Phillips Curve confounds those who rely on it. You can toss inflation onto the bonfire of major events that mainstream theories fail to explain.

  But I’ll argue there might be a better way.

  In three articles, I’ll try to convince you that we can develop a better theory by interpreting Friedman’s research differently than he did. Maybe you’ll like the theory, or maybe you won’t, but I promise this: the indicator that falls from it has a better record predicting major inflation trends than any other serious indicator I’ve studied. It’s not the only way to think about inflation, but it’s realistic and practical, and I’m interested in the reader reaction.

  They Said, Hey Sugar…

  Let’s get started with a walk on the wild side – we’ll walk with the renegades in economics who acknowledge the true role commercial banks play in the monetary system, that of creating money from nothing in the process of making loans. By our choice of company, we’re rejecting mainstream economics, including Monetarism and Keynesianism, which call for banks to be mere conduits in the money creation process. I discussed this topic last year in “Learning from the 1980s,” and I’ll summarize the key points below:

  1. When Friedman and his coauthor Anna Schwartz published their famous research showing a strong correlation between money growth and GDP growth, they and their followers failed to appreciate the importance of money-creating bank loans.

  2. Instead of allowing that bank lending might explain the historical correlation to GDP, they assumed that the intrinsic characteristics of money—liquidity, stability, and value as a medium of exchange—explained their results, leading them to embrace measures such as M1 and M2.

  3. But in fact, their seminal research had little to do with M1 and M2, because that data didn’t exist over the full period they studied. Instead, they used a measure that was almost exactly equal to the amount of money banks create when they make loans and buy securities.

  4. Loan and behold, when the various measures diverged in the 1980s, M1 and M2 lost their correlations to GDP, whereas the original measure studied by Friedman and Schwartz did not.

  Confusing?

  I’ll say it again in one sentence:

  The money measures economists discuss and follow (M1 and M2, primarily) are empirically inferior to the measure they ignore (bank-created money), even though the measure they ignore is responsible for getting them interested in “money” in the first place.

  For anyone my age, think Gilda Radner’s creations Emily Litella and Roseanne Roseannadanna, the spoof newscasters who argued passionately about topics that didn’t match the topics given. After being told of the mistake, Litella would end her rant with a simple “nevermind,” whereas Roseannadanna would just keep on talking. The economics profession is more Roseannadanna than Litella (you’ll never hear a “nevermind”), but my recommendation is to forget what you’ve been told about the monetary aggregates and focus instead on bank-created money.

  Do Stop Believing

  So I’ve channeled iconic characters from both economics and Saturday Night Live, but I haven’t yet drilled down to the inflation rate. In fact, I’ll use this article to expand on the empirical result noted above, which, to my knowledge, isn’t widely known. Once you see how the alternative approach to money works, and how it differs from mainstream economics, I can break out inflation in the next article. But we’ll also need some terminology.

  In the past, I used the name “MDuh” for bank-created money, “Duh” referring to the result that the best indicator is the measure Friedman and Schwartz studied, not the measures they popularized. For this article, though, I’ll use “M63,” referring to the year they published their work. We should credit the original monetary maestros for their extensive research, notwithstanding my alternative interpretation, and “M63” should check that box. (Not only that, but “MDuh,” like a Journey song, sounded catchy at first but wore me down after repeated use.)

  To choose M63 components, I ask a single question: Is a potential component initiated by a private entity with the legal authority to create money, meaning either a commercial bank or a similar deposit-taking institution? If the answer is yes, I include the component in M63. Otherwise, I don’t. By using only that criterion, I’m estimating the amount of new money banks pump into the economy when they make loans and buy securities. Not surprisingly, M63 correlates almost perfectly with net bank lending—the correlation between 1959 and 2016 was 0.97.

  So, M63 growth and net bank lending both correlate with GDP growth, but why?

  I would say it’s because banks are the only institutions that create money from nothing when they make loans, meaning their loans inject purchasing power directly into the economy. For loans that aren’t made by banks, purchasing power flows from one party to another without increasing the total (lenders that don’t hold bank charters have to give up their own purchasing power when they deliver loan proceeds). But for bank loans, net purchasing power increases, because banks can make loans without requiring prior saving. Apart from a small allocation of bank capital, banks conjure loan proceeds from thin air—that’s the crux of what their charters allow them to do.

  In other words, bank loans are additive to the amount of spending that’s already occurring, and therefore, flow directly into GDP. They might boost real growth or inflation, or both, depending on a variety of factors including how the loan money is spent. But it’s important to remember that the money–GDP correlation is merely a byproduct of a lending–GDP correlation. Bank lending, not money, is the driving force.

  Round, Round, Get Around

  In pictures, we can compare the traditional, mainstream view to the alternative approach by sketching a “circular flow” between spending and income. Here’s an example I’ve simplified from charts that appear in my recently published book, Economics for Independent Thinkers, which covers the topic in more detail:

  

  The upper panel shows that the people on the left—both consumers and businesses—are spending, and because a dollar spent equals a dollar earned, the exact amount that’s spent flows back to consumers and businesses to be spent once again. So money cycles from spending to income and back to spending in a circular flow, and that’s exactly how money works in mainstream theory.

  The problem, though, is that mainstream theory assumes the role played by banks to be mostly irrelevant, whereas banks have a giant effect on the circular flow in the real world. In the real world, banks create deposits or cashier’s checks or some other form of money purchasing power to deliver loan proceeds. And by creating money from nothing, they increase spending above and beyond the amount of income that feeds in from the bottom of the loop. The circular flow expands, as in the lower panel.

  Even more importantly, these bank loan effects cumulative over time. If we say the chart above is the current time period or period 1, then the next chart (below) shows that period 1’s new bank credit (or at least a portion of it) is now part of the circular flow, and then it gets joined by period 2’s new bank credit. And then periods 1 and 2 join period 3’s new bank credit and the flow gets fatter and fatter.

  

  Pictures Telling Stories

  If every picture tells a story, the pictures above tell a story of economists building a discipline (mainstream macro) on a false premise so significant it can’t be corrected without starting over. Core theories in every mainstream school rely on the foundational assumption that money is independent of bank lending, all forms of lending believed equivalent and banks believed to be mere intermediaries. Mainstream macro restricts the circular flow to the picture in the first chart’s upper panel—it doesn’t allow private banks to expand the flow endogenously as in the other diagrams.

  Of course, some mainstreamers claim to have improved their theories, and almost all of them would rather you didn’t listen to troublemakers like me. According to a typical defense, economists have now figured out how to stuff a hypothetical financial economy into a mainstream, real-economy wrapper, making my criticisms invalid. Anyone who says otherwise just isn’t in-the-know, as the story goes.

  I shouldn’t have to write this, but those claims are as hollow as they are self-serving. Every paper I’ve read that purports to fix mainstream theory either still ignores the realities of bank lending or blends in other wildly unrealistic assumptions. (To pick a few notable examples, see Ben Bernanke’s financial accelerator model, similar papers on the same topic or Paul Krugman’s work on the financial economy.) Again, mainstreamers wove false assumptions into the theoretical fabric, and you can’t fix that without shredding the fabric and starting over. And once you’re committed to starting over, as I am, you might borrow from more realistic theories that sit well outside the mainstream.

  Too much information?

  I digress because certain economists respond predictably to my way of thinking, and it seems a good idea to address the most common response before moving to the next step. If you’re willing to entertain that those economists might be blowing smoke, and I might be onto something, stick with the series for another article.

  In Part 2, I’ll extend the charts above to consider other flows relevant to inflation. We’ll need to paint the whole picture before I can present the logic behind my suggested inflation predictor, which, again, has an excellent historical record. Its historical performance might even lead you to question whether inflation really is “always and everywhere” a monetary phenomenon.

  

• "Automatic-Bidding" Is Fueling Bubbles In The Hottest Housing Markets

  It has been a year-and-a-half since US home prices surpassed their previous peak from July 2006, and they’ve only continued to move higher since. Earlier this week, we reported that home prices in two-thirds of US cities climbed to record highs during the fourth quarter, according to data from the National Association of Realtors.

  This advance has continued even as prices in the ultra-high end of the market – where homes go for $10 million or more – have climbed to such elevated levels that buyers are beginning to disappear.

  And today, at a time when investors are worried that rising 10-year yields and the affects of the Trump tax plan could trigger a shakeout in the housing market, the Wall Street Journal highlighted a practice that is being widely embraced in some of the US’s hottest housing markets, like Seattle and San Francisco.

  Essentially, these clauses are attached to offers, and stipulate that the buyer will increase his or her offer by a given incremental amount if the seller can prove that a higher, verifiable bid has been made.

  Typically, this tactic is employed for homes in the middle-level of the market – because if a buyer is bidding on an ultra-high end home, the increments would be so large they would warrant review by a human.

  

  And as one professor pointed out, some buyers see it as a way to have their cake and eat it to: That is, a way to ensure that the price they would pay should they win the bid is the lowest possible in their price range.

  However, there are obvious concerns that, in our view, make this a terrible tactic.

  “A buyer can think of an escalation clause as a ‘have your cake and eat it, too’ clause,” says David Reiss, a Brooklyn Law School professor who specializes in real estate. “But in real estate, as with cake, it is hard to have it all.”

  One concern is that the buyer is tipping his hand to the seller by using an escalation clause, Prof. Reiss says.

  By indicating the maximum amount he will pay for the house, a buyer is revealing important information—that he’s willing to pay more. For example: Seller lists the house for $1 million. The buyer bids $950,000 with an escalation up to $975,000. The seller can counteroffer at $975,000, knowing that the buyer can both afford it at that price and is willing to pay it.

  “Sellers get more money than they ever thought they would have,” says Carrie DeBuys, a real-estate agent with Realogics Sotheby’s Realty in Seattle. In her market, it isn’t uncommon for a seller to receive “10, 15 or 20 offers on a property.”

  On the flip side, an escalation clause may not be in the seller’s best interest, explains Prof. Reiss.

  Say a house is listed for $1 million, and there are three bidders. Buyer A offers $950,000. Buyer B offers $975,000 with an escalation clause that could go up to $1 million in $5,000 increments. Buyer C offers $980,000. In this scenario, the seller would get $985,000 from Buyer B after the initial offer escalates over Buyer C’s offer. But, had the seller not relied on the escalation clause and instead asked the bidders for their best and final offer, he might have sold the house for $1 million. “We know that the buyer was willing and able to go up that high,” Mr. Reiss says. “Thus, the seller is likely getting $15,000 less in the escalation-clause scenario.”

  Since a seller would know that an escalation clause has been attached to an offer, they could easily orchestrate “verifiable” bids by coaxing a third party to make a dummy offer, knowing with certainty that it will not be filled. Automating the process of price discovery is, as every flash crash and blowup in equity, bond or currency markets has demonstrated, fraught with risk that many of the parties involved don’t fully understand.

  Whether the use of these clauses has had a material impact on prices would be difficult to confirm. Already, mortgage applications are tumbling as mortgage rates spike to their highest levels in more than four years. The real question is, how long after demand evaporates will sellers be able to abuse these “escalation clauses” to ensure they sell at the highest price possible.

  

   

  

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• Escalation In Syria – How Far Can The Russians Be Pushed?

  Authored by The Saker,

  Events in Syria have recently clearly taken a turn for the worse and there is an increasing amount of evidence that the Russian task force in Syria is being targeted by a systematic campaign of “harassing attacks”.

  First, there was the (relatively successful) drone and mortar attack on the Russian Aerospace base in Khmeimin.

  Then there was the shooting down of a Russian SU-25 over the city of Maasran in the Idlib province.

  Now we hear of Russian casualties in the US raid on a Syrian column (along with widely exaggerated claims of “hundreds” of killed Russians).

  In the first case, Russian officials did openly voice their strong suspicion that the attack was if not planned and executed by the USA, then at least coordinated with the US forces in the vicinity. In the case of the downing of the SU-25, no overt accusations have been made, but many experts have stated that the altitude at which the SU-25 was hit strongly suggests a rather modern MANPAD of a type not typically seen in Syria (the not so subtle hint being here that these were US Stingers sent to the Kurds by the USA). As for the latest attack on the Syrian column, what is under discussion is not who did it but rather what kind of Russian personnel was involved, Russian military or private contractors (the latter is a much more likely explanation since the Syrian column had no air-cover whatsoever).

  

  Taken separately, none of these incidents mean very much but taken together they might be indicative of a new US strategy in Syria: to punish the Russians as much as possible short of an overt US attack on Russian forces.

  To me this hypothesis seems plausible for the following reasons:

  First, the USA and Israel are still reeling in humiliation and impotent rage over their defeat in Syria: Assad is still in power, Daesh is more or less defeated, the Russians were successful not only their military operations against Daesh but also in their campaign to bring as many “good terrorists” to the negotiating table as possible. With the completion of a successful conference on Syria in Russia and the general agreement of all parties to begin working on a new constitution, there was a real danger of peace breaking out, something the AngloZionist are absolutely determined to oppose (check out this apparently hacked document which, if genuine, clearly states the US policy not to allow the Russian to get anything done).

  Second, both Trump and Netanyahu have promised to bring in lots of “victories” to prove how manly and strong they are (as compared to the sissies which preceded them). Starting an overt war against Russian would definitely be a “proof of manhood”, but a much too dangerous one. Killing Russians “on the margins”, so to speak, either with plausible deniability or, alternatively, killing Russians private contractors is much safer and thus far more tempting option.

  Third, there are presidential elections coming up in Russia and the US Americans are still desperately holding on to their sophomoric notion that if they create trouble for Putin (sanctions or body bags from Syria) they can somehow negatively impact his popularity in Russia (in reality they achieve the opposite effect, but they are too dull and ignorant to realize that).

  Last but not least, since the AngloZionist have long lost the ability to actually getting anything done, their logical fall-back position is not let anybody else succeed either. This is the main purpose of the entire US deployment in northern Syria: to create trouble for Turkey, Iran, Syria and, of course, Russia.

  The bottom line is this: since the US Americans have declared that they will (illegally) stay in Syria until the situation “stabilizes” they now must do everything their power to destabilize Syria. Yes, there is a kind of a perverse logic to all that…

  For Russia, all this bad news could be summed up in the following manner: while Russia did defeat Daesh in Syria she is still far from having defeated the AngloZionists in the Middle-East.

  The good news is, however, that Russia does have options to deal with this situation.

  Step one: encouraging the Turks

  There is a counter-intuitive but in many ways an ideal solution for Russia to counter the US invasion of Syria: involve the Turks.

  How? Not by attacking the US forces directly, but by attacking the Kurdish militias the US Americans are currently “hiding” behind (at least politically). Think of it, while the US (or Israel) will have no second thoughts whatsoever before striking Syrian or Iranian forces, actually striking Turkish forces would carry an immense political risk: following the US-backed coup attempt against Erdogan and, just to add insult to injury, the US backing for the creation of a “mini-Kurdistsan” both in Iraq and in Syria, US-Turkish relations are at an all-time low and it would not take much to push the Turks over the edge with potentially cataclysmic consequences for the US, EU, NATO, CENTCOM, Israel and all the AngloZionist interests in the region. Truly, there is no overstating the strategic importance of Turkey for Europe, the Mediterranean and the Middle-East, and the US Americans know that. From this flows a very real if little understood consequence: the Turkish armed forces in Syria basically enjoy what I would call a “political immunity” from any US attacks, that is to say that (almost) no matter what the Turks do, the US would (almost) never consider actually openly using force against them simply because the consequence of, say, a USAF strike on a Turkish army column would be too serious to contemplate.

  In fact, I believe that the US-Turkish relationship is so bad and so one-sided that I see a Turkish attack on a Kurdish (or “good terrorist”) column/position with embedded US Special Forces far more likely than a US attack on a Turkish army column. This might sound counter-intuitive, but let’s say the Turks did attack a Kurdish (or “good terrorist”) column/position with US personnel and that US servicemen would die as the result. What would/could the US do? Retaliate in kind? No way! Not only is the notion of the US attacking a fellow NATO country member is quite unthinkable, it would most likely be followed by a Turkish demand that the US/NATO completely withdraw from Turkey’s territory and airspace. In theory, the US could ask the Israelis to do their dirty job for them, but the Israelis are not stupid (even if they are crazy) and they won’t have much interest in starting a shooting war with Turkey over what is a US-created problem in a “mini-Kurdistan”, lest any hallowed “Jewish blood” be shed for some basically worthless goyim.

  No, if the Turks actually killed US servicemen there would be protests and a flurry of “consultations” and other symbolic actions, but beyond that, the US would take the losses and do nothing about it. As for Erdogan, his popularity at home would only soar even higher. What all this means in practical terms is that if there is one actor which can seriously disrupt the US operations in northern Syria, or even force the US to withdraw, it is Turkey. That kind of capability also gives Turkey a lot of bargaining power with Russia and Iran which I am sure Erdogan will carefully use to his own benefit. So far Erdogan has only threatened to deliver an “Ottoman slap” to the USA and Secretary of State Tillerson is traveling to Ankara to try to avert a disaster, but the Turkish instance that the USA chose either the Turkish or the Kurdish side in the conflict very severely limits the chances of any real breakthrough (the Israel lobby being 100% behind the Kurds). One should never say never, but I submit that it would take something of a miracle at this point to really salvage the US-Turkish relationship. Russia can try to capitalize on this dynamic.

  The main weakness of this entire concept is, of course, that the USA is still powerful enough, including inside Turkey, and it would be very dangerous for Erdogan to try to openly confront and defy Uncle Sam. So far, Erdogan has been acting boldly and in overt defiance of the USA, but he also understands the risks of going too far and for him to even consider taking such risks there have to be prospects of major benefits from him. Here the Russians have two basic options: either to promise the Turks something very inciting or to somehow further deteriorate the current relationship between the US and Turkey. The good news here is that Russian efforts to drive a wedge between the US and Turkey are be greatly assisted by the US support for Israel, Kurds, and Gulenists.

  The other obvious risk is that any anti-Kurdish operation can turn into yet another partition of Syria, this time by the Turks. However, the reality is that the Turks can’t really stay for too long in Syria, especially not if Russia and Iran oppose this. There is also the issue of international law which is much easier for the USA to ignore than for the Turks.

  For all these reasons using the Turks to put pressure on the USA has its limitations. Still, if the Turks continue to insist that the USA stop supporting the Kurds, or if they continue putting military pressure on the Kurdish militias, then the entire US concept of a US-backed “mini-Kurdistan” collapses and, with it, the entire US partition plan for Syria.

  So far, the Iraqis have quickly dealt with the US-sponsored “mini-Kurdistan” in Iraq and the Turks are now taking the necessary steps to deal with the US-sponsored “mini-Kurdistan” in Syria at which point *their* problem will be solved. The Turks are not interested in helping Assad or, for that matter, Putin and they don’t care what happens to Syria as long as *their* Kurdish problem is under control. This means that the Syrians, Russians, and Iranians should not place too much hope on the Turks turning against the USA unless, of course, the correct circumstances are created. Only the future will tell whether the Russians and the Iranians will be able to help to create such circumstances.

  Step two: saturating Syria with mobile modern short/middle range air defenses

  Right now nobody knows what kind of air-defense systems the Russians have been delivering to the Syrians over the past couple of years, but that is clearly the way to go for the Russians: delivering as many modern and mobile air defense systems to the Syrians.

  While this would be expensive, the best solution here would be to deliver as many Pantsir-S1 mobile Gun/SAM systems and 9K333 Verba MANPADs as possible to the Syrians and the Iranians. The combination of these two systems would immensely complicate any kind of air operations for the US Americans and Israelis, especially since there would be no practical way of reliably predicting the location from which they could operate. And since both the USA and Israel are operating in the Syrian skies in total violation of international law while the Syrian armed forces would be protecting their own sovereign airspace, such a delivery of air-defense systems by Russia to Syria would be impeccably legal.

  Best of all, it would be absolutely impossible for the AngloZionist to know who actually shot at them since these weapon systems are mobile and easy to conceal. Just like in Korea, Vietnam or Lebanon, Russian crews could even be sent to operate the Syrian air defense systems and there would be no way for anybody to prove that “the Russians did it” when US and Israeli aircraft would start falling out of the skies. The Russians would enjoy what the CIA calls “plausible deniability”. The US Americans and Israelis would, of course, turn against the weaker party, the Syrians, but that other than feeling good that would not really make a difference on the ground as the Syrians skies would not become safer for US or Israelis air forces.

  The other option for the Russians would be to offer upgrades (software and missile) to the existing Syrian air defense systems, especially their road-mobile 2K12 Kub and 9K37 Buk systems. Such upgrades, especially if combined with enough deployed Pantsirs and Verbas would be a nightmare for both the US Americans and the Israelis. The Turks would not care much since they are already basically flying with the full approval of the Russians anyway, and neither would the Iranians who, as far as I know, have no air operations in Syria.

  One objection to this plan would be that two can play this game and that there is nothing preventing the USA from sending even more advanced MANPADs to their “good terrorist” allies, but that argument entirely misses the point: if both sides do the same thing, the side which is most dependent on air operations (the USA) stands to lose much more than the side which has the advantage on the ground (the Russians). Furthermore, by sending MANPADs to Syria, the USA is alienating a putative ally, Turkey, whereas if Russia sends MANPADs and other SAMs to Syria the only one who will be complaining will be the Israelis. When that happens, the Russians will have a simple and truthful reply: we did not start this game, your US allies did, you can go and thank them for this mess.

  The main problem in Syria is the fact that the US and the Israelis are currently operating in the Syrian skies with total impunity. If this changes, this will be a slow and gradual process. First, there would be a few isolated losses (like the Israeli F-16 recently), then we would see that the location of US and/or Israeli airstrikes would gradually shift from urban centers and central command posts to smaller, more isolated targets (such as vehicle columns). This would indicate an awareness that the most lucrative targets are already too well defended. Eventually, the number of air sorties would be gradually replaced by cruise and ballistic missiles strikes. Underlying it all would be a shift from offensive air operations to force protection which, in turn, would give the Syrians, Iranians, and Hezbollah a much easier environment to operate in. But the necessary first step for any of that to happen would be to dramatically increase the capability of Syrian air defenses.

  Hezbollah has, for decades, very successfully operated under a total Israelis air supremacy and their experience of this kind of operations would be invaluable to the Syrians until they sufficiently built up their air defense capabilities.

  Conclusion: is counter-escalation really the only option?

  Frankly, I am starting to believe that the Empire has decided to attempt upon a partial “reconquista” of Syria, even Macron is making some noises about striking the Syrians to “punish” them for their use of (non-existing) chemical weapons. At the very least, the USA wants to make the Russians pay as high a price as possible for their role in Syria. Further US goals in Syria include:

  • The imposition of a de-facto partition of Syria by taking under control the Syrian territory east of the Euphrates river (we could call that “plan C version 3.0”)

  • The theft of the gas fields located in northeastern Syria

  • The creation of a US-controlled staging area from which Kurdish, good terrorist and bad terrorist operations can be planned and executed

  • The sabotaging of any Russian-backed peace negotiations

  • The support for Israeli operations against Iranian and Hezbollah forces in Lebanon and Syria

  • Engaging in regular attacks against Syrian forces attempting to liberate their country from foreign invaders

  • Presenting the invasion and occupation of Syria as one of the “victories” promised by Trump to the MIC and the Israel lobby

  So far the Russian response to this developing strategy has been a rather a passive one and the current escalation strongly suggests that a new approach might be needed. The shooting down of the Israeli F-16 is a good first step, but much more needs to be done to dramatically increase the costs the Empire will have to pay for is policies towards Syria. The increase in the number of Russian commentators and analysts demanding a stronger reaction to the current provocations might be a sign that something is in the making.

  

• "Sudden Stratospheric Warming Event" Fractures The Polar Vortex In Two

  “This split of the polar vortex will shift the upper atmospheric pattern such that the coldest airmass is located in western North America as well as over parts of Europe. This will allow for a ridge of high pressure to amplify in the eastern US, bringing unseasonably warm conditions next week,” said Ed Vallee, Long-Range Meteorologist and President of Vallee Wx Consulting.

  

  The Weather Channel describes the atmosphetic impact for the Northern Hemisphere, as this unique weather event splits the polar vortex into two smaller vortices: one over western Canada and another over Europe.

  •  A split of the polar vortex occurred this week due to warming in the stratosphere
  • This is likely to result in cold temperatures in Europe
  • Although a disruption of the polar vortex is sometimes associated with cold weather in the eastern U.S., that is not always guaranteed

  Further, from the Weather Channel:

  “Across the Arctic, where the polar vortex typically stays locked, the stratosphere has warmed. This typically kicks into motion a polar vortex disruption like we are seeing. The stratosphere is a layer of the upper atmosphere above which most of our weather occurs – known as the troposphere – and where most of the polar vortex resides.” (Shown Below: The polar vortex has split into smaller vortices, one over Europe, and the other over northwestern North America.)

  

  The one vortex over Western Europe and much of Eurasia will send the region into a dangerous deep freeze for the second half of February into early March. A disruption of the polar vortex has sent March 18 U.K. natural gas contracts soaring on the session, advancing +3.6% to 51.540.

  

  During the same timeframe, the vortex over western Canada could bring spring-like conditions for the Eastern U.S. in the second half of February through early March. Temperatures for the next few weeks could be 20 to 25 degrees Fahrenheit above average for this time of year. Highs in the 70s Fahrenheit are possible from Washington, D.C. to New York City, which would be a significant change from the arctic conditions experienced earlier in the winter season. In the Western U.S, it is an entirely different story, particularly in the Northern Rockies, which could see measurable snowfall and frigid arctic air for the next two weeks.

  

  A disruption of the polar vortex has sent US March 18 natural gas contracts crashing -22% in February to December 2017 lows. A breach below 2.50 would indicate a deeper correction, as much as -15% to 2.172 area where the .764-fib resides (measured from the March 2016 low to December 2016 high).

  

  “Models are indicating very impressive early Spring warmth across the eastern U.S. next week… the West/Rockies will have some cold air to deal with, however,” said Michael Ventrice, a Meteorological Scientist for the Weather Company.

  Models are indicating very impressive early Spring warmth across the eastern U.S. next week… the West/Rockies will have some cold air to deal with, however. pic.twitter.com/nddbOhrHGd

  — Michael Ventrice (@MJVentrice) February 15, 2018

  What’s all this talk about a Sudden Stratospheric Warming (SSW)? 

  Mashable explains that the primary polar vortex exists in the stratosphere, which is the layer of the atmosphere where most of the weather occurs. An SSW event refers to a rapid warming of the stratosphere at high latitudes, up to 122 degrees Fahrenheit in a matter of days, some six to nine miles above the earth’s surface. Mashable said, “an SSW event, took place in early-to-mid February, and this has caused the splitting of the stratospheric polar vortex.”

  “Someone once asked why they call them “sudden” stratospheric warmings,” said Anthony Masiello, a private weather forecaster.

  Someone once asked why they call them “sudden” stratospheric warmings: pic.twitter.com/cfhBSEnLbx

  — Anthony Masiello (@antmasiello) February 13, 2018

  Mashable further explains how the SSW broke apart the polar vortex into two and what it means for the weather in your region:

  Sudden stratospheric warming events occur when large atmospheric waves send energy upward, into the stratosphere, setting in motion a complex process that results in the temporary breakdown of the polar vortex. This February’s stratospheric warming event was particularly extreme, possibly setting records for how sharply temperatures spiked in the upper atmosphere.

  The polar vortex split isn’t the only factor favoring a cold snap in Europe, warmup in the Eastern U.S., and cool down in the West. There’s also a cycle of atmospheric pressure over the North Atlantic Ocean, known as the North Atlantic Oscillation (NAO), that can increase the odds of colder and snowier weather in some of these areas.

  Computer models are projecting the NAO will become strongly negative during the next few weeks in response to the polar vortex split and stratospheric warming event, and this also favors cold and snow in Western Europe. (It also ups the odds of similar weather in the eastern U.S., but that may not happen right away.)

  “A significant PV [polar vortex] disruption is often followed by widespread cold temperatures across northern Eurasia and the Eastern US. However the cold is more certain across northern Eurasia following these type of PV disruptions,” meteorologist Judah Cohen, who specializes in seasonal weather forecasting and tracking the polar vortex for AER, a Verisk Analytics company, wrote on his blog.

  The negative mode of the NAO typically features an area of strong high pressure over Greenland, which blocks the progression of weather systems moving in from the southwest, and causes the jet stream to plunge southward over Europe, allowing cold air to flow in from the Arctic and Scandinavia. Sudden stratospheric warming events tend to cause the NAO to switch into negative mode shortly after they occur.

  The rest of February should feature a colder than average Western U.S., coupled with a milder than average East Coast. However, the negative NAO phase could bring a return of winter weather to the East in early March, depending where exactly that Greenland block sets up. There’s often a delay between when the polar vortex is disrupted, and when the cold air arrives in parts of the U.S., if at all.

  Snow lovers will be watching upcoming forecasts anxiously because the deeper into March we go, the less likely widespread snows along the East Coast become.”

  In summary: the polar vortex has split, here’s what that means for us:

  

• Facebook VP: "The Majority Of Russian Ad Spend Happened AFTER The Election"

  Facebook VP of advertising, Rob Goldman, tossed a hand grenade in the Russian meddling narrative in a string of tweets responding to Mueller’s indictment of 13 Russian nationals running a “bot farm” which, according to Mueller (via Deputy AG Rod Rosenstein), was unsuccessful at influencing the 2016 election. 

  Deputy Attorney General Rosenstein: “No allegation in the indictment of any effect on the outcome of the election.” https://t.co/eSwD0ToL67 pic.twitter.com/SrOTipSoxu

  — ABC News Politics (@ABCPolitics) February 16, 2018

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  Notably, Goldman points out that the majority of advertising purchased by Russians on Facebook occurred after the election – and was designed to “sow discord and divide Americans”, something which Americans have been quite adept at doing on their own ever since the Fed decided to unleash a record class, wealth, income divide by keeping capital markets artificially afloat at any cost.

  The majority of the Russian ad spend happened AFTER the election. We shared that fact, but very few outlets have covered it because it doesn’t align with the main media narrative of Tump and the election. https://t.co/2dL8Kh0hof

  — Rob Goldman (@robjective) February 17, 2018

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  The main goal of the Russian propaganda and misinformation effort is to divide America by using our institutions, like free speech and social media, against us. It has stoked fear and hatred amongst Americans. It is working incredibly well. We are quite divided as a nation.

  — Rob Goldman (@robjective) February 17, 2018

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  The Russian campaign is ongoing. Just last week saw news that Russian spies attempted to sell a fake video of Trump with a hooker to the NSA. US officials cut off the deal because they were wary of being entangled in a Russian plot to create discord. https://t.co/jO9GwWy2qH

  — Rob Goldman (@robjective) February 17, 2018

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  President Trump fired off Goldman’s comment in a Saturday morning tweet:

  The Fake News Media never fails. Hard to ignore this fact from the Vice President of Facebook Ads, Rob Goldman! https://t.co/XGC7ynZwYJ

  — Donald J. Trump (@realDonaldTrump) February 17, 2018

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  Subversion

  If we are to accept Mueller’s findings that Russian disinformation campaign was focused on elevating an outside candidate to win the White House, no matter who it was (Mueller notes they supported both Sanders and Trump, while using “any opportunity to criticize Hillary and the rest”), then the logical conclusion is that while there was no collusion with the Trump campaign, the ultimate goal would be to weaken America by creating a divide in the long-standing establishment power structure. 

  To that end, this 1985 interview with ex-KGB agent Yuri Bezmenov, who defected to the West in 1970, is a must-watch. in it, Bezmenov very clearly outlines that the KGB’s primary goal is not covert intelligence; it’s a long-term campaign of ideological subversion, or “active measures.” 

  The entire interview is over two hours long, and both condensed and extended versions can be found below. In summary,the KGB, for decades, has had a goal of altering the average American’s perception of reality in order to confuse and divide the US population, while reducing men of fighting age to feminized soy boys.

  

   

  There are four basic stages: 

  1) Demoralization: This will take 15-20 years (which would bring us to around 2000-2005), which is enough time to educate a generation of students and indoctrinate them into a Marxist-Leninist ideology as “useful idiots.” The result of this stage of subversion is that the “useful idiots” will be “contaminated” through ideological and irreversible brainwashing. According to Bezmenov, the demoralized person is unable to assess fact-based information. You can shower him with documents, facts and other solid evidence, and he will refuse to believe it until kicked in his “fat bottom” by troops.”

  Bezmenov said (in 1985), that the demoralization campaign had been active for 25 years. 

  2) Destablization: Once the population has been programmed and “contaminated,” the subverter does not care about your ideas, the patterns of your consumption, whether you eat junk food and get fat and flabby. It doesn’t matter anymore. This time, and it only takes from two to five years to destabilize a nation, what matters is essentials, economy, foreign relations, defense systems.

  3) Crisis: Once destabilization has occurred, “It may take only six weeks to bring a country to the verge of crisis. You see it in Central America now.”

  4) Normalization: “And after crisis, with a violent change in power, structure, and economy, you have the period of so-called normalization will last indefinitely. Normalization is a cynical expression borrowed from Soviet propaganda”

  ***

  If Bezmenov was correct about the KGB’s “recipe” for subverting the United States, one need look no further than a generation of pussy-hat wearing, hypersensitive, multi-gendered, ultra politically-correct Social Justice Warrior mentality that’s infiltrated the West – most recently characterized by Justin Trudeau’s recent “peoplekind” admonishment of a young and inquisitive student. 

  Justin Trudeau tells a woman she should say peoplekind, not mankind. But was he mansplaining? pic.twitter.com/nyMG9RHo5x

  — RTÉ News (@rtenews) February 7, 2018

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  The tools of subversion are identity politics and the destruction of culture, often conducted under the guise of “equality” and humanitarianism. Has the forced integration of scores of migrants across Europe strengthened or weakened nations with open-border policies? Are Poland and Hungary stronger or weaker for resisting said invasion? 

  Indeed, it can be said that Europe has been demoralized through social-justice identity politics, which has paved the way for the active and ongoing destabilization of Europe’s long-knit social and economic fabric. 

  Next will be crisis brought on by the powder-keg created by “cultural enrichment” and no-go zones, after which Europe will surely be forced to normalize under a brave new regime in which the ongoing threat of civil war will keep Europe weak for decades.

  One has to consider who destabilized North Africa despite Ghadaffi offering to hold migrants at bay for a mere £4bn-per-year. Who then welcomed migrants which were the byproduct of said destabilization? And what will be the end result when we roll the clock forward five, ten, fifteen years? 

  One could make the argument that we are now shifting from demoralization and destabilization, to crisis. 

  Watch Bezmenov’s interview below:

  Short version:

  Long version:

  

• 'Ring Of Fire' Quake-Cluster Prompts Scientists To Warn Of "Large Rupture Sooner Than Later"

  Earlier in the week we reported on scientists’ warnings over the “strained” magma chamber within Yellowstone’s supervolcano.

  

  And now, perhaps even more concerning, The Daily Express reports that scientists in California have analyzed 101 major earthquakes around the Pacific Ring of Fire, a horseshoe-shaped geological disaster zone, between 1990 and 2016.

  

  They believe a cluster of tremors around the area could indicate a “big one” is due to hit.

  Earthquakes have already struck in Japan, Tawain, Guam and Indonesia in the past few weeks.

  Thorne Lay, professor of Earth and planetary sciences at UC Santa Cruz, said: “Based on the clustering of earthquakes in space and time, the area that has just slipped is actually more likely to have another failure.“

  He added that “the surrounding areas have been pushed towards failure in many cases, giving rise to aftershocks and the possibility of an adjacent large rupture sooner rather than later.“

  The Express notes that the study comes after the Ring of Fire was hit by earthquakes in the first two weeks of February.

  More than 180 people were injured and 17 killed when a 6.4 magnitude quake struck Taiwan’s coast on February 6.

  

  A series of tremors on reaching magnitudes as high as 5.7 shook the US territory of Guam.

  

  Three earthquakes have hit Japan since February 11, with the largest measuring at 4.8 on the Richter scale.

  Additionally, numerous volcano eruptions, hit the Pacific Rim in January.

  Scientists have. of course, reassured the public saying that the activity is normal for the Ring of Fire.

  Toshiyasu Nagao, head of Tokyo-based Tokai UNiversity’s Earthquake Prediction Research Centre, told Japan Times:

  “The Pacific Rim is in a period of activity. In terms of volcanic history, however the current activity is still regarded as normal.“

  As we concluded previously, is this time to panic? Maybe, maybe not. But it’s interesting that the Ring of Fire is waking up and  coinciding with news that a pole reversal is near, Yellowstone is ‘strained’, and the sun is approaching its solar minimum which could cause a mini ice age.

  

• America's Forever Wars: Guantanamo Bay "Prepared" For New Inmates, Says US Admiral

  On Thursday, Kurt Walter Tidd, a high ranking United States Navy admiral, currently serving as the Commander of the United States Southern Command, told lawmakers on Capitol Hill that the Guantanamo Bay Naval Base is now “prepared” to receive an influx of new detainees.

  

  “We have 41 detainees who are there right now. We are prepared to receive more should they be directed to us,” Admiral Kurt Tidd, told lawmakers.

  “As of today we have not been given a warning order that new detainees might be heading in our direction, but our responsibility will be to integrate them in effectively,” he added.

  During President Donald Trump’s State of the Union speech last month, Trump said he had signed an executive order directing Secretary of Defense James Mattis to “re-examine our military detention policy and to keep open the detention facilities at Guantánamo Bay.”

  

  “I am asking Congress to ensure that in the fight against ISIS and al Qaeda we continue to have all necessary power to detain terrorists wherever we chase them down, wherever we find them. And In many cases for them it will now be Guantánamo bay,” Trump said during his speech.

  

  The executive order is a significant reversal of his predecessor Barack Obama’s administration.

  AFP notes that Guantanamo Bay has not received any new inmates since 2008, but that could be changing under the Trump administration, as he plans on expanding the forever war on terrorism.

  US military officials have been openly discussing the fate of Islamic State group detainees, mainly foreign fighters, held by US-backed militias in northern Syria. Guantanamo has not received any new inmates since 2008 but on the campaign trail, Trump vowed to load the facility with “bad dudes,” and said it would be “fine” if US terror suspects were sent there for trial. During his State of the Union speech in January, Trump said IS captives would in “many cases” end up in Guantanamo. 

  Earlier last month, we reported on the Arizona National Guard unit deploying to Cuba to support operations in Guantanamo Bay. Despite the rumors of the prison closing, it appears that the Trump administration is preparing for a ramp-up period. The soldiers won’t have contact with the detainees and they are expected to serve a nine-month rotation which started at the beginning of January.

  These soldiers leaving for Guantanamo Bay in the coming days in support of Operation Enduring Freedom.

  “There was some discussion some time back about actually shutting it down. Right now that’s not what’s going to happen so it’s still very important for us service members to be prepared to go and continue that mission,” said Arizona Army National Guard Command Sergeant Major Fidel Zamora. 

  That’s exactly what nearly 50 Arizona Army National Guard soldiers will soon be doing.

  “Part of that is being able to inform and advise the Joint Task Force Commander there on military police tasks and procedures and part of that is just making sure that the staff runs effectively on a day to day basis,” said Colonel Rich Baldwin, the Land Component Commander of the Arizona Army National Guard.

  This mission is so sensitive we were asked not to show the faces of these soldiers and their families.

  “We don’t want to telegraph to the world who is going, who’s there and who’s performing this mission because they all have families that are still back here while they’re overseas doing this mission,” Colonel Baldwin said.

  Last November, Trump said, “Would love to send the NYC terrorist to Guantanamo but statistically that process takes much longer than going through the Federal system…”

  Would love to send the NYC terrorist to Guantanamo but statistically that process takes much longer than going through the Federal system…

  — Donald J. Trump (@realDonaldTrump) November 2, 2017

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  After more than 15-years of America’s never-ending wars on terror, the one thing that President Trump has failed to mention is an exit strategy.

  Nevertheless, America’s war spending has not just bankrupted this once great nation to the tune of trillions, it has depleted the inner core of the American economy. The one question we ask: With the Trump administration rapidly preparing for an influx of new prisoners at Guantanamo Bay, who will those new prisoners be?

  

• China Steps Into The Middle East Maelstrom

  Submitted by James Dorsey,

  The Middle East has a knack for sucking external powers into its conflicts. China’s ventures into the region have shown how difficult it is to maintain its principle of non-interference in the internal affairs of other states.

  

  China’s abandonment of non-interference is manifested by its (largely ineffective) efforts to mediate conflicts in South Sudan, Syria and Afghanistan as well as between Israel and Palestine and even between Saudi Arabia and Iran. It is even more evident in China’s trashing of its vow not to establish foreign military bases, which became apparent when it established a naval base in Djibouti and when reports surfaced that it intends to use Pakistan’s deep sea port of Gwadar as a military facility.

  This contradiction between China’s policy on the ground and its long-standing non-interventionist foreign policy principles means that Beijing often struggles to meet the expectations of Middle Eastern states. It also means that China risks tying itself up in political knots in countries such as Pakistan, which is home to the crown jewel of its Belt and Road Initiative — the China–Pakistan Economic Corridor (CPEC).

  Middle Eastern autocrats have tried to embrace the Chinese model of economic liberalism coupled with tight political control. They see China’s declared principle of non-interference in the affairs of others for what it is: support for authoritarian rule. The principle of this policy is in effect the same as the decades-old US policy of opting for stability over democracy in the Middle East.

  It is now a risky policy for the United States and China to engage in given the region’s post-Arab Spring history with brutal and often violent transitions. If anything, instead of having been ‘stabilised’ by US and Chinese policies, the region is still at the beginning of a transition process that could take up to a quarter of a century to resolve.

  There is no guarantee that autocrats will emerge as the winners.

  China currently appears to have the upper hand against the United States for influence across the greater Middle East, but Chinese policies threaten to make that advantage short-term at best.

  Belt and Road Initiative-related projects funded by China have proven to be a double-edged sword. Concerns are mounting in countries like Pakistan that massive Chinese investment could prove to be a debt trap similar to Sri Lanka’s experience.

  Chinese back-peddling on several Pakistani infrastructure projects suggests that China is tweaking its approach to the US$50 billion China–Pakistan Economic Corridor. The Chinese rethink was sparked by political volatility caused by Pakistan’s self-serving politics and continued political violence — particularly in the Balochistan province, which is at the heart of CPEC.

  China decided to redevelop its criteria for the funding of CPEC’s infrastructure projects in November 2017. This move seemingly amounted to an effort to enhance the Pakistani military’s stake in the country’s economy at a time when they were flexing their muscles in response to political volatility. The decision suggests that China is not averse to shaping the political environment of key countries in its own authoritarian mould.

  Similarly, China has been willing to manipulate Pakistan against its adversaries for its own gain. China continues to shield Masoud Azhar (who is believed to have close ties to Pakistani intelligence agencies and military forces) from UN designation as a global terrorist. China does so while Pakistan cracks down on militants in response to a US suspension of aid and a UN Security Council monitoring visit.

  Pakistan’s use of militants in its dispute with India over Kashmir serves China’s interest in keeping India off balance — a goal which Beijing sees as worthy despite the fact that Chinese personnel and assets have been the targets of a low-level insurgency in Balochistan. Saudi Arabia is also considering the use of Balochistan as a launching pad to destabilise Iran. By stirring ethnic unrest in Iran, Saudi Arabia will inevitably suck China into the Saudi–Iranian rivalry and sharpen its competition with the United States. Washington backs the Indian-supported port of Chabahar in Iran — a mere 70 kilometres from Gwadar.

  China is discovering that it will prove impossible to avoid the pitfalls of the greater Middle East. This is despite the fact that US President Donald Trump and Saudi Arabia’s powerful Crown Prince Mohammad bin Salman seem singularly focussed on countering Iran and Islamic militants.

  As it navigates the region’s numerous landmines, China is likely to find itself at odds with both the United States and Saudi Arabia. It will at least have a common interest in pursuing political stability at the expense of political change — however much this may violate its stated commitment to non-interference.

  *  *  *

  Dr James M Dorsey is a senior fellow at the S. Rajaratnam School of International Studies.

  

• CIA Argues The Public Can't See Classified Information It Has Already Leaked To Favored Reporters

  Authored by Will Racke via The Daily Caller,

  Intelligence officials can selectively release classified information to trusted journalists while withholding the same information from other citizens who request it through open records laws, CIA lawyers argued Wednesday.

  

  In a motion filed in New York federal court, the CIA claimed that limited disclosures to reporters do not waive national security exemptions to Freedom of Information Act (FOIA) requests. Intelligence and law enforcement agencies frequently deny records requests on the basis of protecting sensitive national security information, one of nine exemptions written into the federal FOIA law.

  The case stems from lawsuit against the CIA by New York-based independent journalist Adam Johnson, who had used FOIA to obtain emails between the agency’s public information office and selected reporters from the Wall Street Journal, the Washington Post and The New York Times. The emails the CIA provided to Johnson were redacted, leading him to question why he was not allowed to see the same information that had been given to uncleared reporters.

  Johnson challenged the redaction in court, arguing that the CIA, once it has selectively disclosed information to uncleared reporters, cannot claim the same information is protected by a FOIA exemption.

  The judge in the case appeared to find Johnson’ argument compelling. In a court order last month, Chief Judge Colleen McMahon of the Southern District of New York said FOIA laws do not authorize limited disclosure, to favored journalists or otherwise.

  “In this case, CIA voluntarily disclosed to outsiders information that it had a perfect right to keep private,” she wrote.

  “There is absolutely no statutory provision that authorizes limited disclosure of otherwise classified information to anyone, including ‘trusted reporters,’ for any purpose, including the protection of CIA sources and methods that might otherwise be outed.“

  McMahon also said it didn’t matter if the journalists in question published the information they received, only if the CIA waived its right to deny the information.

  “The fact that the reporters might not have printed what was disclosed to them has no logical or legal impact on the waiver analysis, because the only fact relevant to waiver analysis is: Did the CIA do something that worked a waiver of a right it otherwise had?” she wrote, asking CIA lawyers to come up with a stronger defense for non-disclosure.

  The CIA’s response on Wednesday centered on the contention that the information disclosed to favored reporters had not actually entered the public domain. As such, the limited disclosure did not constitute a waiver of the FOIA exemption, government lawyers said.

  “The Court’s supposition that a limited disclosure of information to three journalists necessarily equates to a disclosure to the public at large is legally and factually mistaken,” the CIA motion stated. “The record demonstrates beyond dispute that the classified and statutorily protected information withheld from the emails has not entered the public domain.”

  Selective disclosure of classified information to uncleared reporters is a fairly common practice recognized by Congress, which requires briefings by the CIA on such disclosures, according to Steven Aftergood, the director of the Federation of American Scientists’ Project on Government Secrecy. Johnson’s case, if decided in favor of the CIA, could end up ratifying the practice via the courts, Aftergood says.

  Johnson has until March 1 to reply to the government’s motion, which asks for a summary judgement in favor of the CIA.

  Another ‘win’ for The Deep State looms…

  

• Eric Peters: "Toxic" Risk Parity Funds Could Trigger The Next Market Blowup

  On this week’s MacroVoices podcast, host Erik Townsend interviews Zero Hedge regular contributor, Eric Peters, CIO of One River Asset Management who – having correctly predicted the recent record VIX spike (See “Why Eric Peters Is Betting All On A Volatility Eruption” from Jan 7)- discusses the latest explosion of volatility, and its implications for markets as the global economy exits what has become one of the longest business cycles in history and heads toward the next recession.

  The discussion begins with what has been the most talked-about topic of the past month: the blowup of short-volatility products that had earned retail traders millions of dollars in profits during the expansion.

  While pundits on CNBC have given investors the all-clear to buy the dip and get back in, believing that all the fiscal stimulus from the Trump tax plan will almost certainly drive asset prices higher again, Peters is much more circumspect: As growth slows and inflation creeps higher, Peters believes markets will anticipate the recession by dumping stocks and bonds lower before the next recession even begins.

  And risk parity, which has been a reliable strategy for years, will quickly turn toxic, helping establish a negative feedback loop that will continue to drive bonds and stocks lower…

  The problem with products like XIV, which make it possible for retail investors to place extremely risky bets on volatility in a manner that makes them extremely exposed to their own ignorance…

  

  But what, specifically, triggered this blowup, Townsend asked? Was it, as we suggested earlier this month, an intentionally malicious attempt by traders spoofing the VIX complex to manipulate the VIX and trigger the cascading selloff amplified by the product’s explicitly high convexity?

  Peters believes there are several fundamental factors that contributed to the selloff, but the poor design of products like the XIV greatly contributed to the selloff.

  There’s no question that, in an economy and in a financial system where there’s the level of debt that we have and the sensitivity to interest rates, rising rates are kind of a pre-condition to equity market disruptions and selloffs. I think that the level of volatility selling and its integration into risk models across virtually every type of investment strategy are contributors.

  And, having gone through such a long period with very, very little movement, I’d say that many people’s trading books were robust for relatively small moves. But once you’ve passed a certain move – and I think in this case it was probably the S&P down 3-ish% that triggered a whole series of different adjustments that people needed to make to their books and their option books – that then amplified the move in volatility and led to this blowup in the VIX product. But you have to remember that these VIX products were extremely ill-designed. And they were very vulnerable to this. They’re a rare thing that you see in our industry, which is they had a predefined stop loss. And markets are pretty good at finding stop losses and triggering them.

  I started my career in the commodity pits, and I witnessed firsthand how the commodity pit is built around finding stop losses on the top side of the bottom side of markets. So I think the market did a great job of finding the stops – and in this case finding the weakest ones, which were in the VIX complex – and hitting them.

  But I don’t think that that really explains why this move happened. Why did we get the first leg down, and why are markets starting to move with very little news flow? And, again, that’s something that’s difficult to explain for a lot of people that are trying to do it.

  To be sure, there’s plenty of evidence to suggest that XIV and other short-volatility products behaved exactly as they were supposed to during this month’s volocaust. So, what does Peters mean when he says these products are poorly designed?

  Specifically, he’s referring to the fact that the larger these products become, the easier it becomes for sophisticated investors to suss out where the stops are, and bet against the fun accordingly…

  Number one, I think they were very likely inappropriate for a lot of people that bought them. They’re classic late-cycle type products that, in many respects, are designed to try to create returns in a world where it’s difficult to find returns. And late cycle you tend to see these things pop up that provide enhanced levels of carry, or some type of return that looks safe and is a lot less so.

  They were likely inappropriate for people. But I assume that people had a sense for that. I think the design flaw, specifically, is to have a large retail product that has the ability to fall to zero in a day, provided there are a number of conditions met. But, principally, the front month VIX future has to go up 100% for it to lose 100% of its value – means that product, by design, the bigger it gets, the more likely it is that as the VIX moves up in a rapid way the market is able to anticipate that there is a very, very large fire.

  And they know exactly where to stop losses. And the market will tend to suck itself up, or the VIX market will tend to suck itself up to that level, because it knows that it has a forest fire at that level.

  One of the most befuddling phenomenons to emerge this year across markets is the unraveling correlation between the US dollar and Treasury yields. Typically, they move in lockstep. But recently the dollar has been sinking while yields have continued to climb?

  So, how does Peters square this? He believes markets are anticipating that the US economy is heading for a debt-induced recession, which will only be exacerbated by the Trump tax bill and deficit-expanding budget agreements. Because of this, investors are reasoning that interest rates can’t rise too much before causing serious harm to parts of the US’s economy – which explains the dollar’s move.

  For rates, political factors like rising wealth inequality across the developed world are creating a loss of confidence in the US economy and the belief that politicians will continue to implement what Peters calls “de-globalization” policies…

  The rates, it’s a tricky – and I say it’s tricky because we can all recognize that we have extremely low nominal interest rates relative to history. And we’re not far above 5,000-year lows. We still have major central banks in the world with severely negative interest rates. And there’s still an awful lot of bonds that are trading at negative interest rates globally.

  So interest rates, just generally speaking, are very low. Debt is extremely high. And inflation has remained low. So we’re somewhat caught in a dynamic where it’s extremely difficult for rates to go up very high without raising a significant burden on economies. The only way to alleviate that burden is to create more inflation.

  But I think, as everyone looks at the world as they see it today, they go, well, it’s going to be difficult for inflation to go up very far. Consequently rates can’t go up very far, because if they do they’ll, essentially, bankrupt economies. And obviously they won’t bankrupt the whole economy.

  They’ll pressure it enough that the economy will tip into a significant recession. People’s mental model is, roughly speaking, that. And so they look at it, and they go, well, rates are very low, but they can’t really go much higher without sinking economies and recession – consequently, they’re going to be around the same unless inflation moves up substantially.

  That last part I think is what’s necessary. And, ironically, it’s what the major economies in the world are really seeking to deliver right now. They’re not looking to deliver a 1970s-type inflation.

  We’ve reached that tipping point within society where income inequality has become sufficiently large that we’re seeing political shifts, whether it’s here in the US, in the UK, in Germany – certainly in those three places – where there’s clear pushback by the mid-skill worker against low wages, low wage growth.

  As these things happen, as political winds shift, we’re seeing some of the natural consequences. Which is, let’s call it de-globalization. I don’t think it’s going to be a radical de-globalization. But it’s pretty clear that we’re seeing policies in these various countries that, on balance, are going to lead to less globalization.

  Those factors, combined with already very low unemployment, should lead to higher levels of inflation. I think we’re starting to see that right now. And that’s the thing that’s going to allow interest rates to move higher.

  Peters says he envisions a correction happening before a recession begins because the Fed is already signaling that it can’t afford to be there to rescue markets without introducing even more risk into the financial system. This shift in the Fed’s stance from actively interventionist to passive – which is necessary for the central bank to position itself to react to the next crisis – is one factor that could contribute to a marked drop in equity valuations. The government’s carefree spending will push inflation higher in an economy where low unemployment and high debt levels will create a natural constraint on growth…and equity markets will internalize this in the form of a correction that could arrive months before the next recession begins.

  The Fed will continue to welcome this volatility, Peters says, for fear that markets will end the business cycle with P/E on the S&P 500 above 25, setting them up for a massive, destabilizing correction…

  But the Fed is anticipating this “nightmare scenario,” and its shift in communication reflects that.

  I think that your insight is absolutely correct in that the world that I’m framing is one where monetary policy and its ability to interact with financial markets and the economy is going to look awfully different from what we’ve grown accustomed to. And that’s going to create a really interesting market.

  Incidentally, I think that you’re seeing clear confirmation of this in the way the Fed is speaking. So, unlike 10% correction out of the blue that I’ve seen over many years, this time around we haven’t seen a Fed member come out and say we’re going to be really supportive of the Markets.

  In fact, every single Fed governor who’s spoken in – there have probably been five in the past couple of weeks. And then there was Yellen a couple of Fridays ago on her way out. They all said that it is rather capable of dealing with the decline in equity markets and asset prices, and you should do just fine, and we’re not really worried.

  I think that what they are in the process of doing is they are beginning to shift the way they communicate with the markets and they’re signaling that they’re no longer going be there the way that they have been.

  And there are a few reasons for that. I think number one is because they recognize that, at 4.1% unemployment, and a trillion-and- a-half- dollar tax cut, and a 300-billion- dollar budget boost, and a 90-billion- dollar hurricane recovery spend, and then something that amplifies it with infrastructure spending – they’re looking at this and saying, there’s just literally no way this is not going to lead to higher levels of inflation.

  This growth-constrained scenario that Peters envisions, will create major problems for risk parity funds as the new economic environment causes stocks and bonds to plunge, creating a scenario for risk parity funds where deleveraging leads to a vicious feedback loop.

  

  The eventual blowup could make their horrific performance during this month’s selloff look tame by comparison…

  There’s a short answer and a long answer to that. Maybe I’ll try for a medium answer. The biggest problem in the investment industry today, the portfolio construct that investors have come to rely on, which is a brilliant construct really pioneered by Ray Dalio – he naturally has done incredibly well from this, and it’s been a fantastic strategy – this risk parity strategy.

  And, while there’s certainly more complexity to it that just being long equities and leveraged funds, let’s just view it as that strategy for a moment. It’s essentially what the dominant portfolio has become at all the major investors, pensions, endowments, etc. in the industry. And the beauty of that portfolio has been that you’ve been able to own risk assets and then you’ve been able to own a hedge, which is a leveraged bond portfolio, and that hedge has actually paid you a positive return.

  The problem is when equity valuations become very high and interest rates get very low it’s difficult for that strategy to continue to perform very well. All else being equal. Now, however, if you add modest inflation into the formula, that portfolio actually becomes pretty toxic.

  That’s the environment I think we’re entering into. And that’s why, ultimately, I see some of these shocks like this most recent market shock as just being trail markers on this path to a much more difficult investment environment.

  In summary, while Peters doesn’t envision a return to 1970s-style inflation, given the structural shifts in the US economy, combined with anti-globalist policies instituted by politicians across the West, markets are looking extremely precarious, and investors who are optimistic about the growth prospects of the Trump administration’s fiscal policies should keep this in mind.

  Listen to the whole interview below:

  

• "He Has Her Blood On His Hands" – Father Of Florida Shooting Victim Viciously Attacked Online For Supporting Trump

  Authored by Alex Thomas via SHTFplan.com,

  Leftist social media users have spent the day viciously attacking the father of one of the victims of the horrific Florida school mass shooting over the fact that he wore a Trump 2020 t-shirt during an interview with a local news outlet.

  

  That’s right, in the new America it is apparently perfectly acceptable to attack and even blame the parent of a teenager who was murdered, all because his political beliefs do not line up with the leftist orthodoxy.

  Both Andrew Pollack and his wife were interviewed outside of Broward Health North hospital, hoping to hear from their daughter hours after the attack that left 17 dead and over a dozen injured. During the interview, Pollack committed the thought crime of wearing a t-shirt for his preferred presidential candidate, a fact that apparently gave leftists on twitter the cover to viciously attack him.

  The attacks ranged from actually blaming Pollack himself for his own daughters death, to disgustingly claiming that they did not feel sorry for him simply because he supports Trump and presumably the NRA. Keep in mind that the anti-gun left has spent BILLIONS of dollars to push their agenda while at the same time pretending that the NRA is this all powerful group that cannot be stopped.

  One user even went as far as to claim that Trump, the NRA, and all Republicans themselves were actually RESPONSIBLE for the attack itself.

  Make no mistake, the following tweets are representative of a large portion of the new left which openly hates all their political opposition to the point where they simply do not care if someone’s daughter was literally just murdered.

  Actual responses to a man whose daughter was murdered in the Florida school massacre. Why? Because he voted for Trump. Some people are sick pic.twitter.com/9jUmHH1wFJ

  — Chet Cannon (@Chet_Cannon) February 15, 2018

  https://platform.twitter.com/widgets.js

  How does this father that lost his daughter in a school shooting wear a NRA backed Trump shirt?? How, how??? https://t.co/GkdEMqOwIa

  — Jeanette (@anti_trump_usa) February 16, 2018

  https://platform.twitter.com/widgets.js

  Is that, no it can’t be….. no, it is…. blood on his hands.

  — JohnT (@Mtbbmet) February 15, 2018

  https://platform.twitter.com/widgets.js

  I’m unforgiveable, but it’s a little hard to feel sorry who supported this administration and its racist and its NRA supporting policies. I feel sorry for daughter,but not for him. He probably doesn’t make the connection behind his Party’s policies and what happened to his child

  — Leonard James (@James36Leonard) February 15, 2018

  https://platform.twitter.com/widgets.js

  Sorry for his daughter but wearing a shirt for a politician who will do absolutely nothing in response to his daughter’s death is very ironic.

  — Mark Edwards (@MarkEdwardsATL) February 15, 2018

  https://platform.twitter.com/widgets.js

  Trump did this. The NRA did this. Republicans did this.

  — Jay Z(amora) (@Jay_MCMLXXXIX) February 16, 2018

  https://platform.twitter.com/widgets.js

  Im glad she died. I feel bad for the others. That’s what he gets!

  — Shady Jacob Facts (@ShadyJacobFact) February 15, 2018

  https://platform.twitter.com/widgets.js

  I feel empathy for his daughter – but not him.

  — Amoreena (@lilblondeduck) February 15, 2018

  https://platform.twitter.com/widgets.js

  Additionally, the social media giants themselves (Facebook, Twitter, etc) seemingly support the vicious attacks on Pollack as they have allowed them to continue unimpeded while at the same time censoring dozens of conservatives for a variety of fake reasons.

  As I noted above, this is the new America folks, where all it takes is wearing a Trump shirt to be attacked and even blamed for your own daughters murder.

  *  *  *

  ZH: One could interject that these vicious attacks are not from real left-leaning Americans, they are all Russian bots, aiming to divide our nation even further?

  

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