• Germany's East Is Shrinking

  According to forecasts from the 'Institut der deutschen Wirtschaft Köln', Germany's population is going to increase to 83.1 million by 2035.

  As Statista's Martin Armstrong notes, the main reason for this is the record number of immigrants and asylum seekers which arrived in the country in 2015.

  

  You will find more statistics at Statista

  While the overall trend is upward, seven of the country's sixteen federal states will see net decreases – primarily in the former German Democratic Republic (aka East Germany).

  The largest decrease is expected in the state of Saxony-Anhalt, where a 10.6 percent fall is forecast.

  

  

• 'Decoders' Offer Dire Warnings About North Korea's Nuclear Program

  Authored by Mac Slavo via SHTFplan.com,

  Experts outside the United States government are using North Korea’s propaganda videos to dissect and decode the rogue regime’s nuclear program.

  

  Decoders say that there are clues about the weapons advancement program hidden in their propaganda, and they are sounding the alarm.

  A group of analysts at the Middlebury Institute’s Center for Nonproliferation Studies in Monterey, California are closely studying the propaganda photos and videos put out by the North Korean regime. They then apply new tools such as satellite imagery and 3-D mapping to the videos and photos so they can learn more about how the North continues to advance their weapons in the face of sanctions and growing opposition.

  The analysts are finding amazingly : information about North Korea’s military capabilities and in this , they walk us through the clues that reveal the capabilities of a North Korean missile. They will also show instances where they’ve found the North Koreans to be faking their weapons success.

  The intense voices in North Korea’s videos make them seem legitimate, but the decoders have looked into what they can actually accomplish and what they cannot by simple decoding images used by the regime themselves.

  Perhaps the most alarming revelation is that the decoders suggest that it’s likely that North Korea is using highly advanced machines to construct their missile components. This could make getting a powerful nuke more likely than originally thought. They also say that North Korea has a missile that can carry a warhead capable of hitting the mainland United States, “New York, LA.”

  But they also point out the failures in the North Korean weapons advancement program and can identify where Kim Jong-Un is in several photos.

  

  

• These Are The World's Most Congested Cities

  No matter what city you live in, traffic is something you probably dread being stuck in.

  Whether it is the slow-moving I-95 in New York City or the molasses-like trip from East Hollywood to Santa Monica in L.A., it’s estimated that traffic congestion costs the United States alone a whopping sum of $300 billion per year in gas and time.

  THE WORLD’S WORST TRAFFIC

  Which city has the ultimate distinction of having the world’s most horrific traffic?

  Today’s infographic comes to us from INRIX via their Global Traffic Scorecard 2016, and it highlights the most congested cities around the globe. The report looks at average hours spent in congestion for 1,064 cities in 38 countries, as well as the percent of time spent in traffic.

  

  Courtesy of: Visual Capitalist

  Here’s a Top 10 list you don’t want to see your city on:

  

  Taking the top spot was Los Angeles, where drivers spent an average 104 hours stuck in the city’s legendary traffic jams.

  

  The cost of this congestion, measured in wasted time and fuel, was $9.7 billion – a number that works out to $2,408 per driver!

  

  

• Paul Craig Roberts Asks "Was The Las Vegas Shooting A False Flag?"

  Authored by Paul Craig Roberts,

  Dear Readers, I appreciate the confidence that you show in me with your emails asking my opinion about the Las Vegas shooting. Many of you suspect that it is another false flag affair, and you ask me about its purpose.

  

  I don’t know if it was a false flag attack, and if so, by who or for what purpose. I don’t expect to ever know. A story is set in place by officials and media. The only way to ever know is to personally investigate. You would have to go to Las Vegas, examine the scene, ask questions of the hotel, investigate the answers if you get any, find and interview concert attendees who were shot, attend funerals and see bodies of those killed, speak to their families, learn about the weapon allegedly used, experience trying to shoot at targets far below and far away, compare the number of casualties with the recorded time of firing, and so forth. In other words, we would have to do the job that in former times would have been done by the press, but no more.

  It is almost like the story is being kept from us.

  For example, from media reports that the event was just across the street from the hotel, I did not know that “across the street” was a distance of 390 yards (1,170 feet).

  As I don’t expect to ever have a confident opinion about what happened, I am not paying much attention to the mass shooting, or should I say alleged shooting. We are lied to and deceived so much that we can never tell when we are told the truth. It is like Dmitry Orlov says:

  “Lies beget other lies, and pretty soon unbiased intelligence-gathering, rational analysis and proper mission planning become impossible.”

   

  ” … a reputation for telling the truth can only be lost exactly once, and from then on the use of the phrase “US intelligence sources” became synonymous with “a conspiracy of barefaced liars.””

   

  “Whatever message Washington and Western mass media are trying to push, a perfectly valid response is to point out all the times they have lied in the past, and to pose a simple question: When did they stop lying?”

  Official explanations of such events as Las Vegas, Sandy Hook, and so forth, always throw up red flags, because the official explanations always studiously ignore contrary eyewitness and other evidence. Also, often there are not even smart phone videos of dead and wounded people. As far as I can tell, the bodies of 573 dead and wounded are absent in the Las Vegas video evidence. Considering the suspicion that such events cause, one would think the authorities would make a special effort to show the dead and wounded. In other cases of mayhem, alleged bodies look like dummies or are covered and could be a pile of anything. The presence of crisis actors on the scene, as in the Boston Marathon Bombing, raise more questions. I remember when it was expected that police and media would investigate all evidence and clear away contradictions. Now all we get is an official story instantly ready and repeated endlessly by officials and media. This itself raises suspicions.

  You will have to make up your own minds about Las Vegas.

  Here are some of the reported facts to consider:

  The victims killed and wounded total 573. That number is the size of a military battalion. It is very difficult to turn an entire battalion into casualties with small arms fire even in a fierce combat situation. I don’t know if it has ever happened. Can one person with no military training shooting down from 32 stories, which requires special sighting knowledge, at a distance of 390 yards – the length of 4 football fields – hit 573 people in a few minutes of firing?

  Jon Rappoport doesn’t believe it. 

  Neither does the progressive Steve Lendman.

  There are reports of multiple shooters.

  There are reports of gun flashes from the 4th floor.

  The windows on the hotel do not open and would require the glass to be broken.

  Stephen Paddock doesn’t fit the profile of a psychopath. Reports are he was a multimillionaire with airplanes and his own pilot. He enjoyed life. His brother is dumbfounded, said it makes no sense Stephen did the shooting.

  The Mandalay Bay Hotel is reportedly a casino. If so, security cameras are everywhere. Why no videos of Stephen Paddock carrying in the many cases of 23 firearms and ammunition? How could maid service clean the room for three days and not see 23 firearms and their ammunition? Makes no sense.

  Why 23 guns? The number is beyond superfluous.

  The large number almost suggests that the entire event is concocted as a gun control incident. The huge number of guns, the huge number of casualties. Finally, at last, enough “gun violence” to get gun control.

  Skeptics are waiting to hear from the authorities how a person at such a distance managed to shoot so many people in such a short time and with what automatic rifle and caliber the deed was done. As this part of the story is especially difficult to believe, we will probably not get the explanation.

  And it is not only the authorities and the presstitutes that truth is up against. There is also the lack of integrity in people with axes to grind. For example, Paul Street writing in CounterPunch says: “The Las Vegas massacre is just the latest in the Gun Lobby’s long line of terrorist attacks on U.S. soil.” The article is titled:  “The NRA’s Latest Terrorist Attack on U.S. Soil.” 

  The gun control lobby has a massive vested interest in the official story. You can bet your life that the gun control lobby will ignore any and all problems associated with the official story. The story is exactly what they want in order to advance their cause. The campaign is underway.

  As Paddock is a rich white male, the story also fits with Identity Politics. Paddock is another example of the evil white male. Here is the Identity Politics connection served up by the Washington Post:

  “All across America white men, some young, some of middle-age, are turning into wolves. Always, after they commit acts of terror, it is revealed out that these perpetrators were not men after all. They were beasts, mindless monsters whose evil was abstract and cold and terrible.”

  CNN says mass shootings are “a white man’s problem.” See “How America has silently accepted the Rage of White Men:”

  People are more interested in confirming their beliefs and prejudices than they are in the truth. If Paddock were a Muslim, Islamophobic people would cling to the official account.

  Truth requires that people believe in truth more than they believe in their own biases and causes. In the United States, such people are increasingly rare.

  Remember always the Roman question: “Who benefits?” That is where you will find the answer.

  *  *  *

  UPDATE: Paddock’s girlfriend describes him as a “kind, caring, quiet” man who she envisioned a “quiet future” with. A woman knows a man. Her description is not one of a psychopath.

  I have spoken to more experienced persons and experts including US Marine snipers. They don’t believe a word of the official story. Will, once again, the experts be got rid of by branding them “conspiracy theorists” as was done to 3,000 architects and engineers who challenge the official story of 9/11?

  

  

• Proof of Multiple Shooters at Vegas Attack?

  I haven’t explored this story — because I’e been uninterested in theories. However, this video is compelling, kindly narrated by A. Jones.

  Sounds like two distinctly different calibers and distance from attack.

  Thoughts?

  

• "He's Full Of Crap": GM Exec Slams Musk As Car War Breaks Out

  Elon Musk says the upcoming Tesla Model 3 has the hardware to enable full-self driving capability. But GM’s self-driving car czar thinks he’s full of crap.

  GM's director of autonomous vehicle integration Scott Miller told a group of Australian journalists in Detroit on Thursday that Musk was “full of crap”, explaining that a “level 5” – that is, fully autonomous – vehicle would require hundreds of thousands of dollars’ worth of sensors. Even for a company like Tesla, which investors have practically encouraged to burn through large sums of cash, offering such an advanced vehicle for between $30,000 and $50,000 would be an impossibility.

  "I think he's full of crap," Mr Miller said. "To think you can see everything you need for a level five autonomous car [full self-driving] with cameras and radar, I don't know how you do that."

  Tesla and a handful of other car companies are testing autopilot in Australia, according to the Leader.

  

  The company is planning to price the Model 3, which just started rolling off the production line at Tesla’s California factory, at $50,000 in Australia. The car reportedly incorporates cameras, radar and ultrasonic sensors for self-driving.

  However, as the Leader points out, the Model 3 won’t be able to use Tesla’s controversial autopilot feature until the company’s engineers perfect the software. A Tesla driver in Florida became the first person to die in an accident involving Autopilot. Eventually, the NHTSA ruled that Tesla wasn’t at fault in the crash. But since then, other customers have complained that they found the way in which autopilot was marketed to be misleading.

  With this in mind, perhaps Musk should consider the consequences before exaggerating the functionality of a feature like autopilot.   

  

  

• JPMorgan Updates By-laws In Case Of "Nuclear Disaster" Or World War III

  In the most bizarre news of the day, Bloomberg’s Hugh Son noticed that in a late Thursday filing, the board of JPMorgan approved a series of revisions to the bank’s by-laws, including a particularly notable one: a new section defining what constitutes a quorum in an emergency resulting from “an attack on the United States” or a “nuclear or atomic disaster.” That scenario is listed among emergencies that – understandably – might make it hard to hold a normal meeting for board members of America’s largest bank.

  The clause can be activated not just in case of a nuclear disaster or World War III, but also in a variety of situations including “without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God.”

  In short, JPMorgan’s Board has decided it is time to seriously consider a TEOTWAWKI scenario.

  As Son notes, in such an event, any member of the board or the firm’s operating committee can call a meeting using “any available means of communication.” And, just in case everyone else on the Board happens to die, one person will be sufficient to constitute a quorum. Vacancies can be filled by a majority vote of available directors. And if none are around, then designated officers can stand in. No officer, director or employee can be held liable in such a situation, except for “willful misconduct.”

  The revised Emergency By-Laws are reposted below (highlights ours):

  ARTICLE XI

   

  Emergency By-laws

   

  Section 11.01. Emergency By-laws. This Article XI shall be operative during any emergency resulting from an attack on the United States or on a locality in which the Corporation conducts its business or customarily holds meetings of its Board or its stockholders, or during any nuclear or atomic disaster, or during the existence of any catastrophe or other similar emergency condition (including without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God), as a result of which a quorum of the Board or the Executive Committee thereof cannot readily be convened for action (an “Emergency”), notwithstanding any different or conflicting provisions in the preceding Articles of these By-laws, the Certificate of Incorporation or the General Corporation Law. To the extent not inconsistent with the provisions of this Article XI, the By-laws provided in the other Articles of these By-laws and the provisions of the Certificate of Incorporation shall remain in effect during such Emergency and upon termination of such Emergency, the provisions of this Article XI shall cease to be operative.

   

  Section 11.02. Meetings. During any Emergency, a meeting of the Board, or any committee thereof, may be called by the Chairman or any other member of the Board or the Chief Executive Officer, or any member of the Corporation’s Operating Committee (each, a “Designated Officer” and collectively, the “Designated Officers”), or the Secretary. Notice of the time and place of any meeting of the Board or any committee thereof during an Emergency shall be given by any available means of communication by the individual calling the meeting to such of the directors and/or Designated Officers who shall be deemed to be directors of the Corporation for purposes of obtaining a quorum during an Emergency if a quorum of directors cannot otherwise be obtained during such Emergency, in each case, as it may be feasible to reach. Such notice shall be given at such time in advance of the meeting as, in the judgment of the individual calling the meeting, circumstances permit.

   

  Section 11.03. Quorum. At any meeting of the Board, or any committee thereof, called in accordance with Section 11.02 above, the presence of one director shall constitute a quorum for the transaction of business. Vacancies on the Board, or any committee thereof, may be filled by a majority vote of the directors in attendance at the meeting. In the event that no directors are able to attend the meeting of the Board, then the Designated Officers in attendance shall serve as directors for the meeting, without any additional quorum requirement and will have full powers to act as directors of the Corporation for such meeting.

   

  Section 11.04. Amendments. At any meeting called in accordance with Section 11.02 above, the Board or a committee of the Board, as the case may be, may modify, amend or add to the provisions of this Article XI so as to make any provision that may be practical or necessary for the circumstances of the Emergency.

   

  Section 11.05. Management Contingency Plan. During an Emergency, the Corporation shall be managed by the Operating Committee under the direction of the Chief Executive Officer. In the absence of the Chief Executive Officer or his or her successor, the Operating Committee shall act under the direction of the Operating Committee member with the longest tenure with the Corporation.

   

  Section 11.06. Liability. No officer, director or employee of the Corporation acting in accordance with the provisions of this Article XI shall be liable except for willful misconduct.

   

  Section 11.07. Repeal or Change. The provisions of this Article XI shall be subject to repeal or change by further action of the Board or by action of the stockholders, but no such repeal or change shall modify the provisions of Section 11.06 of this Article XI with regard to action taken prior to the time of such repeal or change.

   

  Section 11.08. Termination of Emergency. The provisions of this Article XI shall cease to be operative upon the termination of the Emergency as determined by a quorum of the Board or the Executive Committee thereof in accordance with Sections 2.06 and 3.01, respectively, of these By-laws.

  

  

• Sheriff: Vegas Shooter Led "Secret Life", May Have Planned Car Bombing; Tried To Ignite Jet Fuel Tanks

  With every passing day, the Las Vegas police department releases new details about Stephen Paddock, the gunman behind the deadliest mass shooting in modern U.S. history, who according to the latest update, spent decades stockpiling guns and living a “secret life” and may have planned other attacks, including a car bombing, Clark County Sheriff Joseph Lombardo said, after suggesting that it was only logical to “make the assumption” that Stephen Paddock had “some help at some point” in pulling off Sunday’s massacre.

  As evidence, Lombardo pointed to gunman Paddock’s huge arsenal, explosive materials found in his car and his meticulous planning. “What we know is Stephen Paddock is a man who spent decades acquiring weapons and ammo and living a secret life, much of which will never be fully understood,” the sheriff said. Lombardo also revealed that Paddock had an escape plan, even though he turned the gun on himself as police closed in on his suite at the Mandalay Bay Hotel.

  Meanwhile, authorities are still searching for a motive. “Anything that would indicate this individual’s trigger point, that would cause him to do such harm, we haven’t understood it yet,” Lombardo told reporters Wednesday. “Don’t you think the concealment of his history of his life was well thought out?”

  Analyzing Paddock’s computer, cellphone and other electronic devices, investigators have found no obvious ideological motive, no clear connection to extremists or activist groups or outward display of mental illness, the Associated Press reported.

  Earlier in the day, an Australian man who claimed he met Paddock several times in the Philippines told the Guardian that the shooter was “extremely intelligent, methodical, conservative — guarded — and strategic. A planning, thinking type of guy.” The man, who spoke to The Guardian on condition of anonymity from his Brisbane home, said the encounters came through their respective girlfriends, both Philippine-born sisters, who had family reunions.

  He said he and Paddock had “robust” discussions about American gun laws and said Paddock mentioned a “gun room” during one stay in his home in Mesquite, Nev. “His comments were that it’s a substantial hobby that needs to be protected: ‘a gun room’,” the man told The Guardian.

  Separately, NBC reported that Marilou Danley, Paddock’s girlfriend, said she remembers him exhibiting symptoms such as lying in bed and moaning, according to two former FBI officials who have been briefed on the matter. “She said he would lie in bed, just moaning and screaming, ‘Oh, my God,'” one of the former officials said. The other former official said Danley spoke about Paddock displaying “mental health symptoms.”

  Investigators believe Stephen Paddock, who claimed nearly 60 lives and injured hundreds more in Las Vegas on Sunday, may have been in physical or mental anguish, the sources said.

  Investigators are also examining approximately six media devices left behind by Paddock, one of the former officials said. Included in that search is an inquiry into Paddock’s web browsing history.

  * * *

  Meanwhile, as Fox News reports, the materials found in Paddock’s car – 1,600 rounds of ammunition, fertilizer that could be used to make explosives and 50 pounds of the explosive substance Tannerite — led authorities to believe the Paddock was possibly planning a car bombing.

  Authorities also revealed that the weekend before the shooting, Paddock had rented a high-rise condo in a building that overlooked the Life is Beautiful alternative music festival featuring Chance the Rapper, Muse, Lorde and Blink-182. Lombardo offered no other details on what led Paddock there. Paddock also rented a room in August at Chicago’s downtown Blackstone Hotel, but never checked in. The hotel overlooks Grant Park where the Lollapalooza festival is held each year with hundreds of thousands of people in attendance.

  Addition to the confusion is that as the AP notes, where other mass killers have left behind a trail of plain-sight clues that help investigators quickly understand what drove them to violence, Paddock had nearly no close friends, social media presence or other clear connections to the broader world. Even the No. 2 official in the FBI said Wednesday he was surprised investigators have not uncovered more about why a man with no obvious criminal record would cause so much bloodshed.

  “There’s all kinds of things that surprise us in each one of these events. That’s the one in this one, and we are not there yet,” FBI Deputy Director Andrew McCabe said. “We have a lot of work to do.”

  They wonder if he had some sort of mental break at the time that drove him to start making plans for mass murder. Authorities were looking for hints in the details of the kind of life he lived, and the kind of victims and venue he targeted, said David Gomez, a former FBI national security and criminal profiler.

  “We may never know to 100 percent certainty,” he said. “But they will find out.”

  * * *

  In a tangent, overnight the Las Vegas Review-Journal reported that Paddock reportedly also took aim at nearby aviation fuel tanks during the rampage. The bullets fired by the killer left two holes in one of two circular white tanks. One of the bullets penetrated the tank, but did not cause a fire or explosion near the Route 91 Harvest country music festival. The tanks are roughly 1,100 feet from the concert site, where Paddock killed 58 people. Several airplane hangars belonging to prominent corporations are also near the tanks.

  

  Within the past couple of days, a construction crew repaired the holes, and FBI agents inspected the tanks and took measurements of the line of fire from Mandalay Bay, the sources said. The bases of private aircraft companies are also close to the tanks, which sit on property owned by McCarran International Airport.

  The tanks are operated by Swissport, the company that runs the fueling operations for the airport, according to McCarran spokeswoman Christine Crews. They primarily are used to provide fuel to the private aircraft operators.

  According to the Journal, jet fuel is hard to ignite and tanks like those across from Mandalay Bay have mechanisms in place to prevent fires. Mike Boyd, a Colorado-based aviation consultant, echoed those words. “A machine gun is not going to blow up a tank of fuel,” Boyd said. “Jet fuel itself sitting there in a big wet pile is very hard to ignite. You have to be a very amateur terrorist to think anything like that.”

  Which would make sense: earlier in the day ISIS “tripled down” on allegations that Paddock was both a convert to Islam and operating on its behalf in its just published edition of its weekly Naba newsletter. The Islamic State propaganda newsletter featureed infographs and new specific claims concerning Paddock, who the terror group identifies according to the Muslim name, Abu Abdul Barr al-Amriki (or Abu Abdul Barr “The American”) and claimed “converted six months ago” to ISIS.

  

  

• Previewing The September "Hurricane-Disrupted" Jobs Report

  Tomorrow’s hurricane-affected September jobs report will be… confusing. That is the (lack of) consensus from Wall Street analysts, who expect an average print of 80,000 (down from the 3-month average of 185K), however with huge variance on either side, with 4 economists predicting a loss of jobs, three expecting a print higher than 150K and one optimistic forecaster going as high as 260,000.

  

  The amusing breakdown by bank is as follows:

  • Hugh Johnson 153k
  • Stadnard Chartered 150k
  • UBS 125k
  • JPMorgan 100k
  • Bank of America 80k
  • Citi 70k
  • Wells Fargo 55k
  • Goldman Sachs 50k
  • Deutsche Bank 50k
  • SocGen -25k
  • Jefferies -45k

  Of course, the numbers are so scattered (as to make tomorrow’s report meaningless) due to the negative distortions from hurricanes Harvey, Irma, and Maria. The payroll survey is designed to ask employers about their number of employees for the pay period that includes the 12th of the month. Hurricane Irma made landfall just prior to the workweek containing the 12th of September. For workers who are paid on a weekly basis, if they were not able to work that week following Irma’s landfall, they may not be counted in the payroll report.

  Still, while jobs may be depressed due to the hurricanes, the impact on average hourly earnings would be the opposite. As Citi’s desk notes, the hurricanes themselves may put upward pressure on earnings given overtime paid as companies have a hard time finding workers. The street is fairly split on this fact, with 23 of the 57 economist submissions so far with an estimate of 0.2 or below (2 estimates at 0.1%) and the rest calling for 0.3% or above (4 estimates at 0.4%), although this may understate risk for a positive surprise.

  

  With that in mind, here is a summary of what to expects tomorrow at 8:30am, courtesy of RanSquawk

  US NONFARM PAYROLL PREVIEW – SEP 2017, ANALYST FORECASTS (forecast, range, previous):

  • Non-farm Payrolls: 80k (-45k to 209k, Prev. 156k)
  • Unemployment Rate: 4.4% (4.3% to 4.6%, Prev. 4.4%)
  • Average Earnings Y/Y: 2.5% (2.4% to 2.7%, Prev. 2.5%)
  • Average Earnings M/M: 0.3% (0.1% to 0.4%, Prev. 0.1%)
  • Average Work Week Hours: 34.4 hrs (34.2 to 34.6 hrs, Prev. 34.4 hrs)
  • Private Payrolls: 83k (-25k to 199k Prev. 165k)
  • Manufacturing Payrolls: 10k (-20k to 40k, Prev. 36k)
  • Government Payrolls: No forecasts (Prev. -9k)
  • U6 Unemployment Rate: No forecasts (Prev. 8.6%)
  • Labour Force Participation: No forecasts (Prev. 62.9%)

  TRENDS:

  Headline non-farm payrolls have averaged 176k in the first eight months of 2017, slightly lower than the 187k 2017 average. But the trend rate of payroll growth has picked up in recent months; on a  three-month rolling average basis, payroll growth averaged 185k in August, which is roughly in-line with the trend over the last three-months, and above the 175k twelve-month rolling average. Over the last five years, payrolls in September has averaged 204k, though it is worth noting that this month’s data will be distorted by the impact of Hurricanes Harvey, Irma, and Maria.

  “Expectations are heavily discounted due to the recent hurricanes,” write analysts at Lloyds. “The natural disaster is going to leave the data unclean for a while and the release would have to be significantly weaker than anticipated for the market to start discounting a December rate hike from the Fed.”

  HURRICANE IMPACT:

  Analysts at Capital Economics estimate that the hurricanes may have cut payrolls growth in half. “We already know that Hurricane Harvey caused jobless claims to spike in Texas. The rise in claims was smaller than that seen post-Katrina in 2005, but was larger than the impact from Ike in 2008. The rise in claims in Florida following Hurricane Irma so far has been negligible.”

  State-Level Jobless Claims Data Suggests a Larger-than-Normal Payrolls Impact from Hurricanes Harvey and Irma
  

  In 2005, Hurricane Katrina resulted in two months where payroll growth languished beneath 100k (versus the six-month trend of around 250k being added on a monthly basis).

  Hurricane Ike is a more troublesome example to look for clues about how payrolls react, given that Lehman Brothers collapsed two days after the hurricane hit, CapEco says.

  Looking further back, Capital Economics notes that payroll growth fell by around 100k in the aftermath of Hurricane Andrew in 1992, which was the largest storm on record to hit Florida at the time.

  WAGES:

  In its latest policy statement, the FOMC noted that “job gains have remained solid in recent months, and the unemployment rate has stayed low”, but “market-based measures of inflation compensation remain low”. Accordingly, despite the expected distortions to this month’s data, analysts will be looking to see if the wage inflation story remains intact, reinforcing the narrative behind a December rate hike.

  ING’s analysts believe “a decent wage number should help cement market pricing of a December hike,” and are more optimistic than consensus, forecasting annualised wage growth of 2.6%, arguing that calendar quirks may drive a strong print.

  Last month’s data was disappointing, ING says, but can be attributed to a change in the number of work days between the calendar months. The bank notes that where there were two additional workdays in the August, there were two fewer in the September month.

  “Of course, these statistical quirks tell us nothing about the economics. The tight labour market and increasing job-to-job flows should drive up the pace of pay rises over coming months. But it is a slow-moving picture and we may struggle to see growth above 3% this year.”

  MARKET INDICATORS:

  CLAIMS: The most recent data shows initial jobless claims at 268,250 on a four-week moving-average basis, higher than the 250,250 going into last month’s Employment Report. However, it seems that this jump was more mild than analysts had foreseen. “We feared a big spike in claims as a result of Hurricane Maria hitting Puerto Rico, but it didn’t happen,” writes Pantheon Macroeconomics. “Given the extent of the devastation and the subsequent drop in economic activity, this is odd.” Pantheon notes that the lingering impact of Harvey and Irma kept claims above the pre-storm trend around 240k, and  believes that a reversion to these levels will be seen in a matter of weeks. “We have no reason to think that the underlying labour market has changed much since August,” Pantheon says.

  ADP: The ADP’s measure of payroll growth was more-or-less in-line with expectations, showing the addition of 135k payrolls in September. But the tone of the commentary was generally positive; Moody’s chief economist Mark Zandi said “Hurricanes Harvey and Irma hurt the job market in September, but looking through the storms, the job market remains sturdy and strong.”

  CHALLENGER JOB CUTS: Challenger reported announced job cuts by US employers fell 4.4% MM, while they lodged a 27% YY fall. Looking at Q3 as a whole, job cuts were down by 6.2% QQ and were 22.5% lower than Q3 2016. The data continues to paint a picture of a healthy labour market. “Job cuts have remained low since the second half of last year. As companies grapple with potential deregulation and changes to health care costs in a tight labour market, employers are holding on to their existing workforces while many positions requiring skilled labour go unfilled,” Challenger noted.

  ISM SURVEYS: The employment sub-indices for both the manufacturing and non-manufacturing ISM surveys rose in September by 0.4pts and 0.6pts respectively. That marked the 12th straight month of employment growth in the manufacturing sector, and the 43rd consecutive month of growth in the non-manufacturing sector. And this is similar to the findings from the IHS Markit PMIs; for the manufacturing sector, employment growth was the fastest in nine months, though Markit noted that growth was running hotter than output, which signals that productivity may be slipping. The services PMI, however, saw employment growth slip to a three-month low, though Markit said it was still “solid” in September.

  * * *

  WHAT BANK DESKS ARE SAYING:

  Barclays: We look for nonfarm payrolls to expand by 75k, down from 156k in August. Informing our view are initial and continuing jobless claims, which have risen following the landfall of Hurricanes Harvey and Irma. Offsetting this to some degree are other factors like part-time employment for economic reasons and the employment diffusion index, which have shown improvement in recent months. Elsewhere in the report, we look for private payrolls to rise by 70k. We also expect average hourly earnings to rise by 0.3% m/m and 2.6% y/y, while average weekly hours remain unchanged at 34.4. With the slowdown in employment growth on the month, we expect an unchanged unemployment rate at 4.4%.

  Deutsche Bank: we expect only a 50k gain on headline nonfarm payrolls (+50k private). However, this may be enough to keep the unemployment rate steady at 4.4%. In fact, the “weather workers” series within the Household survey should provide a reasonable sense of the magnitude of the hurricane related disruptions to the payroll data.

  Goldman Sachs: We estimate that nonfarm payroll growth slowed to +50k in September, below consensus of +80k and the 3- month average pace of +185k. Our forecast reflects the widespread flooding and power outages caused by Hurricanes Harvey and Irma, which affected over 10% of the population and caused over $100bn in damages. The impact on tomorrow’s report is highly uncertain, but our base-case assumes a significant impact of -125k that partially offsets continued job growth in the rest of the country. We also expect the hurricanes to weigh on the household survey results, and given the high unrounded level of last month’s unemployment rate (4.442%), we believe the September jobless rate is more likely to round up than down (we estimate a rise to 4.5%). Finally, we estimate average hourly earnings increased 0.4% month over month and 2.7% year over year, reflecting positive calendar effects.

  Citi: Hurricane-related distortions to September payrolls imply market sensitivity to this month’s jobs tally will be lower than usual. Focus will be on wage growth for signs of inflation given last week’s soft PCE deflator print. We expect growth in average hourly earnings of 0.3% MoM (on-consensus) and 2.6% YoY (above-consensus), but see risks of a 0.4% print from a possible hurricane boost. Our forecast is for nonfarm payrolls growth of 70K (consensus: 80K) based on an analysis of initial claims data around past hurricanes. It would likely take a substantially below-consensus print (around flat or negative payrolls) to induce a large market reaction. Instead, the market may be more sensitive to upside surprises as a strong reading would imply either a smaller-than-expected impact from the hurricanes or stronger ex-hurricane job growth. Any hurricane-related softness in the September report will likely subsequently revert and boost the October payrolls report, as activity in the hurricane-affected areas returns to normal. Hurricane-related boosts to average hourly earnings will be temporary. Still, boosts to GDP growth from reconstruction will contribute to further labor market tightening, and with solid underlying growth, should lead to stronger wages over time.

  ING: With this month’s payrolls number likely to be “written off” given the effect of recent hurricanes, a decent wage number should help cement market pricing of a December hike. But in reality, if the Fed decides not to move at the end of the year, it’s unlikely to be because of economics. Instead, the new debt ceiling deadline falls almost right on top of the December meeting and given the divisive nature of US politics, it could go down to the wire. A substantial pick-up in market volatility on the possibility of a government shutdown could conceivably see the Fed delay until 2018 – although that’s not our base case.

  RBC: The survey period for the September employment report (the week that includes the 12th of the month) began as Hurricane Irma was making landfall in Florida and as Texas was still reeling from the effects of Hurricane Harvey. Thus, we will be shocked if we don’t see a significant slowing in nonfarm payroll growth on the month. Our best guess (given what Texas and Florida have added to payroll growth recently and trends in unemployment insurance claims in these states in the wake of the Hurricanes) is that headline and nonfarm payroll growth will slow to around 50K on the month, against a 6-month trend of around 160K. There is incredible uncertainty in this forecast and this is also reflected in the range of Street estimates (from -25K to +145K, if we throw out the highest and lowest guesstimates). Given the probability we get a very messy report is high, the market is likely to fade any weakness.

  SocGen: Hurricane Harvey may have led to a decline in nonfarm payrolls in September, which would mark the first negative reading in seven years. Quantifying the hurricane’s impact on job growth is fraught with uncertainty, but we suspect that Harvey’s impact was similar to the drag on payrolls seen in the wake of Hurricane Katrina in 2005.

  

  

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• Fukushima Operator Given Green Light To Restart Nuclear Reactors

  Via TheAntiMedia.org,

  The Japanese utility Tokyo Electric Power Company (TEPCO) has received approval to operate reactors for the first time since the 2011 Fukushima meltdown.

  

  On Wednesday, the Nuclear Regulation Authority said TEPCO’s two reactors in northern Japan met new and stricter safety standards.

  The authority unanimously approved the draft certificate for reactors number 6 and 7 at the Kashiwazaki-Kariwa plant, marking the first step in the process toward restarting them. Portions of the plant’s reactors were damaged in a 2007 earthquake.

  Much of the Japanese public is opposed to granting TEPCO permission to once again operate reactors, and rightfully so.

  TEPCO was blamed for safety lapses in the Fukushima nuclear plant disaster after a major earthquake in March of 2011, and the tsunami that followed damaged the power supply and cooling system of three reactors at the Fukushima Daiichi plant, resulting in an unprecedented nuclear accident.

  The area around the plant will be closed for the foreseeable future, with extremely high levels of radiation still being recorded in 2017. Radiation from the damaged plant has found its way into the ocean and surrounding areas, including groundwater. The long-term effects of the disaster are still unknown.

  TEPCO said in a statement that it will continue improving safety standards at its plants while focusing on Fukushima’s decommissioning in addition to compensation for the thousands of evacuees.

  

  

• Catalan Independence: Why The Collective Hates It When People Walk Away

  Authored by Brandon Smith via Alt-Market.com,

  I have written many times in the past about the singular conflict at the core of most human crises and disasters, a conflict that sabotages human endeavor and retards critical thought. This conflict not only stems from social interaction, it also exists within the psyche of the average individual. It is an inherent contradiction of the human experience that at times can fuel great accomplishment, but usually leads to great tragedy. I am of course talking about the conflict between our inborn need for self determination versus our inborn desire for community and group effort — sovereignty versus collectivism.

  

  In my view, the source of the problem is that most people wrongly assume that "collectivism" is somehow the same as community. This is entirely false, and those who make this claim are poorly educated on what collectivism actually means. It is important to make a distinction here; the grouping of people is not necessarily or automatically collectivism unless that group seeks to subjugate the individuality of its participants. Collectivism cannot exist where individual freedom is valued. People can still group together voluntarily for mutual benefit and retain respect for the independence of members (i.e. community, rather than collectivism).

  This distinction matters because there is a contingent of political and financial elites that would like us to believe that there is no middle ground between the pursuits of society and the liberties of individuals. That is to say, we are supposed to assume that all our productive energies and our safety and security belong to society. Either that, or we are extremely selfish and self serving "individualists" that are incapable of "seeing the bigger picture." The mainstream discussion almost always revolves around these two extremes. We never hear the concept that society exists to serve individual freedom and innovation and that a community of individuals is the strongest possible environment for the security and future of humanity as a whole.

  Thus, the mainstream argument becomes a kabuki theater between the "ignorantly destructive" populists/nationalists/individualists versus the more "reasonable" and supposedly forward thinking socialists/globalists/multiculturalists. The truth is, sovereignty champions can be pro-individual liberty and also pro-community or pro-nation, as long as that community is voluntary.

  Collectivists will have none of this, however, and despite their intellectual and "rational" facade, they will often turn to brutality in order to disrupt any movement to decentralize power.

  The civil unrest in the Spanish region of Catalonia is an interesting example of the tyranny of the collectivist ideology. According to mainstream doctrine, Spain is supposed to be a "decentralized unitary state" made up of "autonomous communities," all with their own statutes and self governing bodies "loosely" regulated by the Spanish constitution of 1978. Catalonia, along with a couple other regions and cities in Spain, has long fought for true autonomy from the central government in Madrid. This separatist culture was crushed under the heel of Francisco Franco's dictatorial regime after the Spanish Civil War which started in 1936.

  After Franco's death in 1975, Spain began its "transition to democracy" (democracy being the tyranny of the majority rather than tyranny by military regime). Once again, Catalonia's push for independence returned.

  The reasons for a Catalan secession are multitude and are of course noble or nefarious depending on which side you talk to. From my research, it would seem the primary drive for Catalonia is economic. Spain is one of the more indebted member states in the European Union with a national debt near 100% of GDP. The "great recession" starting in 2008 struck Spain particularly hard, with around 21% of the general population officially in poverty and over 40% of all children officially in poverty. Unemployment according to government statistics hovers near 18%.

  Catalonia is the most prosperous region in Spain's economy, accounting for nearly 20% of total GDP. Catalans also assert that taxation in their region is a primary pillar for the Spanish government, which has not returned the favor with sufficient investment in infrastructure in the region. In essence, there is a "taxation without representation" feel to the conflict, and Americans in particular know very well how that kind of situation can end.

  On the other side of the debate, it is clear that if Catalonia leaves the Spanish system on negative terms, then Spain's already crumbling economy will be destroyed. The motivation for Spain to keep control of Catalonia is high just on the grounds of economic disaster.

  Beyond the economic issue, another interesting side note on Spain is its intense social justice (cultural Marxism) programs. While Europeans often suggest Spain as being a "conservative" government, in policy and action this is simply not true.  Spain is notorious for being one of the most militantly feminist governments in the EU aside from Sweden, and this is saying something given the socialist nature of the EU. Gender laws and divorce laws in the country offer some of the most draconian double standards against men I have ever witnessed. Perhaps this will give you a kind of litmus test for the sort of culture we are dealing with here, and maybe it accounts for some discontent in certain portions of the Spanish population.

  Catalonia itself is often cited as being "more liberal" in its political orientation in comparison to the rest of Spain. Of course, the term "liberal" can mean many different things in Europe depending on the nation, and American definitions do not necessarily apply. Just as Europeans tend to have no understanding whatsoever of what "conservatism" means in the U.S., Americans have a hard time understanding all the intricacies of the various levels of "liberalism" in Europe.

  That said, what side of the political spectrum Catalonia sits on is irrelevant to greater discussion.

  What I actually enjoy pointing out here is the fact that whether you look at the Franco era of nationalist totalitarianism, or the "semi" socialist and hyper-cultural Marxist era of today, the Spanish government STILL acts the same in its despotism against Catalan separation or independence.  It is not as if the socialists set out to right the wrongs of the Franco regime once it fell. Not at all. Instead, they merely perpetuated the same attitude of centralization while wearing a smiling face. Once again, we see that there is very little difference between fascism and communism/socialism when we get down to core behaviors and policies.

  Collectivists, regardless of what other labels they use to identify themselves, have certain rules that they consistently follow in order to maintain power. One of those rules is that the collective is indivisible. They might pontificate endlessly about their superior democratic ideals, but when some people vote to leave en masse, either in polling booths or with their feet, the mask of benevolence always comes off and the true monster behind collectivism is revealed.

  As we have seen in Catalonia, this monstrous behavior is undeniable. The Spanish government has set out to prevent not just separation, it has sought to prevent the very act of voting on separation using police and military force. In essence, martial law was been declared in Catalonia in order to stop the people from enacting the very democratic ideals the Spanish government claims it enshrines.

   

  Despite the vicious measures of interference, reports suggest that the vote was still successful, with 90% of the citizenry in support of independence. What happens now is unclear, but I can tell you two things are relatively certain.

  First, a 90% vote in favor will result in a militarized response from the Spanish government. If the vote was less overwhelming, the government might attempt to pit one side of the population against the other, causing internal strife and disrupting secession. This strategy is unrealistic given the mass movement for independence. So, the only other option for the government is full blown martial law.

  Second, such a crackdown will result in a violent counter-response. This happened in the 1970s in Catalonia and I see no reason why it would not happen again. When you have almost an entire population in agreement on separation and you use force to stop them from attaining it, they will become violent. Civil war is inevitable if martial law is declared.

  It is vital that we examine the root ideological catalyst in this scenario.

  The most rational solution would be for the Spanish government to accept the Catalan vote (if they believe in "democracy" as they claim, then they have to accept it, otherwise they appear extraordinarily hypocritical). This could result in a more harmonious economic relationship and less drastic damage to Spain's fiscal structure. However, this is not going to happen. Instead, Spain is going to use the age old collectivist tactics of intimidation and carnage to oppress the Catalan's and subsume their economic production (as socialist governments always do).  When civil war erupts, and it will, production in Catalonia will grind to a standstill and Spain STILL loses 20% of its GDP.

  You see, this is a lose/lose scenario for Spain, all because the collectivist doctrine demands a jackbooted reaction to any movement for decentralization. Collectivist systems are parasitic in nature; they see the citizenry as food, as units of production for the state that cannot be allowed to leave, for the "greater good of the greater number." Collectivists rationalize their behavior as essential to the well being of the society at large, but this is dishonest, for their behavior more often harms society by crushing individual innovation and instigating wars that might not have ever happened in the first place.

  There is at the same time the matter of sovereignty movements across Europe. The only people who benefit from stopping these movements are globalists/collectivists. They may also benefit by sabotaging these movements after the fact, making an example of them and holding them up to the rest of the world as symbols of the "failures of populism."

  It is important to point out here that Catalonia is not necessarily seeking independence from the EU, only Spain.  Some might argue that this makes the Catalan vote irrelevant.  I disagree.  If Catalonia wants to be separate from Spain but still retain ties to the EU, then I suppose that is their choice, which is really the issue here – choice. Everyone should be allowed to make good and bad decisions and hopefully learn from them both. If Catalan's choice is meaningless because they will still be part of the EU, then the Spanish government should pull its national guard out and leave them to their own devices.

  Some people might also argue that if secession happened in the U.S., the response would be the same. I would argue that just because it might happen the same way, this does not mean it is right. If leftist Californians, for example, followed through with their latest threats to secede from the U.S. and a massive shift of leftists and cultural Marxists move to the state, frankly I would be ecstatic. Let these people separate and congregate. Let them fail or succeed on the merits of their own ideas and ethics. If they are allowed to organize without interference and they fail, then this is simply more proof that their ideology was unsound and impractical. California's large percentage of U.S. GDP would simply transfer to other states if in fact the productive people there are not leftists and they migrate away, leaving the separatists to wallow in their naive ideology.

  If Catalonia separates without interference and succeeds economically and socially, then perhaps it is not for Spain to try to subvert or destroy the region, but to emulate their model and learn from them. If people wish to walk away from a community, they should be allowed to do so. This is very simple. Self determination is not dependent on political expediency or mutual benefit. It is an inherent human right.  Communities and borders should be based on principles that the population stands by and every system should remain voluntary. If they do not stand by said principles and they work to thwart voluntarism, then those communities are worthless and should not exist at all.

  When a collective acts to stop people from leaving, all they are doing is exposing the fact that their reasons for existing are inadequate and unconvincing. This goes for Spain, it goes for the EU and it goes for the rest of the world. Globalists and collectivists should take note  decentralization is the true model for the future.

  In the long run, forcing people into participation in the system is a losing battle.

  

  

• A Failing Empire, Part 2: De-Dollarisation – China and Russia's Plan From Petroyuan To Gold

  Authored by Federico Pieraccini via The Strategic Culture Foundation,

  As seen in my previous article, US military power is on the decline, and the effects are palpable. In a world full of conflicts brought on by Washington, the economic and financial shifts that are occurring are for many countries a long-awaited and welcome development.

  

  If we were to identify what uniquely fuels American imperialism and its aspirations for global hegemony, the role of the US dollar would figure prominently.

  An exploration of the depth of the dollar’s effects on the world economy is therefore necessary in order to understand the consequential geopolitical developments that have occurred over the last few decades.

  The reason the dollar plays such an important role in the world economy is due to the following three major factors: the petrodollar; the dollar as world reserve currency; and Nixon's decision in 1971 to no longer make the dollar convertible into gold. As is easy to guess, the petrodollar strongly influenced the composition of the SDR basket, making the dollar the world reserve currency, spelling grave implications for the global economy due to Nixon's decision to eliminate the dollar’s convertibility into gold. Most of the problems for the rest of the world began from a combination of these three factors.

  Dollar-Petrodollar-Gold

  The largest geo-economic change in the last fifty years was arguably implemented in 1973 with the agreement between OPEC, Saudi Arabia and the United States to sell oil exclusively in dollars.

  Specifically, Nixon arranged with Saudi King Faisal for Saudis to only accept dollars as a payment for oil and related investments, recycling billions of excess dollars into US treasury bills and other dollar-based financial resources. In exchange, Saudi Arabia and other OPEC countries came under American military protection. It reminds one of a mafia-style arrangement: the Saudis are obliged to conduct business in US dollars according to terms and conditions set by the US with little argument, and in exchange they receive generous protection.

  The second factor, perhaps even more consequential for the global economy, is the dollar becoming the world reserve currency and maintaining a predominant role in the basket of international foreign-exchange reserves of the IMF ever since 1981. The role of the dollar, linked obviously to the petrodollar trade, has almost always maintained a share of more than 40% of the Special Drawing Right (SDR) basket, while the euro has maintained a stable share of 29-37% since 2001. In order to understand the economic change in progress, it is sufficient to observe that the yuan is now finally included in the SDR, with an initial 10% share that is immediately higher than the yen (8.3%) and sterling (8.09%) but significantly less than the dollar (41%) and euro (31%). Slowly but significantly Yuan currency is becoming more and more used in global trade.

  The reason why the United States has been able to fuel this global demand for dollars is linked to the need for other countries to own dollars in order to be able to buy oil and other goods. For example, if a Bolivian company exports bananas to Norway, the payment method requires the use of dollars. Norway must therefore own US currency to pay and receive the goods purchased. Similarly, the dollars Bolivia receives will be used to buy other necessities like oil from Venezuela. It may seem unbelievable, but practically all countries until a few years ago used US dollars to trade amongst each other, even countries that were anti-American and against US imperialist policies.

  This continued use of the dollar has had some devastating effects on the globe. First of all, the intense use of the American currency, coupled with Nixon’s decisions, created an economic standard based on the dollar that soon replaced precious metals like gold, which had been the standard for the global economy for years. This has led to major instability and to economic systems that have in the proceeding years created disastrous financial policies, as seen in 2000 and 2008, for example. The main source of economic reliability transferred from gold to dollars, specifically to US treasury bills. This major shift allowed the Federal Reserve to print dollars practically without limit (as seen in recent years with interests rates for borrowing money from the FED at around 0%), well aware that the demand for dollars would never cease, this also keeping alive huge sectors of private and public enterprises (such as the fracking industry). This set a course for a global economic system based on financial instruments like derivatives and other securities instead of real, tangible goods like gold. In doing this for its own benefit, the US has created the conditions for a new financial bubble that could even bring down the entire world economy when it bursts.

  The United States found itself in the enviable position of being able to print pieces of paper (simply IOU’s) without any gold backing and then exchange them for real goods. This economic arrangement has allowed Washington to achieve an unparalleled strategic advantage over its geopolitical opponents (initially the USSR, now Russia and China), namely, a practically unlimited dollar-spending capacity even as it accumulates an astronomical public debt (about 21 trillion dollars). The destabilizing factor for the global economy has been Washington's ability to accumulate enormous amounts of public debt without having to worry about the consequences or even of any possible mistrust international markets may have for the dollar. Countries simply needed dollars for trade and bought US treasures to diversify their financial assets.

  The continued use of the dollar as a means of payment for almost everything, coupled with the nearly infinite capacity of the of FED to print money and the Treasury to issue bonds, has led the dollar to become the primary safe refuge for organizations, countries and individuals, legitimizing this perverse financial system that has affected global peace for decades.

  Dollars and War: The End?

  The problems for the United States began in the late 1990s, at a time of expansion for the US empire following the demise of the Soviet Union. The stated geopolitical goal was the achievement of global hegemony. With unlimited spending capacity and an ideology based on American exceptionalism, this attempt seemed to be within reach for the policymakers at the Pentagon and Wall Street. A key element for achieving global hegemony consisted of stopping China, Russia and Iran from creating a Eurasian area of integration. For many years, and for various reasons, these three countries continued to conduct large-scale trade in US dollars, bowing to the economic dictates of a fraudulent financial system created for the benefit of the United States. China needed to continue in its role of becoming the world's factory, always having accepted dollar payments and buying hundreds of billions of US treasury bills. With Putin, Russia began almost immediately to de-dollarize, repaying foreign debts in dollars, trying to offload this economic pressure. Russia is today one of the countries in the world with the least amount of public and private debt denominated in dollars, and the recent prohibition on the use of US dollars in Russian seaports is the latest example. For Iran, the problem has always been represented by sanctions, creating great incentives to bypass the dollar and find alternative means of payment.

  The decisive factor that changed the perception of countries like China and Russia was the 2008 financial crisis, as well as growing US aggression ever since the events in Yugoslavia in 1999. The Iraq war, along with other factors, prevented Saddam from starting an oil trade in euro, which threatened the dollar's financial hegemony in the Middle East. War and the America’s continued presence in Afghanistan stressed Washington’s intentions to continue encircling China, Russia and Iran in order to prevent any Eurasian integration. Naturally, the more the dollar was used in the world, the more Washington had the power to spend on the military. For the US, paying a bill of 6 trillion dollars (this is the cost of the wars in Iraq and Afghanistan) has been effortless, and this constitutes an unparalleled advantage over countries like China and Russia whose military spending in comparison is a fifth and a tenth respectively.

  The repeated failed attempts to conquer, subvert and control countries like Afghanistan, Georgia, Iraq, Libya, Syria, Donbass, North Korea, Egypt, Tunisia, Yemen and Venezuela, have had significant effects on the perception of US military power. In military terms, Washington faced numerous tactical and strategic defeats, with the Crimean peninsula returning to Russia without a shot fired and with the West unable to react. In Donbass, the resistance inflicted huge losses on the NATO-supported Ukrainian army. In North Africa, Egypt is now under the control of the army, following an attempt to turn the country into a state under the control of the Muslim Brotherhood. Libya, after being destroyed, is now divided into three entities, and like Egypt seems to be looking with favorable regard towards Moscow and Beijing. In the Middle East, Syria, Turkey, Iran and Iraq are increasingly cooperating in stabilizing regional conflicts, where needed they are backed by Russian military power and Chinese economic strength. And of course the DPRK continues to ignore US military threats and has fully developed its conventional and nuclear deterrent, effectively making those US threats null and void.

  Color revolutions, hybrid warfare, economic terrorism, and proxy attempts to destabilize these countries have had devastating effects on Washington's military credibility and effectiveness. The United States finds itself being considered by many countries to be a massive war apparatus that struggles to get what it wants, struggles to achieve coherent common goals, and even lacks the capability to control countries like Iraq and Afghanistan in spite of its overwhelming military superiority.

  No One Fears You!

  Until a few decades ago, any idea of straying away from the petrodollar was seen as a direct threat to American global hegemony, requiring of a military response. In 2017, given the decline in US credibility as a result of triggering wars against smaller countries (leaving aside countries like Russia, China, and Iran that have military capabilities the likes of which the US has not faced for more than seventy years), a general recession from the dollar-based system is taking place in many countries.

  In recent years, it has become clear to many nations opposing Washington that the only way to adequately contain the fallout from the collapsing US empire is to progressively abandon the dollar. This serves to limit Washington’s capacity for military spending by creating the necessary alternative tools in the financial and economic realms that will eliminate Washington's dominance. This is essential in the Russo-Sino-Iranian strategy to unite Eurasia and thereby render the US irrelevant.

  De-dollarization for Beijing, Moscow and Tehran has become a strategic priority. Eliminating the unlimited spending capacity of the Fed and the American economy means limiting US imperialist expansion and diminishing global destabilization. Without the usual US military power to strengthen and impose the use of US dollars, China, Russia and Iran have paved the way for important shifts in the global order.

  The US shot itself in the foot by accelerating this process through their removal of Iran from the SWIFT system (paving the way for the Chinese alternative, known as CIPS) and imposing sanctions on countries like Russia, Iran and Venezuela. This also accelerated China and Russia’s mining and acquisition of physical gold, which is in direct contrast to the situation in the US, with rumors of the FED no longer possessing any more gold. It is no secret that Beijing and Moscow are aiming for a gold-backed currency if and when the dollar should collapse. This has pushed unyielding countries to start operating in a non-dollar environment and through alternative financial systems.

  A perfect example of how this is being achieved can be seen with Saudi Arabia, which has represented the crux of the petrodollar.

  De-dollarize

  Beijing has started putting strong pressure on Riyadh to start accepting yuan payments for oil instead of dollars, as are other countries such as the Russian Federation. For Riyadh, this is an almost existential issue. Riyadh is in a delicate situation, dedicated as it is to keeping the US dollar tied to oil, even though its main ally, the US, has pursued in the Middle East a contradictory strategy, as seen with the JCPOA agreement. Iran, the main regional enemy of Saudi Arabia, was able to have sanctions lifted (especially from Europeans countries) thanks to the JCPOA. In addition, Iran was able to pursue a historic victory with its allies in Syria, gaining a preeminent role in the region and aspiring to become a regional powerhouse. Riyadh is obliged to obey the US, an ally that does not care about its fate in the region (Iran is increasingly influential in Iraq, Syria and Lebanon) and is even competing in the oil market. To make matters worse for Washington, China is Riyadh’s largest customer; and considering the agreements with Nigeria and Russia, Beijing can safely stop buying oil from Saudi Arabia should Riyadh continue to insist on receiving payment only in dollars. This would badly hurt the petrodollar, a perverse system that damages China and Russia most of all.

  For China, Iran and Russia, as well as other countries, de-dollarization has become a pressing issue.

  The number of countries that are beginning to see the benefits of a decentralized system, as opposed to the US dollar system, is increasing.

   Iran and India, but also Iran and Russia, have often traded hydrocarbons in exchange for primary goods, thereby bypassing American sanctions.

   

  Likewise, China's economic power has allowed it to open a 10-billion-euro line of credit to Iran to circumvent recent sanctions.

   

  Even the DPRK seems to use cryptocurrencies like bitcoin to buy oil from China and bypass US sanctions. 

   

  Venezuela (with the largest oil reserves in the world) has just started a historic move to completely renounce selling oil in dollars, and has announced that it will start receiving money in a basket of currencies without US dollars. (This is not to mention the biggest change to have occurred in the last 40 years).

   

  Beijing will buy gas and oil from Russia by paying in yuan, with Moscow being able to convert yuan into gold immediately thanks to the Shanghai International Energy Exchange.

  This gas-yuan-gold mechanism signals a revolutionary economic change through the progressive abandonment of the dollar in trade.

  In the next and last article, we will concentrate on how successful Russia, Iran and China have been in forging a multipolar world order with the goal of peacefully containing the fallout from the collapsing American empire, and how this alternative world order is opening up a new geopolitical landscape for America’s allies and other countries.

  

  

• Stanford Says Soaring Public Pension Costs Devastating Budgets For Education And Social Services

  A new study from Joe Nation of Stanford’s Institute for Economic Policy Research entitled “Pension Math: Public Pension Spending and Service Crowd Out in California, 2003-2030,” says that the devastating consequences of the ill-advised, Cadillac pensions doled out to America’s public employees over the past several decades are only getting started. 

  Looking back at taxpayer contributions to public pensions in California, Nation found that they’ve increased by 5 times since 2002-2003 and are very likely to double again by 2029-2030.  Not surprisingly, that kind of hyper-inflationary growth has massively outstripped increases in tax revenue, even in the great progressive state of California (shocking, we know), meaning that pension contributions now account for 11.4% of California’s operating budget, up 3x from the 3.9% it consumed in 2002-2003.

  For more than a decade, public pension costs have been rising sharply in California. There is contentious debate about what is driving these cost increases—significant retroactive benefit increases, unrealistic assumptions about investment earnings, operational practices that mask or delay recognition of true system costs, poor governance, 1 to name the most commonly cited. But there is agreement on one fact: public pension costs are making it harder to provide services that have traditionally been considered part of government’s core mission.

   

  • Employer pension contributions (i.e., pension contributions plus debt service on any Pension Obligation Bonds) from 2002-03 to 2017-18 expanded on average 400%, i.e., contributions in nominal dollars are now five times greater.
  • Employer contributions are projected to rise an additional 76% on average from 2017-18 to 2029-30 in the baseline projection and 117%, i.e., more than double, in the alternative projection.
  • Employer pension contributions from 2002-03 to 2017-18 have increased at a much faster rate than operating expenditures. As noted, pension contributions increased an average of 400%; operating expenditures grew 46%. As a result, pension contributions now consume on average 11.4% of all operating expenditures, more than three times their 3.9% share in 2002-03.
  • The pension share of operating expenditures is projected to increase further by 2029-30: to 14.0% under the baseline projection—that is, even if all system assumptions, including assumed investment rates of return, are met—or to 17.5% under the alternative projection.
  • The average employer funding amount expressed as a percent of active member payroll, i.e., the employer contribution rate,5 has increased from 17.7% in 2008-09 to 30.8% in 2017-18. By 2029-30, it reaches 35.2% under the baseline projection and 44.2% under the alternative projection.
  • On a market basis, the average funded ratio fell from 58.5% in 2008 to 43.0% in 2015. By 2029 it improves to 48.2% in the baseline projection, but falls to 39.0% in the alternative projection. The unfunded liability per jurisdiction household on an actuarial basis also rose from an average $1,682 in 2008 to $5,071 in 2015; the unfunded liability per household on a market basis is $21,491, up from $9,127 in 2008.

  Here’s a graphical depiction of California taxpayers getting steamrolled…

  

  …or as a percent of total operating expenditure, if you prefer…

  

  What’s getting cut from California’s budget to make room for these exorbitant pension payouts?  Well, basically everything else…

  As discussed above, the pension expenditure share of the state’s operating budget increased from 2.1% in 2002-03 to 4.9% in 2008-09; it is estimated at 7.1% in 2017-18. This increasing share, despite an expanding budget, has shifted $6.0 billion in 2017-18 from other state expenditures to pensions.

   

  Changes in state expenditures by agency and department suggest that this reduction has come primarily from social services and higher education. For example, the expenditure share for the Department of Social Services (DSS) fell from 10.7% in 2002-03 to 6.0% in 2014-15 before climbing to 7.0% in 2017-18. The higher education share of operating expenditures fell from 11.3% in 2002-03 to 9.8% in 2014-15, although it increased to 10.5% in 2017-18.

   

  In addition, expenditure shares fell in several smaller departments from 2002-03 through 2014-15: the Department of Justice (0.4% to 0.2%), Department of Parks and Recreation (0.2% to 0.1%), and Department of Water Resources (0.2% to 0.1%).

  So good luck with that whole education thing kiddos because you’re grandparents are about to crush your future.

  Here is the full study:

  

  

• Paul Craig Roberts Asks "Whose Bright Idea Was RussiaGate?"

  Authored by Paul Craig Roberts,

  The answer to the question in the title of this article is that Russiagate was created by CIA director John Brennan.

  

  The CIA started what is called Russiagate in order to prevent Trump from being able to normalize relations with Russia.

  

  The CIA and the military/security complex need an enemy in order to justify their huge budgets and unaccountable power. Russia has been assigned that role.

  The Democrats joined in as a way of attacking Trump. They hoped to have him tarnished as cooperating with Russia to steal the presidential election from Hillary and to have him impeached. I don’t think the Democrats have considered the consequence of further worsening the relations between the US and Russia.

  Public Russia-bashing pre-dates Trump. It has been going on privately in neoconservative circles for years, but appeared publicly during the Obama regime when Russia blocked Washington’s plans to invade Syria and to bomb Iran.

  Russia bashing became more intense when Washington’s coup in Ukraine failed to deliver Crimea. Washington had intended for the new Ukrainian regime to evict the Russians from their naval base on the Black Sea. This goal was frustrated when Crimea voted to rejoin Russia.

  The neoconservative ideology of US world hegemony requires the principal goal of US foreign policy to be to prevent the rise of other countries that can serve as a restraint on US unilateralism. This is the main basis for the hostility of US foreign policy toward Russia, and of course there also is the material interests of the military/security complex.

  Russia bashing is much larger than merely Russiagate.

  The danger lies in Washington convincing Russia that Washington is planning a surprise attack on Russia. With US and NATO bases on Russia’s borders, efforts to arm Ukraine and to include Ukraine and Georgia in NATO provide more evidence that Washington is surrounding Russia for attack. There is nothing more reckless and irresponsible than convincing a nuclear power that you are going to attack.

  Washington is fully aware that there was no Russian interference in the presidential election or in the state elections.

  The military/security complex, the neoconservatives, and the Democratic Party are merely using the accusations to serve their own agendas.

  These selfish agendas are a dire threat to life on earth.

  

  

• Maduro Visits Putin, Proposes Global Oil Trade In Rubles, Yuan

  Three weeks after the US imposed financial sanctions on Venezuela in an effort to cripple its economy and choke the Maduro regime, which in turn prompted Caracas to announce it would no longer receive or send payments in dollars, and that those who wished to trade Venezuelan crude would have to do so in Chinese Yuan, today during an energy summit held in Moscow, Venezuela’s president Nicolas Maduro proposed to expand his own personal blockade of the US, by proposing that all oil producing countries discuss creating a currency basket for trading crude and refined products. One which is no longer reliant on the (petro)dollar. 

  “Developing a new mechanism of controlling the oil market is necessary,” Maduro said on Wednesday at the Russian Energy Forum, being held in Moscow this week.

  Quoted by RT, Maduro also blamed trade in crude oil paper futures as having an adverse impact on the oil market, which has undermined attempts by OPEC to stabilize prices. To counteract such “speculation”, Maduro proposed an alternative currency basket, one which is based not on the world’s reserve currency but includes the yuan, ruble, and other currencies, and which will mitigate the alleged adverse impact of futures trading.

   

  

   

  Maduro’s proposal is merely the latest not so veiled hint at dedolarizing the global financial system by bypassing the petrodollar entirely, and rearranging a new currency basket determined by the world’s biggest oil producer, and largest oil importer.

  Of course, Maduro is merely piggybacking on what China may already have in the works: recall that a month ago, the Nikkei Asian Review reported that China is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan.

  Maduro also insisted that Venezuela is dealing with its debt to Russia, currently in the billions, and that Rosneft’s deal with Venezuelan state oil producer PDVSA is “subject to negotiation.” “We fulfill all the obligations to Russia. If we get more favorable terms for restructuring the debt, this will be the result of a deal between the two governments,” said Maduro. It was unclear how Putin felt toward said proposal. 

  Maduro also complained that US sanctions make it difficult to negotiate the debt issue with American debt holders (something the US is well aware of). In addition to switching to a Yuan-based basket…

  

  … Caracas has been framing a plan to deliver its crude to alternative markets should the White House impose sanctions on trading the country’s oil, Maduro said in response to a question on the possibility of PDVSA’s default. “Venezuela has plans A, B, C, and others. There are other international companies interested in buying oil and refined products. We will create the best terms for them,” he said.

  It remains to be seen if a last minute agreement by Russia and China to bailout Venezuela by revoking some or all of the petrodollar’s reserve currency privileges, is in store. Needless to say, such a development would be the biggest shock to the global monetary system since Nixon killed the gold standard.

  

  

• China's Shadow-Lending Ecosystem Could Be As Large As $40 Trillion, PBOC Guesses

  Authored by Deep Throat at Deep Throat Blog

  Today, I'd like to take some time to revisit a couple of related topics that we first started discussing a few years ago. I am, of course, referring to the burgeoning increases in China's Debt levels, Shadow Bank Assets (loans) and M2, along with a high-level analysis of the most recent PBOC Financial Stability Report and FSB Global Shadow Bank Monitoring Report. (No!….please don't click this page closed….I promise this will eventually get interesting…)

  As a starting point, let's begin by reviewing the February, 2015 McKinsey report  Debt and (not much) Deleveraging .  I first referenced the report in this blog in March of 2015. The report focused on the world's, and particularly China's, rapidly building debt/leverage phenomenon (2014 Year End Data).  I encourage you to re-read the entire report, but for those of you who are pressed for time, I'll give you the executive summary bullet-points right here:

  • Debt continues to grow  
  • Reducing government debt will require a wider range of solutions
  • Shadow banking has retreated, but non?bank credit remains important
  • Households borrow more
  • China’s debt is rising rapidly

  I'm hoping that the McKinsey authors will consider updating the report, bringing the figures current, as I believe these observations, figures and analysis are even more pertinent today than they were back in 2015.

  China's Debt

  So now, using McKinsey as a reference point, let's take a look at where we are today, via the FRED (St. Louis FED)data below.

  The FRED (Federal Reserve Economic Data – Citations below) Chart below represents US Core Debt (as defined and provided by the BIS – Bureau of International Settlements) compared to China Core Debt, as a percentage of GDP.  The third (bold Red) line represents China's debt levels adjusted for a "what-if" constant I'll explain shortly.

  Lets dig into the numbers.  We see from 2006 thru 2016 US Core Debt increased modestly from roughly 220% of GDP to 250% of GDP.  However, China's Core Debt, relative to GDP nearly doubled during the same period, to roughly 260% of GDP.

  
  Before we discus the above, let's talk about what GDP is (and isn't).  GDP is:

  C+I+G+(NX) or:

  (Consumption + Investment + Government Spending + (Exports-Imports)).  

  First, it's important to understand that increased GDP does not necessarily increase wealth or improve quality of life.  A GDP calculation is measuring-stick for economic activity….nothing more.  A GDP figure makes no representations as to the quality, efficiency or economic utility of the activity producing the GDP.  i.e.) When my Dad was in the Army (WWII….the "big one") he talked about "practicing" digging fox holes.  He and thousands of other soldiers would be told/ordered to dig holes and fill them in…..for no apparent reason other than to keep them busy.  This activity, since he was being paid to do it, would increase GDP, even though it accomplished nothing more than wear them out and keep them out of the English pubs.

  That said, here are a few examples of things that would significantly increase GDP.

  • Building a Superhighway, Bridge or Bullet Train connecting two uninhabited deserts or islands. (I+G)
  • Building a Ghost City. (I+G)
  • A military build up. (I+G)
  • Producing millions of tons of steel and cement held in a developer's CIP inventory. (I+G+C)
  • Creating even more manufacturing capacity (factories and mines) for steel, cement, etc.(I)
  • Building infrastructure.  i.e.) Public works, water, power plants, tunnels, wells, utilities etc. (I+G)
  • Manufacturing phones, computers, clothing and consumer goods for export. (C+NX)
  • Buying tons of eCommerce stuff. (C)
  • Tearing down an abandoned building/high rise. (C+G)

  Here are a few more you might not think about…..again, these are events/activities that increase GDP but don't necessarily increase wealth or quality of life.

  • A hurricane….all of the destruction has to be financed and rebuilt. (C+I+G)
  • Public Welfare and Housing Assistance Checks (C+G)
  • Single Payer Health Care (C+G)
  • Paying 10x as much for a medical procedure as you might pay in other countries (C)

  So you get the point…..although it looks good on paper, incurring debt to build/finance things that aren't economically viable, produce little (or no) economic utility or fail to generate earnings and cash flow doesn't work too well over the long haul.  At some point, the lenders won't be paid back…..or, as should happen in a free-floating world, if they are eventually paid back, they'll be paid back with a currency having a fraction of the purchasing power of the currency they initially loaned out to finance the activity.

  China's "Productive GDP"

  Now, let's get back to the bold Red line on the chart above and take some time to coin a phrase. We'll call it "Productive GDP" or PGDP.  As any economist will tell you, desperate times call for desperate measures…..and new terminology!  Let's say that China's "Productive" GDP, for lack of a better term, is defined as GDP excluding all of the over-building, non-productive excess capacity and accounting games created simply to hit the arbitrary 7%, etched in stone, silly, CCP mandated GDP growth target.

  So let's further say that rather than the published, rock solid, 7%, annual NBS GDP growth rate, the "Productive", un-fudged, non-incentivized, PGDP growth rate is only 4.6%, (2/3rds of the published/reported rate), but still a remarkable number for an economy the size of China's.  Extrapolating the bold Red Line above, if GDP is "overstated" by a third, we illustrate/conclude that the ratio of Core Debt to "Productive" PGDP explodes to nearly 400%, much higher than the current G20 average of 240%.

  Author's Note:  You math aficionados out there might be observing that the bold red line doesn't consider the compounding impact (i.e. reducing the GDP growth rate in a prior year impacts the current year starting point).  So the method illustrated (multiplying GDP by a constant) actually overstates GDP.  That's absolutely correct.  However, since I have no actual data to base my adjustment on, it's a guess, an arbitrary adjustment, so the compounding doesn't matter.  Besides using a constant was just simply easier than trying to program the FRED model to compound the change.  In any case, I'm just illustrating a point.

  So far so good?

  Shadow Banking

  Now lets revisit the 2015 McKinsey Report (2014 data) bullet points above.  Specifically:

  • Shadow banking has retreated, but non?bank credit remains important

  Unfortunately, per the People's Bank of China (PBOC), Shadow Bank lending has reversed course abruptly and skyrocketed since the 2015 McKinsey report.  Nobody really knows how big China's Shadow Bank ecosystem is, but the PBOC recently offered a rather shocking guess in their 2017 Financial Stability Report (pg.48).  China's Off-Balance-Sheet, un-regulated, "Shadow" loans have grown to nearly US $37 Trillion (RMB 252.3 Trillion) and have surpassed China's US$34 Trillion, "On-Balance Sheet" bank assets as of the close of 2016.  They also restated the 2015 numbers, increasing the 2015 figures to US$ 28 Trillion (RMB 189 Trillion), roughly doubling the 2015 figure.

  Keep in mind, the PBOC estimating Non-Bank Shadow loans is a bit like the local Sheriff estimating "unreported financial crime".  He doesn't have authority over the mechanics of the activity, lacks enforcement resources and therefore can't do much about preventing the crime(s).  Even if he had authority and resource, he'd have a hard time zeroing in on the metric….criminals generally don't respond to surveys or self-report their schemes.  Moreover, the Sheriff would have an incentive to under-estimate the problem and hope everything works out, since, at some point, someone is going to be held accountable.  As history shows, and Chinese Bankers are well aware of this, financial scoundrels are normally exiled to horrific disgrace on a private tropical island with access to boatloads of Cayman Islands money…..so it goes.

  Again, based solely on the usual, limited transparency inherent in PBOC reporting (good things are trumpeted and bad things are swept under the rug), a disclosure like this would indicate that the problem is potentially much larger than they are letting on.  In the 2017 Financial Stability Report (an oxymoron if I've ever heard one) the PBOC restates the Shadow Bank Assets for 2014 and 2015 (as shown by the dotted line in the chart below). To my knowledge, no other major economy has ever experienced an acceleration anywhere near these levels of Non-Bank, Shadow debt relative to GDP, much less restated it in a gigantic "ooppps….our bad" buried in a couple of paragraphs in the bowels of a report.  In China….they do things big.  The bigger the better.  The two Charts below, prepared by Capital Economics illustrate that we've apparently entered uncharted waters.

  

  

  Although the fiercely independent citizens, politicians and bankers of Hong Kong and Singapore might disagree, we can generalize that the leverage in those economies (tall bars on the left of the chart) is inextricably linked to the Chinese financial system. If there were ever a potential "ground-zero" for a default-induced financial contagion Shang-Hong-apore would be it.

  Moreover, when we examine the PBOC/CE Charts above, it wouldn't be much of a reach to conclude that Shadow/Non-Bank Credit has become an absolutely essential tool for keeping all of the financial balls in the air. As reported by Ambrose Evans-Pritchard in a piece for the Telegraph:

  Jahangir Aziz and Haibin Zhu from JP Morgan said the debts of the state-owned entities (SOEs) have alone reached 90pc of GDP or $13.3 trillion.  

  Nearly 60pc of new credit this year is being used to repay old loans. It takes four times as much new credit to generate a given amount of extra of GDP as it did a decade ago. “China’s rising indebtedness has come to represent all that is disconcerting about their economy,” they said in a report entitled “The Sum of All Fears”.

  Hmmmm….."The Sum of All Fears"….catchy little title for a financial/policy report!  Tom Clancy would be proud….

  Viewed another way, when we add the current, 2016 BIS figure, roughly US$28 Trillion of China's Core Debt plus the estimated US$37 Trillion +/- of Shadow debt (RMB 253.5 Trillion), we have a Debt/PGDP ratio approaching 900% of "Productive" PGDP.  The Comparable, relatively constant, US ratio (250% +/-) is shown in blue below.

  

  

  "Total Social Financing" (TSF)

  Total Social Financing (TSF), a term of art the Chinese government introduced a few years ago to track the leverage in their economy, grew to RMB 155.99 trillion RMB (US$ 23 Trillion),  up 12.8 percent from 2015, per the PBOC Report. (Pg. 28)  The intent of this statistic is to track the "total financing" required by households and businesses.  The process goes awry when we try to decipher exactly what's included in this metric and how the data is collected.  There are numerous articles written on this topic and I've listed a few of them in the citations below.  Suffice it to say that the consensus is, that a significant amount of Non-Bank Shadow financing is excluded from TSF.  Interestingly, this metric, intended to show changes in the composition of how economic growth is financed, is actually misleading, since significant Shadow risk is omitted from the calculations.

  

  Some Verifiable Numbers…..Bonds

  As difficult as it is to measure China's fragmented Shadow Financial System, there are a few reported metrics which are presumably more reliable than others.  China's bond markets are one such example.  In the last two years (2015 & 2016) the value of new "Major" Chinese Bond issues (below) has actually exceeded the total amount outstanding of America's Corporate Bond market (about US$ 8.6 Trillion).  Why is all of this new debt necessary?  Again, most (60%?) of the new issues are used to roll over other bonds/debts/financing coming due.

  

  Continuing the theme, Non-Performing Loans (NPL's) have somehow remained relatively constant, hovering just under 2% since 2011 as shown below.  (pg. 44 of the PBOC Report)
  

  How can this be?  Perhaps it's just little old skeptical me, but usually, when borrowing skyrockets like this, underwriting is lax and bad loans go bad much quicker.  The universally accepted game bankers play to keep a bad loan from being reported as non-performing is to refinance it and change the terms….and (drum roll please….) ….like magic, it's a performing loan again!  In all likelihood, that's what's happening with this fake NPL statistic.  It's hard to believe that China's financial system hasn't already broken its economic foot as a consequence of kicking all of these NPL cans down the road, but somehow it just keeps chugging merrily along.  As my favorite Irish pub drinking song goes…."Roll me over in the clover…..roll me over lay me down and do it again…this is number one….we've only just begun….."

  

  

• Las Vegas Sheriff: "You Got To Assume He Had Help" As "Mystery Woman" Emerges

  During a lengthy press conference update on the investigation into the Las Vegas massacre, Clark County Sheriff Lombardo expressed his belief that gunman Stephen Paddock had to have help at some point but sarcastically says "maybe he’s a super guy."

  Clearly showing the strains of being awake under serious stress for the last 72 hours, the sheriff explained…

   “Look at this. You look at the weapon obtaining the different amounts of tannerite available, do you think this was all accomplished on his own, face value?”

   

  “You got to make the assumption he had to have help at some point, and we want to insure that’s the answer. Maybe he’s a super guy, super hero–not a hero, super–I won’t use the word. Maybe he’s super — that was working out this out on his own, but it will be hard for me to believe that.”

   

  “Here’s the reason why, put one and one–two and two together, another residence in Reno with firearms, okay, electronics and everything else associated with larger amounts of ammo, a place in Mesquite, we know he had a girlfriend. Do you think this is all self-facing individual without talking to somebody, it was sequestered amongst himself. Come on focus folks these type of investigations have been occurring in the last few years and we have to investigate that.”

  Sheriff Lombardo began by giving more detailed timeline of the Las Vegas Police effort to breach the hotel door…

  Sheriff Lombardo says Las Vegas police took 75 minutes to breach hotel door from the time the first shots were fired https://t.co/aiaPBRqDqO pic.twitter.com/398hcWcAwv

  — ABC News (@ABC) October 5, 2017

  Additionally, Sheriff Lombardo stated that the piece of paper in the gunman's hotel room was not a suicide note and that authorities have seen evidence that the shooter planned to survive and possible escape, adding that he could not disclose details…

  Sheriff Lombardo says authorities have seen evidence Las Vegas shooter planned to survive and possibly escape https://t.co/q3YSXGGVUt pic.twitter.com/8813G3dJjs

  — ABC News (@ABC) October 5, 2017

  Police also told a news conference that 317 of the 489 people injured in the Las Vegas shooting have been discharged from hospitals.

  Lombardo also said none of the cameras Paddock put up in the hotel room where he unleashed gunfire onto a concert crowd were recording, and noted that the shooter had 1,600 rounds of ammunition and several containers of an explosive commonly used in target shooting (Ammonium nitrate and Tannerite) that totaled 50 pounds in his car.

  Earlier this afternoon, several law enforcement officials told NBC News that investigatorsare trying to identify a mystery woman seen with Stephen Paddock in the days before the Las Vegas massacre. They don't know if she has any connection to the attack, but they would like to speak with her as they build a timeline of Paddock's last days, the officials said.

  So to summarize – He had help, planned to escape (so was not a suicide mission), there is a female potential accomplice at large, and the FBI further confirmed that "no evidence at this point to say it was an act of [domestic] terrorism."

  

  

• Will Brazil Be The Next Hotspot For Independence Movements?

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

   

  If you’ve read my work over the past several weeks, you’ve probably noticed an increased fascination with secession/independence movements around the world.

  

  I think we’re at the very early stages of this developing trend, which will see nation-states across the world fracture for a variety of reasons.

  The historical significance of the political changes we’re about to live through cannot be overstated. As I wrote in last month’s piece, The Future Will Be Decentralized:

  To conclude, I recognize that I’m making a huge call here. I think the way human beings organize their affairs will experience the most significant paradigm level shift we’ve seen in the Western world since the end of the European feudal system hundreds of years ago. That’s how significant I think this shift will be. There are two key things that need to happen for this to occur. The first is technological innovation, and that’s already happening. The second is increased human consciousness. As Thoreau noted, in order for us to have greater self-determination we need to be ready for it. Are we ready? I think we’re getting there.

  While extremely significant, the Catalan independence movement is just the tip of the iceberg when it comes to a global drive toward political decentralization. For example, just today I came across another potential secessionist hotspot in an unexpected place, Brazil.

  Bloomberg reports:

  Inspired by the separatist vote in Catalonia, secessionists in three wealthy southern Brazilian states are redoubling their efforts to break away from the crisis-battered nation.

   

  Residents of Rio Grande do Sul, Santa Catarina and Parana states are being called to vote in an informal plebiscite on Oct. 7 on whether they want independence. Organizers are also urging residents of the three states to sign a legislative proposal for each of their regional assemblies that would call for a formal, binding referendum. The non-profit group “The South is My Country” aims to mobilize a million voters in 900 out of the region’s 1,191 cities.

   

  Cooler, whiter and richer than the rest of Brazil, these southern states have long nursed separatist ambitions. Rio Grande do Sul even briefly claimed independence 180 years ago. Few Brazilians expect the current movement to succeed any time soon, not least because it is prohibited by the Constitution. But the country’s deepest recession on record and a massive corruption scandal have exacerbated the region’s longstanding resentment towards the federal government in Brasilia. With just one year to go until general elections, the rekindling of separatist sentiment in the south is another indicator of the unsettled state of Brazilian politics.

   

  Celso Deucher, the leader of The South is My Country, says the region contributes four times as much tax as it receives and suffers from a below-average level of political representation. He argues that such an unjust situation outweighs any legal concerns.

   

  “Whenever the subject of separatism comes up, they ban it because the federal Constitution does not allow it,” he said. “But the law is not immutable.”

   

  Rio Grande do Sul is currently immersed in a financial crisis and has lost much of its economic clout, according to Fernando Schuler, a professor of political science at Insper University in Sao Paulo.

   

  “There’s a huge cultural detachment between the Tropicalia Brazil and the South,” he said. “The reasons for separation are solid, justifiable, but I don’t think they are viable.” 

  There are two aspects of the above story I’d like to address.

  First, is that, like Catalonia, the regions thinking about secession from Brazil are relatively wealthy. This is not insignificant and certainly worth thinking about when it comes to wondering what sorts of responsibility these regions should have to the former union should a peaceful breakup go forward. It’s also worth remembering that the leaders of the American revolution were also extremely wealthy. An Independence movement driven by wealthy factions doesn’t necessarily preclude the creation of a superior governing structure.

   

  The second point relates to the fact that Brazil, like Spain, apparently provide no “exit option” for any province or region which decides it no longer wishes to be part of the nation-state. As such, this is by definition an oppressive and involuntary political relationship completely inappropriate to conscious human beings. As I explained in Monday’s post, all political associations should be voluntary and it’s absurd that people are simply born into nation-states that are assumed to be forever entities with no escape latch.

  Nation-states aren’t eternal, nor should they be. The problem with nation-states is they refuse to accept this fundamental reality. As such, political dealings with the state get transformed into oppressive centralized relationships, as opposed to voluntary decentralized arrangements. It’s no surprise then that oppressive relationships work out less positively for the average person than voluntary ones where the citizen and local communities are sovereign and empowered.

  In response to the Spanish King’s extraordinarily thuggish comments regarding Catalonia yesterday, I composed several tweets relevant to today’s discussion.

  If a union no longer works you always need to have a way to leave. Whether marriage or political.

  — Michael Krieger (@LibertyBlitz) October 3, 2017

  //platform.twitter.com/widgets.js

  Spain's constitution apparently does not allow a way out.
  This is bondage and is actually patently insane.

  — Michael Krieger (@LibertyBlitz) October 3, 2017

  //platform.twitter.com/widgets.js

  Humans have advanced in many ways in the past half century, but we haven't really advanced at all when it comes to political systems.

  — Michael Krieger (@LibertyBlitz) October 3, 2017

  //platform.twitter.com/widgets.js

  Any nation-state constitution that claims there’s no way to separate from the centralized government is an unethical and anti-human constitution. You can’t hide behind unjust laws to defend political bondage. The sooner we recognize this truth and increasingly move toward voluntary political relationships, the better.

  *  *  *

  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.

  

  

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• Caracas Or Catalan – Nightstick Democracy At Its Finest…

  Authored by Simon Black via SovereignMan.com,

  The last several days in Venezuela have been absolutely mind-blowing.

  Pretty much all the stories you’ve heard are true– countless people eating out of garbage cans, the appalling shortages of basic staples like food, medicine, and even soap… and the lines.

  Oh boy, the lines.

  The longest lines I saw, in fact, were not at grocery stores, but at banks.

  Hundreds of people were queuing up, many of them to pull money out of their accounts to exchange cash on the black market.

  Lines snaked through a bank’s cavernously large lobby, continued outside, wrapped around the entire building, and terminated at some point down the street.

  Making a simple withdrawal can be an all-day affair.

  Perhaps most surprising was how much Venezuela deteriorated since the last time I came here. And I’m concerned that it will continue to get worse… perhaps even much worse… until it gets better.

  As I mentioned last week, long-term this place is a veritable gold mine. The natural resources, cheap hydropower production, port facilities, low-cost workforce, abundant factories, etc.

  Venezuela is a manufacturer’s dream.

  But none of those opportunities can come to pass until this government collapses and there’s a complete reset.

  Undoubtedly the Venezuelan government will eventually run out of money, probably within the next two years. It’s nearly a mathematical certainty.

  And when they’ll no longer be able to pay the scumbag police and military who shoot peaceful protesters in the face, it’ll be game over.

  But until then they’re doing everything they can to strengthen their grip.

  A few months ago the government held a sham election here, where citizens exercised their ‘democratic’ right to choose among a bunch of puppet candidates hand-selected by the government.

  You can still see the billboards up across Caracas telling people to go vote between the choices given to them by the government. Freedom!

  You’d think that such oppressive tactics to keep a population under control would only exist in brutal dictatorships like Venezuela or North Korea.

  But then we witnessed the events in Spain over the weekend where millions of people in the Catalan region went out to vote on independence for their region.

  Caracas? … or Catalonia…

  

  The Spanish government loves democracy so much that they sent tens of thousands of police around the region to confiscate ballots, shut down polling stations, and beat-up peaceful citizens.

  This is ‘Nightstick Democracy’ at its finest.

  And in a most Orwellian statement, Spanish Prime Minister Mariano Rajoy told reporters later on Sunday that “there was no referendum in Catalonia today. . .”

  It was like some Jedi mind trick trying to hide the fact that more than 2 million Catalans voted for independence.

  I’m reminded of that old quote, often attributed to Soviet dictator Josef Stalin, that basically says “It’s not the people who vote that counts, it’s the people who count the votes.”

  (According to the memoirs of Stalin’s personal secretary, the actual quote was “I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this– who will count the votes, and how.”)

  This is pretty pathetic: we are ‘free’, as long as we only vote when they give us permission and choose among the options that they provide us.

  A few months ago when writing about Venezuela, I concluded that blockchain technology could fix this.

  Think about it– in 2017, it’s pretty ridiculous that people have to go down to a polling station to stuff a paper ballot into a box, all of which will be counted by hand.

  Blockchain technology would ensure that everyone registered has exactly one vote, and that every vote is counted once.

  No more lost ballots. No more tampering. No more miscounts and recounts. No more voter fraud.

  Plus, blockchain voting can be cryptologically hashed to ensure secrecy, as well as provide an easy way for ANY candidate to be nominated.

  And compared to the cost of legions of human beings required to supervise and count votes, in addition to the logistical cost of printing and moving all that paper, a Blockchain vote is MUCH cheaper.

  A blockchain vote would be a clear, independent, indisputable expression to the world that millions of Venezuelans reject their government… and that millions of Catalans desire independence from Spain.

  This isn’t some far-fetched idea. These tools already exist, as do the means to implement them, including identity validation to ensure that every registrant is eligible to vote.

  When the game is rigged, there are really only two choices available: stop playing. Or change the game.

  And this is absolutely game-changing technology.

  Do you have a Plan B?

  

  

• Texas Lawyer Says Neighbors Need To Stop Complaining About His New Tank

  Wealthy homeowners in one tiny Fort Worth suburb say their neighbor’s decision to park a World War II-era tank in front of his multimillion-dollar home is making them nervous.

  At least that’s what attorney Tony Buzbee, a history buff who purchased the WWII tank for $600,000 earlier this year, learned when his neighborhood homeowners’ association sent him a letter saying the tank “impedes traffic” and causes a “safety issue” and “serious concerns for neighbors."

  

  Buzbee says he’s temporarily storing the tank at his River Oaks, Texas home before moving it out to his ranch in East Texas later this year. But even though he’s made it clear that the tank’s presence is temporary, his neighbors are pressing him to remove the tank as soon as possible, according to Houston’s KHOU television station.

  Unfazed by his whiny neighbors, Buzbee is pushing back against what he described as NIMBYism run amok, telling local media outlets that his neighbors need to “lighten up” and that the tank isn’t going anywhere unless he decides to move it. Buzbee said the tank “took a year to get here, but now it’s on River Oaks Boulevard,” according to Fox. “This particular tank landed at Normandy. It liberated Paris, and ultimately went all the way to Berlin. There’s a lot of history here.”

  "It's not violating any ordinance, but for some people it makes the homeowners association uncomfortable," said Buzbee.

   

  They sent Buzbee a letter saying the tank "impedes traffic", causes a "safety issue" and is causing "serious concerns for neighbors".

   

  "If you're offended just lighten up, my goodness it isn't hurting anyone," said Buzbee.

   

  Buzbee says he's not losing too much sleep over that HOA letter. For now though, he's keeping his new tank right where it is.

   

  "The problem is there is no action they can take," said Buzbee. "They can ticket it or they can try to tow it, but the truth is unless I decide to move it, it's not going anywhere."

   

  Buzbee says the tank will eventually end up on his ranch in east Texas.

  The irony is, with the tank easily visible to any would-be criminals, Buzbee's block is probably the safest in the town.
   

  

  

• Mass Shootings: The Military-Entertainment Complex's Culture Of Violence Turns Deadly

  Authored by John Whitehead via The Rutherford Institute,

  This latest mass shooting in Las Vegas that left more than 50 people dead and more than 500 injured is as obscure as they come: a 64-year-old retiree with no apparent criminal history, no military training, and no obvious axe to grind opens fire on a country music concert crowd from a hotel room 32 floors up using a semi-automatic gun that may have been rigged to fire up to 700 rounds a minute, then kills himself.

  We’re left with more questions than answers, none of them a flattering reflection of the nation’s values, political priorities, or the manner in which the military-industrial complex continues to dominate, dictate and shape almost every aspect of our lives.

  For starters, why do these mass shootings keep happening? Mass shootings have taken place at churches, in nightclubs, on college campuses, on military bases, in elementary schools, in government offices, and at concerts. This shooting is the deadliest to date.

   

  What is it about America that makes violence our nation’s calling card?

   

  Is it because America is a gun culture?

   

  Is it because guns are so readily available? After all, the U.S. is home to more firearms than adults. Curiously enough, the majority of gun-related deaths in the U.S. are suicides, not homicides.

   

  Is it because entertainment violence is the hottest selling ticket at the box office?

   

  Is it because the government continues to whet the nation’s appetite for violence and war through paid propaganda programs (seeded throughout sports entertainment, Hollywood blockbusters and video games) – what professor Roger Stahl refers to as “militainment” – that glorify the military and serve as recruiting tools for America’s expanding military empire?

   

  Is it because the United States is the number one consumer, exporter and perpetrator of violence and violent weapons in the world? America spends more money on war than other countries. America polices the globe, with 800 military bases and troops stationed in 160 countries. And the war hawks have turned the American homeland into a quasi-battlefield with military gear, weapons and tactics. In turn, domestic police forces have become roving extensions of the military – a standing army.

   

  Or is the Second Amendment to blame, as many continue to suggest? Would there be fewer mass shootings if tighter gun control laws were enacted?

  Then again, could it be, as some have speculated, that these shootings are all part of an elaborate plan to incite fear and chaos, heighten national tensions and shift us that much closer to a complete lockdown? After all, the military and our militarized police forces have been predicting and preparing for exactly this kind of scenario for years now.

  Perhaps there’s no single one factor to blame for this gun violence. However, there is a common denominator, and that is a war-drenched, violence-imbued, profit-driven military industrial complex that has invaded almost every aspect of our lives.

  Ask yourself: Who are these shooters modelling themselves after? Where are they finding the inspiration for their weaponry and tactics? Whose stance and techniques are they mirroring?

  In almost every instance, you can connect the dots back to the military.

  We are a military culture.

  We have been a nation at war for most of our existence.

  We are a nation that makes a living from killing through defense contracts, weapons manufacturing and endless wars.

  In order to sustain the nation’s appetite for war over the long haul in spite of the costs of war in lives lost and dollars spent—and little else to show for it—the military has had to work overtime to churn out pro-war, pro-military propaganda. It’s exactly what President Eisenhower warned against (“the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex”) in his 1961 farewell address.

  We didn’t listen then and we’re still not listening now.

  All the while, the government’s war propaganda machine has grown more sophisticated and entrenched in American culture.

  All of the military equipment featured in blockbuster movies such as X-Men and Transformers is provided—at taxpayer expense—in exchange for carefully placed promotional spots aimed at indoctrinating the American populace into believing that patriotism means throwing their support behind the military wholeheartedly and unquestioningly.

  Even reality TV shows have gotten in on the gig.

  It’s estimated that U.S. military intelligence agencies (including the NSA) have influenced over 1,800 movies and TV shows.

  And then there are the growing number of video games, a number of which are engineered by or created for the military, which have accustomed players to interactive war play through military simulations and first-person shooter scenarios.

  This is how you acclimate a population to war.

  This is how you cultivate loyalty to a war machine.

  Not satisfied with peddling its war propaganda through Hollywood, reality TV shows and embedded journalists whose reports came across as glorified promotional ads for the military, the Pentagon turned to sports to further advance its agenda, “tying the symbols of sports with the symbols of war.”

  The military has been firmly entrenched in the nation’s sports spectacles ever since.

  Remember, just before this Vegas shooting gave the media, the politicians and the easily distracted public something new to obsess over, the headlines were dominated by President Trump’s feud with the NFL over players kneeling during the national anthem.

  That, too, was yet another example of how much the military entertainment complex – which paid $53 million of taxpayer money between 2012 and 2015 to pro sports teams for military tributes—has infiltrated American culture.

  Are you starting to get the picture now?

  When you talk about the Las Vegas mass shooting, you’re not dealing with a single shooter scenario. Rather, you’re dealing with a sophisticated, far-reaching war machine that has woven itself into the very fabric of this nation.

  You want to stop the gun violence?

  Stop the worship of violence that permeates our culture.

  Stop glorifying the military industrial complex with flyovers and salutes during sports spectacles.

  Stop acting as if there is anything patriotic about military exercises and occupations that bomb hospitals and schools.

  Stop treating guns and war as entertainment fodder in movies, music, video games, toys, amusement parks, reality TV and more.

  Stop distributing weapons of war to the local police and turning them into extensions of the military—weapons that have no business being anywhere but on a battlefield.

  Most of all, as I point out in my book Battlefield America: The War on the American People, stop falling for the military industrial complex’s psychological war games.

  

  

• The Largest Hack Ever? Yahoo Admits 2013 Data Breach Impacted All 3 Billion Accounts

  Is it too late for Verizon to get some more of its money back?

  After the entity responsible for selling Yahoo agreed to cut $350 million off the company’s sales price earlier this year following revelations that hackers had stolen sensitive  account information of as many as 1.5 billion user accounts during two separate data breaches, the Wall Street Journal is now reporting that the scale of one of those intrusions was much larger than initially believed.

  A 2013 data breach that was initially believed to have impacted 1 billion, actually impacted all of Yahoo's 3 billion user accounts, Verizon announced on Tuesday. Verizon’s acquisition of Yahoo formally closed in June after contentious negotiations that were complicated by the discovery of the hacks. The smaller of the two incidents, which took place in 2014, was first disclosed to the public last September. It reportedly involved 500 million user accounts. Three months later, in December, the company publicized the 2013 hack.

  

  The stolen data included names, email addresses, dates of birth, telephone numbers and encrypted passwords, Yahoo has said. In October, before the second breach was even disclosed, Verizon signaled that it would likely consider the data breach to be a “material event”, allowing it to change the terms of its deal to buy Yahoo, which it did in February.

  As WSJ pointed out, the disclosure shows that executives are still coming to grips with Yahoo's myriad security problems.

  Even before the number of affected user accounts was revised higher to 3 billion, the breach was still the largest on record by number affected. However, most experts consider the Equifax breach, which involved sensitive financial and personal information like credit card, social security and drivers’ license numbers, more damaging than the Yahoo breach.

  A spokesman for Oath, the new name of Verizon’s Yahoo unit, said the company determined last week that the break-in was much worse than thought, after it received new information from outside the company. He declined to elaborate on the source of that information. Compromised customer information included usernames, passwords, and in some cases telephone numbers and dates of birth, the spokesman said.

  Fortunately for Yahoo executives, as part of the revised deal, Verizon agreed to forfeit the right to sue Yahoo for allegedly covering up the hacks. Meanwhile, the entity selling Yahoo has retained liability for an SEC investigation that was launched in January, as well as any shareholder lawsuits related to the deal itself.
   

  

  

• Chris Hedges On The End Of Empire: "The Death Spiral Appears Unstoppable"

  Authored by Chris Hedges via TruthDig.com,

  The American empire is coming to an end. The U.S. economy is being drained by wars in the Middle East and vast military expansion around the globe. It is burdened by growing deficits, along with the devastating effects of deindustrialization and global trade agreements. Our democracy has been captured and destroyed by corporations that steadily demand more tax cuts, more deregulation and impunity from prosecution for massive acts of financial fraud, all the while looting trillions from the U.S. treasury in the form of bailouts. The nation has lost the power and respect needed to induce allies in Europe, Latin America, Asia and Africa to do its bidding. Add to this the mounting destruction caused by climate change and you have a recipe for an emerging dystopia. Overseeing this descent at the highest levels of the federal and state governments is a motley collection of imbeciles, con artists, thieves, opportunists and warmongering generals. And to be clear, I am speaking about Democrats, too.

  

  Source: Mr.Fish

  The empire will limp along, steadily losing influence until the dollar is dropped as the world’s reserve currency, plunging the United States into a crippling depression and instantly forcing a massive contraction of its military machine.

  Short of a sudden and widespread popular revolt, which does not seem likely, the death spiral appears unstoppable, meaning the United States as we know it will no longer exist within a decade or, at most, two. The global vacuum we leave behind will be filled by China, already establishing itself as an economic and military juggernaut, or perhaps there will be a multipolar world carved up among Russia, China, India, Brazil, Turkey, South Africa and a few other states. Or maybe the void will be filled, as the historian Alfred W. McCoy writes in his book “In the Shadows of the American Century: The Rise and Decline of US Global Power,” by “a coalition of transnational corporations, multilateral military forces like NATO, and an international financial leadership self-selected at Davos and Bilderberg” that will “forge a supranational nexus to supersede any nation or empire.”

  Under every measurement, from financial growth and infrastructure investment to advanced technology, including supercomputers, space weaponry and cyberwarfare, we are being rapidly overtaken by the Chinese. “In April 2015 the U.S. Department of Agriculture suggested that the American economy would grow by nearly 50 percent over the next 15 years, while China’s would triple and come close to surpassing America’s in 2030,” McCoy noted. China became the world’s second largest economy in 2010, the same year it became the world’s leading manufacturing nation, pushing aside a United States that had dominated the world’s manufacturing for a century. The Department of Defense issued a sober report titled “At Our Own Peril: DoD Risk Assessment in a Post-Primacy World.” It found that the U.S. military “no longer enjoys an unassailable position versus state competitors,” and “it no longer can … automatically generate consistent and sustained local military superiority at range.” McCoy predicts the collapse will come by 2030.

  Empires in decay embrace an almost willful suicide. Blinded by their hubris and unable to face the reality of their diminishing power, they retreat into a fantasy world where hard and unpleasant facts no longer intrude. They replace diplomacy, multilateralism and politics with unilateral threats and the blunt instrument of war.

  This collective self-delusion saw the United States make the greatest strategic blunder in its history, one that sounded the death knell of the empire – the invasion of Afghanistan and Iraq. The architects of the war in the George W. Bush White House, and the array of useful idiots in the press and academia who were cheerleaders for it, knew very little about the countries being invaded, were stunningly naive about the effects of industrial warfare and were blindsided by the ferocious blowback. They stated, and probably believed, that Saddam Hussein had weapons of mass destruction, although they had no valid evidence to support this claim. They insisted that democracy would be implanted in Baghdad and spread across the Middle East. They assured the public that U.S. troops would be greeted by grateful Iraqis and Afghans as liberators. They promised that oil revenues would cover the cost of reconstruction. They insisted that the bold and quick military strike—“shock and awe”—would restore American hegemony in the region and dominance in the world. It did the opposite. As Zbigniew Brzezinski noted, this “unilateral war of choice against Iraq precipitated a widespread delegitimation of U.S. foreign policy.”

  Historians of empire call these military fiascos, a feature of all late empires, examples of “micro-militarism.” The Athenians engaged in micro-militarism when during the Peloponnesian War (431-404 B.C.) they invaded Sicily, suffering the loss of 200 ships and thousands of soldiers and triggering revolts throughout the empire. Britain did so in 1956 when it attacked Egypt in a dispute over the nationalization of the Suez Canal and then quickly had to withdraw in humiliation, empowering a string of Arab nationalist leaders such as Egypt’s Gamal Abdel Nasser and dooming British rule over the nation’s few remaining colonies. Neither of these empires recovered.

  “While rising empires are often judicious, even rational in their application of armed force for conquest and control of overseas dominions, fading empires are inclined to ill-considered displays of power, dreaming of bold military masterstrokes that would somehow recoup lost prestige and power,” McCoy writes.

   

  “Often irrational even from an imperial point of view, these micromilitary operations can yield hemorrhaging expenditures or humiliating defeats that only accelerate the process already under way.”

  Empires need more than force to dominate other nations. They need a mystique. This mystique—a mask for imperial plunder, repression and exploitation—seduces some native elites, who become willing to do the bidding of the imperial power or at least remain passive. And it provides a patina of civility and even nobility to justify to those at home the costs in blood and money needed to maintain empire. The parliamentary system of government that Britain replicated in appearance in the colonies, and the introduction of British sports such as polo, cricket and horse racing, along with elaborately uniformed viceroys and the pageantry of royalty, were buttressed by what the colonialists said was the invincibility of their navy and army. England was able to hold its empire together from 1815 to 1914 before being forced into a steady retreat. America’s high-blown rhetoric about democracy, liberty and equality, along with basketball, baseball and Hollywood, as well as our own deification of the military, entranced and cowed much of the globe in the wake of World War II. Behind the scenes, of course, the CIA used its bag of dirty tricks to orchestrate coups, fix elections and carry out assassinations, black propaganda campaigns, bribery, blackmail, intimidation and torture. But none of this works anymore.

  The loss of the mystique is crippling. It makes it hard to find pliant surrogates to administer the empire, as we have seen in Iraq and Afghanistan. The photographs of physical abuse and sexual humiliation imposed on Arab prisoners at Abu Ghraib inflamed the Muslim world and fed al-Qaida and later Islamic State with new recruits. The assassination of Osama bin Laden and a host of other jihadist leaders, including the U.S. citizen Anwar al-Awlaki, openly mocked the concept of the rule of law. The hundreds of thousands of dead and millions of refugees fleeing our debacles in the Middle East, along with the near-constant threat from militarized aerial drones, exposed us as state terrorists. We have exercised in the Middle East the U.S. military’s penchant for widespread atrocities, indiscriminate violence, lies and blundering miscalculations, actions that led to our defeat in Vietnam.

  The brutality abroad is matched by a growing brutality at home. Militarized police gun down mostly unarmed, poor people of color and fill a system of penitentiaries and jails that hold a staggering 25 percent of the world’s prisoners although Americans represent only 5 percent of global population. Many of our cities are in ruins. Our public transportation system is a shambles. Our educational system is in steep decline and being privatized. Opioid addiction, suicide, mass shootings, depression and morbid obesity plague a population that has fallen into profound despair. The deep disillusionment and anger that led to Donald Trump’s election – a reaction to the corporate coup d’état and the poverty afflicting at least half of the country – have destroyed the myth of a functioning democracy. Presidential tweets and rhetoric celebrate hate, racism and bigotry and taunt the weak and the vulnerable. The president in an address before the United Nations threatened to obliterate another nation in an act of genocide. We are worldwide objects of ridicule and hatred. The foreboding for the future is expressed in the rash of dystopian films, motion pictures that no longer perpetuate American virtue and exceptionalism or the myth of human progress.

  “The demise of the United States as the preeminent global power could come far more quickly than anyone imagines,” McCoy writes. “Despite the aura of omnipotence empires often project, most are surprisingly fragile, lacking the inherent strength of even a modest nation-state. Indeed, a glance at their history should remind us that the greatest of them are susceptible to collapse from diverse causes, with fiscal pressures usually a prime factor. For the better part of two centuries, the security and prosperity of the homeland has been the main objective for most stable states, making foreign or imperial adventures an expendable option, usually allocated no more than 5 percent of the domestic budget. Without the financing that arises almost organically inside a sovereign nation, empires are famously predatory in their relentless hunt for plunder or profit—witness the Atlantic slave trade, Belgium’s rubber lust in the Congo, British India’s opium commerce, the Third Reich’s rape of Europe, or the Soviet exploitation of Eastern Europe.”

  When revenues shrink or collapse, McCoy points out, “empires become brittle.”

  “So delicate is their ecology of power that, when things start to go truly wrong, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, eleven years for the Ottomans, seventeen for Great Britain, and, in all likelihood, just twenty-seven years for the United States, counting from the crucial year 2003 [when the U.S. invaded Iraq],” he writes.

  Many of the estimated 69 empires that have existed throughout history lacked competent leadership in their decline, having ceded power to monstrosities such as the Roman emperors Caligula and Nero. In the United States, the reins of authority may be in the grasp of the first in a line of depraved demagogues.

  “For the majority of Americans, the 2020s will likely be remembered as a demoralizing decade of rising prices, stagnant wages, and fading international competitiveness,” McCoy writes. The loss of the dollar as the global reserve currency will see the U.S. unable to pay for its huge deficits by selling Treasury bonds, which will be drastically devalued at that point. There will be a massive rise in the cost of imports. Unemployment will explode. Domestic clashes over what McCoy calls “insubstantial issues” will fuel a dangerous hypernationalism that could morph into an American fascism.

  A discredited elite, suspicious and even paranoid in an age of decline, will see enemies everywhere. The array of instruments created for global dominance—wholesale surveillance, the evisceration of civil liberties, sophisticated torture techniques, militarized police, the massive prison system, the thousands of militarized drones and satellites—will be employed in the homeland. The empire will collapse and the nation will consume itself within our lifetimes if we do not wrest power from those who rule the corporate state.

  

  

• "Credit Negative For U.S. Government": Moody's Threatens Downgrade If Trump Tax Plan Is Passed

  As various institutions continue to publish very detailed estimates of how Trump’s tax plan will impact the federal budget, which is somewhat amazing since income brackets haven’t even been assigned yet, Moody’s published a note today threatening to finally strip the U.S. of its AAA credit rating if the tax plan is ultimately passed as currently contemplated.

  President Donald Trump’s tax proposal would probably weigh on the U.S. government’s credit outlook, on concerns that it would cause the federal deficit to swell, according to Moody’s Investors Service.

   

  “The Trump tax framework is likely credit negative for the U.S. government,” Moody’s said in a statement. “Tax cuts would not be offset by equivalent cuts to spending, which would put upward pressure on the federal budget deficit and debt,” while “the tax reform’s effect on economic growth and, in turn, federal government revenue would also affect U.S. credit strength.”

   

  By contrast, banks, insurers and asset managers would benefit from a lower tax rate, Moody’s said.

  

  As we pointed out last Friday, the Tax Policy Center found that Trump’s plan would cost $2.4 trillion over the first decade, assuming no spending cuts, and result in federal deficits soaring by several hundred billion dollars each year. 

  • The proposal would reduce federal revenues by $2.4 trillion over the first ten years and $3.2 in the second decade. This means that absent a matched deduction in spending, US deficit and debt will increase by a similar amount. This is a problem as a Senate GOP budget resolution unveiled on Friday only allows for adding $1.5 trillion to the debt, implying a revenue shortfall of just under $1 trillion.
    • The business income tax provisions—including those affecting corporations and pass-through businesses—would reduce revenues by $2.6 trillion over the first ten years. Elimination of estate and gift taxes would lose another $240 billion. The individual income tax provisions (excluding those related to business income) would increase revenues by about $470 billion over the same period.

  

  So, just to summarize Moody’s position on this issue, a ~$1.5 trillion budget deficit in 2009 was no problem at all but a ~$1 trillion budget deficit today would suddenly merit a downgrade.

  

  Of course, the Trump administration has argued that increased GDP growth will offset lower tax receipts and actually result in lower deficits rather than higher. 

  To that end, Deutsche Bank’s economists took a shot a estimating what kind of GDP boost could be expected from the Trump tax plan and found that a 0.4% – 0.5% boost might be reasonable…

  Given the size and scope of the tax plan presented, it is worthwhile to investigate the potential macroeconomic implications of the bill. We use the Fed’s model of the US economy (FRB/US) to do just that.

   

  The full tax plan provides a meaningful lift to growth in the coming years (Figure 7). Year-over-year growth in Q4 2018 and Q4 2019 is about 0.4pp and 0.5pp higher than the no ?scal stimulus baseline.  Higher growth leads to a tighter labor market. The unemployment rate falls to 4% by end-2018 and 3.85% by end-2019 under the full plan, 0.2pp and 0.35pp below the baseline with no tax cuts (Figure 8). The more modest, and in our view more realistic, tax plan intuitively produces more modest results for growth and the unemployment rate. Growth is higher by about 0.2pp and 0.3pp, and the unemployment rate is 0.1pp and 0.2pp lower, by end-2018 and end-2019, respectively.

  

  …that said, they also found that any increase in growth expectations would just be offset by quicker interest rate hikes from the Fed.

  Despite assuming a gradual response by the Fed, the implied fed funds rate is significantly higher in response to the tax cuts, as the Fed at least partially o?sets the further decline in the unemployment rate below NAIRU (Figure 9). By end-2018, the fed funds rate would be 13bp higher in response to the full tax plan and 5bp higher under the more modest tax plan scenario. The gap between the no-stimulus scenario and tax cut scenarios is considerably wider further out. By end-2019, the fed funds rate would be 40bp higher in response to the full tax plan and 20bp higher under the more modest tax plan scenario. These differences rise to 60bp and 30bp by end-2020 – more than two hikes more under the full tax cut scenario and more than one additional hike under the modest stimulus compared with the baseline.

  

  Of course, the most comical part of all of this is that, after years of exponential debt growth, Moody’s has finally decided that Trump’s tax cuts will be the final straw that forces them to strip the U.S. of its pristine debt rating…

  

  

  

• Las Vegas Police Release Body Cam Footage From Night Of Shooting

  The Las Vegas Police have released the first body camera footage from Sunday night’s mass shooting that left 59 dead and over 500 wounded. While not much can be seen, the video depicts the chaos and the gunfire in the background, as officers outside of the Mandalay Bay Resort and Casino try to figure out where the gunfire is coming from as bullets rain down.

  According to police officials, the video is a compilation of footage from several body cameras.

  Separately, the latest press briefing by the LVPD delivered on Tuesday evening, can be seen here.

  

  

• Is It Time To Question The Modern Nation-State Model Of Governance?

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  I typically try to avoid news on Sundays, but I spent much of this weekend in complete awe of the extraordinary strength and fortitude of the Catalan people in the face of totalitarian violence from the Spanish state against citizens attempting to vote in a peaceful referendum.

  Before you start telling me about how the vote is illegal and goes against the Spanish constitution, let me be perfectly clear. That line of thinking is entirely irrelevant to the point of this post.

  

  Specifically, I believe humanity is reaching a point in its evolution, both from a consciousness perspective as well as a technological one, where we’ll begin to increasingly question many of our silly contemporary assumptions about how governance should work.  The primary one is this absurd notion that a nation-state should be seen as a permanent structure of political governance which only becomes dissolvable in the event of violent revolution or war.

  When it comes to great leaps in human progress, a crucial component to lasting change is convincing enough people that a particular way of organizing human affairs is outdated and harmful. I think if we take a step back and look at how people are governed across the world, there are very few places where “the people” feel they live in societies in which they exert any sort of genuine political self-determination. When we look at the last few decades of political governance in the Western world, a march toward more and more centralized political power has been a facet of life in both the U.S and Europe. I believe this trend is being pushed to its breaking point, and groups of humans with common culture, language and interests will increasingly question whether massive nation-states (or wannabe super states like the EU) make sense. In the past five years alone, Scotland held a referendum on UK membership, Great Britain voted to leave the EU, and most recently, Catalonia took a major step toward independence with yesterday’s banned referendum.

  Those who favor centralized power see these events and movements toward decentralized political power as inconvenient, intransigent outbursts from the ungrateful, unwashed masses. Movements which would best put down one way or the other in order to carry on with the business of further centralizing power. They view such burgeoning drives for political self-determination as temporary storms which the wise elders of centralization must merely ride out. Unfortunately for them, this is not the case.

  If anything, we can expect many more movements for decentralized power in the decades ahead for two main reasons.

  First, the current system is simply not working for most people.

   

  Second, as we become more connected and conscious, we will invariably conclude that all human beings deserve to have a real choice in the type of governments they live under.

  The prevailing assumption that we’re simply born into a particular nation-state and must accept this situation for the rest of our days irrespective of how brutal, oppressive and dysfunctional it may be, is an irrational, inhumane and outdated perspective.

  As things stand today, humans essentially have two choices when it comes to political life. We either accept the nation-state we’re born into and play the game to the best of our advantage, or we try to become citizens of another country with values that more align with our own. The only way to really shatter existing political power structures and form new ones is through violent revolution or war, which is an insane way of reorganizing matters of human governance. One of Spanish Prime Minister Mariano Rajoy’s key arguments in casting the Catalan referendum as illegal is that Spain is an indivisible nation under the 1978 constitution. Let’s think about what this means in practice.

  Anyone who’s spent any time in Spain understands how culturally and linguistically distinct many of the regions are when compared to Madrid. These are differences that go back centuries and can’t be brushed off by a constitution created a few decades ago. The idea that these various regions must be part of a centralized Spain even if the people within the regions want political autonomy is ethically preposterous, as well as authoritarian and evil in every sense of the word. If done properly, human governance should always be a voluntary arrangement. If an overwhelming majority of culturally distinct people within any nation-state decide the super state is no longer working for them, they should have every right to leave. Anything else is bondage.

  As the U.S. Declaration of Independence so eloquently states:

  We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

   

  That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. 

  The key aspect of the above declaration is that governments instituted among humans derive their powers from the consent of the governed. If we take the U.S. as an example, how do we know that the people of Texas and California believe centralized power in Washington D.C. as it stands today is an appropriate form of governance unless there’s a periodic vote confirming it? Did any of the 50 states ever actually consent to an out of control centralized deep state-run oligarchy running things as they please? Likewise, how do we know that the people of Catalonia consent to being part of Spain unless you ask them? The truth is you don’t, and this presents a major dilemma we must confront going forward.

  If we look at the world’s nation-states, they generally consist of large, centralized political entities comprised of a union of culturally distinct provinces, states or regions. In some cases these regions voluntarily came together over time, while in other cases they were forced together during a war or revolution. It’s crucial that we not view such nation-states as Rajoy views them, as eternal structures that can never be altered, but rather as voluntary political associations. Again, the only way to know such associations are truly voluntary is to periodically subject them to referendums. It seems to me that this should be an integral part of any nation-state. In contrast, we have a name for power relationships that aren’t voluntary. Slavery.

  Indeed, the fact that we put up with this at all is downright perplexing. For example, although we accept children should be under the care of parents from birth up to a certain point, at a certain age we pretty much all agree that an adult should be free to make autonomous decisions. While a human becomes free at this micro level upon reaching a certain age, at the macro level most human beings never get to choose what sort of government they live under. Most of us are not at all governed by consent, and this feels very wrong to me.

  Beyond the ethical implications of imposed political governance, we should also discuss the way our current system ends up functioning in practice. If power hungry authoritarians understand that the bond which unites the various regions of a nation-state can never be questioned, power dynamics become very lopsided and increasingly centralized over time. In contrast, lets imagine that every 25 years, every defined region of every nation-state gets to vote on whether they want to stay part of the current governing structure or create a new one. Power might be much more distributed in the interim period under such a system, since there’s always a threat that one or many of the various states or provinces might choose to sever ties in a few short years. Such a system would be much more akin to a free market for political governance versus what we have today, which appears more in-line with a “divine right of kings,” feudal type system. I think we can do much better than this.

  That being said, I don’t want anyone to assume that the hypothetical system I described above is what I think should happen. I’m just providing an extremely simplistic example to get people thinking. The key point is human beings should not be forced to live their entire lives under systems of involuntary political governance which they never agreed to in the first place.

  We must figure out a way for human beings to peacefully and periodically alter the forms of government they live under in a major way should they choose to. Right now, the main options for achieving this sort of change tends to involve violence, which often leads to situations that are worse than they were before.

  We need to agree that political associations should always be voluntary, and that most such associations worldwide right now are not. Rather, they are most often maintained via state violence, as we just witnessed in Spain. Our goal should be to live in a world defined by peaceful voluntary political associations, but getting from here to there won’t be easy or quick.

  I hope I live long enough to see such a world.

  *  *  *

  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.

  

  

• Trump Gets Final List Of Fed Candidates, Yellen Gets The Cold Shoulder

  Picking up on a story reported previously by both the WSJ and Politico – oh and Bloomberg itself – Bloomberg writes that Trump’s advisers have delivered the final list of candidates they recommending as candidates to lead the Fed and have ended the search. While only a “small handful” of the president’s closest advisers have seen the final list of names, it did not prevent them from leaking it, and the result is what we already know from previous leaks namely that in addition to Yellen, Trump is considering Gary Cohn, Kevin Warsh and current Fed governor Jerome Powell, who as Politico reported overnight, is said to have the blessing of Steven Mnuchin.

  Also confirming what the WSJ reported previously, Trump’s chief economic advisor Gary Cohn – himself under consideration – has recused himself from the selection process.

  In fact, the only incremental news in the latest report seems to be that while Janet Yellen remains under consideration, “few, if any, of Trump’s inner circle are advocating for her re-appointment.”

  

  Furthermore, we can cross out economist Glenn Hubbard and U.S. Bancorp Chairman Richard Davis, both of whom have been floated as possible candidates, although Trump has no intention of interviewing them.  A potential wildcard is Stanford economist John Taylor, a favorite of fiscal conservatives, who is also said to be under consideration.

  It has also been previously reported that Trump has spoken to Yellen, Cohn, Warsh and Powell about the Fed post, although there is no frontrunner at the moment.

  According to Bloomberg, “the latest developments show that Trump is closer to making a final selection than previously known.” Last Friday, Trump said that he is “two or three weeks away from announcing his nominee” for the post overseeing the nation’s central bank.

  Meanwhile, speaking at the Vanity Fair New Establishment Summit on Tuesday in Los Angeles, Jeffrey Gundlach – who accurately predicted Trump’s presidency – predicted that Neel Kashkari would be picked as next Fed chair. “I actually have a very non-consensus point of view. I think it’s going to be Neel Kashkari… He happens to be the most easy money guy that’s in the Federal Reserve system today and that’s why he may win.”

  The Bond King said that Trump needs someone who will keep rates low in order to keep his populist reputation and help his base voters and that’s why he’ll pick Kashkari. “A stronger dollar is not good for achieving that agenda,” he said.

  Gundlach also is confident that Yellen would not get reappointed: “I
  think there is no chance that she wants to be chairwoman, nor do I think
  the president wants her to be,” said the manager of $109 billion.

  Judging by the latest PredictIt odds, if Gundlach is right, and if he is willing to bet some money on it, he could make a killing, as Kashkari does not even have a contract. As to the current ranking, Warsh remains in top spot with 38% odds, although following today’s Politico news, Powell surged to second place with 31% odds, and now following the Bloomberg report, John Taylor finds himself in third spot with 20% odds, above both Gary Cohn in 4th and Janet Yellen who has tumbled to 5th with just 13% odds of being reappointed.

  

  

  

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• Google Reports Record Level Of Government Data Requests

  Google has just released its biannual transparency report disclosing the number of requests governments send for users' private data.

  As Statista's Niall McCarthy details, in the first six months of this year, the search engine giant received 48,941 requests for data while 83,345 accounts were specified in those requests.

  

  You will find more statistics at Statista

  That has broken the record for the most Google user data requests in a six month period.

  The company complied with 65 percent of the requests, meaning over 54,000 accounts were impacted.

  

  

• Who's Really Trying To Overthrow Mohammed Bin Salman?

  Authored by Andrew Karybko via Oriental Review,

  Saudi Arabia arrested between 16-30 people in a broad crackdown across the Kingdom.

  

  According to reports, this is different than the many other times that it happened because the latest incident includes a wide variety of seemingly disparate individuals such as clerics, a journalist, and even a prince, and comes amid a flurry of speculation that King Salman is considering abdicating in favor of the young Crown Prince Mohammed Bin Salman.

  

  Critics claim that this is being undertaken in order for Salman’s successor to preemptively consolidate power in staving off any unrest that might result from his possibly imminent ascent to the throne, while the government says that it was actually dismantling a foreign intelligence network linked to the Muslim Brotherhood and Houthis.

  Riyadh’s assertions are a thinly veiled euphemism to suggest that Qatar and Iran are behind this shadowy regime change plot, but it’s very unlikely that either of them is involved, and Riyadh may have just said they were in order to diplomatically deflect attention from the true culprit.

  Here’s why.

  Iran and Qatar are close with Russia and China, and the latter two Great Powers are actually enjoying a renaissance of relations with Saudi Arabia right now.

  While one might expect this to make Tehran and Doha jealous, the opposite is true – Moscow and Beijing’s developing high-level strategic partnerships with Riyadh are designed to bring balance to the Mideast by weaning the Kingdom away from Washington and slowly but surely integrating it into the emerging Multipolar World Order, which will never be perfect or without friction, but is still a step in the right direction. In order to appreciate what’s happening, one needs to be reminded of a few things that have happened this past year when it comes to Saudi Arabia’s relations with Russia and China.

  Concerning Moscow, Riyadh agreed to an historic OPEC output deal with Russia last year and renewed it a few months ago after it expired.

  The Saudis are also cooperating with the Russians in encouraging Syria’s so-called “opposition” to merge into a unified entity for facilitating peace talks with Damascus. Foreign Minister Lavrov was just in the Kingdom last week, and King Salman is expected to visit Moscow sometime next month.

  As for China, Beijing signed a total of over $110 billion of deals with Saudi Arabia in the past six months alone in an effort to assist the Crown Prince’s ambitious Vision 2030 program of economic modernization. It’s that initiative more so than anything else which holds the danger of inadvertently destabilizing the country’s internal affairs because of the opposition that it’s come under from some of Saudi Arabia’s many radical clerics who are against the social consequences of its reforms.

  Bearing all of this in mind, it’s worthwhile to revisit the question of who has an interest in destabilizing Saudi Arabia right at the moment that it’s turning away from the US and towards Russia and China, timing their subversive efforts to coincide with a prolonged leadership change and an economic transition.

  By all indicators, those aren’t the hallmarks of an Iranian or Qatari operation, but the red flag for an American one.

  

  

• Fu@K THe EU…

  

  //embedr.flickr.com/assets/client-code.js

• Paul Craig Roberts Warns Americans: "Oligarchic Rule Prevails Regardless Of Electoral Outcomes"

  Authored by Paul Craig Roberts,

  Do the Wall Street Journal’s editorial page editors read their own newspaper?

  The frontpage headline story for the Labor Day weekend was “Low Wage Growth Challenges Fed.” Despite an alleged 4.4% unemployment rate, which is full employment, there is no real growth in wages. The front page story pointed out correctly that an economy alleged to be expanding at full employment, but absent any wage growth or inflation, is “a puzzle that complicates Federal Reserve policy decisions.”

  On the editorial page itself, under “letters to the editor,” Professor Tony Lima of California State University points out what I have stressed for years: “The labor-force participation rate remains at historic lows. Much of the decrease is in the 18-34 age group, while participation rates have increased for those 55 and older.”

  

  Professor Lima points out that more evidence that the American worker is not in good shape comes from the rising number of Americans who can only find part-time work, which leaves them with truncated incomes and no fringe benefits, such as health care.

  Positioned right next to this factual letter is the lead editorial written by someone who read neither the front page story or the professor’s letter. The lead editorial declares: “The biggest labor story this Labor Day is the trouble that employers are having finding workers across the country.” The Journal’s editorial page editors believe the solution to the alleged labor shortage is Senator Ron Johnson’s (R.Wis.) bill to permit the states to give 500,000 work visas to foreigners.

  In my day as a Wall Street Journal editor and columnist, questions would have been asked that would have nixed the editorial. For example, how is there a labor shortage when there is no upward pressure on wages? In tight labor markets wages are bid up as employers compete for workers. For example, how is the labor market tight when the labor force participation rate is at historical lows. When jobs are available, the participation rate rises as people enter the work force to take the jobs.

  I have reported on a number of occasions that according to Federal Reserve studies, more Americans in the 24-34 age group live at home with parents than independently, and that it is those 55 and older who are taking the part time jobs. Why is this? The answer is that part time jobs do not pay enough to support an independent existence, and the Federal Reserve’s decade long zero interest rate policy forces retirees to enter the work force as their retirement savings produce no income. It is not only the manufacturing jobs of the middle class blue collar workers that have been given to foreigners in order to cut labor costs and thus maximize payouts to executives and shareholders, but also tradable professional skill jobs such as software engineering, design, accounting, and IT—jobs that Americans expected to get in order to pay off their student loans.

  The Wall Street Journal editorial asserts that the young are not in the work force because they are on drugs, or on disability, or because of their poor education. However, all over the country there are college graduates with good educations who cannot find jobs because the jobs have been offshored. To worsen the crisis, a Republican Senator from Wisconsin wants to bring in more foreigners on work permits to drive US wages down lower so that no American can survive on the wage, and the Wall Street Journal editorial page editors endorse this travesty!

  The foreigners on work visas are paid one-third less than the going US wage. They live together in groups in cramped quarters. They have no employee rights. They are exploited in order to raise executive bonuses and shareholder capital gains. I have exposed this scheme at length in my book, The Failure of Laissez Faire Capitalism (Clarity Press, 2013).

  When Trump said he was going to bring the jobs home, he resonated, but, of course, he will not be permitted to bring them home, any more than he has been permitted to normalize relations with Russia.

  In America Government is not in the hands of its people. Government is in the hands of a ruling oligarchy. Oligarchic rule prevails regardless of electoral outcomes. The American people are entering a world of slavery more severe than anything that previously existed. Without jobs, dependent on their masters for trickle-down benefits that are always subject to being cut, and without voice or representation, Americans, except for the One Percent, are becoming the most enslaved people in history.

  

  Americans carry on by accumulating debt and becoming debt slaves. Many can only make the minimum payment on their credit card and thus accumulate debt. The Federal Reserve’s policy has exploded the prices of financial assets. The result is that the bulk of the population lacks discretionary income, and those with financial assets are wealthy until values adjust to reality.

  As an economist I cannot identify in history any economy whose affairs have been so badly managed and prospects so severely damaged as the economy of the United States of America. In the short/intermediate run policies that damage the prospects for the American work force benefit what is called the One Percent as jobs offshoring reduces corporate costs and financialization transfers remaining discretionary income in interest and fees to the financial sector. But as consumer discretionary incomes disappear and debt burdens rise, aggregate demand falters, and there is nothing left to drive the economy.

  What we are witnessing in the United States is the first country to reverse the development process and to go backward by giving up industry, manufacturing, and tradable professional skill jobs. The labor force is becoming Third World with lowly paid domestic service jobs taking the place of high-productivity, high-value added jobs.

  The initial response was to put wives and mothers into the work force, but now even many two-earner families experience stagnant or falling material living standards.

  New university graduates are faced with substantial debts without jobs capable of producing sufficient income to pay off the debts.

  Now the US is on a course of travelling backward at a faster rate. Robots are to take over more and more jobs, displacing more people. Robots don’t buy houses, furniture, appliances, cars, clothes, food, entertainment, medical services, etc. Unless Robots pay payroll taxes, the financing for Social Security and Medicare will collapse. And it goes on down from there. Consumer spending simply dries up, so who purchases the goods and services supplied by robots?

  To find such important considerations absent in public debate suggests that the United States will continue on the country’s de-industrialization, de-manufacturing trajectory.

  

  

• "D'Oh!"

  Presented with no comment…

   

  

  Source: Townhall.com

  

  

• Former Puerto Rico AG Cut Off By CNN After Accusing San Juan Mayor Of Being A Political Hack

  Donald Trump’s feud with San Juan mayor Carmen Yulín Cruz got an unexpected reinforcement today, when Former Puerto Rico Attorney General Jose Fuentes, a Republican, on Sunday took aim at Cruz, accusing her of attacking President Trump and using hurricane relief efforts to lay the groundwork for a gubernatorial bid.

  Speaking on CNN’s “New Day”, Fuentes accused Cruz of making an about-face, saying she supported Trump just a few days ago, until her political adviser suggested the idea of running for governor.

  “The mayor of San Juan is a political hack,” Fuentes said. “She was singing the praises of the president until her political adviser, [Rep.] Luis Gutiérrez from Chicago, got there and brought her the t-shirts and said, ‘Hey you want to run for governor, if she wants to run…” at which point the CNN anchor cut him off, pointing to audio issues, and claiming he could no longer hear Fuentes, handing over the mic  to CNN’s Democratic Political Commentator Maria Cardona, who unleashed a scathing critique before somehow audio returned at which point Fuentes was once again given the platform, when he again repeated that any logistical problems were the result of political posturing by the San Juan mayor at which point both the CNN anchor and and Cardona doubled down their attack, and so on.

  Watch CNN’s anchor shut down Fuentes 2 mins 38 seconds into the clip below.

  Also on Sunday, FEMA administrator Brock Long defended the Trump administration’s response to the Puerto Rican humanitarian crisis, warning of a fragmented response if mayors do not take part in the relief effort.  “If mayors decided not to be apart of that [relief effort] then the response is fragmented,” Long told Chris Wallace on “Fox News Sunday” in response to criticism from the mayor of San Juan, Carmen Yulin Cruz.

  “What I don’t have patience for is the fact that what we’re trying to do and we have successfully done is we’ve established a joint field office in San Juan. And you should go there, you should go see that operation, where we’re having daily conversations with all of the mayors, we’re working with the government and his leadership to create unified objectives,” Long said. “We can choose to look at what the mayor spouts off or what other people spout off or we can also choose to see what’s actually being done,” he continued.

  For those who may have (blissfully) missed it, dominating the weekend newsflow (again), the Trump administration came under fire from critics who said it has failed to help Puerto Rico as it struggles with widespread power outages, collapsed infrastructure and ongoing shortages of water and supplies.

  On Saturday, Trump launched a series of tweets attacking Cruz, and accusing the mayor of exhibiting poor leadership in the midst of the recovery efforts and claiming Puerto Rican leaders want the federal government to do everything for them. His tweets came one day after Cruz issued an emotional plea for help, saying people are dying on the American territory and blaming stalled recovery efforts on the federal government’s inefficiency and red tape.

  “I will do what I never thought I was going to do. I am begging, begging anyone who can hear us to save us from dying. If anybody out there is listening to us, we are dying, and you are killing us with the inefficiency,” Cruz said during a Friday press conference, just days after praising Washington’s response.

  The president is scheduled to travel to the Hurricane devastated Puerto Rico on Tuesday.

  

  

• RIP, Monty Hall: The Time Everyone "Corrected" The World's Smartest Woman

  Monty Hall, the genial host and co-creator of “Let’s Make a Deal,” the game show on which contestants in outlandish costumes shriek and leap at the chance to see if they will win the big prize or the booby prize behind door No. 3, died at his home in Beverly Hills, Calif., on Saturday. He was 96.

  

  In memory of the great entertainer, we present:

  The Time Everyone “Corrected” the World’s Smartest Woman

  Authored by Zachart Crockett via Priceonomics.com,

  By all accounts, Marilyn vos Savant was a child prodigy.

  Born in St. Louis, Missouri in 1946, the young savant quickly developed an aptitude for math and science. At age 10, she was given two intelligence tests — the Stanford-Binet, and the Mega Test — both of which placed her mental capacity at that of a 23-year-old. She went on to be listed in the Guinness Book of World Records for having the “World’s Highest IQ,” and, as a result, gained international fame.

  

  Despite her status as the "world’s smartest woman,” vos Savant maintained that attempts to measure intelligence were “useless,” and she rejected IQ tests as unreliable. In the mid-1980s, with free rein to choose a career path, she packed her bags and moved to New York City to be a writer.

  Here, she caught a break: when Parade Magazine wrote a profile on her, readers responded with so many letters that the publication offered her a full-time job. Shortly thereafter, she established “Ask Marilyn,” a now-famous weekly column in which she answered (and continues to answer, to this day) a variety of academic questions and logic puzzles. It was in the body of one of these columns that vos Savant ignited one of the most heated statistical battles of the 21st century.

  When vos Savant politely responded to a reader’s inquiry on the Monty Hall Problem, a then-relatively-unknown probability puzzle, she never could’ve imagined what would unfold: though her answer was correct, she received over 10,000 letters, many from noted scholars and Ph.Ds, informing her that she was a hare-brained idiot.

  What ensued for vos Savant was a nightmarish journey, rife with name-calling, gender-based assumptions, and academic persecution.

  The Monty Hall Problem: A Brief History

  
  Imagine that you’re on a television game show and the host presents you with three closed doors. Behind one of them, sits a sparkling, brand-new Lincoln Continental; behind the other two, are smelly old goats. The host implores you to pick a door, and you select door #1. Then, the host, who is well-aware of what’s going on behind the scenes, opens door #3, revealing one of the goats.

  “Now,” he says, turning toward you, “do you want to keep door #1, or do you want to switch to door #2?”

  Statistically, which choice gets you the car: keeping your original door, or switching?

  If you, like most people, posit that your odds are 50-50, you’re wrong — unless, of course, you like goats as much as you like new cars, in which case you'll win 100% of the time.

  Loosely based on the famous television game show Let’s Make a Deal, the scenario presented above, better known as the “Monty Hall Problem,” is a rather famous probability question. Despite its deceptive simplicity, some of the world’s brightest minds — MIT professors, renowned mathematicians, and MacArthur “Genius” Fellows — have had trouble grasping its answer. For decades, it has sparked intense debates in classrooms and lecture halls.

  Historically, the Monty Hall Problem was predated by several very similar puzzles.

  In Joseph Bertrand’s box paradox (1889), three boxes are presented — one containing two gold coins, one containing two silver coins, and the final containing one of each. Assuming the participant draws one gold coin from a box, the problem then asks what the probability is that the other coin in that box is gold. Bertrand, who concluded that the probability was ?, was lauded for his ability to look beyond the obvious.

  A second iteration of this paradox, the Three Prisoners Problem (1959), presents a statistically identical scenario, with the same outcome. “[It’s] a wonderfully confusing little problem," its creator, Scientific American columnist Martin Gardner, later wrote, smugly. "In no other branch of mathematics is it so easy for experts to blunder as in probability theory."

  First presented in a letter to the editor of The American Statistician in 1975, the Monty Hall Problem was also counterintuitive. In this letter, Steve Selvin, a University of California, Berkeley professor, splayed out the situation in the intro of this article, and contended that switching doors yields a ? chance of winning the car, whereas keeping the original door results in winning only ? of the time. 

  Over the next decade or so, the Monty Hall Problem made several appearances, first in a Journal of Economics Perspectives puzzle by Barry Nalebuff, and subsequently in a 1989 issue of Bridge Today, by Phillip Martin. Neither man’s logic was refuted, and the problem generated relatively little attention.

  Then, after 15 years without incident, the Monty Hall Problem was resurrected by Marilyn vos Savant — and an absolute shit-storm ensued.

  Marilyn vos Savant’s Debacle

  

  In September 1990, Marilyn vos Savant devoted one of her columns to a reader’s question, which presented a variation of the Monty Hall Problem:

  “Suppose you’re on a game show, and you’re given the choice of three doors. Behind one door is a car, behind the others, goats. You pick a door, say #1, and the host, who knows what’s behind the doors, opens another door, say #3, which has a goat. He says to you, "Do you want to pick door #2?" Is it to your advantage to switch your choice of doors?”

  “Yes; you should switch,” she replied. “The first door has a 1/3 chance of winning, but the second door has a 2/3 chance.”

  Though her answer was correct, a vast swath of academics responded with outrage. In the proceeding months, vos Savant received more than 10,000 letters — including a pair from the Deputy Director of the Center for Defense Information, and a Research Mathematical Statistician from the National Institutes of Health — all of which contended that she was entirely incompetent:

  You blew it, and you blew it big! Since you seem to have difficulty grasping the basic principle at work here, I’ll explain. After the host reveals a goat, you now have a one-in-two chance of being correct. Whether you change your selection or not, the odds are the same. There is enough mathematical illiteracy in this country, and we don’t need the world’s highest IQ propagating more. Shame!

  Scott Smith, Ph.D.
  University of Florida

   

  May I suggest that you obtain and refer to a standard textbook on probability before you try to answer a question of this type again?

  Charles Reid, Ph.D.
  University of Florida

   

  I am sure you will receive many letters on this topic from high school and college students. Perhaps you should keep a few addresses for help with future columns.
  W. Robert Smith, Ph.D.
  Georgia State University

   

  You are utterly incorrect about the game show question, and I hope this controversy will call some public attention to the serious national crisis in mathematical education. If you can admit your error, you will have contributed constructively towards the solution of a deplorable situation. How many irate mathematicians are needed to get you to change your mind?
  E. Ray Bobo, Ph.D.
  Georgetown University

   

  You made a mistake, but look at the positive side. If all those Ph.D.’s were wrong, the country would be in some very serious trouble.
  Everett Harman, Ph.D.
  U.S. Army Research Institute

   

  You are the goat!
  Glenn Calkins
  Western State College

   

  Maybe women look at math problems differently than men.
  Don Edwards
  Sunriver, Oregon

  The outcry was so tremendous that vos Savant was forced to devote three subsequent columns to explaining why her logic was correct. Even in the wake of her well-stated, clear responses, she continued to be berated.

   “I still think you’re wrong,” wrote one man, nearly a year later.

   

  “There is such a thing as female logic.”

  Yet, the numbers behind vos Savant's conclusion don't lie.

  Debunking the Monty Hall Problem

  Since two doors (one containing a car, and the other a goat) remain after the host opens door #3, most would assume that the probability of selecting the car is ½. This is not the case.

  “The winning odds of 1/3 on the first choice can’t go up to 1/2 just because the host opens a losing door,” writes vos Savant. Indeed, if you map out six games exploring all possible outcomes, it becomes clear that switching doors results in winning two-thirds (66.6%) of the time, and keeping your original door results in winning only one-third (33.3%) of the time:

  

  Another way to look at this is to break down every door-switching possibility. As we’ve delineated below, 6 out of the 9 possible scenarios (two-thirds) result in winning the car: 

  

  These results seem to go against our intuitive statistical impulses — so why does switching doors increase our odds of winning?

  The short answer is that your initial odds of winning with door #1 (?) don’t change simply because the host reveals a goat behind door #3; instead, Hall’s action increases the odds to ? that you’ll win by switching.

  Here’s another way to visualize this. Imagine that instead of three doors, Monty Hall presents you with 100 doors; behind 99 of them are goats, and behind one of them is the car. You select door #1, and your initial odds of winning the car are now 1/100:

  

  Then, let’s suppose that Monty Hall opens 98 of the other doors, revealing a goat behind each one. Now you’re left with two choices: keep door #1, or switch to door #100:

  

  When you select door #1, there is a 99/100 chance that the car is behind one of the other doors. The fact that Monty Hall reveals 98 goats does not change these initial odds — it merely "shifts" that 99/100 chance to door #100. You can either stick with your original 1/100 odds pick, or switch to door #100, with a much higher probability of winning the car.

  Still, while the math and numbers back up vos Savant’s assertion — that the odds of winning increase to ? when you switch doors — one must consider other factors she doesn’t address in her answer.

  The Psychology of Rationalization

  

  Monty Hall, host of 'Let's Make a Deal'

  In 1992, while the controversy over vos Savant’s answer brewed, Monty Hall — the game show host, and namesake of the problem — sat down for an interview with the New York Times.

  Hall clarified that things worked a bit differently than the scenario presented by the Parade reader in vos Savant’s column. In the real show, for instance, he retained the authority to offer the contestant cash NOT to switch. Details like this, he said, altered the contestant's mindset:

  "[After I opened a door with a goat], they'd think the odds on their door had now gone up to 1 in 2, so they hated to give up the door no matter how much money I offered…The higher I got, the more [they] thought the car was behind [the other door]. I wanted to con [them] into switching there. That's the kind of thing I can do when I'm in control of the game. You may think you have probability going for you when you follow the answer in her column, but there's the psychological factor to consider."

  The “psychological factor” Hall mentions carries over from the show’s rules to the variation of the problem we’ve presented in this article. For contestants and problem-solvers alike, the Monty Hall Problem causes cognitive dissonance, a term psychologists use to describe the “mental stress experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, or is confronted by new information that conflicts with existing beliefs, ideas, or values.” 

  When people are confronted with evidence that is “inconsistent with their beliefs” (ie. the odds of winning by switching doors being ?, instead of ½), they first respond by refuting the information, then band together with like-minded dissenters and champion their own hard-set opinion.

  This is precisely the mentality of vos Savant’s thousands of naysayers.

  ***

  
  More than 25 years later, arguments over the Monty Hall Problem’s semantics and vos Savant’s response still pervade — mainly centering around the intricacies of the host’s actions. 

  “Our brains are just not wired to do probability problems very well, so I'm not surprised there were mistakes,” Stanford stats professor Persi Diaconis told a reporter, years ago. “[But] the strict argument would be that the question cannot be answered without knowing the motivation of the host."

  Eventually though, many of those who’d written in to correct vos Savant’s math backpedaled and ceded that they were in error.

  An exercise proposed by vos Savant to better understand the problem was soon integrated in thousands of classrooms across the nation. Computer models were built that corroborated her logic, and support for her intellect was gradually restored. Whereas only 8% of readers had previously believed her logic to be true, this number had risen to 56% by the end of 1992, writes vos Savant; among academics, 35% initial support rose to 71%.

  Among the new believers was Robert Sachs, a math professor at George Mason University, who’d originally written a nasty letter to vos Savant, telling her that she “blew it,” and offering to help "explain.” After realizing that he was, in fact, incorrect, he felt compelled to send her another letter — this time, repenting his self-righteousness.

  “After removing my foot from my mouth I'm now eating humble pie,” he wrote. “I vowed as penance to answer all the people who wrote to castigate me. It's been an intense professional embarrassment.”

   

  

  

• Bitcoin Surges Above $4400 As World Realizes Jamie Dimon & China Don't Matter

  Bitcoin just topped $4400 for the first time since in over 3 weeks and has now erased all of the plunge losses from Jamie Dimon's "it's a fraud" and China's shuttering of all local exchanges.

  It didn't take long for the world of crypto-currencies to shrug off Jamie Dimon's self-tighteous denigration of the decentralized currency that could directly 'disrupt' his cash cow businesses; and furthermore, as The South China Morning Post reports, China's bitcoin market alive and well as traders defy crackdown.

  

  As SCMP reports, weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

  While several exchanges have announced that they will close by the end of this month, traders have now moved to buy and sell bitcoin directly with each other on peer-to-peer marketplaces and messenger apps.

  Although the crackdown has dissuaded large swathes of less-experienced investors from participating in the trade, market participants point to the limits Chinese regulators ultimately face in controlling the industry, where many users are anonymous and difficult to track.

  In the short-run, the crackdown has also created an arbitrage opportunity for investors, with the price of bitcoin in China now trading at a discount to overseas exchanges.

  “They can’t set rules to stop me from investing in what I want to invest in. They say you are protecting me, but as long as I think this is good, they have no way to intervene,” said a Chinese bitcoin investor named Victor, who declined to give his full name citing current sensitivities.

   

  “I can do over-the-counter trades or I’ll go offshore … My wallet is my wallet. I’ve never registered my identification card.”

  Over 15 exchanges, including the three largest players OkCoin, Huobi and BTCChina, have since announced that they will close their mainland businesses by the end of September.

  Trading has spiked generally on peer-to-peer marketplaces, according to data website Coindance. On OTC platform LocalBitcoins, China trading volumes more than doubled in the week starting September 16 from the previous week to 74 million yuan.

  It hit an all-time-high in the week starting September 23, reaching 115 million yuan in trades.

  “The fact that bitcoin is still being traded is an indication that China isn’t looking to eliminate them, but reposition things in a way to have better control over them,” said Marshall Swatt, the founder of New York-based Coinsetter, a bitcoin exchange acquired by larger peer San Francisco-based Kraken in 2016.

  

  

• Jim Rogers Tells ETF-Holders "The Next Bear Will Be Horrendous"

  Legendary investor Jim Rogers, who in 1973 founded the Quantum Funds, a prominent family of hedge funds, with then-unknown Hungarian-born financier named George Soros, joined RealVision’s Steve Diggle for a wide-ranging interview where the legendary financier, who moved to Singapore in 2007 with his family because he wanted his children to be immersed in Asian culture, discusses his views on gold, bitcoin, and what makes a good investor – along with his belief that a major correction in financial markets is about to begin.

  The interview, which was filmed two weeks ago in Singapore, begins with a discussion of a theme in finance that’s been at the forefront of discussions about the market outlook. Many investors believe that, with volatility at record lows and valuations at record highs, a major shock is imminent. However, these same investors have been burned by uncooperative markets, as an expected selloff has yet to materialize.

  Rogers said he stumbled into his first job on Wall Street, but ended up falling in love with it because it allowed him to “follow the world and know about things.”

  He added that, over his investing career, Roger's has learned that he has a tendency for his calls to be early. So now when he makes an investment decision, he waits six months before buying.

  SD: How do you know the difference between being early and being wrong? Because –

   

  JR: You teach me that, OK? I'd like to know. I'm still trying to learn.

   

  SD: I really don't know, either. I mean, one of the things that has confounded, I think, all of us in this most recent unprecedented rally – I mean, it's not unprecedented in history, but the sort of things that have gone up and the level of volatility we've had that's been unprecedented. The only period that I can compare it to are the late 90s, where just everything in a certain area went up. Now it was almost– at least in the States, it's almost everything across the board. And there have been plenty of people who've wanted to short the FANGs, to short some of the tech stocks, to short some of these very expensive blue chips. And they've been very badly punched.

   

  And then even in the face of very good mutual fund investors, people with tremendous track records like Grantham Mayo, who have moved to a higher cash position – they've seen massive reductions, because their own investors don't seem inclined to stick around and see how it plays out. So both on a personal and professional level, being early seems to be incredibly painful and destructive to your business.

   

  JR: Sure can.

   

  SD: So if you've got a conviction, do you wait for a change in momentum? Do you use moving averages, which is something that I know people have been used, and I've used something myself, which is to wait until the 5 and 20-day diverge, and that gives you a signal that momentum's coming out of a trade? Or do you just need to size it to a degree which you can be persistent?

   

  JR: Well, I usually – since I know I'm always early, I make a decision and then wait, and just make myself wait a month, six months, whatever it happens to be. And I'm still too early. I'm still too early nearly always, because I make the decision too soon, I realize. So maybe I better start making the decision later in life. Sometimes, you just have to throw in the towel. Especially on the short side, you have no choice. If they're just racing against you all the time, you can sit there and meet the margin calls all day long, but one of the old adages is, never beat a margin call, which you may have heard from old-time traders. If you've got a margin call, just don't meet it, because that means something is very seriously wrong.

   

  SD: Right, that's your stop loss.

   

  JR: Yeah, well, stop losses are usually before a margin call comes. But I want to go back to something you said. You're not as experienced as I am, obviously, because you're not as old as I am, is what I'm saying. But I remember in the early 70s, there was something called the Nifty 50, and they were 50 stocks that everybody – the JP Morgan bought everyday. Didn't matter. Avon, Xerox, IBM – they were stocks that always were eternal growth stocks.

   

  And they just kept – we would short them, and they just kept going up. They never stopped. Polaroid– that was another. And they just never stopped going up. Everything else stopped going up but those Nifty 50, which would be something like the FANGs today, or maybe in the late 90s, some of the other kinds of stocks. So this has happened before in market history. They eventually crack, there's no question.

   

  And to today, if you look at the S&P 500, for instance, in the US, I think there are only 40 or 45 stocks that are above their 50-day moving average, to use technician's kind of talk. Everything else is in a downtrend. And yet the market is making all-time highs.

   

  SD: And so there's a lack of breadth in the market.

   

  JR: Definitely that lack of breadth. What is that – over 90% of the stocks are in downtrends. 10% are in uptrends, but they're big companies. And since the S&P is capitalization weighted, those 50 stocks, 40 stocks, whatever it is, dragged the average to all-time highs.

  Diggles' questions soon veered toward the subject of what makes a good investor. Some believe, Diggle says, that to have conviction, you need to know more than 98% of people who follow a stock.

  Rogers said he was never a very disciplined investor, so it’s difficult for him to say how one develops skills like timing and good judgment.

  Knowing more than your rivals is a major advantage, he says. But there’s something to be said for judgment that just can’t be taught.

  SD: So what was different about your analysis? Had you gone deeper into this company? Because one of the things that you've said on a number of occasions, and I think it's very impactful, is if you want to have conviction, you have to know more than not just 90% of the people, but 98% of the people who follow the stock. Is it that you've gone deeper? You've read the annual report, you've looked at what would now be the 14k. Or was it that you'd seen something with a greater level of skepticism or objectivity which other people had missed?

   

  JR: Well, it's both. If read the annual report, you've done more than 90% of investors. If you read the notes to the annual report, you've done more than nearly everybody, including the CEO of the company. So it is certainly knowing more than other people. But then it takes more than that. You also have to know more, but then you have to figure out what does it mean? Just because you know more, you have to then analyze it.

  If 100 people go into a room and hear a presentation, Steve, they'll all come out – most of them will come out with the same view. Seven or eight of those people will come out and say, aha, what this really means is it's going down the tubes, or whatever you come out with. Or seven or eight will come out and say, this is the best thing since sliced bread.

   

  They will realize. They will analyze it and understand it better than the others. It's judgment. I don't know how to teach judgment. I wish I knew how to teach judgment. Facts are wonderful. Knowing more than everybody else is a big, big, big leg up. But then judgment – how you get judgment? And that's certainly what I didn't have. I certainly didn't have timing. Not that I do now, but I have a little better judgment than I used to, and a little better timing than I used to, because I learned to wait.

   

  SD: So your prescription to be an above average investor, to go back to my original question, is be independent-minded, do your work. Don't try and perfect the timing, but if you develop a high enough level of conviction around it, see it through.

   

  JR: Yeah, that's what I always do. And sometimes, I get it right. But I've certainly made plenty of mistakes in my life.

  With stock and bond valuations hopelessly inflated, Rogers says investors hoping to lock in the highest risk-adjusted returns should consider buying gold coins. Barring that, gold futures are the next best market. Rogers says trading gold futures is a great strategy for traders because it’s a market where speculators have easy access to leverage.

  Furthermore, investors who have time to conduct the due diligence should consider investing in a gold mine – but it needs to be the right gold mine.

  SD: Going back to gold, so gold coins –

   

  JR: Gold coins are the best way. And you should have physical possession of some gold coins. After that, gold futures are the best way if you want to make money and you're a good trader. Gold futures, that's where you can get the most leverage of any, unless you can find the right gold mine. But there are hundreds of gold mines. If you're smart enough and have the time to find the right two or three gold mines, then, yeah, then you'll make huge amounts of money in the right to – but, you know, there are hundreds of gold mines.

  The conversation soon turned to a discussion of the ETF space, a market about which Rogers has many reservations.

  SD: And investors do seem to be becoming more short-term, despite the fact that everything we know tells us that finding good people and backing them for the long-term is the most successful thing you can do. Investors seem to be becoming more and more influenced by very short-term records. And that's one of the things that's savaging the mutual fund industry right now. One of the things that I wanted to touch on is this ETF phenomena. I mean, it's probably the equivalent of the Nifty Fifty of the day, which is buy everything in its weight, don't do any research. Don't take any views. Don't even take a view on a manager let alone a stock, but just own a basket. And a lot of people feel great disquiet about this. I think your commodity index has a few ETFs on it, does it? So perhaps you're not the guy to ask if you're in the ETF industry.

   

  JR: No, no, no, I certainly see what's happening in ETFs. I mean I pay enough attention to know what's going on. First of all, ETFs are very efficient, very easy, very simple. There's no question about that.

   

  Therein lies part of the problem, of course, with ETFs is that they are easy, simple, et cetera and that makes it easy for somebody to say oh, I want to buy Germany, buy the German ETF, and don't even look to see what's in the German ETF or whether it's a good ETF to own. And maybe it should be a terrible ETF, but nobody looks anymore.

   

  So there are excesses developing in the ETF business.

   

  There's no question about that. But don't worry Steve, we're going to have a bear market. And when we have the bear market, a lot of people are going to find that, oh my God, I own an ETF and they collapsed. It went down more than anything else. And the reason it will go down more than anything else is because that's what everybody owns.

  And it is this bear market that looms over the market that Rogers is most fearful of as the level of debt that has built across the globe makes a disaster inevitable…

  JR: Steve, in America as you know, we've had bear markets every few years.

   

  SD: We used to.

   

  JR: Well done. And Janet Yellen will tell you we're never going to have a bear market again because she's smarter than we are, she's smarter than the markets, and the central bank has things under control now. She publicly stated this. Do not worry. We will not have financial calamities again. Head of the central bank in America has said that out loud officially, Mrs. Yellen– yeah, Mrs. Yellen.

   

  I happen to have a different view. Now if you believe the American central bank, you shouldn't be talking to me at all. But we've had, we used to have bear markets every several years. We always, always since the beginning of the republic. In my view we will have them again.

   

  And the next one is going to be horrendous, the worst– you came in the business in '86. It will be the worst in your lifetime, in your financial experience.

   

  And the reason, in 2008 we had a bear market because of too much debt, staggering amounts of debt. Steve, since 2008 the debt has gone through the roof. Every country in the world talks about austerity. Nobody has reduced their debt in the last few years.

   

  Everybody has increased their debt in the last few years. And so the next time we have a bear market, it's going to be horrendous because of this.

   

  Even China– in 2008, the Chinese had a lot of money saved for a rainy day. It started raining in Singapore. They had a lot of money saved for a rainy day. It started raining.

   

  They started spending and helped save the world. But even China has a lot of debt now.

  Like his fellow hedge-fund luminary Ray Dalio, Jim Rogers is a cryptocurrency skeptic. However, his outlook is somewhat more nuanced. While Rogers says he doesn’t know enough about the market to have a view on which coins might prosper and which might die on the vine, he suggested that people shouldn’t assume that bitcoin will dominate the market forever.

  After all, Rogers says, most people have never heard of the company that invented the automobile – it disappeared long ago, he said. There once were hundreds of companies manufacturing cars around the world. Now, he says, there are only 25.

  SD: Well, there's been plenty of commentary on cryptocurrencies or cybercurrencies on RealVision and in the mainstream. We're trading them. it's an extraordinary financial experiment. If you're a libertarian, I guess you mind find it inspiring that this has happened with absolutely no regulation. But where do we go with these things? Are you a true believer?

   

  JR: Well, Steve–

   

  SD: Are you an enormous skeptic?

   

  JR: I don't own one, nor am I short one. So I am neutral in that sense. I do know that there are over 2,000 now in just a few years. And anything that booms like that usually has a reason – there's reason for skepticism. You do know that some of them are already zero.

   

  I think the Wall Street Journal had an article yesterday maybe that 30% of the ones that have been launched in the last year or two are at zero because they have not traded. Now, there are some that have been skyrocketing. They've gone up 30 or 40, 100 times. So if you own the ones that have gone up 30 times, you think these are wonderful. If you own the ones that have gone to zero – or some have already gone bankrupt.

   

  Somebody offered me a lot of them recently. And while I was doing my homework, it turned out to be a sham, a fraud. Fortunately, I was doing my homework so I never got around to taking them.

   

  There's no question that the world has money problems. There's no question that all of our lives are being changed by the internet. My kids will never go to a bank when they're adults. My kids will never go to a post office.

   

  They may rarely go to a doctor when they're adults. And so money's going to change on the internet too.

   

  Which one? I don't know. You've heard of IBM in the computer business? IBM did not invent computers. The company that invented computers you never heard of, likewise with automobiles. I mean, there were hundreds of automobile companies 100 years ago. There are only 25 now.

  Rogers, who chafes at being called a contrarian, says one sure-fire strategy for strong investing returns is investing in assets that are "hated" by the broader investing community, for example his Russian-stock investments are making all time highs, he said.

  SD: I want to turn to a few specific sectors now rather than the general outlook of the world. It's clear that you're very concerned about that, though not so concerned that you want to actually be fighting it with aggressive shorts right now. One thing that you've spoken about in the past and one thing that we are exposed to is agriculture. It's an area that's generating quite a lot of comment. But from our experience, very few people have actually done anything about it. Very few pension funds, very few individuals have exposure to it. It's hard to get through the stock market. There are very few agriculture companies, certainly on land-owning companies. You can get exposure through the food industry. But you became very positive about the agriculture a while ago. Where are you know on that?

   

  JR: I'm extremely bullish on agriculture. That hasn't made me any money yet. Well it has a little bit because one of my largest shareholdings – a large – well, it's not one of my largest, but I am a director of a Russian fertilizer company which is making all-time highs or near all-time highs, which is pretty astonishing given that it's Russia and everybody hates Russia, as you well know. In fact I'm startled that all of my Russian stocks making all-time highs.

   

  And this is a hated market. So it's something I have learned. If you buy something that's hated, chances are you're going to make a lot of money down the road.

  In one of his last questions, Diggle pointed out that Rogers, who began working on Wall Street during the first half of the twentieth century, has often expressed a disdain for young people working in finance.

  Diggle says he first noticed this about Rogers while reading a piece he wrote for Barron’s Magazine in the late 1980s.

  Rogers says he doesn’t trust young people for one simple reason: They’re often cocky. But the Darwinian nature of Wall Street quickly separates the wheat from the chaff, making those who survive far more tolerable.

  SD: I think you have something against guys in their 20s because the first time I became aware of you as an investor was a Barron's article written in the summer of 1987, and it's a very impressive article. I was very young on Wall Street. And there was this guy, Jim Rogers, and they said, what do are you bearish on, Jim? And you said, the world. There are all these 20-something guys that are thinking that they deserve six figures just because they work on Wall Street and they know how to buy stocks. And three, four months later, you turned out to be absolutely right.

   

  But as a 20-something at the time, I thought you were being very unfair on 20-something guys. Now that I'm 53, I share your view of these 20-year-old guys. You've got to stay away from them.

   

  JR: Well, but see, you made it. You survived. You're a 26-year-old or 20-year-old who made it and survived, and so it's OK. Many of them don't and don't know why. They make a lot of money. They don't know why they made money.

   

  So they don't know why they lose money. They don't know what happened.

   

  You, at least, something happened. You're still here. You still have a job. You're still in the investment world.

   

  SD: I'm self-employed like you.

   

  JR: Right.

  Rogers has recently been vocal about his bearish outlook on the markets. In an interview during the summer, he claimed that the largest financial crisis of his lifetime is still to come.

  

  

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• "This Is A Crisis Greater Than Any Government Can Handle": The $400 Trillion Global Retirement Gap

  Submitted by John Mauldin of Mauldin Economics

  Today we’ll continue to size up the bull market in governmental promises. As we do so, keep an old trader’s slogan in mind: “That which cannot go on forever, won’t.” Or we could say it differently: An unsustainable trend must eventually stop.

  Lately I have focused on the trend in US public pension funds, many of which are woefully underfunded and will never be able to pay workers the promised benefits, at least without dumping a huge and unwelcome bill on taxpayers. And since taxpayers are generally voters, it’s not at all clear they will pay that bill.

  Readers outside the US might have felt smug and safe reading those stories. There go those Americans again, spending wildly beyond their means. You are correct that, generally speaking, we are not exactly the thriftiest people on Earth. However, if you live outside the US, your country may be more like ours than you think. Today we’ll look at some data that will show you what I mean. This week the spotlight will be on Europe.

  First, let me suggest that you read my last letter, “Build Your Economic Storm Shelter Now,” if you missed it. It has some important background for today’s discussiion.

  Global Shortfall

  I wrote a letter last June titled “Can You Afford to Reach 100?” Your answer may well be “Yes;” but, if so, you are one of the few. The World Economic Forum study I cited in that letter looked at six developed countries (the US, UK, Netherlands, Japan, Australia, and Canada) and two emerging markets (China and India) and found that by 2050 these countries will face a total savings shortfall of $400 trillion. That’s how much more is needed to ensure that future retirees will receive 70% of their working income. This staggering figure doesn’t even include most of Europe.

  

  This problem exists in large part because of the projected enormous increase in median life expectancies. Reaching age 100 is already less remarkable than it used to be. That trend will continue. Better yet, I think we will also be healthier at advanced ages than people are now. Could 80 be the new 50? We’d better hope so, because the math is pretty bleak if we assume people will stop working at age 65–70 and then live another quarter-century or more.

  That said, I think we’ll see a great deal of national variation in these trends. The $400 trillion gap is the shortfall in government, employer, and individual savings. The proportions among the three vary a great deal. Some countries have robust government-provided retirement plans; others depend more on employer and individual contributions. In the aggregate, though, the money just isn’t there. Nor will it magically appear just when it’s needed.

  WEF reaches the same conclusion I did long ago: The idea that we’ll enjoy decades of leisure before our final decline simply can’t work. Our attempt to live out long and leisurely retirements is quickly reaching its limits. Most of us will work well past 65 whether we want to or not, and many of us will not have our promised retirement benefits to help us through our final decades.

  What about the millions who are already retired or close to retirement? That’s a big problem, particularly for the US public-sector workers I wrote about in my last two letters. We should also note that we’re all public-sector workers in a way, since we must pay into Social Security and can only hope Washington gives us something back someday.

  Let’s look at a few other countries that are not much better off.

  UK Time Bomb

  The WEF study shows that the United Kingdom presently has a $4 trillion retirement savings shortfall, which is projected to rise 4% a year and reach $33 trillion by 2050. This in a country whose total GDP is $3 trillion. That means the shortfall is already bigger than the entire economy, and even if inflation is modest, the situation is going to get worse. Further, these figures are based mostly on calculations made before the UK decided to leave the European Union. Brexit is a major economic realignment that could certainly change the retirement outlook. Whether it would change it for better or worse, we don’t yet know.

  A 2015 OECD study (mentioned here) found that across the developed world, workers could, on average, expect governmental programs to replace 63% of their working-age incomes. Not so bad. But in the UK that figure is only 38%, the lowest in all OECD countries. This means UK workers must either build larger personal savings or severely tighten their belts when they retire. Working past retirement age is another choice, but it has broader economic effects – freezing younger workers out of the job market, for instance.

  UK employer-based savings plans aren’t on particularly sound footing, either. According to the government’s Pension Protection Fund, some 72.2% of the country’s private-sector defined-benefit plans are in deficit, and the shortfalls total £257.9 billion. Government liabilities for pensions went from being well-funded in 2007 to having a shortfall 10 years later of £384 billion (~$500 billion). Of course, that figure is now out of date because, just a few months later, it’s now £408 billion – that’s how fast these unfunded liabilities are growing. Again, that’s a rather tidy sum for a $3 trillion economy to handle.

  

  UK retirees have had a kind of safety valve: the ability to retire in EU countries with lower living costs. Depending how Brexit negotiations go, that option could disappear.

  Turning next to the Green Isle, 80% of the Irish who have pensions don’t think they will have sufficient income in retirement, and 47% don’t even have pensions. I think you would find similar statistics throughout much of Europe.

  A report this summer from the International Longevity Centre suggested that younger workers in the UK need to save 18% of their annual earnings in order to have an “adequate” retirement income – which it defines as less than today’s retirees enjoy. But no such thing will happen, so the UK is heading toward a retirement implosion that could be at least as damaging as the US’s.

  Swiss Cheese Retirement

  Americans often have romanticized views of Switzerland. They think it’s the land of fiscal discipline, among other things. To some extent that’s true, but Switzerland has its share of problems, too. The national pension plan there has been running deficits as the population grows older.

  Earlier this month, Swiss voters rejected a pension reform plan that would have strengthened the system by raising women’s retirement age from 64 to 65 and raising taxes and required worker contributions. From what I can see, these were fairly minor changes, but the plan still went down in flames as 52.7% of voters said no.

  Voters around the globe generally want to have their cake and eat it, too. We demand generous benefits but don’t like the price tags that come with them. The Swiss, despite their fiscally prudent reputation, appear to be not so different from the rest of us. Consider this from the Financial Times:

  Alain Berset, interior minister, said the No vote was “not easy to interpret” but was “not so far from a majority” and work would begin soon on revised reform proposals.

  Bern had sought to spread the burden of changes to the pension system, said Daniel Kalt, chief economist for UBS in Switzerland. “But it’s difficult to find a compromise to which everyone can say Yes.” The pressure for reform was “not yet high enough,” he argued. “Awareness that something has to be done will now increase.”

  That description captures the attitude of the entire developed world. Compromise is always difficult. Both politicians and voters ignore the long-term problems they know are coming and think no further ahead than the next election. The remark that “Awareness that something has to be done will now increase” may be true, but there’s a big gap between awareness and motivation – in Switzerland and everywhere else.

  Switzerland and the UK have mandatory retirement pre-funding with private management and modest public safety nets, as do Denmark, the Netherlands, Sweden, Poland, and Hungary. Not that all of these countries don’t have problems, but even with their problems, these European nations are far better off than some others.

  (Sidebar: low or negative rates in those countries make it almost impossible for their private pension funds to come anywhere close to meeting their mandates. And many of the funds are by law are required to invest in government bonds, which pay either negligible or negative returns.)

  Pay-As-You-Go Woes

  Pay-As-You-Go WoesThe European nations noted above have nowhere near the crisis potential that the next group does: France, Belgium, Germany, Austria, and Spain are all pay-as-you-go countries (PAYG). That means they have nothing saved in the public coffers for future pension obligations, and the money has to come out of the general budget each year. The crisis for these countries is quite predictable, because the number of retirees is growing even as the number of workers paying into the national coffers is falling. There is a sad shortfall of babies being born in these countries, making the demographic reality even more difficult. Let’s look at some details.

  Spain was hit hard in the financial crisis but has bounced back more vigorously than some of its Mediterranean peers did, such as Greece. That’s also true of its national pension plan, which actually had a surplus until recently. Unfortunately, the government chose to “borrow” some of that surplus for other purposes, and it will soon turn into a sizable deficit.

  Just as in the US, Spain’s program is called Social Security, but in fact it is neither social nor secure. Both the US and Spanish governments have raided supposedly sacrosanct retirement schemes, and both allow their governments to use those savings for whatever the political winds favor.

  The Spanish reserve fund at one time had €66 billion and is now estimated to be completely depleted by the end of this year or early in 2018. The cause? There are 1.1 million more pensioners than there were just 10 years ago. And as the Baby Boom generation retires, there will be even more pensioners and fewer workers to support them. A 25% unemployment rate among younger workers doesn’t help contributions to the system, either.

  A similar dynamic may actually work for the US, because we control our own currency and can debase it as necessary to keep the government afloat. Social Security checks will always clear, but they may not buy as much. Spain’s version of Social Security doesn’t have that advantage as long as the country stays tied to the euro. That’s one reason we must recognize the potential for the Eurozone to eventually spin apart. (More on that below.)

  On the whole, public pension plans in the pay-as-you-go countries would now replace about 60% of retirees’ salaries. Further, several of these countries let people retire at less than 60 years old. In most countries, fewer than 25% of workers contribute to pension plans. That rate would have to double in the next 30 years to make programs sustainable. Sell that to younger workers.

  The Wall Street Journal recently did a rather bleak report on public pension funds in Europe. Quoting:

  Europe’s population of pensioners, already the largest in the world, continues to grow. Looking at Europeans 65 or older who aren’t working, there are 42 for every 100 workers, and this will rise to 65 per 100 by 2060, the European Union’s data agency says. By comparison, the U.S. has 24 nonworking people 65 or over per 100 workers, says the Bureau of Labor Statistics, which doesn’t have a projection for 2060. (WSJ)

  While the WSJ story focuses on Poland and the difficulties facing retirees there, the graphs and data in the story make clear the increasingly tenuous situation across much of Europe. And unlike most European financial problems, this isn’t a north-south issue. Austria and Slovenia face the most difficult demographic challenges, right along with Greece. Greece, like Poland, has seen a lot of its young people leave for other parts of the world. This next chart compares the share of Europe’s population that 65 years and older to the rest of the regions of the world and then to the share of population of workers between 20 and 64. These are ugly numbers.

  
  Source: WSJ

  The WSJ continues:

  Across Europe, the birthrate has fallen 40% since the 1960s to around 1.5 children per woman, according to the United Nations. In that time, life expectancies have risen to roughly 80 from 69.

  In Poland birthrates are even lower, and here the demographic disconnect is compounded by emigration. Taking advantage of the EU’s freedom of movement, many Polish youth of working age flock to the West, especially London, in search of higher pay. A paper published by the country’s central bank forecasts that by 2030, a quarter of Polish women and a fifth of Polish men will be 70 or older.

   
  Source: WSJ

  Next week we will look at the unfunded liabilities of the US government. It will not surprise anyone to learn that the situation is ugly, and there is no way – zero chance, zippo – that the US government will be able to fund those liabilities without massive debt and monetization.

  Now, what I am telling you is that every bit of analysis about the pay-as-you-go countries in Europe suggests that they are in a far worse position than the United States is. Plus, the economies of those countries are more or less stagnant, and they are already taxing their citizens at close to 50% of GDP.

  The chart below shows the percentage of GDP needed to cover government pension payments in 2015 and 2050. But consider that the percentage of tax revenues required will be much higher. For instance, in Belgium the percentage of GDP going to pensions will be 18% in about 30 years, but that’s 40–50% of total tax revenues. That hunk doesn’t leave much for other budgetary items. Greece, Italy, Spain? Not far behind.

  

  And there is other research that makes the above numbers seem optimistic by comparison. The problem that the European economies have is that for the most part they are already massively in debt and have high tax rates. And they can’t print their own currencies.

  Many of Europe’s private pension companies and corporations are also in seriously deep kimchee. Low and negative interest rates have devastated the ability of pension funds to grow their assets. Combined with public pension liabilities, the total cost of meeting the income and healthcare needs of retirees is going to increase dramatically all across Europe.

  Macron, the new French president, really is trying to shake up the old order, to his credit; and this week he came out and began to lay the foundation for the mutualization of all European debt, which I assume would end up on the balance sheet of the ECB. However, that plan still doesn’t deal with the unfunded liabilities. Do countries just run up more debt? It seems like the plan is to kick the can down the road just a little further, something Europe is becoming really good at.

  In this next chart, note the line running through each of the countries, showing their debt as a percentage of GDP. Italy’s is already over 150%. And this is a chart based mostly on 2006 and earlier data. A newer chart would be much uglier.

  

  I could go on reviewing the retirement problems in other countries, but I hope you begin to see the big picture. This crisis isn’t purely a result of faulty politics – though that’s a big contributor – it’s a problem that is far bigger than even the most disciplined, future-focused governments and businesses can easily handle.

  Look what we’re trying to do. We think people can spend 35–40 years working and saving, then stop working and go on for another 20–30–40 years at the same comfort level – but with a growing percentage of retirees and a shrinking number of workers paying into the system. I’m sorry, but that’s magical thinking. And it’s not what the original retirement schemes envisioned at all. Their goal was to provide for a relatively small number of elderly people who were unable to work. Life expectancies were such that most workers would not reach that point, or would at least live just a few years beyond retirement.

  As I have pointed out in past letters, when Franklin Roosevelt created Social Security for people over 65 years old, US life expectancy was about 56 years. If the retirement age had kept up with the increase in life expectancy, the retirement age in the US would now be 82. Try and sell that to voters.

  Worse, generations of politicians have convinced the public that not only is a magical outcome possible, it is guaranteed. Many politicians actually believe it themselves. They aren’t lying so much as just ignoring reality. They’ve made promises they aren’t able to keep and are letting others arrange their lives based on the assumption that the impossible will happen. It won’t.

  How do we get out of this jam? We’re all going to make big adjustments. If the longevity breakthroughs I expect happen soon (as in the next 10–15 years), we may be able to adjust with minimal pain. We’ll work longer years, and retirement will be shorter, but it will be better because we’ll be healthier.

  That’s the best-case outcome, and I think we have a fair chance of seeing it, but not without a lot of social and political travail. How we get through that process may be the most important question we face.

  I haven’t even thrown in the complications that are going to arise because of changes in the nature of employment and the future of work that will be caused by technological change in the next 10–20 years. That will mean even fewer workers for each retiree. Facebook’s Zuckerberg talks about a basic minimum income. I think that is the wrong thing to do. It is the nature of human beings to need to do things that contribute meaningfully to the lives of their family and society. But the reality is that increasing numbers of people are already having trouble finding that sort of work.

  Maybe we should think about basic minimum employment. FDR put a generation of people to work building public projects that helped get us through the Great Depression. Our world is going to change in ways that we don’t yet understand and that we are not prepared for, psychologically, socially, politically, or economically.

  In the US and much of Europe we have developed social echo chambers in which we talk just to ourselves and those who are like-minded, ignoring or demonizing the other side. We have lost the ability to disagree rationally and productively. When the children’s books written by Dr. Seuss are considered by some to have been written by a white racist and are therefore deemed unacceptable to be in a public library, you know the quality of civil discourse has spiraled downward.

  I do not like that, Sam I am.

  

  

• NBA Orders Players To Stand For The National Anthem

  With the NFL finding itself trapped in a vise of sliding viewership on one hand, and a sudden plunge in its favorability as a result of the ongoing “kneeling” feud with President Trump, which according to a just released POLITICO/Morning Consult poll has plunged from 30% on September 21 to just 17% on September 28, the most unfavorable in history…

  

  … other sports franchises are desperate to avoid the backlash that NFL Commissioner Roger Goodell appears to have unleashed upon his league.

  As a result, the NBA which has seen a similar steep drop in viewership in recent years is taking emergency proactive measures, and according to the Associated Press, NBA Commissioner Adam Silver said he expected players would stand for the anthem, followed up by a memo in which the NBA “recommended teams address fans or show videos expressing themes of unity before their first home games,” while again reminding them of the rule that players must stand for the national anthem.

  In the memo, obtained by the Associated Press, Deputy Commissioner Mark Tatum suggested teams use their opening games “to demonstrate your commitment to the NBA’s core values of equality, diversity, inclusion and serve as a unifying force in the community.” He recommended an address by a player or coach to fans before the anthem, or a video featuring players or community leaders speaking about important issues and showing photos from past community events.

  Tatum said the league supports and encourages players to express their views on matters that are important to them, while reminding of the rule that players, coaches and trainers stand respectfully for the anthem.

  “The league office will determine how to deal with any possible instance in which a player, coach or trainer does not stand for the anthem. (Teams do not have the discretion to waive this rule),” the memo says.

  The memo comes as the NBA’s preseason schedule is set to begin on Saturday with two games, including the NBA champion Golden State Warriors hosting Denver. As a reminder, the feud between Trump and certain sport players escalated last Saturday when Trump withdrew an invitation to Warriors’ Stephen Curry: 

  Going to the White House is considered a great honor for a championship team.Stephen Curry is hesitating,therefore invitation is withdrawn!

  — Donald J. Trump (@realDonaldTrump) September 23, 2017

  //platform.twitter.com/widgets.js

  This in turn prompted the entire Warriors team to announce that “while we intended to meet as a team at the first opportunity we had this morning to collaboratively discuss a potential visit to the White House,” the statement read, “we accept President Trump has made it clear that we are not invited.”

  As the AP adds, the memo builds on discussions held by the NBA’s Board of Governors this week, and follows up on one Silver and players association executive director Michele Roberts sent to players recently. It recommends that teams organize internal discussions to hear the players’ perspectives, if they haven’t already, and to start or expand programs within their communities.

  “The players have embraced their roles in those efforts and we are proud of the work they do in our communities,” Tatum wrote.

  While the NFL never made an explicit demand of players to stand for the national anthem, prompting many teams to do the opposite, or simply not leave the locker room, now that the NBA has taken the extra step of reminding players of what the rules are and that they “do not have the discretion to waive this rule”, it will be especially interesting to observe how many players will flaunt the commissioner’s demand, what the NBA’s response to said rule violation will be, and whether the NBA’s viewership and ad revenues will see a similar sharp decline which ultimately will have an adverse impact on the players’ own bank accounts.

  

  

• Georgetown Bank Teller Steals $185,000 From Homeless Customer With Garbage Bag Full Of Cash

  Where did all this money come from?

  That’s probably the first question that Phelon Davis of District Heights, Maryland, asked himself when a homeless man shuffled into the Wells Fargo branch in Georgetown where Davis worked as a teller three years ago and tried to deposit a garbage bag full of cash.

  His next question was probably "do you think he'd notice if some of it went missing?"

  Instead of helping the customer deposit the money into his account, Davis instead decided to take advantage of the situation, setting up a fraudulent second account under the customers’ name and eventually stealing more than $185,000 from the man, according to the Washington Post.

  The 29-year-old bank teller stole more than $185,000 from a homeless customer who tried to deposit a garbage bag full of cash at a Wells Fargo branch in Georgetown.

  

  In a deal with prosecutors, Davis pleaded guilty this week to one federal felony count of interstate transportation of stolen property, which is punishable by up to 10 years in prison.

  Deepening the intrigue surrounding the story, the court filings didn’t name the man, or furnish an explanation as to how he came to possess such a large sum of cash. It describes the man only as a "street vendor."

  Here’s WaPo with more:

  The victim was unnamed in court filings but was described as a homeless street vendor and longtime Wells Fargo customer who had more than one account that had gone dormant because of a lack of activity.

   

  Court filings did not identify the customer or say why a homeless person would have a large amount of cash in a bag when he showed up at the M Street NW branch where Davis worked. Outside the courtroom, Davis’s attorney, Bruce Allen Johnson Jr., said he also did not know how the individual came to have the cache of cash. “That’s the million-dollar question,” Johnson said.

   

  In plea papers, Davis acknowledged that the customer had “thousands of dollars of cash” that he wanted to deposit in October 2014, but he lacked identification. Davis told the customer where to get ID documents and a Social Security card, and also noted the customer “had a surprisingly large balance with the bank,” according to a signed, three-page statement of the crime.

  Soon after the customer tried to deposit the cash, Davis fraudulently opened a new account by forging the customer’s signature, set up an ATM card, personal identification number, email address and online logon that he controlled.

  He initially funded the account with $3,000 from one of the customer’s other accounts, according to WaPo.

  Slowly over the next two years, Davis transferred $177,400 between the customer’s accounts, withdrew $185,440, and transported at least $5,000 withdrawn from ATMs in DC to his home in Maryland – triggering the federal charge.

  The customer remained oblivious to the fraud, as he could only see the balance by checking on his account at an ATM.

  Davis used the stolen money for a down payment on his home, to pay off personal debt, and fund vacations in Aruba, Jamaica, the Dominican Republic and Mexico.

  As part of his plea, Davis agreed to pay back the stolen money, and Assistant US Attorney Kondi J. Kleinman said he would likely face a sentence of 18 to 30 months under federal guidelines. However, the sentencing judge has discretion to assign a longer, or shorter, sentence.  

  “Did you, in fact, take money from an account as Mr. Kleinman described?” U.S. Magistrate Robin M. Meriweather asked in the Thursday plea hearing.

   

  “Yes, ma’am, I did,” said the soft-spoken Davis.

  Davis’s attorney, Johnson, said outside of court that “he greatly regrets the decisions he made and is dedicated to doing everything he can to make it right, including restitution. He is putting everything aside to repay the money and do what he can to repair what he’s done to his name, his reputation and to the victim.”

  WaPo reports that a date for Davis’s sentencing hasn’t been set.
   

  

  

• Wheels And Deals: Trouble Is Brewing In The House Of Saud

  Authored by Pepe Escobar via The Asia Times,

  Saudi women being allowed to drive is a smokescreen – Salafi-jihadism is alive and well inside the Kingdom. What's more, another coup may be along shortly…

  

  Suddenly, the ideological matrix of all strands of Salafi-jihadism is being hailed by the West as a model of progress – because Saudi women will finally be allowed to drive. Only next year. Only some women. And still subject to many restrictions.

  What’s certain is that the timing of the announcement – which comes after years of liberal American pressure – was calculated with precision, arriving only a few days before House of Saud capo King Salman drops in for a chat at Trump’s White House. The soft power move was coordinated by the 32-year-old Crown Prince Muhammad bin Salman, a.k.a. MBS, the Destroyer of Yemen; the king merely added his signature.

  The diversionary tactic masks serious trouble in the court. A Gulf business source with intimate knowledge of the House of Saud, having held a number of personal meetings with members, told Asia Times that “the Fahd, Nayef, and Abdullah families, the descendants of King Abdulaziz al Saud and his wife Hassa bin Ahmed al-Sudairi, are forming an alliance against the ascendancy to the Kingship of the Crown Prince.”

  No wonder, considering that the ousted Crown Prince Mohammed bin Nayef – highly regarded in the Beltway, especially Langley – is under house arrest. His massive web of agents at the Interior Ministry has largely been “relieved of their authority”. The new Interior Minister is Abdulaziz bin Saud bin Nayef, 34, the eldest son of the governor of the country’s largely Shi’ite Eastern Province, where all the oil is. Curiously, the father is now reporting to his son. MBS is surrounded by inexperienced thirty-something princes, and alienating just about everyone else.

  Former King Abdulaziz set up his Saudi succession based on the seniority of his sons; in theory, if each one lived to the same age all would have a shot at the throne, thus avoiding the bloodletting historically common in Arabian clans over lines of succession.

  Now, says the source, “a bloodbath is predicted to be imminent.” Especially because “the CIA is outraged that the compromise worked out in April, 2014 has been abrogated wherein the greatest anti-terrorist factor in the Middle East, Mohammed bin Nayef, was arrested.” That may prompt “vigorous action taken against MBS possibly in early October.” And it might even coincide with the Salman-Trump get together.

  ISIS playing by the (Saudi) book

  Asia Times’ Gulf business source stresses how “the Saudi economy is under extreme strain based on their oil price war against Russia, and they are behind their bills in paying just about all their contractors. That could lead to the bankruptcy of some of the major enterprises in Saudi Arabia. The Saudi Arabia of MBS features the Crown Prince buying a US$600 million yacht and his father spending US$100 million on his summer vacation, highlighted on the front pages of the New York Times while the Kingdom strangles under their leadership.”

  MBS’s pet project, the spun-to-death Vision 2030, in theory aims to diversify from mere oil profits and dependency on the US to a more modern economy (and a more independent foreign policy).
  That’s completely misguided, according to the source, because “the problem in Saudi Arabia is that their companies cannot function with their local population and [are] reliant on expatriates for about 70% or more of their staff. Aramco cannot run without expatriates. Therefore, selling 5% of Aramco to diversify does not solve the problem. If he wants a more productive society, and less handouts and meaningless government jobs, he has to first train and employ his own people.”

  The similarly lauded Aramco IPO, arguably the largest share sale in history and originally scheduled for next year, has once again been postponed – “possibly” to the second half of 2019, according to officials in Riyadh. And still no one knows where shares will be sold; the NYSE is far from a done deal.

  In parallel, MBS’s war on Yemen, and the Saudi drive for regime change in Syria and to reshape the Greater Middle East, have turned out to be spectacular disasters. Egypt and Pakistan have refused to send troops to Yemen, where relentless Saudi air bombing – with US and UK weapons – has accelerated malnutrition, famine and cholera, and configured a massive humanitarian crisis.

  The Islamic State project was conceived as the ideal tool to force Iraq to implode. It’s now public domain that the organization’s funding came mostly from Saudi Arabia. Even the former imam of Mecca has publicly admitted ISIS’ leadership “draw their ideas from what is written in our own books, our own principles.”

  Which brings us to the ultimate Saudi contradiction. Salafi-jihadism is more than alive inside the Kingdom even as MBS tries to spin a (fake) liberal trend (the “baby you can drive my car” stunt). The problem is Riyadh congenitally cannot deliver on any liberal promise; the only legitimacy for the House of Saud lies in those religious “books” and “principles.”

  In Syria, besides the fact that an absolute majority of the country’s population does not wish to live in a Takfiristan, Saudi Arabia supported ISIS while Qatar supported al-Qaeda (Jabhat al-Nusra). That ended up in a crossfire bloodbath, with all those non-existent US-supported “moderate rebels” reduced to road kill.

  And then there’s the economic blockade against Qatar – another brilliant MBS plot. That has only served to improve Doha’s relations with both Ankara and Tehran. Qatari Emir Tamim bin Hamad Al Thani was not regime-changed, whether or not Trump really dissuaded Riyadh and Abu Dhabi from taking “military action.” There was no economic strangulation: Total, for instance, is about to invest US$2 billion to expand production of Qatari natural gas. And Qatar, via its sovereign fund, counterpunched with the ultimate soft power move – it bought global footballing brand Neymar for PSG, and the “blockade” sank without a trace.

  “Robbing their people blind”

  In Enemy of the State, the latest Mitch Rapp thriller written by Kyle Mills, President Alexander, sitting at the White House, blurts, “the Middle East is imploding because those Saudi sons of bitches have been pumping up religious fundamentalism to hide the fact that they’re robbing their people blind.” That’s a fair assessment.

  No dissent whatsoever is allowed in Saudi Arabia. Even the economic analyst Isam Az-Zamil, very close to the top, has been arrested during the current repression campaign. So opposition to MBS does not come only from the royal family or some top clerics – although the official spin rules that only those supporting Muslim Brotherhood, Turkey, Iran and Qatari “terrorism” are being targeted.

  In terms of what Washington wants, the CIA is not fond of MBS, to say the least. They want “their” man Nayef back. As for the Trump administration, rumors swirl it is “desperate for Saudi money, especially infrastructure investments in the Rust Belt.”

  It will be immensely enlightening to compare what Trump gets from Salman with what Putin gets from Salman: the ailing King will visit Moscow in late October. Rosneft is interested in buying shares of Aramco when the IPO takes place. Riyadh and Moscow are considering an OPEC deal extension as well as an OPEC-non-OPEC cooperation platform incorporating the Gas Exporting Countries Forum (GECF).

  Riyadh has read the writing on the new wall: Moscow’s rising political / strategic capital all across the board, from Iran, Syria and Qatar to Turkey and Yemen.

  That does not sit well with the US deep state.

  Even if Trump gets some Rust Belt deals, the burning question is whether the CIA and its friends can live with MBS on the House of Saud throne.

  

  

• To Increase America's Productivity, Ban This…

  Aside from short-lived booms in the 1990s and 2000s, US productivity growth has averaged just 1.2% from 1975 up to today after peaking above 3% in 1972.

  As we detailed previously, adjusting for the WWII anomaly (which tells us that GDP is not a good measure of a country’s prosperity) US productivity growth peaked in 1972 – incidentally the year after Nixon took the US off gold.

  

  The productivity decline witnessed ever since is unprecedented. Despite the short lived boom of the 1990s US productivity growth only average 1.2 per cent from 1975 up to today.

  If we isolate the last 15 years US productivity growth is on par with what an agrarian slave economy was able to achieve 200 years ago.

  As we reported last year, users spent 51% of their total internet time on mobile devices, for a total of 5.6 hours per day snapchatting, face-booking, insta-graming and taking selfies.

  

  It's an everyday sight – people using their phones while sitting on the train, waiting for a bus, or even having a meal with their partner.

  

  What exactly are they doing the whole time though?

  When it comes to social networks, Verto Analytics may have the answer. The most time spent in the U.S. on a 'mainstream' app is the 899 minutes per month of the average Facebook user.

  The social network whose users invest the most time though is a networking app for gay, bi, and curious men – Grindr. WIth a huge 1,040 minutes on average, that's over 17 hours every month.

  In third place, Growlr is also a networking/dating app for homosexual men. The average user here spends 665 minutes per month.

  In eighth, Twitter's struggles are again highlighted, with only 176 minutes in Q3 2017.

  Figures refer to usage across all platforms, not just mobile.

  

  You will find more statistics at Statista

  So, maybe in their next wide-ranging study, economists could include a test group of workers who leave their phones in a locker at the beginning of the work day, and try to measure how much their “productivity” improves. So, while every effort can be made by Ivory Tower academics to solve the problem of American worker productivity, perhaps it can be summed up simply as "Put The Smart-Phone Down!"

   

  

  

• The Truth About Nuclear Proliferation And North Korea

  The U.S. is communicating with North Korea about its nuclear program and testing Pyongyang’s appetite for negotiations, Secretary of State Rex Tillerson said in the first public acknowledgment by a senior administration official of direct contact on the matter. As Bloomberg reports,Tillerson, speaking to reporters on Saturday after meeting Chinese officials in Beijing, insisted that the U.S. would never accept a nuclear-armed North Korea.

  His remarks offered the clearest glimpse so far into U.S. strategy, and suggested a willingness to get to the negotiating table with Kim Jong Un’s regime — even after President Donald Trump tweeted in August that “talking is not the answer!”

  “We are probing, so stay tuned,” Tillerson said.

   

  “We can talk to them, we do talk to them directly, through our own channels,” adding that the U.S. has “a couple, three channels open to Pyongyang.”

  All of which was 'good' news in a time when we need some. However, a few hours later, the State Department commented that…

  "North Korean officials have shown no indication that they are interested in or are ready for talks regarding denuclearization."

  And that, as Jim Rickards warns below, is why war is coming…

  Authored by James Rickards via The Daily Reckoning,

  I’ve been arguing for months that we are headed for war with North Korea because of its nuclear program.

  

  This brings us to the topic of nuclear proliferation.

  Nuclear proliferation of the kind we are seeing in North Korea is nothing new. The U.S., Soviet Union (now Russia), U.K. and France all had nuclear weapons by 1960. China joined the club in the mid-1960s.

  India and Pakistan started becoming nuclear powers in the 1970s. Israel has never officially announced it has nuclear weapons, but it is well-known that Israel possesses them. At various times, South Africa, Brazil, Iran, Syria, Iraq and Libya have pursued nuclear weapons development.

  The Iranian program is the only one of those that is still active.

  Critics of any effort to attack North Korea to stop its nuclear weapons program point to this extensive proliferation over 60 years as a reason not to risk war.

  According to these critics, the world has learned to live with eight nuclear powers. One more won’t matter. Deterrence works.

  North Korea knows that if it uses nuclear weapons, it will be subject to a nuclear attack by the U.S., and therefore it won’t use them.

  But this analysis is wrong on a number of levels.

  The U.S. began its nuclear program to end World War II. The U.K., French, Russian and Chinese nuclear programs were part of a Great Power dynamic in the Cold War that does not apply to lesser powers like North Korea.

  For the Great Powers, deterrence does work.

  Israel’s program is a response to an existential threat from the Arabs (four large wars and many smaller ones in less than 70 years) and Israel’s lack of strategic depth. India and Pakistan are mutually hostile and their weapons are aimed at each other, not at the west.

  North Korea is different because it continually threatens to use nuclear weapons on the U.S. and its allies, like Japan.

  Deterrence does not work on Kim Jong Un. The North Korean leader will be safe in his nuclear bombproof bunker. He does not care about his people.

  Kim’s threats involve actual nuclear missiles striking cities and a potential electromagnetic pulse weapon (EMP) detonated in the high atmosphere that produces a power surge that would destroy the U.S. power grid.

  All communications, cellphones, computers, bank ATMs, debit and credit cards, gas station pumps and lights would be disabled. U.S. civilization would last about three days before food and water were depleted and society descended into rival gangs of looters and vigilantes.

  That may sound paranoid or alarmist, but it’s not. It’s a legitimate possibility.

  This is why North Korea will not be allowed to have nuclear weapons.

  This is why war is coming.

  

  

• TEPCO Admits Contaminated Water Leaked Into Fukushima Groundwater "Due To Erroneous Gauges"

  In a revelation that, for some, will dredge up memories of TEPCO’s stunning admission back in 2013 that nearly 300 tonnes of radioactive material had leaked from the ruins of the Fukushima Daiichi nuclear-power plant into the water outside, contaminating virtually the entire Pacific Ocean, officials at the Japanese power company told the Associated Press that contaminated water may have leaked into the soil surrounding the plant after human error caused safety mechanisms to fail.

  TEPCO officials said the settings on six of the dozens of wells surrounding the plant’s ruined reactors were accidentally set 70 centimeters below the required levels, briefly causing groundwater at one well to sink below the contaminated water inside in May, possibly allowing radioactive water to leak into the soil.

  Fortunately, groundwater samples have shown no abnormal increase in radioactivity and leaks to the outside are unlikely, according to TEPCO spokesman Shinichi Nakakuki.

  

  The problem with the wells – most of which were drilled in April to help pump groundwater, reducing the possibility that it would be exposed to contamination –  was discovered earlier this week while the company was preparing to drill another well. While Tepco maintained several wells around the plant before the disaster, many more have been drilled since to try and stanch the flow of radioactive materials from the plant.

  It has been six-and-a-half years since a massive earthquake and tsunami critically damaged the Fukushima-Daiichi nuclear-power plant, located about 200 miles away from Tokyo, triggering the worst nuclear accident since Chernobyl – and the Japanese people are still uncovering new evidence of TEPCO's dishonesty and incompetence demonstrated during the aftermath of the disaster.

  Of course, while the coverup was happening, few in the media dared to entertain suspicions that the company might be acting in bad faith – after all, what serious organization would so brazenly defy the public’s trust, not to mention local laws?

  But five years later, those conspiracy theories were transformed into conspiracy facts when TEPCO’s then-President Naomi Hirose admitted last year on NHK that his company intentionally concealed the reactor meltdowns at the Fukushima plant immediately after the storm. The power company didn't officially admit the meltdowns until more than 2 months after the accident.

  "I would say it was a cover-up," Hirose said during a news conference. "It's extremely regrettable."  

  Earlier this year, TEPCO ignited a public controversy after sharing its plans to start pumping radioactive water contaminated with tritium into the Pacific Ocean – a tactic that has met with vociferous opposition from Japan’s fishing industry.

  Tepco has claimed that the radioactive water, pumped from inside the three reactors that melted down following the tsunami, would quickly disperse and not pose a threat to marine life. With the cleanup effort expected to take decades (although we imagine that President Shino Abe would like to accomplish as much as possible before the 2020 Olympics, which will be held in Tokyo), TEPCO has this year dispatched robots into the reactors to try and find the damaged nuclear core material, to mixed results.

  Back in February, TEPCO revealed that it had discovered a hole at least one square meter in size beneath the pressure vessel in the plant’s damaged No. 2 reactor, potentially exposing the surrounding area to record-high radiation. Back in 2011, radiation levels of 530 Sieverts per hour had been detected inside the reactor (8 Sieverts is enough to kill a human).

  These reports should be particularly dismaying for the thousands of Japanese who’ve begun returning to their homes inside the exclusion zone after the Japanese government ended its subsidy payments to disaster victims earlier this year, effectively forcing many of them to choose between financial hardship or living in a home they believe to be unsafe.

  Meanwhile, photos taken earlier this year by journalists who traveled inside the Fukushima exclusion zone – a 20 kilometer perimeter around the plant – depicted a “nuclear nightmare” consisting of eerie ghost villages populated by radioactive wild boars…

  

   

  

  …not exactly the kind of place we’d want to raise our kids.
   

  

  

• Welcome To The Hunger Games: Trump's Tax Plan To Unleash Battle Royal Among D.C. Lobbyists

  Authored by Michael Snyder via The Economic Collapse blog,

  Are you ready for mass chaos in Washington?

  

  There are lobbyists for just about every cause that you can possibly imagine, and they are always working hard to influence members of Congress on their particular issues.  But when you are talking about a major tax reform bill, that is something that virtually every single lobbyist in the entire city will want to be involved in.  Our tax code is over two million words long, and the regulations are over seven million words long, and any changes to our immensely complex system could have absolutely enormous implications.  There will be winners and there will be losers with any piece of legislation, and lobbyists will zealously fight to defend the turf belonging to their particular clients.  Often lobbyists from different sides will literally be pitted directly against one another, and it won’t be pretty. 

  In fact, one analyst that works for Cowen Washington Research Group says that we could soon be watching “the corporate hunger games”…

  Almost every industry, special interest, and consumer group has an interest in the tax code, especially if the package ends up being as ambitious as Trump and Republican leaders want it to be. Chris Krueger, an analyst at Cowen Washington Research Group, told Business Insider that the battle over which loopholes to keep and which to throw out could get nasty.

   

  “Welcome tribunes to the corporate hunger games!” Kruger said in an email.

   

  “Only one-sixth of lobbyists were involved with health care (give or take — assuming it is one-sixth of economy). Six-sixths of lobbyists are involved in taxes.”

  There is so much at stake, and if the Republicans are able to get something passed it probably won’t look much like the plan that Trump originally proposed.  But it is so important to do something, because today Americans spend more on taxes than they will on food, clothing, and housing combined.  That is morally wrong, and we desperately need tax relief.

  Trump’s tax plan would nearly double the standard deduction, and that would be a wonderful thing.  It would provide instant tax relief to working class Americans, and that is something that I would greatly applaud.

  Trump’s tax plan would also great reduce the tax rate for corporations.  Our big corporations certainly don’t need the help, but we do want to get our rate more in line with the rest of the planet.  Because our corporate tax rate is one of the highest in the world, it actually encourages companies to set up shop some place else.  Being more competitive with the rest of the world would likely mean more jobs for the American people.

  Trump’s tax plan would also reduce the number of tax brackets for individuals.  Instead of seven, now there would just be three tax brackets of 12 percent, 25 percent and 35 percent.  To me, those rates are way too high, but of course I would like to eliminate the individual income tax entirely.

  Many are criticizing Trump’s plan for proposing to raise at least a trillion dollars over the next decade by getting rid of the deduction for state and local income taxes.  For those that live in very high tax states such as California, that deduction is a really big deal…

  High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.

   

  Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.

  Hopefully the Republicans can pass some sort of tax reform in the short-term, because the status quo is definitely not acceptable.

  When the income tax was first introduced in 1913, the vast majority of taxpayers were being taxed at a rate of just one percent.  The following comes from Politifact…

  The 1913 law imposed a tax of 1 percent on income up to $20,000, for both individual and joint filers. However, exemptions from the tax — the first $3,000 of income for individuals and the first $4,000 for joint filers — meant “virtually all middle-class Americans” were excused from paying, according to W. Elliot Brownlee’s book, Federal Taxation in America.

   

  The law also put in place a graduated surtax on incomes above $20,000; the highest rate paid, 7 percent, applied to Americans making more than $500,000 (about $11.4 million in 2011 dollars).

  Today, Americans are being taxed into oblivion.  It has been reported that we spend more than 6 billion hours a year on our taxes, and I once wrote an article detailing 97 different ways that various levels of government extract revenue from all of us.

  Every year government just gets bigger and bigger on the federal, state and local levels.  And the bigger government gets, the more oppressive it tends to become.

  Personally, I would love to start starving the beast that the left has created, and a great way to do that would be to completely eliminate the federal income tax.

  A lot of people could not even imagine a world without a federal income tax.  But the truth is that our country once thrived under such a system.  In fact, the greatest period of economic growth in U.S. history was between 1872 and 1913 when there was no income tax at all.

  And we could do it again.  Today, the individual income tax only accounts for about 46 percent of all federal revenue, and if we reduced the federal government to a size that our founders would have wanted, we would be more than okay.

  But even if we can’t greatly reduce the size of the federal government in the short-term, we can at least go to a very basic flat tax or a fair tax, and both of those systems would be far superior to what we have today.

  If we can’t get a flat tax or a fair tax right now, we should at least try to dramatically reduce tax rates and simplify the tax code as much as humanly possible.

  But if we do get a short-term victory, the battle is definitely not over.  In the long-term, we need to be very clear that our goal should be to abolish the income tax, the IRS and the Federal Reserve entirely.  Anything short of that is not good enough.

  *  *  *

  Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

  

  

• A Market In Which "Shocks No Longer Shock": Deutsche's Kocic Explains How To Trade It

  Back in June, one of Wall Street’s more philosophical derivatives strategists, DB’s Aleksandar Kocic looked at the state of the market and postulated that far from “stable” the existing risk  “equilibrium” is one which can be described as “metastable“, the result of widespread complacency, and which he compared to an avalanche where “a totally innocuous event can trigger a cataclysmic event (e.g. a skier’s scream, or simply continued snowfall until the snow cover is so massive that its own weight triggers an avalanche.” Putting it in his usual post-modernist style, Kocic said that “complacency encourages bad behavior and penalizing dissent – there is a negative carry for not joining the crowd, which further reinforces bad behavior.”

  This is the source of the positive feedback that triggers occasional anxiety attacks, which, although episodic, have the potential to create liquidity problems. Complacency arises either when everyone agrees with everyone else or when no one agrees with anyone. In these situations, which capture the two modes of recent market trading, current and the QE period, the markets become calm and volatility selling and carry strategies define the trading landscape. But, calm makes us worry, and persistent worrying causes fear, and fear tends to be reinforcing.

  Kocic framed the current state of the market as follows:

   

  

  Unfortunately, the relentless grind ever lower in volatility, which as reported yesterday has resulted in both the lowest average September VIX on record…

   

  

  … as well as the lowest September monthly settlement on record and only the second sub-10 monthly settlement… 

  

  … appears to have finally unsettled Kocic’ expectations, even if ever so tacitly implied, for a spike higher in suppressed vol, and as he writes in his latest ruminations on volatility, “as volatility continues to be unfazed by what lies ahead in the near term, short of surprises in inflation, we are likely to linger at low levels.”

  Following up to his note from last week, which explained how the Fed’s fake “transparency” killed long-term investor, Kocic writes that “as transparency became the word of the decade, by its very nature it created the forces that push everything to the surface. Things exist thanks only to the attention they produce. There is no room for ambiguity.” 

  Which ties in to the current news cycle, a relentless barrage of flashing red headlines, one scarier than the other, yet which on aggregate have zero adverse impact on volatility, and certainly on risk assets, which on Friday spiked to a new all time high following the latest last-second VIX-smash. Or, as Kocic puts it, “although shocks (political and other) keep arriving in the market, they seem to be appearing at what looks like predictable time intervals (usually, on Fridays). Practically every week, there is a new issue that eclipses the previous one, and we lose interest in past issues, before there is any semblance of resolution.”

  And with traders’ attention spans already severely lacking, this habituation to hyperbolic, staccato newsflow means that not only is the market not discounting the future as Matt King postulated several months ago, but it is no longer able to even respond to the present, to wit:

  Shocks, if they are predictable, lose their spell and gradually become facts of life. Predictable political shocks feed back into their source. Due to their antagonistic character, they gradually erode the ability to make consensus and reduce the ability to legislate, making further reforms at least questionable, if not highly unlikely. The market “euphoria” (aka the Trump trade) that followed immediately after the elections is being perceived as increasingly remote. Despite all the promises of reflation of the economy, fiscal stimulus, expectation of economic turnaround, no change is on the horizon. We are stuck with the status quo, albeit a noisy one.

  So what does this mean for risk assets, and markets? According to the Deutsche analyst, “despite all the distortions and disruptions introduced by the central banks’, which has created a semi-permanent state of exception, markets have not lost one main characteristic, their adaptability. As the markets are getting inoculated against event risk, volatility continues to be under pressure. While we are distancing ourselves from the idea of political change, the Fed is seen, once again, as the main source of volatility. However, the Fed’s position is an uncomfortable one. The main problem it faces is the balance between preventing inflation from becoming a risk while at the same time not causing a rapid and substantial rise of rates. This requires a high level of fine tuning. It means that the Fed has to continue with rate hikes, but the hikes have to be done carefully without triggering the bond unwind.”

  The implication for vol traders is that contrary to warnings of market “metastability” and “suppressed cataclysmic vol events”, Kocic – in many ways pulling a Hugh Hendry of his own – comes to the admission that fighting the Fed’s control over vol has become a futile pastime, and even though further complacency is in the cards, “continued vol selling” is encouraged.

  … the market gradually, and reluctantly, trails behind the Fed, one hike at a time, and adjusts expectations on the go, without taking a longterm view on the Fed. It is difficult to see how this can lead to any excitement capable of inspiring higher volatility. As long as things evolve according to this scenario, everything shoiuld remain “predictable” with occasional noise that the market has learned to ignore. This is an environment that is bearish for volatility. It fosters further complacency and encourages continued vol selling.

  Finally, Kocic takes a “Greek” detour and asks whether in this environment, in which every shock is ignored by a market now programmed to sell vol no matter what, “there is hope for Gamma?” Here is his answer:

  In our recent publications, we have extracted one possible measure of liquidity from the volume data of Treasury futures. This measure quantifies sensitivity of the price to changes in trading volume. The liquidity index is expressed as a negative log of this sensitivity, so that large sensitivity corresponds to low liquidity and vice versa. The figure shows the (smoothed) liquidity (on the inverted axis) overlaid with the 3M10Y– low vol goes hand in hand with high liquidity.

   

  

   

  Liquidity has a logical connection with volatility. This starts at the very short end and propagates across the term structure: By making a price, market makers are implicitly short volatility for which they are required to allocate risk capital and the bid/ask spread (which is an indirect measure of liquidity) is the compensation they receive for this risk exposure. All else equal, the ability to hedge an option is a function of liquidity of the underlying, and the option prices should reflect that. From the figure, we note that post 2004, with the disappearance of mortgage negative convexity hedging and the growth of  volume on the exchanges, liquidity has been providing a lower bound for gamma – whenever gamma reached this lower bound, it has been pushed up. Also, the departures from that lower bound have been increasingly rarer and short lived. This holds not only for rates, but for equities as well.

   

  As volatility continues to be unphased by what lies ahead in the near term, short of surprise in inflation, we are likely to linger at low levels. In that context, liquidity constraints are going to define the lower bound on gamma.

  As a reminder, none of this is new: those who have traded this market (for more than just a few years) instead of merely commenting on it, will recall all those vol traders who lost their jobs in early 2007 when vol crashed so hard, there literally wasn’t a swaptions market. If Kocic is right, vol traders in 2017 (and perhaps 2018) will suffer the same fate. Of course, the 2007 episode is best remembered not for the the vol linked pink slips, but the explosion in VIX shortly thereafter and the resultant near collapse of the US financial system. Despite the Fed’s relentless pressure, trillions in liquidity injections and vol selling, we see nothing that has changed since then, and no reason why this time will be different.

  

  

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• God is Dead

  From the Slope of Hope blog:

  

  That’s something I’ve got in common with Private Pyle: he wants to be different. For whatever reason, I’m a contrarian to the core. Indeed, one of the appeals of messing around with personal computers back in 1980 was that practically nobody else was doing it (in case you hadn’t noticed, the unusualness of microcomputers vanishes decades ago, so that aspect of the appeal is likewise gone).

  This contrarian view of the world extends to the “cover curse”, a theory to which I strongly subscribe. Any bold declaration made by a prominent publication seems to invariably mark an inflection point. There’s this cover, for instance, which came out immediately before the demise and near-bankruptcy of Apple:

  

  This cover from The Economist (itself quite famous for its covers being so often dead wrong) when oil was $10 per barrel and was about to explode hundreds of percent higher.

  

  This homoerotic image of the strength of the US dollar, just before it commenced its very steady slide promptly at the start of 2017:

  

  Barron’s decided Facebook was a lousy stock, just before it started a gargantuan run up to “blue chip” stock status, almost exactly to the day……

  

  And, perhaps the most famous of all, Business Week decided just before 1980 began that stocks were doomed, after which time literally trillions of dollars of new wealth were created.

  

  So, time and again, newspapers and magazines get it wrong – – but plenty of other media does too. This book, for instance, was all about the coast-to-coast millionaires in the United States, and it came out June 2007, precisely at the apex of the housing bubble.

  

  So with mountains of other anecdotal evidence, it would seem that only a fool would declare loudly, on a public stage, anything definitive, since major announcements from prominent publications or thought leaders so often represent the collective consciousness at the point that it’s utterly saturated with some particular notion. Even though they say that no one rings a bell at the top, if you look historically at major turning points, there were always bells ringing – – just in a contrarian, hidden form.

  Thus, when Trump was elected, inaugurated, and soon thereafter started bragging about the stock market, it seemed like a major reversal signal. After all, this is the President of the United States, and he’s crowing to the world about a stock market for which he gives himself full credit. So that’s bound to be some kind of peak, right? Surely after a tweet like that, the gods above will shame the man, just like they’ve embarrassed anyone showing hubris since the times of the ancient Greeks. Right?

  …….Right?.…….

  

  And yet there they are. Tweet after tweet, month after month, about high after high. And yet the market just keeps going higher……….which, let’s face it, is just going to egg the man on even more. It’s one thing for an old biddy like Yellen to yammer on about no more crises in her lifetime. But the POTUS is another matter altogether.

  It really wasn’t that long ago that acts of hubris, either in the form of cover stories or political braggadocio, were met with swift reprisal from the universe. The biggest question facing us today – – far greater than where interest rates are going, or what the dollar is going to do, or even whether Kim is ever going to launch any of those missiles he’s so proud of – – is whether market forces………..normal market forces…………..are gone for good. They might just be, and if so, hubris is not only back in style, but it’s going to be here to stay for a long, long time.

  

  

  

• Exposing The Slimy Business Of 'Russia-Gate' (What The Mainstream Media Doesn't Want You To Know)

  Authored by Robert Parry via ConsortiumNews.com,

  As the U.S. government doles out tens of millions of dollars to 'combat Russian propaganda', one result is a slew of new 'studies' by 'scholars' and 'researchers' auditioning for the loot…

  

  The “Field of Dreams” slogan for America’s NGOs should be: “If you pay for it, we will come.”

  And right now, tens of millions of dollars are flowing to non-governmental organizations if they will buttress the thesis of Russian “meddling” in the U.S. democratic process no matter how sloppy the “research” or how absurd the “findings.”

  

  Russian President Vladimir Putin, following his address to the UN General Assembly on Sept. 28, 2015. (UN Photo)

  And, if you think the pillars of the U.S. mainstream media – The Washington Post, The New York Times, CNN and others – will apply some quality controls, you haven’t been paying attention for the past year or so. The MSM is just as unethical as the NGOs are.

  So, we are now in a phase of Russia-gate in which NGO “scholars” produce deeply biased reports and their nonsense is treated as front-page news and items for serious discussion across the MSM.

  Yet, there’s even an implicit confession about how pathetic some of this “scholarship” is in the hazy phrasing that gets applied to the “findings,” although the weasel words will slip past most unsuspecting Americans and will be dropped for more definitive language when the narrative is summarized in the next day’s newspaper or in a cable-news “crawl.”

  For example, a Times front-page story on Thursday reported that “a network of Twitter accounts suspected of links to Russia seized on both sides of the [NFL players kneeling during the National Anthem] issue with hashtags, such as #boycottnfl, #standforouranthem and #takeaknee.”

  The story, which fits neatly into the current U.S. propaganda meme that the Russian government somehow is undermining American democracy by stirring up dissent inside the U.S., quickly spread to other news outlets and became the latest “proof” of a Russian “war” against America.

  However, before we empty the nuclear silos and exterminate life on the planet, we might take a second to look at the Times phrasing: “a network of Twitter accounts suspected of links to Russia.”

  The vague wording doesn’t even say the Russian government was involved but rather presents an unsupported claim that some Twitter accounts are “suspected” of being part of some “network” and that this “network” may have some ill-defined connection – or “links” – to “Russia,” a country of 144 million people.

  ‘Six Degrees from Kevin Bacon’

  It’s like the old game of “six degrees of separation” from Kevin Bacon. Yes, perhaps we are all “linked” to Kevin Bacon somehow but that doesn’t prove that we know Kevin Bacon or are part of a Kevin Bacon “network” that is executing a grand conspiracy to sow discontent by taking opposite sides of issues and then tweeting.

  

  The New York Times building in Manhattan. (Photo credit: Robert Parry)

  Yet that is the underlying absurdity of the Times article by Daisuke Wakabayashi and Scott Shane. Still, as silly as the article may be that doesn’t mean it’s not dangerous. The Times’ high-profile treatment of these gauzy allegations represents a grave danger to the world by fueling a growing hysteria inside the United States about being “at war” with nuclear-armed Russia. At some point, someone might begin to take this alarmist rhetoric seriously.

  Yes, I understand that lots of people hate President Trump and see Russia-gate as the golden ticket to his impeachment. But that doesn’t justify making serious allegations with next to no proof, especially when the outcome could be thermonuclear war.

  However, with all those millions of dollars sloshing around the NGO world and Western academia – all looking for some “study” to fund that makes Russia look bad – you are sure to get plenty of takers. And, we should now expect that new “findings” like these will fill in for the so-far evidence-free suspicions about Russia and Trump colluding to steal the presidency from Hillary Clinton.

  If you read more deeply into the Times story, you get a taste of where Russia-gate is headed next and a clue as to who is behind it:

  “Since last month, researchers at the Alliance for Securing Democracy, a bipartisan initiative of the German Marshall Fund, a public policy research group in Washington, have been publicly tracking 600 Twitter accounts — human users and suspected bots alike — they have linked to Russian influence operations. Those were the accounts pushing the opposing messages on the N.F.L. and the national anthem.

   

  “Of 80 news stories promoted last week by those accounts, more than 25 percent ‘had a primary theme of anti-Americanism,’ the researchers found. About 15 percent were critical of Hillary Clinton, falsely accusing her of funding left-wing antifa — short for anti-fascist — protesters, tying her to the lethal terrorist attack in Benghazi, Libya, in 2012 and discussing her daughter Chelsea’s use of Twitter. Eleven percent focused on wiretapping in the federal investigation into Paul Manafort, President Trump’s former campaign chairman, with most of them treated the news as a vindication for President Trump’s earlier wiretapping claims.”

  The Neocons, Again!

  So, let’s stop and unpack this Times’ reporting.

  First, this Alliance for Securing Democracy is not some neutral truth-seeking organization but a neoconservative-dominated outfit that includes on its advisory board such neocon luminaries as Mike Chertoff, Bill Kristol and former Freedom House president David Kramer along with other anti-Russia hardliners such as former deputy CIA director Michael Morell and former House Intelligence Committee Chairman Mike Rogers.

  

  Neoconservative pundit William Kristol. (Photo credit: Gage Skidmore)

  How many of these guys, do you think, were assuring us that Iraq was hiding WMDs back in 2003?

  This group clearly has an ax to grind, a record of deception, and plenty of patrons in the Military-Industrial Complex who stand to make billions of dollars from the New Cold War.

  The neocons also have been targeting Russia for regime change for years because they see Russian President Vladimir Putin as the chief obstacle to their goal of helping Israel achieve its desire for “regime change” in Syria and a chance to bomb-bomb-bomb Iran. Russia-gate has served the neocons well as a very convenient way to pull Democrats, liberals and even progressives into the neocon agenda because Russia-gate is sold as a powerful weapon for the anti-Trump Resistance.

  The Times article also might have mentioned that Twitter has 974 million accounts. So, this alarm over 600 accounts is a bit disproportionate for a front-page story in the Times, don’t you think?

  And, there’s the definitional problem of what constitutes “anti-Americanism” in a news article. And what does it mean to be “linked to Russian influence operations”? Does that include Americans who may not march in lockstep to the one-sided State Department narratives on the crises in Ukraine and Syria? Any deviation from Official Washington’s groupthink makes you a “Moscow stooge.”

  And, is it a crime to be “critical” of Hillary Clinton or to note that the U.S. mainstream media was dismissive of Trump’s claims about being wiretapped only for us to find out later that the FBI apparently was wiretapping his campaign manager?

  However, such questions aren’t going to be asked amid what has become a massive Russia-gate groupthink, dominating not just Official Washington, but across much of America’s political landscape and throughout the European Union.

  Why the Bias?

  Beyond the obvious political motivations for this bias, we also have had the introduction of vast sums of money pouring in from the U.S. government, NATO and European institutions to support the business of “combatting Russian propaganda.”

  

  President Obama in the Oval Office.

  For example, last December, President Obama signed into law a $160 million funding mechanism entitled the “Combating Foreign Propaganda and Disinformation Act.” But that amounts to only a drop in the bucket considering already existing Western propaganda projects targeting Russia.

  So, a scramble is on to develop seemingly academic models to “prove” what Western authorities want proven: that Russia is at fault for pretty much every bad thing that happens in the world, particularly the alienation of many working-class people from the Washington-Brussels elites.

  The truth cannot be that establishment policies have led to massive income inequality and left the working class struggling to survive and thus are to blame for ugly political manifestations – from Trump to Brexit to the surprising support for Germany’s far-right AfD party. No, it must be Russia! Russia! Russia! And there’s a lot of money on the bed to prove that point.

  There’s also the fact that the major Western news media is deeply invested in bashing Russia as well as in the related contempt for Trump and his followers. Those twin prejudices have annihilated all professional standards that would normally be applied to news judgments regarding these flawed “studies.”

  On Thursday, The Washington Post ran its own banner-headlined story drawn from the same loose accusations made by that neocon-led Alliance for Securing Democracy, but instead the Post sourced the claims to Sen. James Lankford, R-Oklahoma. The headline read: “Russian trolls are stoking NFL controversy, senator says.”

  The “evidence” cited by Lankford’s office was one “Twitter account calling itself Boston Antifa that gives its geolocation as Vladivostok, Russia,” the Post reported.

  By Thursday, Twitter had suspended the Boston Antifa account, so I couldn’t send it a question, but earlier this month, Dan Glaun, a reporter for Masslive.com, reported that the people behind Boston Antifa were “a pair of anti-leftist pranksters from Oregon who started Boston Antifa as a parody of actual anti-fascist groups.”

  In an email to me on Thursday, Glaun cited an interview that the Boston Antifa pranksters had done with right-wing radio talk show host Gavin McInnes last April.

  And, by the way, there are apps that let you manipulate your geolocation data on Twitter. Or, you can choose to believe that the highly professional Russian intelligence agencies didn’t notice that they were telegraphing their location as Vladivostok.

  Mindless Russia Bashing

  Another example of this mindless Russia bashing appeared just below the Post’s story on Lankford’s remarks. The Post sidebar cited a “study” from researchers at Oxford University’s Project on Computational Propaganda asserting that “junk news” on Twitter “flowed more heavily in a dozen [U.S.] battleground states than in the nation overall in the days immediately before and after the 2016 presidential election, suggesting that a coordinated effort targeted the most pivotal voters.” Cue the spooky Boris and Natasha music!

  

  Boris and Natasha, the evil spies from the Rocky and Bullwinkle shows.

  Of course, any Americans living in “battleground states” could tell you that they are inundated with all kinds of election-related “junk,” including negative TV advertising, nasty radio messages, alarmist emails and annoying robo-calls at dinner time. That’s why they’re called “battleground states,” Sherlock.

  But what’s particularly offensive about this “study” is that it implies that the powers-that-be must do more to eliminate what these “experts” deem “propaganda” and “junk news.” If you read deeper into the story, you discover that the researchers applied a very subjective definition of what constitutes “junk news,” i.e., information that the researchers don’t like even if it is truthful and newsworthy.

  The Post article by Craig Timberg, who apparently is using Russia-gate to work himself off the business pages and onto the national staff, states that “The researchers defined junk news as ‘propaganda and ideologically extreme, hyperpartisan, or conspiratorial political news and information.’

  “The researchers also categorized reports from Russia and ones from WikiLeaks – which published embarrassing posts about Democrat Hillary Clinton based on a hack of her campaign chairman’s emails – as ‘polarizing political content’ for the purpose of the analysis.”

  So, this “study” lumped together “junk news” with accurate and newsworthy information, i.e., WikiLeaks’ disclosure of genuine emails that contained such valid news as the contents of Clinton’s speeches to Wall Street banks (which she was trying to hide from voters) as well as evidence of the unethical tactics used by the Democratic National Committee to sabotage Sen. Bernie Sanders’s campaign.

  Also dumped into the researchers’ bin of vile “disinformation” were “reports from Russia,” as if everything that comes out of Russia is, ipso facto, “junk news.”

  And, what, pray tell, is “conspiratorial political news”? I would argue that the past year of evidence-lite allegations about “Russian meddling” in the U.S. election accompanied by unsupported suspicions about “collusion” with the Trump campaign would constitute “conspiratorial political news.” Indeed, I would say that this Oxford “research” constitutes “conspiratorial political news” and that Timberg’s article qualifies as “junk news.”

  Predictable Outcome

  Given the built-in ideological bias of this “research,” it probably won’t surprise you that the report’s author, Philip N. Howard, concludes that “junk news originates from three main sources that the Oxford group has been tracking: Russian operatives, Trump supporters and activists part of the alt-right,” according to the Post.

  

  The Washington Post building in downtown Washington, D.C. (Photo credit: Washington Post)

  I suppose that since part of the “methodology” was to define “reports from Russia” as “junk news,” the appearance of “Russian operatives” shouldn’t be much of a surprise, but the whole process reeks of political bias.

  Further skewing the results, the report separated out information from “professional news organizations [and] political parties” from “some ‘junk news’ source,” according to the Post. In other words, the “researchers” believe that “professional news organizations” are inherently reliable and that outside-the-mainstream news is “junk” – despite the MSM’s long record of getting major stories wrong.

  The real “junk” is this sort of academic or NGO research that starts with a conclusion and packs a “study” in such a way as to guarantee the preordained conclusion. Or as the old saying goes, “garbage in, garbage out.”

  Yet, it’s also clear that if you generate “research” that feeds the hungry beast of Russia-gate, you will find eager patrons doling out dollars and a very receptive audience in the mainstream media.

  In a place like Washington, there are scores if not hundreds of reports generated every day and only a tiny fraction get the attention of the Times, Post, CNN, etc., let alone result in published articles. But “studies” that reinforce today’s anti-Russia narrative are sure winners.

  So, if you’re setting up a new NGO or you’re an obscure academic angling for a lucrative government grant as well as some flattering coverage in the MSM, the smart play is to join the new gold rush in decrying “Russian propaganda.”

  

  

• Armed Soldiers To Replace Cops On Danish Streets

  Even as Europe’s political establishment professes its liberal ideals by accepting – or in the case of the ongoing spat between Brussels and Central Europe, forcing others to accept –  as many refugees as humanitarian virtue signalling will require, the true face of Europe is gradually emerging behind the scenes, and according to The Local.de, starting today armed soldiers from the Danish Armed Forces (Forsvaret) will replace police officers at both Denmark’s southern border to Germany and at potential terror targets in Copenhagen.

  

  According to the Danish National Police (Rigspolitiet) and Copenhagen Police, 160 soldiers will patrol the border and take over guard duties at Jewish institutions including the Great Synagogue in central Copenhagen.

  The synagogue has been under constant police protection since a Danish-born terrorist of Palestinian descent shot and killed 37-year-old Dan Uzan, a volunteer security guard, outside the building in February 2015. The gunman, Omar El-Hussein, had earlier in the night opened fire with an automatic rifle outside a cultural centre hosting a free speech event, killing 55-year-old Finn Nørgaard and injuring police officers. El-Hussein was later shot and killed by police.

   

  The soldiers’ role at the German border was described as ancillary and will not entail actively checking the IDs of those entering the country. That role will still be filled by police officers and members of the Danish Home Guard (Hjemmeværnet), which has been active in border checks since April 2016.

  The plan to put armed military soldiers at the border and potential terror targets has been under discussion for well over a year, or not long after Europe realized the consequences of the great welcome party thrown by Angela Merkel in 2015. The official explanation is that it is being implemented as a way “to ease the workload of an overworked and undermanned police force.” The unofficial, of course, is that the police desperately need help against an ongoing influx of potential terrorists.

  The 160 soldiers will relieve the police force of the equivalent of 128 full-time police officers. According to news agency Ritzau, police currently use the equivalent of 456 full-time officers on border controls and patrolling potential terror targets.

  Meanwhile, Denmark has long since lost the idealistic illusion it is a noble, humanitarian home welcoming the world’s refugees. As the WaPo wrote last year,  “as Europe walls itself off, the continent is left to reckon with what’s become of its long- cherished humanitarian beliefs. And to many in Denmark, the chasm between reputation and reality looks particularly gaping.

  “We’re losing respect for the values upon which we built our country and our European Union,” said Andreas Kamm, secretary general of the Danish Refugee Council. “It’s becoming very hard to defend human rights.”

  This Scandinavian nation of compulsively friendly people is celebrated by U.S. presidential candidate Bernie Sanders as a ­social-welfare utopia, one that was recently judged the world’s happiest place. Ranking high in the country’s pantheon of heroes are those who protected Jews during the Holocaust or who helped the oppressed escape from behind the Iron Curtain during the Cold War.

  But when it came to those fleeing 21st-century conflicts on Europe’s doorstep, Denmark went into overdrive to broadcast its hostility. While Germany continued to welcome asylum seekers, and other European countries such as Sweden held their doors open for as long as they could, Denmark took a hard line almost from the beginning. The government slashed refugees’ benefits, then advertised the cuts in Lebanese newspapers. It enabled police to confiscate refugees’ valuables, including cash and jewelry. And authorities made it far more difficult for those already here to reunite with their families, upping the wait time from one year to three.

  And now, just in case the measures were insufficient, heavily armed soliders will be there to make sure there are no more casualties as a result of Angela Merkel’s “shared” generosity.

  

  

• "The Fed Is Afraid…"

  Authored by Ryan McMaken via The Mises Institute,

  Janet Yellen this week cast doubt on the Fed's announced plan to continue Fed rate hikes and reverse its years of "unconventional" monetary policy. 

  “My colleagues and I may have misjudged the strength of the labor market,” Yellen announced on Tuesday, adding that they'd also misjudged "the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation."

   

  Yellen also "noted that the labor market, which historically has been closely linked to inflation, may not be as tight as the low unemployment rate suggests."

  In other words, Fed economists are concerned by the fact they've been unable to achieve their arbitrary 2% price-inflation objective, which they believe indicates a healthy level of economic activity.

  Moreover, they're concerned the low unemployment rate — which can be deceptive since it can show a "tight" market even in the presence of unemployed discouraged workers and involuntary part-timers — is not telling the whole story. 

  The end result is that the Fed is not at all sure that it can continue with its promised path of raising the target interest rate as has been the "plan" for the past several years. 

  As we've noted here at mises.org before, the Fed has a habit of announcing big plans to scale back quantitative easing, and increasing the target rate — only to later backtrack or downplay the extent to which it will "normalize" monetary policy. 

  Since 2009, the target rate has been at rock-bottom rates. Over the past year, the Fed has raised the target rate from 0.5 percent to 1.25 percent, but this has only gotten the rate back up to where it was when it was attempting to stimulate the economy in the wake of the dot-come bust in 2001. On other words, the Fed is still deep into "stimulative monetary policy" territory. 

  

  And now we're being told that the Fed may have overestimated the rate to which it can scale back monetary policy. 

  Nine Years of Stagnant Incomes 

  Looming over the latest admission of "miscalculating" the economy's success is the ongoing myth that the Fed and its economists are wisely and carefully steering the economic ship to a safe port. 

  Actual experience — given that the target rate was kept near zero for eight years — more suggests panic and dismay, rather than the presence of a steady hand. 

  If we look at the Federal government's own data on incomes through 2016, we find an unimpressive record indeed. 

  Real median personal income, for example, peaked during the last cycle at $30,821 in 2007. This total was not exceeded again until 2016 when it reached $31,099. That's 0.9 percent growth over a period of nine years. 

  

  We see a similar picture with both median family income and median household income. 

  

  Median family income grew 2.3 percent from 2007 to 2016. It grew 2.7 percent from 2000 to 2016. Growth was nearly zero from 2000 to 2015, and only began to really surpass old peaks in 2016. 

  

   Median household income grew 1.5 percent from 2007 to 2016. It grew 0.6 percent from 2000 to 2016. 

  (See here and here for more discussion on how demographic changes can affect income growth levels.)

  These number by themselves don't prove that real incomes are flat for everyone of course. But, lackluster numbers in employment, and in GDP over the last 20 years — compared to the post-war economy overall — hardly point to a period of economic gain for many ordinary Americans. 

  The Fed Is Afraid 

  For years, the Fed has been telling us repeatedly that the economy is moving forward, that growth is "moderately" robust, and that they'll return to more "normal" interest rates and more normal monetary policy. The reality has been eight yeears of no action followed by about 18 months of extremely mild and cautious increases in the target rate. 

  So the question is this: if we're seeing moderate growth month after month, and year after year, why has the Fed been too afraid to do anything except make only the smallest changes?

  The answer, most likely, is that the Fed knows the economy is extremely fragile. This latest admission from Yellen serves to — yet again — manage expectations and tell us to not expect much of anything from the Fed in terms of normalization. Perhaps we'll need another seven or eight years to get the targe rate up to 2 percent.

  

  

• Real Estate Company Is Replacing Agents With Robots

  With robots slowly but surely taking over every semi-skilled occupation including in a bizarre development, the production of cocaine which may well unleash the era of cocaine deflation upon Wall Street (a welcome development in light of ever-shrinking bonuses), a new – and familiar – industry has emerged as the robots’ next target. According to Newsday, a California real estate technology company that aims to lower the cost of home-selling by using robots and “big data” instead of commission-based real estate agents has recently opened a Long Island office.

  The latest potential source of tech-inspired deflation, REX Real Estate Exchange, which charges a selling commission of only 2% instead of the usual 5 to 6%, launched its Long Island operation this summer. The Los Angeles-based company expects to start listing New York-area homes on its website, rexchange.com in the near-term.

  

  Traditional real estate fees “are just crazy high compared with every other industry in the United States,” said Jack Ryan, Rex’s CEO and a former partner at Goldman Sachs. Decades ago, investment brokerages charged 12 cents a share for stock trades, but now they charge less than a penny, he said. By lowering real estate fees, he said, his company is “doing the same thing with residential real estate.” In the process – if successful – it will also put countless people out of work.

  According to Newsday, REX, which has raised $16 million from investors, is not the only company seeking to upend the residential real estate sales model. Another new entrant to the housing market is EasyKnock, a Sag Harbor startup that is rolling out a website designed to match sellers with buyers without the intervention of brokers. The company, which has raised $1.2 million in venture capital and plans to go live at any moment, has lowered commissions even more, to just 1.5% and does not list homes on the Multiple Listing Service of Long Island, said co-founder and chief executive Jarred Kessler. The MLS is a way for brokers to share information about homes for sale.

  “We’re a broker-free ecosystem,” Kessler said.

  Among national brokerages, Seattle-based Redfin charges sellers a 1.5 percent listing fee — or 1 percent in a few communities, including Washington, D.C. — though unlike REX and EasyKnock, it also pays a commission to the buyer’s agent.

   

  In a typical home sale, the commission gets split between the seller’s and buyer’s brokerages. If a home sells for $300,000 and the seller pays a 6 percent commission divided equally, each brokerage receives $9,000 and pays out a portion of that to the agents.

  Like any threatened ecosystem, long Island real estate brokers expressed skepticism about the tech-focused companies’ prospects for success. “Discount brokers have attempted to be around for many, many years, and they just fall away because it is important to provide good personal services to the seller and to the buyer,” said Joe Moshé, owner of Plainview-based Charles Rutenberg Realty.

  To be sure, few home sellers choose to bypass agents. Last year and in 2015, 89 percent of home sellers used a real estate agent, the highest share since at least 1981, said Adam DeSanctis, a spokesman for the National Association of Realtors.

  Buyers typically start their search online, he said, “but at the end of the day, most people are still relying on the value a real estate agent provides.”

  That could change, however,  once sellers and buyers discover how much they could save, REX’s Ryan said. For instance, he said, if the seller or buyer of a $500,000 home saves 3 percent on real estate brokerage fees, that adds up to $15,000.

  Despite the discount fees, REX will provide full service, he said. The company expects to employ 10 licensed, salaried real estate agents here by the end of the year, and 50 by next year, Ryan said. The agents will guide buyers and sellers through listing and marketing a home and negotiating a sale, but the most sophisticated work will be done by computers, he said.

  REX finds likely buyers by doing rigorous analysis of consumers’ income, location, spending habits and other data, and it reaches them through targeted ads on social media and other sites, Ryan said. The company even tracks potential buyers’ browsing on its website, so if a buyer spends time checking out one home’s pool and its zoned schools, that buyer will get more ads for homes with pools and information about schools, he said.

  “It’s working brilliantly in southern California,” where the company closed 30 home sales in June, he said.

   

  The company does not list homes on services such as the MLS. Instead, Ryan said, it uses ads and listings on websites such as Zillow.

  But rather than relying on commission-based agents to provide information about homes, it is testing a tabletlike “robot” named REX that will be stationed in listed homes, programmed to answer some 75 typical questions. The Alexa-like tabletop box can answer nearly any question a prospective buyer lobs in its direction — from when the roof was last repaired to where the nearest Starbucks is.  Since in its current generation, Rex can’t do it all, a human rep is also on site, greeting potential buyers. Rex also employs licensed brokers and salespersons but is paying them salaries rather than commissions.

  The AI robot may very well appeal to millennials as they grow to house-buying age. Roughly 8% of sales in 2016 were from For Sale By Owner sites, a National Association of Realtors study found, while 89 percent of the sellers used a broker. Rex is trying to increase that 8 percent number by being super smart. Its research has found that the average buyer for a $500,000 home lives within 12 miles and for a $1 million home lives within 18 miles. But for a $50 million home, the buyer is global and already owns a home worth at least $10 million.

  One California home seller said REX provided better service than the traditional agents he had used before in a dozen or so transactions.

  Bob Simpson, 62, of Ventura, agreed to be interviewed by Newsday at the request of REX.

   

  Simpson said he liked that his for-sale sign listed a webpage dedicated to his own home, instead of to a brokerage’s website, and that he always got quick responses to his questions.

   

  Moreover, he said, when his home sold for $518,000, “we saved $21,000 by using REX. That’s indelibly inscribed in my head.”

   

  One of REX’s Long Island-based agents, Bryan Starck, 22, who moved from California to Great Neck two months ago, said he has met with 10 to 15 buyers so far. The lower fee “makes a ton of sense” to sellers, and so does the use of technology to identify buyers, Starck said.

  “You used to really need a traditional agent to buy a home or sell a home,” Starck said. But now, he said, “there’s an unprecedented amount of information available . . . I really do think this is going to be the company to change the industry.”

  If he is right, then your next real estate agent may look like this.

  

  

  

• Every Single Cognitive Bias In One Infographic

  The human brain is capable of incredible things, but it’s also extremely flawed at times.

  Science has shown that we tend to make all sorts of mental mistakes, called “cognitive biases”, that can affect both our thinking and actions. These biases, as Visual Capitalist's Jeff Desjardins points out, can lead to us extrapolating information from the wrong sources, seeking to confirm existing beliefs, or failing to remember events the way they actually happened!

  To be sure, this is all part of being human – but such cognitive biases can also have a profound effect on our endeavors, investments, and life in general. For this reason, today’s infographic from DesignHacks.co is particularly handy. It shows and groups each of the 188 known confirmation biases in existence.

  

  Courtesy of: Visual Capitalist

   

  WHAT IS A COGNITIVE BIAS?

  Humans tend to think in certain ways that can lead to systematic deviations from making rational judgments.

  These tendencies usually arise from:

  • Information processing shortcuts
  • The limited processing ability of the brain
  • Emotional and moral motivations
  • Distortions in storing and retrieving memories
  • Social influence

  Cognitive biases have been studied for decades by academics in the fields of cognitive science, social psychology, and behavioral economics, but they are especially relevant in today’s information-packed world. They influence the way we think and act, and such irrational mental shortcuts can lead to all kinds of problems in entrepreneurship, investing, or management.

  COGNITIVE BIAS EXAMPLES

  Here are four examples of how these types of biases can affect people in the business world:

  Familiarity Bias: An investor puts her money in “what she knows”, rather than seeking the obvious benefits from portfolio diversification. Just because a certain type of industry or security is familiar doesn’t make it the logical selection.

  Self-Attribution Bias: An entrepreneur overly attributes his company’s success to himself, rather than other factors (team, luck, industry trends). When things go bad, he blames these external factors for derailing his progress.

  Anchoring Bias: An employee in a salary negotiation is too dependent on the first number mentioned in the negotiations, rather than rationally examining a range of options.

  Survivorship Bias: Entrepreneurship looks easy, because there are so many successful entrepreneurs out there. However, this is a cognitive bias: the successful entrepreneurs are the ones still around, while the millions who failed went and did other things.

  

  

• Scientists Are Developing A Technique To Control The Weather With Laser-Beams

  In a breakthrough that could permanently ameliorate the threat of thinning water supplies in California and much of the western US, a team of scientists says it will soon be able to induce rainfall and lightning storms by firing high-energy laser beams into the heavens.

  Express reports that the breakthrough involves manipulating the static electricity present in clouds – which, after all, are just balls of condensation, triggering rainfall, according to experts at the University of Central Florida and the University of Arizona.

  A six year drought in California was finally declared over this year but the threat for the south-western state as well as other locations in the world remains the same.

  

  But scientists may now be able to induce rain and lightning storms using high energy lasers in a breakthrough that could potentially eradicate droughts throughout the globe.

  The possibility of condensation, lightning and storms are ever present in the clouds and are containED through high amounts of static electricity.

  Experts from the University of Central Florida and the University of Arizona believe that by firing a series of laser beams, they can activate the static electricity and induce rain and storms.

  Here’s how it would work: One beam would be fired into the clouds to stimulate rainfall. Then, a second beam would surround the first beam to help sustain it for longer.

  “When a laser beam becomes intense enough, it behaves differently than usual – it collapses inward on itself,” said Matthew Mills, a graduate student in the Center for Research and Education in Optics and Lasers (CREOL).

   

  “The collapse becomes so intense that electrons in the air’s oxygen and nitrogen are ripped off creating plasma – basically a soup of electrons.”

  This struggle is known as “filamentation” and creates a “light string” that only lasts for a short time before it disperses – hence the need for the second beam.

  However, “because a filament creates excited electrons in its wake as it moves, it artificially seeds the conditions necessary for rain and lightning to occur.”

  And, as it turns out, “if you wrap a large, low intensity, doughnut-like ‘dress’ beam around the filament and slowly move it inward, you can provide this arbitrary extension.

  “Since we have control over the length of a filament with our method, one could seed the conditions needed for a rainstorm from afar," Mills continued.

   

  “Ultimately, you could artificially control the rain and lightning over a large expanse with such ideas.”

  One of the scientists involved with the study appeared on CBS This Morning on Thursday to explain how the technology would work in more detail:

  
   

  

  

• Airports Systems Just Crashed Globally; Could The Power Grid Be Next?

  Authored by Mac Slavo via SHTFplan.com,

  Airport computer systems crashed around the globe yesterday. The crash caused passenger delays, angst, and fright among travelers, but a more ominous question has arisen in light of this glitch. Could the next failure be a worldwide power grid outage?

  

  Thousands of travelers were grounded yesterday when a computer glitch took down check-in systems at more than 100 airports worldwide. The crash left passengers waiting in long lines at counters while trying to check-in for their flights. T Amadeus Alta, the company that provides the software, confirmed it is experiencing a “network issue that is causing disruption,” The Telegraph reported.

  The glitch affected even massive airports,  such London’s Heathrow International Airport, Charles de Gaulle Airport in Paris, and Ronald Reagan International Airport in Washington, D.C. “Technical teams are working on the problem, services are gradually being restored,” the software company said. After a few hours, officials at Gatwick and Heathrow airports said their systems were “back up and running” after the “momentary IT glitch,” adding there may be a delay due to the outage.

  A statement on the glitch read, “A small number of airlines are currently experiencing intermittent issues with their check-in systems at airports around the world — including at Heathrow.”

   

  It continued, “Passengers will still be able to check-in for their flight, although the process may take slightly longer than usual.”

  Passengers took to social media to complain about the crash.

  The @Qantas check in system down. Massive queues in Hong Kong. Not sure why they can't get this right pic.twitter.com/lrL5jUzVEN

  — Paul Harapin (@paulharapin) September 28, 2017

  //platform.twitter.com/widgets.js

  What is going on @HeathrowAirport with @ThaiAirways checkin, this is quickly becoming a joke!

  — Peter White (@peterwhite1997) September 28, 2017

  //platform.twitter.com/widgets.js

  According to Fox News, it is still unclear when all the systems will be back up and running, but it begs the question: what if a power grid failure is next?

  It isn’t like it’s never happened, but it may only be a matter of time before it occurs on a massive scale.

  In December of 2015, 230,000 people in Western Ukraine lost power after 30 substations were mysteriously shut off. Contrary to what most people assumed at the time, this wasn’t an innocuous power outage. The authorities would later admit that the loss of power was caused by a cyber attack, which marked the first time that malware was successfully used to attack a power grid. A similar, albeit more sophisticated cyber attack, occurred one year later just outside of Kiev. Given the current tensions between Russia and Ukraine, it’s widely believed that the Russian government was responsible for these incidents.

   

  However, there’s more to this story than meets the eye. A computer security company has been investigating these attacks, and has discovered the malware that was used to take down the grid. They’ve found that it’s far more dangerous and easier to use than anyone realized before. –Ready Nutrition

  It may not necessarily be malicious malware that takes down the grid either.  Even solar flares can cause some incredibly intense issues.

  Most policy makers have not taken the threat of an earth-directed solar flare seriously, even though a senior member of the Congressional Homeland Security Committee recently warned that there is a 100% Chance of a Severe Geo-Magnetic Event Capable of Crippling Our Electric Grid.

  If such an event were to happen Congressman Roscoe Bartlett, who has advised people to develop individual preparedness plans based on the threat of massive solar flares or electro-magnetic pulse detonations, says that it would take upwards of 18 months to bring the grid back online because of a decaying national infrastructure. –SHTFPlan

  With the crash of the airport system affecting people worldwide, imagine how much chaos would ensue should the power grid go down over most of earth.

  

  

• Monitor Releases Simulation Of What Nuclear Strike On North Korea Would Look Like

  A scientist tasked with monitoring the proliferation of nuclear weapons has published what he described as a “rough simulation” of what would happen if North Korea follows through with threats to test a hydrogen bomb over the Pacific Ocean.

  The upshot of the simulation – which was published by Lassina Zerbo, the head of the Comprehensive Nuclear Test Ban Treaty Organization – is that such an “atmospheric burst” could spread a “radio-isotope cloud” of radiation across the planet, potentially leading to the catastrophic loss of life. 

  In response to inquiries: Rough simulation (Sept15-29) of #radio-isotope cloud from hypothetical atmospheric burst over Pacific: #CTBT #IMS pic.twitter.com/361ZBkoUy7

  — Lassina Zerbo (@SinaZerbo) September 28, 2017

  //platform.twitter.com/widgets.js

  Simply a rough simulation of potential cloud that cld carry isotopes! In response to specific inquiries and nothing more.

  — Lassina Zerbo (@SinaZerbo) September 28, 2017

  //platform.twitter.com/widgets.js

  To be sure, some criticized the graphic as misleading, arguing that such a test probably wouldn’t lead to a world-wide cataclysm.

  This is very misleading. Folks will interpret as cataclysmic. Localized rad levels and global fallout totally different.

  — Tucker Murray (@TJM11291) September 28, 2017

  //platform.twitter.com/widgets.js

  A Harvard PhD professor said that people “will confuse it with the kinds of fallout clouds they are used to reading about” the “shelter in place for two weeks kind.”

  They will confuse it with the kinds of fallout clouds they are used to reading about, the "take shelter for 2 weeks" kind. pic.twitter.com/JEvIhbe97L

  — Alex Wellerstein (@wellerstein) September 28, 2017

  //platform.twitter.com/widgets.js

  US President Donald Trump warned earlier this week, North Korea’s nuclear weapons threaten “the entire world with unthinkable loss of life,” adding that the US has several “devastating” military options to choose from in dealing with North Korea.  

  Last week, North Korean Foreign Minister Ri Yong-ho told the UN General Assembly in New York that the US had effectively “declared war” on North Korea, and that the isolated country wouldn’t hesitate to retaliate with a nuclear strike. Since then, there have been reports that the North could be planning another show of force – and possibly its seventh nuclear test – to coincide with a local holiday next month.

  According to Ri, the “most powerful detonation of an H-bomb” would be one of the North’s “highest-level” actions against the US, as Russia Today reports.

  “It could be the most powerful detonation of a hydrogen bomb in the Pacific,” Ri told Yonhap while in New York. “We have no idea about what actions could be taken, as it will be ordered by leader Kim Jong-un.”

  

  North Korea completed its sixth successful nuclear test earlier this month when it tested what’s believed to have been a hydrogen bomb. However, it’s unclear if the country has developed a thermonuclear warhead small enough to fit inside the tip of one of it’s ICBMs. Monitoring groups estimate the explosion caused by the Sept. 3 test was 16 times the size of the bomb that destroyed Hiroshima.

  Yesterday, China announced that it had ordered all North Korean businesses operating within its borders to close, part of its obligations under the latest round of UN Security Council sanctions that were passed earlier this month.

  Ultimately, Russia and China have called on both the US and North Korea to sit down for diplomatic talks. The two countries even proposed a peace plan where North would agree to suspend its nuclear and ballistic missile tests in exchange for the US halting its military drills with the South Koreans. However, neither the US nor North Korea have expressed much interest in talks.

  

  

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• Here Are The Cities Of The World Where "The Rent Is Too Damn High"

  In ancient times, like as far back as the 1990s, housing prices grew roughly inline with inflation rates because they were generally set by supply and demand forces determined by a market where buyers mostly just bought houses so they could live in them. Back in those ancient days, a more practical group of world citizens saw their homes as a place to raise a family rather that just another asset class that should be day traded to satisfy their gambling habits. 

  But, thanks to the efforts of global central banks, the days where home prices roughly reflected the ability of the marginal local buyer to afford those homes, is long gone.  As a general rule of thumb, a house was historically considered “affordable” if it was less than 2.5 times a family’s annual gross income…by those metrics, at least according to the UBS Global Real Estate Bubble Index released earlier today, the median buyer can’t afford housing in pretty any of the major cities of the world.

  Buying a 60m2 (650 sqft) apartment exceeds the budget of people who earn the average annual income in the highly skilled service sector in most world cities. In Hong Kong, even those who earn twice the city’s average income would struggle to afford an apartment of that size. House prices have also decoupled from local incomes in London, Paris, Singapore, New York and Tokyo, where price-to-income multiples exceed 10. Unaffordable housing is often a sign of strong investment demand from abroad, tight zoning and rental market regulations. If investment demand weakens, the risk of a price correction will increase and the long-term appreciation prospects will shrink.

  

  Meanwhile, the price-to-rent ratios below further reflect the insanity of global real estate bubbles where yields have gradually trended toward 0% as speculators are once again utilizing cheap mortgages to bet on price appreciation with complete disregard for underlying fundamentals. 

  Zurich and Munich have the peak price-to-rent ratios, followed by Stockholm and Vancouver. Extremely high multiplies indicate an undue dependence of housing prices on low interest rates. Overall, half of the covered cities have price-to-rent multiples above 30. House prices in all these cities are vulnerable to a sharp correction should interest rates rise.

   

  Price-to-rent values below 20 are found only in the US cities of Los Angeles, Boston and Chicago. Their low multiplies reflect, among other things, higher interest rates and a relatively mildly regulated rental market. Conversely, rental laws in France, Germany, Switzerland and Sweden are strongly protenant, preventing rentals from reflecting true market levels.

   

  But stratospheric price-to-rent multiples reflect not only interest rates and rental market regulation but expectations of rising prices, for example in Hong Kong and Vancouver. Investors anticipate being compensated with capital gains for overly low rental yields. If such hopes do not materialize and expectations deteriorate, homeowners in markets with high price-to-rent multiples are likely to suffer significant capital losses.

  

  But there’s probably nothing to worry about…everything worked out just fine in 2009.

  

  

• Rickards Warns "Cracks In The Dollar Are Getting Larger"

  Authored by James Rickards via The Daily Reckoning,

  Many readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.

  

  It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.

  Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar.

  Confidence in the dollar began to crack. Henry Kissinger and Treasury Secretary William Simon worked out a plan. If the Saudis would price oil in dollars, U.S. banks would hold the dollar deposits for the Saudis.

  These dollars would be “recycled” to developing economy borrowers, who in turn would buy manufactured goods from the U.S. and Europe. This would help the global economy and help the U.S. maintain price stability. The Saudis would get more customers and a stable dollar, and the U.S. would force the world to accept dollars because everyone would need the dollars to buy oil.

  Behind this “deal” was a not so subtle threat to invade Saudi Arabia and take the oil by force.

  I personally discussed these invasion plans in the White House with Kissinger’s deputy, Helmut Sonnenfeldt, at the time. The petrodollar plan worked brilliantly and the invasion never happened.

  Now, 43 years later, the wheels are coming off. The world is losing confidence in the dollar again. China just announced that any oil-exporter that accepts yuan for oil can convert the oil to gold on the Shanghai Gold Exchange and hedge the hard currency value of the gold on the Shanghai Futures Exchange.

  The deal has several parts, which together spell dollar doom.

  The first part is that China will buy oil from Russia and Iran in exchange for yuan.

  The yuan is not a major reserve currency, so it’s not an especially attractive asset for Russia or Iran to hold. China solves that problem by offering to convert yuan into gold on a spot basis on the Shanghai Gold Exchange.

  This straight-through processing of oil-to-yuan-to-gold eliminates the role of the dollar.

  Russia was the first country to agree to accept yuan. The rest of the BRICS nations (Brazil, India and South Africa) endorsed China’s plan at the BRICS summit in China earlier this month.

  Now Venezuela has also now signed on to the plan. Russia is #2 and Venezuela is #7 on the list of the ten largest oil exporters in the world. Others will follow quickly. What can we take away from this?

  This marks the beginning of the end of the petrodollar system that Henry Kissinger worked out with Saudi Arabia in 1974, after Nixon abandoned gold.

  Of course, leading reserve currencies do die — but not necessarily overnight. The process can persist over many years.

  For example, the U.S. dollar replaced the UK pound sterling as the leading reserve currency in the 20^th century. That process was completed at the Bretton Woods conference in 1944, but it began thirty years earlier in 1914 at the outbreak of World War I.

  That’s when gold began to flow from the UK to New York to pay for badly needed war materials and agricultural exports.

  The UK also took massive loans from New York bankers organized by Jack Morgan, head of the Morgan bank at the time. The 1920s and 1930s witnessed a long, slow decline in sterling as it devalued against gold in 1931, and devalued again against the dollar in 1936.

  The dollar is losing its leading reserve currency status now, but there’s no single announcement or crucial event, just a long, slow process of marginalization. I mentioned that Russia and Venezuela are now pricing oil in yuan instead of dollars. But Russia has taken its “de-dollarization” plans one step further.

  Russia has now banned dollar payments at its seaports. Although these seaport facilities are mostly state-owned, many payments, like those for fuel and tariffs, were still conducted in dollars. Not anymore.

  This is just one of many stories from around the world showing how the dollar is being pushed out of international trade and payments to be replaced by yuan, rubles, euros or gold in this case.

  I believe gold is ultimately heading to $10,000 an ounce, or higher.

  Now, people often ask me, “How can you say gold prices will rise to $10,000 without knowing developments in the world economy, or even what actions will be taken by the Federal Reserve?”

  It’s not made up. I don’t throw it out there to get headlines, et cetera.

  It’s the implied non-deflationary price of gold. Everyone says you can’t have a gold standard, because there’s not enough gold. There’s always enough gold, you just have to get the price right.

  I’m not saying that we will have a gold standard. I’m saying if you have anything like a gold standard, it will be critical to get the price right.

  The analytical question is, you can have a gold standard if you get the price right; what is the non-deflationary price? What price would gold have to be in order to support global trade and commerce, and bank balance sheets, without reducing the money supply?

  The answer is, $10,000 an ounce.

  I use a 40% backing of the M1 money supply. Some people argue for 100% backing. Historically, it’s been as low as 20%, so 40% is my number. If you take the global M1 of the major economies, times 40%, and divide that by the amount of official gold in the world, the answer is approximately $10,000 an ounce.

  There’s no mystery here. It’s not a made-up number. The math is eighth grade math, it’s not calculus.

  That’s where I get the $10,000 figure. It is also worth noting that you don’t have to have a gold standard, but if you do, this will be the price.

  The now impending question is, are we going to have a gold standard?

  That’s a function of collapse of confidence in central bank money, which is already being seen. It’s happened three times before, in 1914, 1939 and 1971. Let us not forget that in 1977, the United States issued treasury bonds denominated in Swiss francs, because no other country wanted dollars.

  The United States treasury then borrowed in Swiss francs, because people didn’t want dollars, at least at an interest rate that the treasury was willing to pay.

  That’s how bad things were, and this type of crisis happens every 30 or 40 years. Again, we can look to history and see what happened in 1998. Wall Street bailed out a hedge fund to save the world. What happened in 2008? The central banks bailed out Wall Street to save the world.

  What’s going to happen in 2018?

  We don’t know for sure.

  But eventually a tipping point will be reached where the dollar collapse suddenly accelerates as happened to sterling in 1931. Investors should acquire gold and other hard assets before that happens.

  

  

• Ethereum (ETHUSD) Rejected Near 50% Fib Retrace of ~400-200 Fall

  Ethereum (ETHUSD) Weekly/Daily

  Ethereum (ETHUSD) is showing fatigue after about 2 weeks of bouncing off roughly 200, with the selloff today intensifying after failing to hold the psychologically key 300 whole figure level.  300 also represents the 50% Fib retrace of the fall from roughly 400 to 200.  With daily RSI and Stochastics tiring, and the weekly Stochastics and MACD turning down, the weekly Tombstone forming is increasingly ominous for bulls.  ETHUSD continues to be relatively weaker than Bitcoin (BTCUSD), with ETHUSD serving as a leading indicator for BTCUSD price momentum.  Risk:reward will further improve for bears once the daily MACD blue line flattens and begins tilting lower.

   

  

   

   

  

   

  Bitcoin (BTCUSD) Weekly/Daily

  Bitcoin (BTCUSD) is showing fatigue after about 2 weeks of bouncing off roughly 3000, with the selloff today intensifying after failing to hold the 61.8% Fib retrace of the fall from roughly 5000 to 3000.  With daily RSI and Stochastics tiring, and the weekly MACD trying to negatively cross, BTCUSD could be in the early stages of forming a downchannel (on the daily and weekly chart).  Risk:reward will further improve for BTCUSD bears once the daily MACD blue line flattens and begins tilting lower.

   

  

   

  

  Click here for today’s technical analysis on EURUSD

   Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures, spot FX and cryptocurrency markets can be analyzed to enhance trading performance. Tradable Patterns’ daily newsletter provides technical analysis on a subset of three CME/ICE/Eurex futures (commodities, equity indices, and interest rates), spot FX and cryptocurrency markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

  

• Glenn Greenwald: Yet Another 'Major' Russia Story Falls Apart…

  Authored by Mike Shedlock via MishTalk.com,

  The biggest purveyors of “fake news” and irresponsible journalism are the news media outlets complaining most about it.

  MSNBC’s Rachel Maddow is at the forefront of the latest fake news on Russia.

  Maddow’s Rant

  DHS didn't bother to tell the 21 states Russia tried to hack during the election until this afternoon. https://t.co/48CNZL8MBp

  — Maddow Blog (@MaddowBlog) September 23, 2017

  //platform.twitter.com/widgets.js

  The story went viral of course.

  Took a pic!???? pic.twitter.com/rtwguSq2Uo

  — Jayne Partridge (@JaynePart) September 23, 2017

  //platform.twitter.com/widgets.js

  The same day @realDonaldTrump refers to "Russia Hoax," Homeland Security Dept. tells 21 states that Russia tried to hack their elections. https://t.co/X6UrqFMUTW

  — Rep. Don Beyer (@RepDonBeyer) September 22, 2017

  //platform.twitter.com/widgets.js

  Another Story Falls Apart

  Today, Glen Greenwald reports Yet Another Major Russia Story Falls Apart. Is Skepticism Permissible Yet?

  

  LAST FRIDAY, most major media outlets touted a major story about Russian attempts to hack into U.S. voting systems, based exclusively on claims made by the Department of Homeland Security. “Russians attempted to hack elections systems in 21 states in the run-up to last year’s presidential election, officials said Friday,” began the USA Today story, similar to how most other outlets presented this extraordinary claim.

   

  MSNBC’s Paul Revere for all matters relating to the Kremlin take-over, Rachel Maddow, was indignant that this wasn’t told to us earlier and that we still aren’t getting all the details. “What we have now figured out,” Maddow gravely intoned as she showed the multi-colored maps she made, is that “Homeland Security knew at least by June that 21 states had been targeted by Russian hackers during the election. . .targeting their election infrastructure.”

   

  So what was wrong with this story? Just one small thing: it was false. The story began to fall apart yesterday when the Associated Press reported that Wisconsin – one of the states included in the original report that, for obvious reasons, caused the most excitement – did not, in fact, have its election systems targeted by Russian hackers.

   

  

   

  The spokesman for Homeland Security then tried to walk back that reversal, insisting that there was still evidence that some computer networks had been targeted, but could not say that they had anything to do with elections or voting.

   

  Then the story collapsed completely last night. The Secretary of State for another one of the named states, California, issued a scathing statement repudiating the claimed report:

   

  

   

  This has happened over and over and over again. Inflammatory claims about Russia get mindlessly hyped by media outlets, almost always based on nothing more than evidence-free claims from government officials, only to collapse under the slightest scrutiny, because they are entirely lacking in evidence.

   

  The examples of such debacles when it comes to claims about Russia are too numerous to comprehensively chronicle. I wrote about this phenomenon many times and listed many of the examples, the last time in June when 3 CNN journalists “resigned” over a completely false story linking Trump adviser Anthony Scaramucci to investigations into a Russian investment fund which the network was forced to retract.

   

  Remember that time the Washington Post claimed that Russia had hacked the U.S. electricity grid, causing politicians to denounce Putin for trying to deny heat to Americans in winter, only to have to issue multiple retractions because none of that ever happened?

   

  Or the time that the Post had to publish a massive editor’s note after its reporters made claims about Russian infiltration of the internet and spreading of “Fake News” based on an anonymous group’s McCarthyite blacklist that counted sites like the Drudge Report and various left-wing outlets as Kremlin agents?

   

  Or that time when Slate claimed that Trump had created a secret server with a Russian bank, all based on evidence that every other media outlet which looked at it were too embarrassed to get near?

   

  Or the time the Guardian was forced to retract its report by Ben Jacobs – which went viral – that casually asserted that WikiLeaks has a long relationship with the Kremlin? Or the time that Fortune retracted suggestions that RT had hacked into and taken over C-SPAN’s network?

   

  And then there’s the huge market that was created – led by leading Democrats – that blindly ingested every conspiratorial, unhinged claim about Russia churned out by an army of crazed conspiracists such as Louise Mensch and Claude “TrueFactsStated” Taylor?

   

  And now we have the Russia-hacked-the-voting-systems-of-21-states to add to this trash heap.

   

  Each time the stories go viral; each time they further shape the narrative; each time those who spread them say little to nothing when it is debunked.

   

  Regardless of your views on Russia, Trump and the rest, nobody can possibly regard this climate as healthy. Just look at how many major, incredibly inflammatory stories, from major media outlets, have collapsed. Is it not clear that there is something very wrong with how we are discussing and reporting on relations between these two nuclear-armed powers?

  Hello Rachel Maddow!

  I'm literally laughing my ass off watching Rachel Maddow hyperventilate on MSNBC: "Russia. Russia. Russia. Russia. Russia. Russia. Russia."

  — Stacy Herbert (@stacyherbert) September 28, 2017

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  Please, please, tune into Maddow now. She's literally having a deranged conspiracy rant of epic proportions. Democrats think this will help?

  — Stacy Herbert (@stacyherbert) September 28, 2017

  //platform.twitter.com/widgets.js

  ????I knew then Russia was jacking w/ our election. I think I told u. Rachel's just doing her job. Just like u r. It's #IdeologicalSubversion.???? pic.twitter.com/yecRqvKMiY

  — ©Marv ?????????????????????????™ (@MarvinAmelie) September 28, 2017

  //platform.twitter.com/widgets.js

  In 10 minutes Maddow has blamed Russia for: independence movements of Kurds, Catalan, Texas; Bernie Sanders, Jill Stein & BLM. #lol

  — Stacy Herbert (@stacyherbert) September 28, 2017

  //platform.twitter.com/widgets.js

  Like that movement hasn't been going on for a hundred years! LOL. https://t.co/qayOpH7UXS

  — Stacy Herbert (@stacyherbert) September 28, 2017

  //platform.twitter.com/widgets.js

  Why does @maddow cover Ukraine? No one in their right mind would get their Ukraine news from @MSNBC.

  — Max Keiser (@maxkeiser) September 28, 2017

  //platform.twitter.com/widgets.js

  My Quick Take

  People listen to nonsense from @maddow and believe it. The correct approach is to treat it as comedy. https://t.co/KeXxbmH1vI

  — Mike Mish Shedlock (@MishGEA) September 28, 2017

  //platform.twitter.com/widgets.js

  The worst aspect, missed by @ggreenwald is Homeland Security purposely spreads fake Russia news to bring down Trump.https://t.co/KeXxbmH1vI

  — Mike Mish Shedlock (@MishGEA) September 28, 2017

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• "What're They For, Exactly?" $100 Million Bridge-And-Tunnel Towers Baffle New Yorkers

  After a summer plagued by hours-long delays and service outages, New Yorkers’ frustration with the city’s rapidly deteriorating subway system has reached a boiling point. But while the MTA is desperately trying to close massive budget shortfalls by hiking fares in lieu  of any kind of meaningful assistance from the State of New York, commuters have noticed that a series of mysterious metal towers have started appearing at the entrances of tunnels and bridges around the city.

  And some are expressing frustration with Gov. Andrew Cuomo and the MTA for refusing to release any details about the towers' purpose, despite planning to spend $100 million on them.

  One New Yorker, Jose Lugo, told CBS that the quickly appeared after the Brooklyn Battery Tunnel toll booths came down.

  

  Earlier this month, Reinvent Albany asked the Authorities Budget Office to investigate whether the 'MTA board was fully informed, before approving contracts' related to the construction of the towers. The group is trying to figure out if the MTA board knew what it was doing when it approved a series of contract amendments worth some $47 million worth of expenses for the towers that currently sit at the entrance to the Battery and Queens Midtown Tunnels.

  Eventually, the MTA plans to construct 18 such towers, saying only that they will serve some vague anti-terrorism-related purpose.

  “It’s a bit mind-boggling that the MTA is approving $100 million for what appears to us to be big, decorative pylons,” says John Kaehny, the leader of the watchdog group Reinvent Albany. “What we’re asking for is transparency from the MTA.”

   

  “What we're asking for is transparency from the MTA.”  

  But the individuals in charge are staying tight-lipped about what the towers actually do.

  Cedrick Fulton, the head of the MTA's bridges and tunnels, refused to comment to media organizations asking about the towers, and MTA chaiman and former mayoral candidate Joe Lhota said he wasn't at liberty to discuss details of the project, other than to confirm that they would serve some type of anti-terrorism-related purpose.

  Shams Tarek, a spokesman for the MTA, told Politico that the towers 'host cameras, traffic monitoring and other equipment related to homeland security that would otherwise have been hosted by the former toll booth structures'.

  If this is accurate, then $100 million seems like a hefty price tag for such a project.

  Citizens aren’t the only ones asking questions about the towers. According to CBS, some MTA board members, including New York City Transportation Commissioner Polly Trottenberg, say they know too little about the towers – especially considering that the MTA has already spent $50 million on them.

  “It’s a $100 million MTA project shrouded in secrecy, with 18 of them for tunnels and bridges. So, what are they exactly?” Trottenberg said.

  Let’s hope – for the MTA’s sake – that these pylons do have some kind of sophisticated functionality, and that this isn’t another classic example of the wasteful spending habits that have contributed to the subway’s present-day troubles.  
   

  

  

• This Is What $100 Buys You In Venezuela

  Authored by Simon Black via SovereignMan.com,

  The gunfire on the streets near my hotel started around 9pm last night.

  The sound is unmistakable, especially at night on an otherwise quiet city street.

  I had recently returned to the hotel after a few evening meetings. And coming back after dark it was as if they had rolled the sidewalks up — restaurants with no patrons, bars and clubs that were totally empty.

  There was an incredibly striking woman I remember, standing in front of her restaurant playing hostess to absolutely nobody.

  And with few people on the streets, it felt like some sort of zombie apocalypse.

  Amazingly enough this country used to be THE wealthiest in the region. And not too long ago.

  Throughout the 1950s, 60s, and 70s, Venezuela enjoyed robust growth. Low inflation. Substantial foreign investment. High wages. It was the envy of Latin America.

  It was all based on one industry: oil. Venezuela has effectively been a one-trick pony for decades.

  And when oil prices were strong, the government was swimming in cash. Even as recently as 2007, the Venezuelan government’s oil revenue was so high that they PAID OFF ALL FOREIGN DEBT.

  Think about that: only ten years ago Venezuela had ZERO foreign debt.

  But at the same time the government here had a long history of excessive spending. Social programs. Military. Fuel and electricity subsidies. Whatever it took to remain in power.

  The government spent so much money that, even when oil prices exceeded $100 per barrel between 2011 and 2013, they STILL couldn’t break even.

  Then oil prices collapsed. By early 2016, a barrel of oil was fetching less than $30.

  Venezuela’s public finances were in shambles… so the government resorted to the same old tactics that nearly every bankrupt government has relied on throughout history.

  For one, they started spending their foreign reserves– essentially burning through the public savings account.

  Today Venezuela has its lowest level of foreign reserves in decades, less than $10 billion, compared to $42 billion in December 2008.

  They’ve also sold off a huge portion of their gold reserves.

  In late 2015 Venezuela held 373 metric tons of gold. Today that’s down to 188 metric tons, a nearly 50% drop in less than two years.

  More importantly, though, the government has resorted to printing incomprehensible quantities of paper currency and vastly expanding the central bank balance sheet.

  This chart is really amazing to see– the Venezuelan central bank’s balance sheet literally TRIPLED in a SINGLE MONTH between April and May of this year.

  

  They keep printing more and more money, to the point that the currency has become totally worthless.

  I remember coming here a few years ago when the black-market rate was around 8 bolivars per US dollar.

  On my next trip, it took 100 bolivars to buy a dollar in the black market. And the rate kept dropping with each trip.

  This time I exchanged dollars at around 27,000 per US dollar. Meanwhile the ‘official’ rate is a laughable 10:1. It’s a nearly 3000x difference.

  So, depending on which exchange rate you use, Venezuela is either absurdly expensive or absurdly cheap.

  A ride from the airport was about 80,000 bolivars. At official rates that’s EIGHT THOUSAND DOLLARS. For a taxi ride.

  But at black market rates it’s less than three bucks. Quite a difference.

  Last night I exchanged $100 and received this brick of cash in exchange.

  

  Needless to say this monetary insanity makes life extremely difficult.

  Anything imported is prohibitively expensive. And with the economy collapsing, domestic production is also grinding to a halt.

  There’s very little economic activity. People are sitting in their homes trying to survive. Medicine is scarce. And even staples like food are running out… which is totally nuts.

  

  Venezuela is a vast country with rich, fertile soil and abundant sources of water. There is absolutely no reason why there should be food shortages here.

  Chalk up another victory for socialism and central planning.

  In their desperation, people are turning to crime, prostitution… anything they have to do to make ends meet. I routinely see people picking through garbage cans eating scraps, anything they can find.

  Incredibly there is still a hint of normalcy in the city, at least during the daytime.

  People are out on the streets going about their lives… heading to work, taking their kids to school, playing sports, chatting with their friends.

  I find it remarkable how well this place has held itself together. Venezuelans constantly display ingenuity and resilience in their ability to deal with such an epic crisis.

  And the good news is that this will one day get better.

  The government has nearly run out of money and is dangerously close to defaulting on its debts. At some point they’ll no longer be able to pay the armed thugs who keep the population in line.

  It’s inevitable. Totalitarian governments almost invariably fall when they run out of resources to sustain themselves.

  It may get worse before it gets better. But eventually this madness and oppression WILL come to an end, whether through war, revolution, peaceful means.

  What I find so strange is how little optimism there is for Venezuela.

  By comparison, investors are perennially excited about Cuba. People have been saying for decades that Cuba will be an investment paradise once the authoritarian regime comes to an end.

  Sure, great. I’ve been to Cuba. I like it. And there will certainly be great opportunities there.

  But few people apply this same logic to Venezuela. And I find that strange.

  This place is huge. There is SO MUCH opportunity here. 30+ million people. Enormous reserves of natural resources. Plenty of coastline. Ports. Infrastructure. Manufacturing capacity. Strategic geography. Renewable energy.

  Whether it’s next year or ten years from now, this country has the potential to some day become one of the most exciting places in the world. 

  Do you have a Plan B?

  

  

• Is The Bubble About To Burst? Student-Loan Delinquency Rates Rise For First Time In Years

  Since the financial crisis, most market observers and economists have cheerfully ignored the aggregate student-debt load in the US, which recently swelled to an economy-threatening $1.4 trillion. Even as student-debt, which can't be discharged in bankruptcy, grew to represent 10% of the total US debt burden, defenders of the status quo pointed to declining default rates as evidence that the government-backed student loan industry wasn’t in danger of imploding.

  But that may soon change.

  As Bloomberg reports, the student-loan default rate in the US ticked higher during the second quarter for the first time since 2013. While it’s only one quarter of data, it should send a chill down the spine of government and private lenders, who have every reason to worry that this could be more than a temporary blip.

  To wit, the share of Americans at least 31 days late on loans from the U.S. Department of Education ticked up to 18.8% as of June 30, up from 18.6% during the same period a year ago, according to new federal data. Meanwhile, about 3.3 million Americans have gone more than a month without making a required payment on their Education Department loans—up about 320,000 borrowers.

  The rise interrupts a period of 12 straight quarters of declines in delinquency rates, according to numbers dating to 2013. It also comes at a time when US economic growth is nominally expanding (the BEA announced earlier today that the US economy expanded by 3.1% during the second quarter, an improvement over its previous estimate).

  

  While the uptick may be small compared with the 17 million debtors making student-loan payments, according to Bloomberg, it has baffled economists, who’ve struggled to find a suitable explanation.

  “There's no fundamental reason for that to be happening,” said Yelena Shulyatyeva, senior U.S. economist for Bloomberg Intelligence. After all, she said, the U.S. economy has improved since June of last year, with lower unemployment, higher household incomes and increased wealth, federal data show. Consumers are more confident about the economy and their own personal finances, too, according to Bloomberg Consumer Comfort data.

  In the name of generosity, let’s assume that these economists aren’t being willfully ignorant, and that the argument that there are no “fundamental reasons” for the uptick in delinquencies is grounded in some type of institutional shortsightedness.

  

  To be sure, when it comes to the precarious finances of student-loan borrowers, nothing has changed in the past three months. Instead, we’d posit that the US’s massive pile of student-loan debt has for years posed an underappreciated threat to the US economy.

  Case in point: The recently released Student Loan Debt and Housing Report 2017, an annual study conducted by the National Associated of Realtors, confirmed that many borrowers are putting off moving out of their parents’ house, purchasing homes, and myriad other purchases because of their student debt.

  The U.S. currently has a student debt load of $1.4 trillion, which accounts for 10 percent of all outstanding debt and 35 percent of non-housing debt. The magnitude of the debt continues to grow in size and share of the overall debt in the economy. While this amount of debt has risen, the homeownership rate has fallen, and fallen more steeply among younger generations.

  Student loan debt impacts other life decisions including employment, the state the debt holder lives in, life choices such as continuing education, starting a family, and retirement.

   

  Twenty-two percent were delayed by at least two years in moving out of a family member’s home after college due to their student loans.

   

  Among non-homeowners, 83 percent cite student loan debt as the factor delaying them from buying a home. This is most frequently the case due to the fact that the borrowers cannot save for a downpayment because of their student debt. Among homeowners, 28 percent say student debt is impacting the ability to sell their existing home and move to a different home. The delay in buying a home among non-homeowners is seven years and three

  years for homeowners.

  But perhaps the most dismaying evidence was when the NAR tried to gauge “buyer awareness” – i.e. the student’s understanding and frame of mind when they first applied for the loans.

  • Before attending college, 28 percent of borrowers knew generally the school “might be expensive” or “might be cheap”, but had no further information.
  • More than one-quarter of borrowers had an understanding of tuition, but had little understanding of other costs such as fees and housing expenses.
  • One in five borrowers understood all the costs including tuition, fees, and housing.

  After offering a handful of specious explanations, ranging from a rise in the number of debtors actively making payments, to the notion that the best borrowers have already “graduated” (i.e. paid off their loans), Bloomberg offers a nugget of sense.  

  Finally, Tarkan said, there could be a simpler reason: Maybe more Americans just can’t afford their monthly payments.

  Sometimes, the best explanations are also the simplest.
   

  

  

• America's Broken Education System: Grade-Rigging Scandal Strikes Baltimore And Spreads…

  Via StockBoardAsset.com,

  Project Baltimore, an investigative reporting initiative, which was launched in March 2017, by Sinclair Broadcast Group Inc, the largest U.S. broadcaster, has uncovered more evidence of a massive grade manipulation scheme brewing in Baltimore City Schools.

  

  The report indicates, the problem is more widespread than thought.

  A high-level district administrator, who works in inside the school system says Project Baltimore now has “concrete evidence” of grade manipulation through 13 report cards obtained from Calverton Elementary/Middle School in west Baltimore.

  For each report card, Project Baltimore has two versions, one which teachers submitted, and a second version, where every single failing grade was changed to a passing mark.

  Per the report,

  Project Baltimore found the initial report cards showed 13 students failing a total of 18 classes.

   

  The timestamp tells us the first versions were printed on November 11, which is after the quarter ended and final grades were submitted.

   

  But nineteen days later, on the 30th, the report cards were printed again.

   

  This time, every single failing grade was changed to 60.

   

  In some cases, the course names weren’t even re-entered, and comments meant to alert parents of their child’s poor performance were deleted.

  The high level district administrator exclaimed, “once a report card is generated, that means that’s the end of the quarter. There would have been no further credit given because the first quarter had already ended”.

  That leaves the grade manipulation to a higher authority than a teacher, such as the principle, assistant principal, and or whoever the principal has given the authority.

  Back in August, the Baltimore community was outraged, after Northwood Appold Community Academy II, a high school in the area, had zero students proficient in math, but had one of the highest graduation rates in the district.

  Meanwhile, the grade rigging scandal in Baltimore, is now spreading across Maryland, where Gov. Larry Hogan will be investigating claims of widespread corruption in Prince George’s County Schools aimed at inflating graduation rates.

  The school system is conveniently boarding Washington, D.C., where school board members alleged in a May 30 letter to Hogan that “widespread systemic corruption” in the district since 2014 contributed to grade rigging.

  “Whistleblowers at almost every level in (Prince George’s County Public Schools) have clear and convincing evidence that PGCPS has graduated hundreds of students who did not meet the Maryland State Department of Education graduation requirements,” the board members wrote.

  *  *  *

  The outbreak of grade rigging scandals in Maryland’s public school system is alarming. America’s public education system is cracking and the scandals are quite evident of it.

  For President Trump, overhauling America’s broken public education system could be a hefty task. Whoever said ‘Making America Great Again’ was an easy thing? Let’s not kid ourselves, America is in a transitional period and it will take some time to realign the country.

  

  

• UN Says Blacks In America Deserve Reparations, Ignores Entire History Of Slavery

  Content originally published at iBankCoin.com

  A recent report published by a U.N. commissioned organization concludes that America’s history of slavery justifies reparations for African Americans. The submission by the ‘Working Group of Experts on People of African Descent’ – which one might assume would study all ‘People of African Descent’ around the world, notably fails to opine on other nations which have engaged in the practice – considering that less than 10% of African slaves were brought to North America. Also absent from the report is the fact that arabs operated the slave trade for over 1300 years – a practice which continues to this day, primarily in India, China, Pakistan, Bangladesh and Gulf states such as Saudi Arabia.

  The group presented its findings on Monday, pointing to what they say is a “continuing link between present injustices and the dark chapters of American history,” and recommended “Past injustices and crimes against African Americans need to be addressed with reparatory justice.”

  

  The report cites last year’s spate of blacks killed by police officers around the United States, which the panel says has created a “human rights crisis” that “must be addressed as a matter of urgency.”

  “In particular, the legacy of colonial history, enslavement, racial subordination and segregation, racial terrorism and racial inequality in the United States remains a serious challenge, as there has been no real commitment to reparations and to truth and reconciliation for people of African descent,” the report stated. “Contemporary police killings and the trauma that they create are reminiscent of the past racial terror of lynching.”

  “Despite substantial changes since the end of the enforcement of Jim Crow and the fight for civil rights, ideology ensuring the domination of one group over another, continues to negatively impact the civil, political, economic, social and cultural rights of African Americans today,” it said in a statement. “The dangerous ideology of white supremacy inhibits social cohesion amongst the US population.”

  Mireille Fanon-Mendes-France, chairwoman of a United Nations working group for people of African descent, reads findings about institutionalized racism after an official visit to the U.S. (Youtube/UN Human Rights)

  What about the rest of the story?

  Conspicuously absent from the U.N. report is the fact that the slavery in the United States was facilitated by 1300 years of Arab slave trade. According to Wikipedia:

  Some historians assert that as many as 17 million people were sold into slavery on the coast of the Indian Ocean, the Middle East, and North Africa, and approximately 5 million African slaves were bought by Muslim slave traders and taken from Africa across the Red Sea, Indian Ocean, and Sahara desert between 1500 and 1900.^[5]  

  The captives were sold throughout the Middle East. This trade accelerated as superior ships led to more trade and greater demand for labour on plantations in the region. Eventually, tens of thousands of captives were being taken every year.^[4][6][7]

  Will this report pave the way for universal basic income for low income blacks in America?

  Ignoring modern slave trade

  Meanwhile, the U.N. has been quiet on the topic of countries which haven’t cracked down on the slave trade, including UN Human Rights Council member Saudi Arabia. There are an estimated 21 – 46 million slaves around the world today, with India dominating the top of the list.

  source: https://www.globalslaveryindex.org/findings/

   

  Perhaps we can look forward to a followup report from the U.N. on reparations owed by the other 90% of the world which participated in the slave trade, as well as their thoughts on what’s owed to the 48 million modern slaves worldwide.

  Follow on Twitter @ZeroPointNow § Subscribe to our YouTube channel

   

  Updated: 12:41 EST

  

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• UK Public Schools Forcing Girls As Young As Four To Wear Muslim Veil

  Research published in The Sunday Times this week revealed that eight state-funded British schools are forcing children to wear the Islamic hijab along with other Muslim female dress code requirements, which includes girls as young as four. The findings are based on open source investigations into published dress code directives of 176 Muslim schools across Britain, most of which are private.

  However, the new discovery of public schools among them has sparked outrage across the UK, especially as three of the schools are elementary level schools (including kindergarten). According to The Sunday Times:

  Girls as young as four are being “forced to wear the hijab” as part of approved school uniform in state-funded Islamic schools, campaigners have told ministers.

   

  According to research by the National Secular Society, the hijab appears to be compulsory in eight state-funded Islamic schools in England, including three primary schools.

   

  A further 51 private Islamic schools of the 176 surveyed by the society also require the headscarf to be worn by female pupils. Eighteen schools said wearing the head covering was optional.

  Shockingly, one particular school called the Independent Olive Secondary requires that, “Hair should be covered by a black scarf; outside the School the face must be covered,” while another UK school is explicit in stipulating that, "It is very important that the uniform is loose fitting and modest and that the hijaab is fitted closely to the head. The College uniform is COMPULSORY" (sic). The Tayyibah Girls School in London warns: "The school is not willing to compromise on any issues regarding uniform."

  
  The Tayyibah Girls School in London.

  Meanwhile, some schools go so far as to recommend the niqab. For example girls at Al-Ihsaan school in Leicester are told they must wear either a “jilbaab or niqab”. The jilbaab is a long and loose-fitting gown which covers the entire body expect for hands, face, and feet. But the niqab recommendation is much more significant in that it is practiced by only a small minority within the Muslim world – it covers the entire face except for the eyes, and is typically worn with black garments with cover head to toe. 

  In addition to the eight publicly funded schools which require head coverings of veils, thirteen others cite an optional hijab as part of their uniform policy. Islamic academies in Britain came under scrutiny early this month when a previous Times story first reported that "Thousands of state primary schools are allowing girls as young as five to wear the Muslim religious headscarf as part of approved school uniform, a Sunday Times survey has revealed."

  The earlier investigation found that even Church of England associated schools were increasingly adopting various forms of Islamic dress as acceptable among students:

  Last month a survey by The Sunday Times revealed that nearly a fifth (18%) of 800 state primary schools, including Church of England primaries, in 11 regions of England now list the hijab as part of their uniform policy, mostly as an optional item.

  

  Feversham College is a high school level academy specializing in Science for Muslim girls aged 11-18 years. It's website spells out that a "close-fitting" hijab is "COMPULSORY" (sic).

  Activists associated with the investigation cited by The Sunday Times called the uniform requirements “illiberal and repressive” and stated, “no child should be obliged to wear the hijab or any other article of religious clothing while at school.” Included among those appealing to the UK education secretary to root out such practices, especially when they appear at state funded schools, are Muslim women activists.

  Of course, it's mostly a good thing when the state leaves private religious schools alone to do or require whatever they want in terms of dress code, but that state funded UK schools would enforce Muslim veils is the deepest hypocrisy in a country which has recently been known to target and punish families wanting to opt out of LGBT related curriculum. The British authorities have even threatened Orthodox Jewish schools with closure with the ultimatum: "teach your children about homosexuality and gender reassignment, or we will close you down."

  In a trend that began years ago, the British education secretary began warning even Christian private schools that their teaching curriculum must reflect the "UK values" and laws concerning transgender recognition. The government now routinely cites "combating extremist" as a motive for getting private schools to conform.

  

  

• Meet Yvonne Felcara – Antifa Leader Arrested After Scuffle In Berkeley

  Authored by Nikita Vladimirov via CampusReform.org,

  Prominent anti-fascist leader Yvonne Felarca was arrested Tuesday following a rowdy Antifa “Victory March” in Berkeley, California.

  Felarca, a 47-year-old middle school teacher who leads the Coalition to Defend Affirmative Action, Integration & Immigrant Rights and Fight for Equality by Any Means Necessary (BAMN), was arrested following a scuffle with demonstrators who had turned out for a Patriot Prayer rally.

  Images and video obtained by Campus Reform appear to show Felarca being surrounded by numerous police officers in riot gear in the middle of the street.

  

  According to an eyewitness on the ground, the activist was then taken to the back of a police car that promptly left the scene.

  

  Felarca, an organizer of many anti-fascist demonstrations in Berkeley, has a history of publically advocating for violence against her political opponents.

  Earlier in the summer, Felarca was arrested and charged with inciting a riot after she openly punched a member of a white nationalist organization who was peacefully protesting in the street.

  According to numerous reports, the video of the incident showed Felarca punching the man in the stomach while shouting “get the fuck off our streets.”

  The political organizer has also frequently clashed with the Republican students at Berkeley, accusing them, without evidence, of “stalking women” and targeting minorities.

  *  *  *

  UPDATE: Berkeley Police has released Felarca's mugshot via Twitter, confirming that she was arrested for "battery and resisting arrest."

  

  

  

• Brandon Smith Rages: "NFL Players Have A First Amendment Right To Act Like Little Bitches"

  Authored by Brandon Smith via Alt-Market.com,

  Frankly, in my view, the sporting world should be a politics free zone, and the fact that I am compelled to write about politics in sports in America today is bewildering beyond belief.

  

  That said, to be clear, I am not a fan of the NFL. I think the sport, like most professional sports, is overrun with whiny, juiced-up morons paid millions of dollars for providing nothing to the public except sub-par entertainment and little-to-no loyalty to the state or city in which they happen to be employed.

  NFL players are not legitimate role models for society anymore than costumed television wrestlers are role models for society.

  Add to this the rampant politicization of the NFL over the past several years with social justice undertones and overtones, and I can't think of a single redeeming quality to the arena. The best thing that could possibly happen to U.S. athletics would be if the entire system was scrapped and rebuilt from the ashes with truly local teams composed of local players driven purely by the desire for athletic excellence and healthy competition.

  To me, it seems the appeal of sports, at least for spectators, is the possibility that anything could happen according to the merit of the players and the teams. In a society in which so much is restricted and controlled and dictated by political correctness and appeals to artificial "fairness," the idea that, at least on a football field, baseball diamond or hockey rink, all of that garbage goes out the window for a few hours is enticing to say the least. Spontaneous moments of greatness are what people want to see, not blithe displays of ideological ignorance.

  There is no social justice in real sports. There is no affirmative action. There are no safe spaces. The best men or women rise to the top and the losers go home with nothing. That is the way it should be. Champions soar to the heights as easily as they fall to the depths, and underdogs can shock the world through sheer determination. You cannot lie or steal your way to athletic superiority. You cannot use victim-group status to win trophies and medals. You have to work hard. You have to earn it. If you are a fraud you will be found out eventually. This is a philosophy which has been lost in modern athletics. Leftists in our culture are also oblivious to the notion.

  When I see one of the last fields of American heritage and meritocracy being destroyed by cultural Marxism, I do feel what I'm sure many people feel — enraged. However, the situation is more complex than surface conflicts suggest.

  NFL players refusing to stand for the national anthem is not really the issue here. Donald Trump admonishing them for their actions is also not the issue here. It is the motivations behind both sides that concerns me.

  For activist NFL players and owners the motivation is rather clear; social justice cultism has seeped into their profession and some of them have decided to use the platform they have been given to pontificate rather than play the game they are paid to play. Protests attacking non-existent racism and "patriarchy" against a system that has made these men multi-millionaire celebrities regardless of their skin color would be relegated to the idiocy of college campuses if any of these people had any sense of judgment.

  For Donald Trump, the motivation is far more foggy. I would prefer if the president of the United States spent his energies on fulfilling his campaign promise of "draining the swamp" of banking elites and neo-con warmongers instead of loading his cabinet with them and spouting off on Twitter about forcing a few football players to stand for a national anthem that praises the freedom of rebellion.

  My readers are well aware that I view Trump as a pied piper, leading conservatives down a path back to neo-con totalitarianism rather than towards libertarian virtues of individual sovereignty. In other words, I am not seeing much difference between Trump and Obama so far. Perhaps in rhetoric, but certainly not in action.

  The circus surrounding Trump's latest feud with the NFL is just another distraction away from the fact that this administration is following a very similar policy path to every other corrupt administration before it. And conservatives are so tired of the trespasses of the social justice cult, many of them are eating up every minute of the farce.  Though, this is not what a bunch of football players are concerned about.

  Let's summarize the actual problem…

  If NFL players refused to stand for the national anthem because they believed in the ideals it represents but felt that our government no longer represented those ideals, then I would be in full support of their motives. Obviously, this is not why they are protesting. If their motivation was about speaking against corrupt government, then they would have refused to stand for the anthem back when Barack Obama, a Constitution-wrecking cabana boy for the elites, was in office.

  If Trump's attacks on the NFL were motivated by a love of liberty as the anthem inspires, then he would not demand that players be forced to stand, which is indeed a violation of their First Amendment rights. Instead, he would have dropped that concept completely and stuck with the rational side of his position, which was for spectators to vote with their wallets and stop supporting the league with their dollars.

  The bottom line is, whether or not you or I support their motives, constitutionally, legal precedence is on the side of the players. They have every right to act like bitches on an SJW plantation, kneeling and virtue signaling to their heart's content. And, the public has every right to stop watching the NFL, drop their ESPN subscriptions, throw their overpriced sports jerseys in the trash and move on to more important issues… like what the hell is all this nonsense with North Korea? And why do we keep hearing about economic recovery when the average American can't make it from month-to-month without running up their credit cards? And why are so many of us so damn fat and unhealthy?

  Hell, here's an idea — how about more people stop watching sports and start playing sports instead? Why not simply let the NFL die out along with every other venture poisoned by social justice?

  The point is, the NFL battle with Trump is irrelevant compared to the greater battle of ideals behind it. It is not for Trump to fight this battle; it is for the spectators and consumers to fight this battle. The solution is not Trump's Twitter account or his interference. The solution is for Americans to walk away and take their money with them.

  The solution is also not to attempt legislation or government force to strike fear into those who might disagree with us. I have seen far too many so-called "liberty minded" people repeat the fanatically stupid mantra of "stomp my flag and I'll stomp your ass!" The great sacrifice of living in a free country is that you have to support the individual rights of EVERYONE, even people who don't believe in individual rights.

  Some might argue that this is not a path that is being pursued so we should not be concerned. I say the social undercurrent today is ripe for zealotry on both sides, and conservatives need to take the high road even if it means things will be more difficult for us in the short term.

  Finally, to the players that have so far jumped on the Colin Kaepernick bandwagon; understand that you have delusions of grandeur. You are NOT Jesse Owens proving your worth in the face of Hitler's Aryan dystopia. You are not important or effective activists in the grand scheme of things because your political and philosophical views are ill informed and generally incompetent. In fact, your views work in FAVOR of the corrupt system, not against it.

  While you do have the right to sit during the national anthem, knowing why you are sitting is more important than the action itself. If you are sitting because you have bought into a cultural Marxist con game that is using you as fodder for political division, then perhaps you should rethink your little protest and try working towards concrete solutions.

  If you are going to use race and social inequality as a crux for your theatrical displays of "defiance" as you are cashing checks for millions in sponsorship deals paid for primarily by white people, then I think you will find most of America laughing at you in the end. Show us your true resolve and refuse that dirty imperialist money. Otherwise, you are just another over-privileged punk pretending to be under-privileged in order to gain notoriety at the expense of reason.

   

  

  

• Maduro To Generals: Prepare For War With "Criminal Empire" US

  After barely managing to scrape together the nearly $200 million needed to make a bond payment earlier this month (the country made the payment a week late), Embattled Venezeulan President Nicolas Maduro is refocusing his attention on the US, warning military leaders Tuesday to begin preparing for war with the US. Maduro's call to arms comes after the US has repeatedly tightened sanctions against Maduro's regime and the country's state-run oil company; earlier this week, the Trump administration blocked Venezeulan officials from entering the US as part of the White House's new “targeted” travel ban. Trump has also repeatedly threatened a military intervention if Maduro doesn't leave voluntarily.

  Maduro is probably still brooding over Trump’s call for the world community to help restore “democracy and political freedoms” to Venezeula by ousting Maduro (to which Maduro reportedly responded in typical leftist fashion by comparing Trump to Hitler).  Trump made those remarks last week during his first address to the UN General Assembly. Earlier this year, Trump said he wouldn't rule out a military option for dealing with Venezuela, adding that the US has an obligation to take of the country because it's "our neighbor."

  Maduro said Trump’s threats were the reason for him ordering the military to be on alert.

  "We have been shamelessly threatened by the most criminal empire that ever existed and we have the obligation to prepare ourselves to guarantee peace," said Maduro, who wore a green uniform and a military hat as he spoke with his army top brass during a military exercise involving tanks and missiles. "We need to have rifles, missiles and well-oiled tanks at the ready….to defend every inch of the territory if needs be," he added.

  Over the summer, the US announced sanctions to prevent PDVSA, Venezuela’s state-owed oil company, from issuing new debt (sanctions that conveniently avoided existing bonds held by Goldman Sachs), while also preventing Citgo, the US subsidiary of PDVSA, from repatriating dividends. The US has also passed sanctions against many top Venezuelan officials. Tensions between Maduro and Trump started escalating shortly after Trump’s inauguration, when the US blacklisted Venezuelan Vice President Tareck El Aissami for drug trafficking.

  

  Maduro referenced the sanctions during his speech at the military base. As he spoke, Russian military planes flew in the sky as part of the training exercise, according to Newsweek.

  "The future of humanity cannot be the world of illegal sanctions, of economic persecution," Maduro said.

  Of course, Maduro doesn't have the manpower to stand up to the US’s much-larger military. The embattled leader has managed to cling to power in Venezuela despite mounting political and economic crises that have inspired months of deadly anti-government demonstrations in the streets of the capital, Caracas and many other cities around the country.

  As Newsweek reports, Defense Minister Vladimir Padrino has backed Maduro through the unrest, but Reuters reported back in August that there may be growing support for a military-backed coup against Maduro, whose approval rating remains at all-time lows, even as he has succeeded in consolidating power and marginalizing his opposition.

  The country has managed to avoid financial calamity with the help of Russia and China. However, Newsweek reports that China is beginning to limit its exposure to Venezuela amid the mounting political unrest.
   

  

  

• FEMA Director Urges Americans To Develop "A True Culture Of Preparedness" But No One Is Listening

  Authord by Daisy Luther via The Organic Prepper blog,

  It looks like preppers aren’t that crazy after all.

  

  FEMA’s new director, Brock Long, has repeatedly said that Americans do not have a “culture of preparedness,” something that is much-needed with the startling uptick in natural disasters. Long has only been the director of FEMA since June 20 of this year and already has had to deal with a historic number of disasters in this short period of time.

  It appears that Mr. Long has a mindset of self-reliance based on a couple of recent statements he has made to the media, but the MSM doesn’t seem too interested in his ideas about fostering a culture of preparedness, despite the practicality and essential nature of his suggestions.

  First, in an interview from Sept. 11 that I personally only heard about yesterday, FEMA’s new director, Brock Long, spoke with journalists to discuss the response to Hurricane Irma. In the interview, he said some things that vindicate all of us who have spent time and money working toward being prepared.

  “I really think that we have a long way to go to create a true culture of preparedness within our citizenry in America. No American, no citizen, no visitor to this country is immune to disaster. And we have a long way to go to get people to understand the hazards based on where they dwell, where they work, and how to be prepared financially, how to be prepared through insurance, how to have continuity of operations plans for their businesses, so that we can avoid the suffering, the strife, and the loss of life. It’s truly disappointing that people won’t heed the warnings.

  Straight out of our favorite prepper handbooks, right?

  Of course, the reporter quickly shifted from the actual useful information to start asking about climate change, because for some reason she felt that was far more essential than the practical advice Mr. Long was offering. You can watch the interview below.

  Some of those numbers were shocking – FEMA is spending 200 million dollars a day in relief efforts and desperately-needed help has hardly even begun for Puerto Rico and the US Virgin Islands.

  In a more recent statement, Mr. Long re-emphasized the need to be prepared, and to start kids off young with this mindset.

  I think that the last 35 days or so have been a gut check for Americans that we do not have a true culture of preparedness in this country. And we’ve got a lot of work to do.

   

  Whether it’s in education and being ready, it’s not just saying, hey, have three days worth of supplies ready to go. It’s greater than that. It’s also people having the finances and the savings to be able to overcome simple emergencies.

   

  We have to hit the reset button and create a true culture of preparedness starting at a very young age and filtering all the way up.

  We in the preparedness community have been saying this for ages, Mr. Long, but thank you for attempting to put this front and center.

  One thing that is different about Long’s approach is the practicality. Many government officials seem to forget about the financial end of emergencies. They can’t seem to wrap their brains around the fact that while they have 200 million dollars a day, most folks do not. This is why financial preparedness is of such massive importance. If you had to live away from home without access to a kitchen, the expenses would rack up pretty quickly. As well, think about how thinly those millions are spread.

  FEMA is eventually going to run out of money.

  As well, think about how thinly those millions are spread. One person I know who lost her rental home will receive $4000. That has to replace everything she owns: furniture, clothing, personal items, food, cleaning products…you get the idea…plus pay first and last month’s rent for a new apartment. People without flood insurance who lost their homes will be eligible for a maximum of only $21,000. But if their property wasn’t paid for, they’ll still owe the mortgage payments on a place that is uninhabitable.

  Don’t forget that FEMA is also providing aid for those displaced by more than 2 million acres of wildfires throughout the Western US. (Although initially, they turned down requests for assistance, they reconsidered.)

  When you look at the true cost of disasters on this scale, it’s hard to imagine that FEMA will have enough money should these emergencies continue, or even enough to cover our current tab.

  There were reports that FEMA had run out of money shortly after Hurricane Harvey, but more appeared for Hurricane Irma.

  One article blithely suggested that FEMA can never run out of money because Congress will just vote to give them more when addressing concerns that FEMA was down to its last billion dollars.

   But the U.S. Congress quickly put such worries to rest on Sept. 8, 2017, by hastily passing legislation that gave the DRF an infusion of cash.

   

  “The emergency supplemental appropriation of $7.4 billion allows FEMA to continue to fully focus on the ongoing preparation, response, and recovery needs,” said an agency spokesperson via email.

   

  While legislators may have cut it a bit close, there was little chance that FEMA actually would run out of cash. According to a Congressional Research Service analysis, Congress made 14 supplemental appropriations to the fund between 2004 and 2013, for a total of $89.6 billion. In one year alone — 2005, the year that Hurricane Katrina devastated New Orleans and other areas in the Gulf Coast — legislators bolstered the fund with three extra appropriations amounting to $43 billion. (source)

  This, of course, naively assumes that there will always be more money to give to FEMA. Eventually, we’re going to run out.

  Is this the reason for the slow response to Puerto Rico?

  Personally, I keep wondering if a lack of money is the reason for our slow response to the desperate situation in Puerto Rico. Add to this the logistical problems, and you have a recipe for chaos.

  Another thing to keep in mind about Puerto Rico is that this is one of the rare situations in which stockpile preparedness may not have done any good. While some folks like to say that Puerto Ricans shouldn’t be out of food within 6 days after the disaster, what they aren’t considering is the totality of the destruction.

  

  What food people may have had stored was destroyed when homes were turned into piles of rubble. Other food spoiled soon after the power for the entire island was taken out. If you look at these photos, you will understand why few people have food.

  I imagine in such a situation, my own carefully preserved jars of food would have been smashed to bits and my freeze-dried food would have been soaked in flood waters. In most situations, your stockpile will see you through, but in a disaster of this magnitude, even the most well-prepared person could be left with nothing.

  Maybe money is why the director is urging a culture of preparedness

  Perhaps this reality is why Mr. Long is so adamant that Americans need to get prepared to take care of themselves and that we need to raise our children to understand this too. That’s not the warm fuzzy thing that people who refuse to prepare want to hear, so the mainstream media gives his advice little attention. A culture of preparedness is indeed the answer, and preppers have known this for a very long time.

  If you are interested in being better prepared, be sure to sign up for this daily newsletter.

  

  

• Morgan Stanley's Mike Wilson is Calling For a Boom and a Bust in Stocks

  This is what you’re paying for, clients of Morgan Stanley. You get Mike Wilson, Chief U.S. Equity Strategist and Chief Investment Officer, the most bullish of analysts on Wall Street, while also being the most bearish.

  How wonderful.
  
  Asshat, Morgan Stanley

  To best experience the dynamics of Mike Wilson’s intricate market call, first I advise you to sit back, relax, and drink a fifth of vodka — straight from the bottle — then doze off in that nice rocking chair of yours and be prepared to vomit when you wake up.

  He’s calling for S&P 2,700 by Q2 of 2018, roughly 10% higher from present levels. In a televised interview on CNBC yesterday, he described a market that would saunter higher, amidst cheerful baskets of flowers being tossed upon investors. There wouldn’t be any cause for concern, until his price target was met — at which time grave horrors would unfold — leaving top tickers stranded at the altar — raped, battered, and bruised.

  After the market soars to new record levels, a pox will befall equities, shattering dreams and stopping pace makers. The S&P 500 will fall by 20%, drowning investors in a bear market that is both menacing and harrowing.

  Until then, earnings should drive gains and potential economic stimulus will keep the party train going, leisurely stocked with the strongest and the purest strains of cocaine, booze, and hookers.

  “Today is a short term euphoria but we think this is the primary trend: Small caps, financials energy” are all opportunities for investors. “That doesn’t mean that FANG or tech gets left behind. They can both work in concert now. So I think this is the next leg.”

  While markets should trade higher, up until it crests at Wilson’s ghostly target of 2,700, he does caution investors that is could trade down, rather severely, at any given moment. He’s calling for a possible retracement of 5-6% by late October to early November. In the event that doesn’t happen, well then, stocks should trade higher.

  “I think the way it sets up is people probably get excited over the next couple of weeks,” said Wilson, also chief investment officer of institutional securities and wealth management. Wilson said he expects earnings to keep buoying the market. “Then we’re going to have the inevitable disappointment.”

  Wilson also took a shot at his peers for being wrong about a summer correction, smugly reminding them of what drives stocks in this market.

  The reason why stocks went higher this summer, as opposed to lower, was simple, according to Wilson — “It survived the test. The reason it survived the test is that fundamentals are too good,” he said. “There’s two ways to correct an overbought market. You could go down or you could go sideways. We took that latter route. “

  After the 5-6% fall correction, stocks will extricate themselves from the ribald glumness of Autumn and reassert a bullish vigor — sending it to new record highs at 2,700.

  “We’ll get to 2,700 first, and then the timing of the beginning of the cyclical bear could be imminent. It could be any time after that. It could be as early as the second half of next year,” he said in the telephone interview.

  To avoid sounding absurd, or even ridiculous, Mr. Wilson reminded the reps at Morgan Stanley that butcherous market slaughterings are quite normal happenings for stocks — in spite of them becoming increasingly rare in the 8th year of the present bull market.

  He summed up his intellectually diverse market call as calling for both a boom and a bust, having it both ways, having cake and eating it too.

  “I think this is the trick…Be careful what you wish for. We’re late cycle. We made this call back in April. We’re looking for the boom, bust,” he said. The boom is the bump and euphoria from fiscal stimulus, and investors could get excited about tax cuts sometime early next year. “It actually brings the end of the cycle. That’s the irony.”

  Prepare for both gains and losses, ups and downs.

  Thank you Morgan Stanley.

  

• Robots Have Ushered In An Era Of "Cocaine Deflation" On Wall Street

  Authored by

  Brazilian Police have stumbled into a cocaine workshop with robots packing 150,000 cocaine baggies per day. The era of cocaine deflation is upon Wall Street, as drug lords in Brazil are betting on automation to ramp up production.

  Source: StockBoardAsset

  Perhaps this 'automation' is why Brazil's cocaine prices have suffered such a deflationary collapse…

  

  …And it looks like the benefits of automation haven’t been limited to the market for cocaine…

  

  …During Congressional testimony last month, Fed Chairwoman Janet Yellen named unlimited cell phoe data plans as one of several "special one-time transitory factors" that has weighed on inflation thiis year. We wonder: will this be Janet Yellen's next 'transtory' reason for low inflation…?
   

  

  

• The “Trump Tax Plan” – Details & Analysis

  Submitted by Lance Roberts of Real Investment Advice

  

  Almost a full year after the election of Donald Trump to the White House, one of the key promises made to voters was the largest “tax cut” since Ronald Reagan was in office. As President Trump stated in Indiana yesterday:

  “This is a revolutionary change, and the biggest winners will be middle-class workers as jobs start pouring into our country, as companies start competing for American labor, and as wages continue to grow. This will be the lowest top marginal income tax rate for small and mid-size businesses in more than 80 years.”

  Here are the major points as summed up by BI.

  Business tax changes:

  • A 20% corporate tax rate. This is the first time Trump has publicly backed down from one of his earliest campaign promises: a 15% corporate tax rate. The budget math required for a 15% rate was too difficult, so the somewhat higher rate is the opening bid. The current statutory federal rate is 35%.
  • A 25% rate for pass-through businesses. Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the pass-through rate. The plan also says it will consider rules to prevent “personal income” from being taxed at this rate. Mnuchin previously suggested there may be limitations on what types of businesses get this rate — it could apply only to goods producers and not service-oriented companies to prevent people from creating limited-liability corporations to store their assets and receive a lower rate.
  • Elimination of some business deductions, industry-specific incentives, and more. There are few details, but the plan includes language regarding the “streamlining” of business tax breaks.
  • A one-time repatriation tax. All overseas assets from US-owned companies would be considered repatriated and taxed at a one-time lower rate — this is designed to bring corporate profits back from overseas. Illiquid assets like real estate would be taxed at a lower rate than cash or cash equivalents, and the payments would be spread out over time. While there is no precise number in the plan, officials have indicated the rate could end up somewhere around 10%.

  Personal tax changes:

  • A bottom individual tax rate of 12%. The plan specifies three tax brackets, with the lowest rate being 12%. That would represent a slight bump in the bottom bracket, which is now 10%. People currently in the 15% marginal tax bracket would most likely be included here.
  • A middle tax bracket of 25%. The incomes in this bracket aren’t specified.
  • The top individual tax rate of 35%. The current top rate is 39.6%.
  • The possibility of a fourth, higher bracket. Because of Trump’s insistence that taxes for the wealthiest Americans not decrease, the plan proposes the possibility of a fourth tax bracket at a rate higher than 35% if the tax-writing committees wish. “An additional top rate may apply to the highest-income taxpayers to ensure that the reformed tax code is at least as progressive as the existing tax code and does not shift the tax burden from high-income to lower- and middle-income taxpayers,” the plan reads.
  • A larger standard deduction. To avoid raising taxes on those currently in the 10% tax bracket, the standard deduction for all taxes would increase to $12,000 for individuals (up from $6,350) and $24,000 for married couples (up from $12,700). These are slightly less than the doubled deductions expected and the idea this would save people money may be misleading.
  • Eliminates most itemized deductions. The only deduction preserved explicitly in the plan is for charitable gifts and home-mortgage interest.
  • Increases the size of the child tax credit. A pet project of Ivanka Trump, the proposal is to make the first $1,000 of the child tax credit refundable and increase the income level at which the credit would phase out.
  • Vague promises on retirement savings and other deductions. Sections of the plan refer to retirement savings and other “provisions,” but details are sparse.
  • Elimination of the state and local tax deduction. The so-called SALT deduction allows people to deduct what they pay in state and local taxes from their federal tax bill. Most of the people who take this deduction are wealthier Americans in Democratic states — about one-third of the beneficiaries are in New York, New Jersey, and California.
  • Elimination of the estate tax. Called the “death tax” in the plan, this applies only to inherited assets totaling $5.49 million or more in 2017. Very few households pay the estate tax, but it has long been a target for Republicans.

  Devil In The Details

  As in always the case, there are some important points to remember. This is just a proposal. This will have to go through several drafts, negotiations, and tweaking before a final bill is voted on by the House. It will then go to Senate for changes and a vote. IF, and that is a big if, it is passed by the Senate the bill returns to the House where the bill will be reconciled before it is passed onto the President for his signature.
  The bill, as proposed today, will likely look very different by the time it is actually voted on. 

  However, as is always the case, the “devil is in the details.”

  First, as the Committee for a Responsible Federal Budget lays out:

  “Tax cuts shouldn’t be handed out like Halloween candy. To grow the economy, they must be paid for, and the details of this plan appear to come up $2 to 2.5 trillion short.

   

  Deficit-financed tax cuts are a recipe for a short-term economic sugar high followed by sluggish long-term growth.

   

  Without sufficient details on how or even if these tax cuts will be fully paid for, this outline is nothing more than a fiscal fantasy.

   

  Tax reform remains one of the most important national objectives. Fiscally responsible tax reform would not only improve simplicity and fairness, but can actually grow the economy and help to improve the dangerous fiscal situation we face.

   

  But the difference between tax reform that would grow the economy, and tax cuts that would grow the debt, cannot be made up for with wishful thinking or magical economic growth. And tax cuts certainly don’t pay for themselves.“

  Furthermore, the CFRB picks up on a particularly important point that headlines have seemed to overlook:

  “Making many assumptions about the plan – including that the brackets apply to the same income as the Trump campaign’s plan, that its 25 percent pass-through rate contains guardrails so it only applies to active business income, and that the limit on interest makes up about half the revenue lost from expensing – we estimate the plan has about $5.8 trillion over a decade of gross tax cuts and would cost $2.2 trillion on net through 2027. Given that it calls for only five years of expensing rather than permanent – a major budget gimmick – it also potentially sets the stage for an extenders package of over $1 trillion when expensing expires.”

  

  But even before we can get to tax reform, the issue of the budget must be addressed first. As Congressman Kevin Brady, Chairman of the House Ways And Means Committee, stated during a recent interview on the “Lance Roberts Show:”

  “No budget, no tax-reform.”

  Without a budget for 2018, the tax bill cannot be passed using “reconciliation” which would only require a 51-vote majority versus the currently required 60-vote majority under Senate rules.

  Passing a budget has been an impossible feat over the last 8-years with the government currently operating under another continuing resolution (“CR”) until December of this year. (That means spending remains at the same level as the previous budget, last  passed in 2008, with an 8% baseline increase.)

  The debate over the budget will be contentious enough with threats of a Government “shutdown” now an annual event. But some GOP members, however, have suggested combining another attempt at repealing Obamacare with the tax bill for 2018 reconciliation. This will make an already difficult undertaking even more complicated.

  As I stated previously:

  “The issue of tax reform is not going to be an easy one. With such a deeply partisan government the probability of passing tax reform as currently proposed is extremely slim. Furthermore, while I do expect that some version of tax reform will eventually get passed, it will likely take much longer than most expect. The chart below shows the current chasm leading to the difficulty of getting anything accomplished in Washington.”

  

  Already, Democrats are aligning to push back against the proposed legislation:

  “If this framework is all about the middle class, then Trump tower is middle-class housing,” – Senator Ron Wyden (D)

  “This would cost anywhere from 5 to 7 TRILLION dollars and they have no credible plan to pay for it… If they don’t pay for it, they’ll balloon the deficit and debt….” – Senator Chuck Schumer (D)

  And most importantly:

  “Tax reform is going to make health care look like a piece of cake,” – Retiring Sen. Bob Corker.

  This is why there hasn’t been a major piece of tax legislation enacted since Ronald Reagan was in office.

  Economic Outcomes Likely Disappointing

  Do not misunderstand me. Tax rates CAN make a difference in the short run particularly when coming out of a recession as it frees up capital for productive investment at a time when recovering economic growth and pent-up demand require it.

  However, in the long run, it is the direction and trend of economic growth that drives employment. The reason I say “direction and trend” is because, as you will see by the vertical blue dashed line, beginning in 1980, both the direction and trend of economic growth in the United States changed for the worse.

  

  Furthermore, as I noted previously, Reagan’s tax cuts were timely due to the economic, fiscal, and valuation backdrop which is diametrically opposed to the situation today.

  “Importantly, as has been stated, the proposed tax cut by President-elect Trump will be the largest since Ronald Reagan. However, in order to make valid assumptions on the potential impact of the tax cut on the economy, earnings and the markets, we need to review the differences between the Reagan and Trump eras.My colleague, Michael Lebowitz, recently penned the following on this exact issue.

   

  ‘Many investors are suddenly comparing Trump’s economic policy proposals to those of Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and potential growth of 1982 was vastly different than it is today.  Consider the following table:’”

  

  The differences between today’s economic and market environment could not be starker. The tailwinds provided by initial deregulation, consumer leveraging and declining interest rates and inflation provided huge tailwinds for corporate profitability growth. The chart below shows the ramp up in government debt since Reagan versus subsequent economic growth and tax rates.

  

  Of course, as noted, rising debt levels is the real impediment to longer-term increases in economic growth. When 75% of your current Federal Budget goes to entitlements and debt service, there is little left over for the expansion of the economic growth.

  

  The tailwinds enjoyed by Reagan are now headwinds for Trump as the economic “boom” of the 80’s and 90’s was really not much more than a debt-driven illusion that has now come home to roost.  (More discussion on this problem here, here and here)

  Tax Cuts Don’t Reduce The Deficit

  Senator Pat Toomey, a Pennsylvania Republican who sits on the finance committee, said he was confident that a growing economy would pay for the tax cuts and that the plan was fiscally responsible.

  “This tax plan will be deficit reducing,”

  The belief that tax cuts will eventually become revenue neutral due to expanded economic growth is a fallacy. As the CRFB noted:

  “Given today’s record-high levels of national debt, the country cannot afford a deficit-financed tax cut. Tax reform that adds to the debt is likely to slow, rather than improve, long-term economic growth.”

  The problem with the claims that tax cuts reduce the deficit is that there is NO evidence to support the claim. The increases in deficit spending to supplant weaker economic growth has been apparent with larger deficits leading to further weakness in economic growth. In fact, ever since Reagan first lowered taxes in the ’80’s both GDP growth and the deficit have only headed in one direction – lower.

  

  As noted above, there are massive differences between the economic and debt related backdrops between the early 80’s and today.

  The true burden on taxpayers is government spending, because the debt requires future interest payments out of future taxes. As debt levels, and subsequently deficits, increase, economic growth is burdened by the diversion of revenue from productive investments into debt service. 

  While lowering corporate tax rates will certainly help businesses potentially increase their bottom line earnings, there is a high probability that it will not “trickle down” to middle-class America.

  

  While I am certainly hopeful for meaningful changes in tax reform, deregulation and a move back towards a middle-right political agenda, from an investment standpoint there are many economic challenges that are not policy driven.

  • Demographics
  • Structural employment shifts
  • Technological innovations
  • Globalization
  • Financialization 
  • Global debt

  These challenges will continue to weigh on economic growth, wages and standards of living into the foreseeable future.  As a result, incremental tax and policy changes will have a more muted effect on the economy as well.

  As Mike concluded in his missive:

  “As investors, we must understand the popular narrative and respect it as it is a formidable short-term force driving the market. That said, we also must understand whether there is logic and truth behind the narrative. In the late 1990’s, investors bought into the new economy narrative. By 2002, the market reminded them that the narrative was born of greed not reality. Similarly, in the early to mid-2000’s real estate investors were lead to believe that real-estate prices never decline.

  The bottom line is that one should respect the narrative and its ability to propel the market higher.“

  Will “Trumponomics” change the course of the U.S. economy? I certainly hope so. Unfortunately, there is no evidence that such has ever been the case.

  As investors, we must understand the difference between a “narrative-driven” advance and one driven by strengthening fundamentals. The first is short-term and leads to bad outcomes. The other isn’t, and doesn’t. 

  Full text of Tax Reform plan below.

   

   

  

  

• United States And Russia To Build NASA-Led Space Station

  Content originally published at iBankCoin.com

  The liberal science community has a moral dilemma on its hands following today’s announcement that the United States is partnering with Russia on a NASA-led project to build an orbiting lunar station.

  On one hand, the international base for lunar exploration will serve as a “gateway to deep space and the lunar surface,” according to NASA.

  On the other hand, Russia is involved – which means they’ll undoubtedly slit our throats in space, populate the surface of the moon, build a moon cannon (having read a U.S. astronaut’s Heinlein collection), and fire silicon, magnesium, and aluminum-rich moon rocks at the United States. Once we are obliterated, Russia will invade the country and enslave all surviving Americans in moon-rock crushing factories.

  Pretending not to be evil, Igor Komarov – Roscosmos’s general director, stated that Russia, the United States and other participants agreed it was important to work using unified standards to avoid future problems in space, citing Sandra Bullock’s movie “Gravity” in the process.

  “Roscosmos and NASA have already agreed on standards for a docking unit of the future station,” the Russian space agency said.

  AFP reports:

  “Taking into account the country’s extensive experience in developing docking units, the station’s future elements — as well as standards for life-support systems — will be created using Russian designs.”

  NASA said it planned to expand human presence into the solar system using its new deep space exploration transportation systems, the Space Launch System rocket and Orion spacecraft.

  – ‘Better to fly together’ –

  Russia and the United States also discussed using Moscow’s Proton-M and Angara rockets as well as other spacecraft to help create the infrastructure of the lunar spaceport, the Russian statement said, adding that the main works were slated to begin in the mid-2020s.

  “The station will be a serious platform for future research,” said Komarov – concealing his seething Red ambition, though boasting “That is a rather significant contribution.”

  Igor Lisov, editor at Space News, told AFP of Russia’s potential contribution: “We are offering carriers for flights to a lunar orbiting station, we are offering our docking units or their components,” he said, adding Russia had vast experience in creating life-support systems.

  Unfortunately, this will be our doom…

  

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• Why Political Correctness Fails (When What We Know "For Sure" Is Wrong)

  Authored by Gail Tverberg via Our Finite World blog,

  Most of us are familiar with the Politically Correct (PC) World View. William Deresiewicz describes the view, which he calls the “religion of success,” as follows:

  There is a right way to think and a right way to talk, and also a right set of things to think and talk about. Secularism is taken for granted. Environmentalism is a sacred cause. Issues of identity – principally the holy trinity of race, gender, and sexuality – occupy the center of concern.

  There are other beliefs that go with this religion of success:

  • Wind and solar will save us.
  • Electric cars will make transportation possible indefinitely.
  • Our world leaders are all powerful.
  • Science has all of the answers.

  To me, this story is pretty much equivalent to the article, “Earth Is Flat and Infinite, According to Paid Experts,” by Chris Hume in Funny Times. While the story is popular, it is just plain silly.

  In this post, I explain why many popular understandings are just plain wrong. I cover many controversial topics, including environmentalism, peer-reviewed literature, climate change models, and religion. I expect that the analysis will surprise almost everyone.

  Myth 1: If there is a problem with the lack of any resource, including oil, it will manifest itself with high prices.

  As we reach limits of oil or any finite resource, the problem we encounter is an allocation problem. 

  

  Figure 1. Two views of future economic growth. Created by author.

  As long as the quantity of resources we can extract from the ground keeps rising faster than population, there is no problem with limits. The tiny wedge that each person might get from these growing resources represents more of that resource, on average. Citizens can reasonably expect that future pension promises will be paid from the growing resources. They can also expect that, in the future, the shares of stock and the bonds that they own can be redeemed for actual goods and services.

  If the quantity of resources starts to shrink, the problem we have is almost a “musical chairs” type of problem.

  

  Figure 2. Circle of chairs arranged for game of musical chairs. Source

  In each round of a musical chairs game, one chair is removed from the circle. The players in the game must walk around the outside of the circle. When the music stops, all of the players scramble for the remaining chairs. Someone gets left out.

  The players in today’s economic system include

  • High paid (or elite) workers
  • Low paid (or non-elite) workers
  • Businesses
  • Governments
  • Owners of assets (such as stocks, bonds, land, buildings) who want to sell them and exchange them for today’s goods and services

  If there is a shortage of a resource, the standard belief is that prices will rise and either more of the resource will be found, or substitution will take place. Substitution only works in some cases: it is hard to think of a substitute for fresh water. It is often possible to substitute one energy product for another. Overall, however, there is no substitute for energy. If we want to heat a substance to produce a chemical reaction, we need energy. If we want to move an object from place to place, we need energy. If we want to desalinate water to produce more fresh water, this also takes energy.

  The world economy is a self-organized networked system. The networked system includes businesses, governments, and workers, plus many types of energy, including human energy. Workers play a double role because they are also consumers. The way goods and services are allocated is determined by “market forces.” In fact, the way these market forces act is determined by the laws of physics. These market forces determine which of the players will get squeezed out if there is not enough to go around.

  Non-elite workers play a pivotal role in this system because their number is so large. These people are the chief customers for goods, such as homes, food, clothing, and transportation services. They also play a major role in paying taxes, and in receiving government services.

  History says that if there are not enough resources to go around, we can expect increasing wage and wealth disparity. This happens because increased use of technology and more specialization are workarounds for many kinds of problems. As an economy increasingly relies on technology, the owners and managers of the technology start receiving higher wages, leaving less for the workers without special skills. The owners and managers also tend to receive income from other sources, such as interest, dividends, capital gains, and rents.

  When there are not enough resources to go around, the temptation is to use technology to replace workers, because this reduces costs. Of course, a robot does not need to buy food or a car. Such an approach tends to push commodity prices down, rather than up. This happens because fewer workers are employed; in total they can afford fewer goods. A similar downward push on commodity prices occurs if wages of non-elite workers stagnate or fall.

  If wages of non-elite workers are lower, governments find themselves in increasing difficulty because they cannot collect enough taxes for all of the services that they are asked to provide. History shows that governments often collapse in such situations. Major defaults on debt are another likely outcome (Figure 3). Pension holders are another category of recipients who are likely to be “left out” when the game of musical chairs stops.

  

  Figure 3 – Created by Author.

  The laws of physics strongly suggest that if we are reaching limits of this type, the economy will collapse. We know that this happened to many early economies. More recently, we have witnessed partial collapses, such as the Depression of the 1930s. The Depression occurred when the price of food dropped because mechanization eliminated a significant share of human hand-labor. While this change reduced the price of food, it also had an adverse impact on the buying-power of those whose jobs were eliminated.

  The collapse of the Soviet Union is another example of a partial collapse. This collapse occurred as a follow-on to the low oil prices of the 1980s. The Soviet Union was an oil exporter that was affected by low oil prices. It could continue to produce for a while, but eventually (1991) financial problems caught up with it, and the central government collapsed.

  

  Figure 4. Oil consumption, production, and inflation-adjusted price, all from BP Statistical Review of World Energy, 2015.

  Low prices are often a sign of lack of affordability. Today’s oil, coal, and natural gas prices tend to be too low for today’s producers. Low energy prices are deceptive because their initial impact on the economy seems to be favorable. The catch is that after a time, the shortfall in funds for reinvestment catches up, and production collapses. The resulting collapse of the economy may look like a financial collapse or a governmental collapse.

  Oil prices have been low since late 2014. We do not know how long low prices can continue before collapse. The length of time since oil prices have collapsed is now three years; we should be concerned.

  Myth 2. (Related to Myth 1) If we wait long enough, renewables will become affordable.

  The fact that wage disparity grows as we approach limits means that prices can’t be expected to rise as we approach limits. Instead, prices tend to fall as an increasing number of would-be buyers are frozen out of the market. If in fact energy prices could rise much higher, there would be huge amounts of oil, coal and gas that could be extracted.

  

  Figure 5. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much oil can be produced at various price levels, according to IEA models.

  There seems to be a maximum affordable price for any commodity. This maximum affordable price depends to a significant extent on the wages of non-elite workers. If the wages of non-elite workers fall (for example, because of mechanization or globalization), the maximum affordable price may even fall.

  Myth 3. (Related to Myths 1 and 2) A glut of oil indicates that oil limits are far away. 

  A glut of oil means that too many people around the world are being “frozen out” of buying goods and services that depend on oil, because of low wages or a lack of job. It is a physics problem, related to ice being formed when the temperature is too cold. We know that this kind of thing regularly happens in collapses and partial collapses. During the Depression of the 1930s, food was being destroyed for lack of buyers. It is not an indication that limits are far away; it is an indication that limits are close at hand. The system can no longer balance itself correctly.

  Myth 4: Wind and solar can save us.

  The amount of energy (other than direct food intake) that humans require is vastly higher than most people suppose. Other animals and plants can live on the food that they eat or the energy that they produce using sunlight and water. Humans deviated from this simple pattern long ago–over 1 million years ago.

  Unfortunately, our bodies are now adapted to the use of supplemental energy in addition to food. The use of fire allowed humans to develop differently than other primates. Using fire to cook some of our food helped in many ways. It freed up time that would otherwise be spent chewing, providing time that could be used for tool making and other crafts. It allowed teeth, jaws and digestive systems to be smaller. The reduced energy needed for maintaining the digestive system allowed the brain to become bigger. It allowed humans to live in parts of the world where they are not physically adapted to living.

  In fact, back at the time of hunter-gatherers, humans already seemed to need three times as much energy total as a correspondingly sized primate, if we count burned biomass in addition to direct food energy.

  

  Figure 6 – Created by author.

  “Watts per Capita” is a measure of the rate at which energy is consumed. Even back in hunter-gatherer days, humans behaved differently than similar-sized primates would be expected to behave. Without considering supplemental energy, an animal-like human is like an always-on 100-watt bulb. With the use of supplemental energy from burned biomass and other sources, even in hunter-gatherer times, the energy used was equivalent to that of an always-on 300-watt bulb.

  How does the amount of energy produced by today’s wind turbines and solar panels compare to the energy used by hunter-gatherers? Let’s compare today’s wind and solar output to the 200 watts of supplemental energy needed to maintain our human existence back in hunter-gatherer times (difference between 300 watts per hour and 100 watts per hour). This assumes that if we were to go back to hunting and gathering, we could somehow collect food for everyone, to cover the first 100 watts per hour. All we would need to do is provide enough supplemental energy for cooking, heating, and other very basic needs, so we would not have to deforest the land.

  Conveniently, BP gives the production of wind and solar in “terawatt hours.” If we take today’s world population of 7.5 billion, and multiply it by 24 hours a day, 365.25 days per year, and 200 watts, we come to needed energy of 13,149 terawatt hours per year. In 2016, the output of wind was 959.5 terawatt hours; the output of solar was 333.1 terawatt hours, or a total of 1,293 terawatt hours. Comparing the actual provided energy (1,293 tWh) to the required energy of 13,149 tWh, today’s wind and solar would provide only 9.8% of the supplemental energy needed to maintain a hunter-gatherer level of existence for today’s population. 

  Of course, this is without considering how we would continue to create wind and solar electricity as hunter-gatherers, and how we would distribute such electricity. Needless to say, we would be nowhere near reproducing an agricultural level of existence for any large number of people, using only wind and solar. Even adding water power, the amount comes to only 40.4% of the added energy required for existence as hunter gatherers for today’s population.

  Many people believe that wind and solar are ramping up rapidly. Starting from a base of zero, the annual percentage increases do appear to be large. But relative to the end point required to maintain any reasonable level of population, we are very far away. A recent lecture by Energy Professor Vaclav Smil is titled, “The Energy Revolution? More Like a Crawl.”

  Myth 5. Evaluation methods such as “Energy Returned on Energy Invested” (EROI) and “Life Cycle Analyses (LCA)” indicate that wind and solar should be acceptable solutions. 

  These approaches are concerned about how the energy used in creating a given device compares to the output of the device. The problem with these analyses is that, while we can measure “energy out” fairly well, we have a hard time determining total “energy in.” A large share of energy use comes from indirect sources, such as roads that are shared by many different users.

  A particular problem occurs with intermittent resources, such as wind and solar. The EROI analyses available for wind and solar are based on analyses of these devices as stand-alone units (perhaps powering a desalination plant, on an intermittent basis). On this basis, they appear to be reasonably good choices as transition devices away from fossil fuels.

  EROI analyses don’t handle the situation well when there is a need to add expensive infrastructure to compensate for the intermittency of wind and solar. This situation tends to happen when electricity is added to the grid in more than small quantities. One workaround for intermittency is adding batteries; another is overbuilding the intermittent devices, and using only the portion of intermittent electricity that comes at the time of day and time of year when it is needed. Another approach involves paying fossil fuel providers for maintaining extra capacity (needed both for rapid ramping and for the times of year when intermittent resources are inadequate).

  Any of these workarounds is expensive and becomes more expensive, the larger the percentage of intermittent electricity that is added. Euan Mearns recently estimated that for a particular offshore wind farm, the cost would be six times as high, if battery backup sufficient to even out wind fluctuations in a single month were added. If the goal were to even out longer term fluctuations, the cost would no doubt be higher. It is difficult to model what workarounds would be needed for a truly 100% renewable system. The cost would no doubt be astronomical.

  When an analysis such as EROI is prepared, there is a tendency to leave out any cost that varies with the application, because such a cost is difficult to estimate. My background is in actuarial work. In such a setting, the emphasis is always on completeness because after the fact, it will become very clear if the analyst left out any important insurance-related cost. In EROI and similar analyses, there is much less of a tieback to the real world, so an omission may never be noticed. In theory, EROIs are for multiple purposes, including ones where intermittency is not a problem. The EROI modeler is not expected to consider all cases.

  Another way of viewing the issue is as a “quality” issue. EROI theory generally treats all types of energy as equivalent (including coal, oil, natural gas, intermittent electricity, and grid-quality electricity). From this perspective, there is no need to correct for differences in types of energy output. Thus, it makes perfect sense to publish EROI and LCA analyses that seem to indicate that wind and solar are great solutions, without any explanation regarding the likely high real-world cost associated with using them on the electric grid.

  Myth 6. Peer reviewed articles give correct findings.

  The real story is that peer reviewed articles need to be reviewed carefully by those who use them. There is a very significant chance that errors may have crept in. This can happen because of misinterpretation of prior peer reviewed articles, or because prior peer reviewed articles were based on “thinking of the day,” which was not quite correct, given what has been learned since the article was written. Or, as indicated by the example in Myth 5, the results of peer reviewed articles may be confusing to those who read them, in part because they are not written for any particular audience.

  The way university research is divided up, researchers usually have a high level of specialized knowledge about one particular subject area. The real world situation with the world economy, as I mentioned in my discussion of Myth 1, is that the economy is a self-organized networked system. Everything affects everything else. The researcher, with his narrow background, doesn’t understand these interconnections. For example, energy researchers don’t generally understand economic feedback loops, so they tend to leave them out. Peer reviewers, who are looking for errors within the paper itself, are likely to miss important feedback loops as well.

  To make matters worse, the publication process tends to favor results that suggest that there is no energy problem ahead. This bias can come through the peer review process. One author explained to me that he left out a certain point from a paper because he expected that some of his peer reviewers would come from the Green Community; he didn’t want to say anything that might offend such a reviewer.

  This bias can also come directly from the publisher of academic books and articles. The publisher is in the business of selling books and journal articles; it does not want to upset potential buyers of its products. One publisher made it clear to me that its organization did not want any mention of problems that seem to be without a solution. The reader should be left with the impression that while there may be issues ahead, solutions are likely to be found.

  In my opinion, any published research needs to be looked at very carefully. It is very difficult for an author to move much beyond the general level of understanding of his audience and of likely reviewers. There are financial incentives for authors to produce PC reports, and for publishers to publish them. In many cases, articles from blogs may be better resources than academic articles because blog authors are under less pressure to write PC reports.

  Myth 7. Climate models give a good estimate of what we can expect in the future.

  There is no doubt that climate is changing. But is all of the hysteria about climate change really the correct story?

  Our economy, and in fact the Earth and all of its ecosystems, are self-organized networked systems. We are reaching limits in many areas at once, including energy, fresh water, the number of fish that can be extracted each year from oceans, and metal ore extraction. Physical limits are likely to lead to financial problems, as indicated in Figure 3. The climate change modelers have chosen to leave all of these issues out of their models, instead assuming that the economy can continue to grow as usual until 2100. Leaving out these other issues clearly can be expected to overstate the impact of climate change.

  The International Energy Agency is very influential with respect to which energy issues are considered. Between 1998 and 2000, it did a major flip-flop in the importance of energy limits. The IEA’s 1998 World Energy Outlook devotes many pages to discussing the possibility of inadequate oil supplies in the future. In fact, near the beginning, the report says,

  Our analysis of the current evidence suggests that world oil production from conventional sources could peak during the period 2010 to 2020.

  The same report also mentions Climate Change considerations, but devotes many fewer pages to these concerns. The Kyoto Conference had taken place in 1997, and the topic was becoming more widely discussed.

  In 1999, the IEA did not publish World Energy Outlook. When the IEA published the World Energy Outlook for 2000, the report suddenly focused only on Climate Change, with no mention of Peak Oil. The USGS World Petroleum Assessment 2000 had recently been published. It could be used to justify at least somewhat higher future oil production.

  I will be the first to admit that the “Peak Oil” story is not really right. It is a halfway story, based on a partial understanding of the role physics plays in energy limits. Oil supply does not “run out.” Peak Oilers also did not understand that physics governs how markets work–whether prices rise or fall, or oscillate. If there is not enough to go around, some of the would-be buyers will be frozen out. But Climate Change, as our sole problem, or even as our major problem, is not the right story, either. It is another halfway story.

  One point that both Peak Oilers and the IEA missed is that the world economy doesn’t really have the ability to cut back on the use of fossil fuels significantly, without the world economy collapsing. Thus, the IEA’s recommendations regarding moving away from fossil fuels cannot work. (Shifting energy use among countries is fairly easy, however, making individual country CO2 reductions appear more beneficial than they really are.) The IEA would be better off talking about non-fuel changes that might reduce CO2, such as eating vegetarian food, eliminating flooded rice paddies, and having smaller families. Of course, these are not really issues that the International Energy Association is concerned about.

  The unfortunate truth is that on any difficult, interdisciplinary subject, we really don’t have a way of making a leap from lack of knowledge of a subject, to full knowledge of a subject, without a number of separate, partially wrong, steps. The IPCC climate studies and EROI analyses both fall in this category, as do Peak Oil reports.

  The progress I have made on figuring out the energy limits story would not have been possible without the work of many other people, including those doing work on studying Peak Oil and those studying EROI. I have also received a lot of “tips” from readers of OurFiniteWorld.com regarding additional topics I should investigate. Even with all of this help, I am sure that my version of the truth is not quite right. We all keep learning as we go along.

  There may indeed be details of this particular climate model that are not correct, although this is out of my area of expertise. For example, the historical temperatures used by researchers seem to need a lot of adjustment to be usable. Some people argue that the historical record has been adjusted to make the historical record fit the particular model used.

  There is also the issue of truing up the indications to where we are now. I mentioned the problem earlier of EROI indications not having any real world tie; climate model indications are not quite as bad, but they also seem not to be well tied to what is actually happening.

  Myth 8. We don’t need religion; our leaders are all knowing and all powerful.

  We are fighting a battle against the laws of physics. Expecting our leaders to win in the battle against the laws of physics is expecting a huge amount. Some of the actions of our leaders seem extraordinarily stupid. For example, if falling interest rates have postponed peak oil, then proposing to raise interest rates, when we have not fixed the underlying oil depletion problem, seems very ill-advised.

  Everything I have seen indicates that there is a literal Higher Power governing our world economy. It is the Laws of Physics that govern the world economy. The Laws of Physics affect the world economy in many ways. The economy is a dissipative structure. Energy inputs allow the economy to remain in an “out of equilibrium state” (that is, in a growing state), for a very long period.

  Eventually the ability of any economy to grow must come to an end. The problem is that it requires increasing amounts of energy to fight the growing “entropy” (higher energy cost of extraction, need for growing debt, and rising pollution levels) of the system. The economy must come to an end, just as the lives of individual plants and animals (which are also dissipative structures) must come to an end.

  People throughout the ages have been in awe of how this system that provides growth works. We get energy from the sun. This solar energy helps grow our food. It allows the physical growth of humans. It allows the growth of ecosystems and of economies. Humans, ecosystems, and economies seem permanent, but eventually they all must collapse. In physics terms, they are all dissipative structures.

  Humans have been in awe of the self-organizing property permitted by flows of energy for as long as humans have had the ability to think abstract thoughts. These flows allow a newly created whole to be greater than the sum of their parts. For example, babies start from a small beginning and mature into adults. Musical notes go together to form recognizable melodies. Physical movements go together to form dances. Awe for this phenomenon seems to be one of the origins of religion.

  Another reason for religions is a need for hierarchical structure within an economy. We know that animal groups very often have “pecking orders.” Adding a god provides a convenient way of adding a “top level” to the pecking order. Of course, if leaders can convince members of the group that they are all knowing and that science can provide all of the answers, then the top level provided by religion is not needed.

  A third reason for religions is to help align the thoughts of members in a particular way. Most of us are aware of the power of magnetized materials.

  

  Figure 7. Source.

  To some extent, the same power exists when the belief systems of groups of people can be aligned in the same direction. For example, teachers find it much easier to teach large groups of students, if parents have emphasized the importance of school and the need for respect for teachers. A military leader can attack another country, if soldiers follow orders. A group of generally uncivilized people can learn the benefit of working with others, if proper instruction is given.

  What has been astounding to me, as I have looked into the situation, is that the scientific evidence seems to point in the direction of a literal Higher Power governing our Universe. It is not clear whether this higher power is the Laws of Physics, or whether it is some outside “God” that created the Laws of Physics.

  In the past, many researchers assumed that the Universe was a closed energy system, irreversibly headed toward a cold, dark end. Recent research indicates that the Universe is ever-expanding, and in fact, seems to be expanding at an accelerating rate. While individual dissipative structures are constantly encountering more and more entropy, the universe as a whole is perhaps expanding rapidly enough to “outrun” growing entropy. Thus, it can behave as an always-open system. This always-open energy system allows many types of objects to self-organize and grow, at least for a time. These objects behave as dissipative structures, each having a beginning and an end.

  We really don’t know whether the Universe had a beginning. Some research suggests that it did not. Others believe it began with a Big Bang.

  Within the Universe, the earth seems extremely unusual. In fact, it is not clear that there is any other planet that has exactly the right conditions for complex life. A recent American Scientist article discusses this issue. The book Rare Earth: Why Complex Life Is Uncommon in the Universe points out the huge number of coincidences that were necessary for complex life to form and flourish.

  Within the Earth, and perhaps within the Universe as a whole, human economies are the most energy-dense form of structure found.

  

  Figure 8. Image similar to ones shown in Eric Chaisson’s 2001 book, Cosmic Evolution: The Rise of Complexity in Nature.

  Thus, in some sense, we humans and our economies may, in some sense, represent the current upper bound on development in the Universe.

  We humans live on Earth. It is easy for us to think that our primary purpose in life is to care for and protect the Earth. Unfortunately, with our need for supplemental energy, this is not possible. Even at an early date, our need for resources exceeded what was sustainable. Joshua (in Joshua 17:14-18 relating to the period around 1400 BCE) instructs the tribes of Joseph to clear the trees from the hill country to have enough land for his tribe. This practice was clearly unsustainable; it would lead to erosion of the soil on hilltops. Even at that early date, high population and the need for resources to provide for this high population was conflicting with earth’s sustainability.

  If our God is either the Laws of Physics, or some force giving rise to the Laws of Physics, then our God is really the God of the Universe. The limitations of the current Earth are no problem. God (or the Laws of Physics) could create a new Earth, or 1 million new Earths, if He chose to. Thus, from God’s point of view, it is not clear that there is any point to today’s environmentalism. There is a need not to poison ourselves, but “saving the earth” for other species after humans, or for a new set of humans who somehow will use much less energy, doesn’t make much sense. Humans can’t use much less energy; even if we could, our energy use would always be on an upward slope, headed to precisely where we are now.

  There are many things that we can’t know for certain. Does this God want/expect us to worship him? Does this God plan an afterlife for some or all of the humans on Earth today? Obviously, if God (or the Laws of Physics) could create the Earth, God could also create other structures as well–possibly a “Heaven.” It is not clear to me that any one of today’s religions has a monopoly on insights regarding what is expected. A person might argue that we need not worry about religion at all, except for the fellowship it provides and the insights it offers regarding how early people coped with their difficulties.

  Myth 9. The texts of religious groups around the world are literally true.

  The texts of religious groups are true in the same sense that peer reviewed scientific literature is true. They represent, more or less, the best thinking of the day on a particular subject. This certainly does not mean that they are literally true.

  We need to read religious texts in the context that they were written. In the earliest days, religious texts represented stories that people passed down from one generation to the next. These stories represented insights that these early people had gained. No one at that time was too concerned about authorship. If a story says, “God said,” it could also mean, “We think that this is something that God might have said.”

  Literary styles were very different, back in an era before people pretended to have scientific knowledge. People created stories illustrating some aspect of a particular phenomenon. These stories were not supposed to fully describe what happened. This is why Genesis features two different creation stories.

  The Bible makes liberal use of hyperbole and exaggeration. It is hard for people who are not familiar with the original language to understand how stories were intended to be interpreted. Is the concept of Hell added, primarily to provide a contrast to Heaven? In the Old Testament, the number of words in the ancient Hebrew language is much smaller than in today’s languages. This, by itself, makes direct translation difficult.

  The earliest religious stories explained how God was perceived at that time. As people became more settled, their views changed. People were getting more “civilized.” Population densities were rising. The best beliefs in an early period may not have had relevance for a later period. This is why most religions have had reformers. Sometimes new writings are added. At other times, the way the writings are interpreted changes. This is why there seems to be a bizarre progression of stories from the Old Testament to the New Testament; new stories needed to be added to supplement and replace old ways of thinking.

  Some of the things that early people discovered have not been understood by environmentalists. Genesis 1:28 says,

  God blessed them and said to them, “Be fruitful and increase in number; fill the earth and subdue it. Rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.”

  The early people had figured out that humans were indeed different from other animals and plants. Their use of supplemental energy gave them power over other creatures. Their numbers could (and indeed, did) increase. Early authors were documenting how the world really worked. We later humans have been too blind to see the real situation. It is more pleasant for us to think that somehow we are just like other animals, except perhaps smarter and more in control. With our greater knowledge, we could somehow have avoided an increase in our numbers, if we had only planned better. The laws of physics say this cannot happen; our higher energy use dictates who will win the battle for resources.

  The early religious stories were not too different from Peak Oil and Climate Change. They were sort of right. They gave partial insight. They were the best the authors could do at the time.

  The ancient religious documents could not tell the whole story at once. New groups would gradually add more insights to the developing story, providing a better understanding of what was truly important for people living in a later period.

  Conclusion

  In practice, people need a religion or a religion-substitute. People need a basic set of beliefs with which to order their lives.

  Our leaders today have proposed the Religion of Success, with its belief in Science, and the power of today’s leaders, as the new religion. This religion has appeal, because it denies the limits we are up against. Life will continue, as if we lived on a flat earth with unlimited resources. This story is pleasant, but unfortunately not true.

  Donald Trump, with his version of conservatism, presents another religion. This religion seems to be focused on justifying the allocation of wealth away from the poor, toward the rich, through tax breaks for corporations and the wealthy. This is part of the process of “freezing out” the poor people of the world, when there are not enough resources to go around.

  It is hard for me to support Trumpism, even though I recognize that in the animal world, the expected outcome when there are not enough resources to go around is “survival of the best-adapted.” If our concern is leaving energy resources in the ground for future generations, transferring buying power from the poor to the rich is a way of collapsing the economy quickly, while considerable resources remain in the ground. The fact that wealthy people are favored ensures that at least some people will survive.

  China and Japan both have what are close to state religions, created by their leaders. School children learn stories regarding what is important, based on what state leaders tell them. In Japan, school children visit religious sites, and learn the proper religious observances. They also learn rules about what is expected of them–always be polite; respect those in charge; don’t eat food on the street; never leave any food wrappers on the ground. In many ways, these religions are probably not too different from today’s Religion of Success.

  I personally am not in favor of religions that originate from political groups. I would prefer the “old fashioned” religions based on ancient documents from one or another of the world’s religions. We are clearly facing a difficult time ahead. Perhaps early people had insights regarding how to deal with troubled times. Admittedly, we don’t know for certain that heaven can be in our future. But when things look bleak, it is helpful to see the possibility of a reasonable outcome.

  Furthermore, religious groups offer the possibility of finding a group of like-minded individuals to make friends with. We need all of the support we can get as we go through troubled times.

  

  

• Venezuelan Women Forced To Turn To Prostitution To Afford Food

  Authored by Mac Slavo via SHTFplan.com,

  All twelve women who work at the “Show Malilo Night Club” brothel in Arauca, Colombia are from Venezuela. As Venezuela’s socialist economic crisis continues, many Venezuelan women have turned to the sex trade in neighboring Colombia to eat and provide for their families.

  

  “We’ve got lots of teachers, some doctors, many professional women and one petroleum engineer,” brothel owner Gabriel Sánchez said of the women who sell their bodies for $25 an hour.  “All of them showed up with their degrees in hand.” 

  Sanchez who is 60 years-old, started the brothel in Arauca, Colombia after he lost his job in a car repair shop in Venezuela thanks to the government’s socialist policies.

  Sánchez and others in the sex industry say Venezuelans dominate the trade now because they’re willing to work for less pay.

  “I would say 99 percent of the prostitutes in this town are Venezuelan,” he said. 

  Amid food shortages, hyperinflation, rampant poverty driven by socialism, and U.S. sanctions, waves of economic refugees have fled the country. Those with the means to do so have gone to places like Miami, Santiago, and Panama. But those who are less fortunate, have had to sink low to simply eat.

  A recent study suggested as many as 350,000 Venezuelans had entered Colombia in the last six years. With jobs scarce in the country though, many young (and some not so young) women are turning to the world’s oldest profession to make ends meet. According to the Miami Herald, prostituting for money to buy basic necessities has become commonplace for Venezuelan women.

  “If you had told me four years ago that I would be here, doing this, I wouldn’t have believed you,” said Dayana, who asked that her last name not be used.

   

  “But we’ve gone from crisis to crisis to crisis, and now look where we are.”

  Dayana is a 30-year-old mother of four who found herself struggling to feed her family in Caracas.  Seven months ago, she came to Colombia looking for work. Without an employment permit, she found herself working as a prostitute in the capital, Bogotá.  Dayana said she used to be the manager of a food-processing plant on the outskirts of Caracas, but that job disappeared after the government seized the factory and “looted it,” she said.

  With inflation running in excess of 700 percent and the bolivar currency in free fall, finding food and medicine in Venezuela has become a frustrating, time-consuming task. Dayana said she often would spend four to six hours waiting in line hoping to buy a bag of flour. Other times she was forced to buy food on the black market at exorbitant rates. Hunger in Venezuela is rampant. –The Miami Herald

  Many in Venezuela didn’t prepare for the certain economic failure and food shortages that inevitably result from socialism. As The Prepper’s Blueprint says “If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not. A crisis rarely stops with a triggering event. The aftermath can spiral, having the capacity to cripple our normal ways of life.” And Venezuela is in the midst of such a crisis.  This is made evident by the seeking of prostitution jobs by previously successful and professional women.

  Dayana claims she can make between $50-$100 per night by selling herself for 20 minutes at a time.

   “Prostitution obviously isn’t a good job,” she said.

   

  “But I’m thankful for it because it’s allowing me to buy food and support my family.”

  There seems to be no end in sight for Venezuela’s economic pain either.  And President Nicolás Maduro has been digging in and avoiding the economic reforms that economists say are necessary.

  

  

• Nomi Prins: The White House As Donald Trump's New Casino

  Authored by Nomi Prins via TomDispatch.com,

  During the 2016 election campaign, Donald Trump repeatedly emphasized that our country was run terribly and needed a businessman at its helm. Upon winning the White House, he insisted that the problem had been solved, adding, “In theory, I could run my business perfectly and then run the country perfectly. There's never been a case like this.”

  Sure enough, while Hillary Clinton spent her time excoriating her opponent for not releasing his tax returns, Americans ultimately embraced the candidate who had proudly and openly dodged their exposure. And why not? It’s in the American ethos to disdain “the man” — especially the taxman. In an election turned reality TV show, who could resist watching a larger-than-life conman who had taken money from the government?

  Now, give him credit. As president, The Donald has done just what he promised the American people he would do: run the country like he ran his businesses. At one point, he even displayed confusion about distinguishing between them when he said of the United States: “We’re a very powerful company — country.”

  

  Of course, as Hillary Clinton rarely bothered to point out, he ran many of them using excess debt, deception, and distraction, while a number of the ones he guided personally (as opposed to just licensing them the use of his name) — including his five Atlantic City casinos, his airline, and a mortgage company — he ran into the ground and then ditched. He escaped relatively unscathed financially, while his investors and countless workers and small businesses to whom he owed money were left holding the bag. We may never fully know what lurks deep within those tax returns of his, but we already know that they were “creative” in nature. As he likes to put it, not paying taxes “makes me smart.”

  To complete the analogy Trump made during the election campaign, he’s running the country on the very same instincts he used with those businesses and undoubtedly with just the same sense of self-protectiveness. Take the corporate tax policy he advocates that’s being promoted by his bank-raider turned Treasury secretary, Steve Mnuchin. It’s focused on lowering the tax rate for multinational corporations from 35% to 15%, further aiding the profitability of companies that already routinely squirrel away profits and hide losses in the crevices of tax havens far removed from public disclosure.

  We, as citizens, already bear the brunt of 89% of U.S. tax revenues today. If adopted, the new tax structure would simply throw yet more of the government’s bill in our laps. Against this backdrop, the math of middle-class tax relief doesn’t work out — not unless you were to cut $4.3 trillion from the overall budget for just the kinds of items non-billionaires count on like Medicaid, education, housing assistance, and job training.

   Or put another way, Trump’s West Wing is now advocating the very policy he railed against in the election campaign when he was still championing the everyday man. By promoting tax reform for mega-corporations and the moguls who run them, he’s neglecting the “forgotten” white working class that sent him to the Oval Office to “drain the swamp.”

  Since entering the White House, he’s also begun to isolate our country from the global economy, essentially pushing other nations to engage in more trade with each other, not the United States. Whether physically shoving aside the leader of Montenegro, engaging in tweet-storms with the President of Mexico over his “big, fat, beautiful wall,” or hanging up on the prime minister of Australia, Trump has seemingly forgotten that diplomacy and trade matter to the actual American economy. His version of “America First” has taken aim at immigrants, multinational trade agreements, regulations, and the U.N. Calvin Coolidge acted in a somewhat similar (if far less flamboyant) manner and you remember where that led: to the devastating crash of 1929 and the Great Depression of the 1930s.

  What’s In a Shell?

  As a new report by Public Citizen makes clear, the glimpses we’ve gotten of inner Trumpworld from the president’s limited financial disclosures indicate that his business dealings, by design, couldn’t be more complex, shadowy, or filled with corporate subterfuge.  He excels, among other things, at using shell companies to hide the Trump Organization’s profits (and losses) in the corporate labyrinth that makes up his empire. And even though the supposedly blind trust run by his sons is designed to shield him from that imperial entity's decision-making, it still potentially allows him maneuver room to increase his own fortune and glean profits along the way.

  So, what’s in such a shell? The answer: another shell, a company that usually has no employees, no offices, and no traceable capital.  Think of such entities as financial gargoyles. They offer no real benefits to the economy, create no jobs, and do nothing to make America great again. However, they have the potential to do a great deal for the bottom lines of Donald Trump and his offspring.  

  Think of the corporate shell game he’s been engaged in as his oyster.  After all, anonymous buyers now make up the majority of those gobbling up pieces of his empire. Two years prior to his presidential victory, only 4% of the companies affiliated with people buying his properties were limited-liability, or LLC corporations, which are secretive in nature. Following his victory, that number jumped to 70%.

  What that means in plain English is that there’s simply no way of knowing who most of those investing in Trump properties actually are, what countries they come from, how they made their fortunes, or whether there might be any conflicts between their buy-ins to Trumpworld and the national interest of this country.

  Trump Lawsuits Meet Pennsylvania Avenue

  Secret as so many of his dealings may be, there’s a very public aspect to them that Donald Trump has brought directly into the White House: his pattern of being sued. He’s already been sued 134 times in federal court since he assumed the presidency. (Barack Obama had 26 suits against him and George W. Bush seven at the same moment in their presidencies.)

  In other words, one of the nation’s most litigious billionaires is in the process of becoming its most litigious president. A pre-election analysis in USA Today found that Trump and his businesses had been “involved in at least 3,500 legal actions in federal and state courts” over the previous three decades. That volume of lawsuits was unprecedented for a presidential candidate, let alone a president.

  It’s fair to say that the public will, in one fashion or another, bear some of the expenses from such lawsuits, as it will, of course, from a lengthening list of ongoing federal investigations, including those into Trump’s business dealings with wealthy Russian businessmen and their various affiliates. According to Public Citizen, Trump formed at least 49 new business entities since announcing his candidacy (including some that were created after he was sworn in as CEO-in-chief). Of those 49, about half were related to projects in foreign countries, including Argentina, India, Saudi Arabia, and Indonesia. Since entering the Oval Office, Trump has met with leaders from each of those countries. And while it’s hardly atypical of a President to meet with foreign leaders, in this case there can be little doubt that national policy overlaps with private interests big time.

  As Public Citizen concluded, “Although just prior to being inaugurated as president, Trump announced plans to ‘separate’ himself from his business empire, he still maintains ownership in his corporations and merely reshuffled his businesses into holding companies that are held by a trust that is controlled by Trump himself.” It added that he now has an ongoing stake of some sort in more than 500 businesses. Three-quarters of them are legally registered in Delaware, the largest tax-shelter state in the country.  So expect plenty more trouble and suits and investigations to come.

  The Era of Golf-plomacy

  Trump has always had a knack for promoting his own properties.  Now, however, he gets to do it on our dime. Indeed, we taxpayers fork over a million dollars or more every time the president simply takes a trip to visit his Mar-a-Lago private club in Florida, his National Golf Club in Bedminster, New Jersey, or any of his other properties. During his first 241 days in office, he spent 79 days visiting his properties.

  Meanwhile, a near-army of his well-connected friends and wannabe friends have been sharpening their golf games at Trump locales. At least 50 executives of companies that bagged sweetheart government contracts, as well as 21 lobbyists and trade group officials, are members of Trump golf courses in Florida, New Jersey, and Virginia. As the president’s son Eric Trump told The New York Times, “I think our brand is the hottest it has ever been.”

  They’re not just paying for golf, of course; they’re paying for access. About two-thirds of them “happened” to be golfing during one of those 58 days when Trump, too, was present. It doesn’t take an investigative reporter to show that whatever happens on a Trump golf course undoubtedly does not stay there. And keep in mind that the upkeep of the Trump entourage that travels from D.C. to those clubs with him is at least partially funded by us taxpayers, too.

  Trump may tilt isolationist when it comes to countries that don’t put money into his clubs and hotel suites, but the nations that do tend to be in big with him. To take one example, Saudi Arabia, the first stop on his first foreign tour, recently disclosed that it had spent $270,000 for lodgings and food at the new Trump International Hotel just down Pennsylvania Avenue from the White House. Trump’s lawyers have pledged to donate any money foreign governments pay that hotel to the Treasury Department. Yet, so far at least, Treasury’s website has no such line item and the money promised for 2017 has now been pushed into 2018. Keep something else in mind: the Trump family forecast that it would lose about $2 million on that hotel in 2017. So far, it has made nearly a cool $2 million profit there instead.

  While gaining unprecedented international coverage for his family-owned, for-profit business locales, Trump has created an ethical boundary problem previously unknown in the history of American governments. After all, we, the people, functionally pay taxes to his business empire to host foreign dignitaries, to feed them and provide appropriate security.  In this context, the president has made a point of having official state visits at his properties, which ensures that we taxpayers get hit for expenses when, say, Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe stay at Mar-a-Lago. Though the president swore he would cover Abe’s stay, there’s no evidence that it was more than a “fake claim.”

  Meanwhile, the Trump brand rolls on abroad.  Though his election campaign took up the banner of isolationism, the Trump Organization didn’t.  Not for a second.  On January 11th, days before placing his hand on the Bible to “defend the Constitution,” Trump proudly noted that he “was offered $2 billion to do a deal in Dubai with a very, very, very amazing man, a great, great developer from the Middle East… And I turned it down. I didn't have to turn it down because, as you know, I have a no-conflict situation because I'm president… But I don’t want to take advantage of something.”

  He also promised that he wouldn’t compromise his office by working privately with foreign entities.  His business empire, however, made no such promises.  And despite his claims, Dubai has turned out to be ripe for a deal.  This August, the Trump Organization announced a new venture there (via Twitter of course): Trump Estates Park Residences. It is to be “a collection of luxury villas with exclusive access to” the already thriving Trump International Golf Course in Dubai, a Trump-branded (though not Trump-owned) part of an ongoing partnership with the Dubai-based real-estate firm DAMAC. Its president, Hussain Sajwani, is well known for his close relationship with the Trump family. Units in the swanky abode are expected to start at about $800,000 each.

  Meanwhile, DAMAC gave a $32 million contract to the Middle Eastern subsidiary of the China State Construction Engineering Corporation to build part of Trump World Golf Club, also in Dubai. That’s the same China that Trump regularly chides for not working with us properly. The course is scheduled to open in 2018.

  So buckle your seatbelts. U.S. foreign policy and the Trump Organization’s business ventures will remain in a unique and complex relationship with each other in the coming years as the president and his children take the people who elected him for a global ride.

  His Real Inner Circle

  President Trump has made it abundantly clear that sworn loyalty is the route to staying in his favor. Unwavering dedication to the administration, but also to the Trump Organization, and above all to him is the definition of job security in Washington in 2017. Take the latest addition to his communications team, Hope Hicks, who has rocketed into her new career by making devotion to the Trump brand, including defense of daughter Ivanka, a central facet of her professional life.  The 28-year-old Hicks has now been anointed the new White House communications director.

  But she doesn’t have as much job security as one other group: The Donald’s personal legal team.  For make no mistake, Trump’s financial dealings lie at the heart of his presidency, raising conflicts of a sort not seen at least since Warren Harding was president in the 1920s, if ever. And yet, even though they should be secure through at least 2020 and possibly beyond, one little slip about Russia in the wrong D.C. restaurant could see any one of them ushered out the door.

  In 2011, the Supreme Court’s Citizens United decision rendered corporations people. It erased crucial campaign finance and lobbying restrictions, and elevated billionaires to the top ranks of the American political game. It was a stunning moment — until now. Donald Trump’s presidency is doing something even more remarkable. The billionaire who became our president has already left Citizens United in a ditch.  He’s created not just a political campaign but a White House in which it’s no longer possible to imagine barriers between lobbying efforts, government decisions, and personal interest, or for that matter profits and policy.

  In November, after the election, Trump announced that “the law's totally on my side, the president can't have a conflict of interest.” Recently, however, the Sunlight Foundation, a non-profit dedicated to government transparency, revealed 530 active Trumpian conflicts of interest and that’s after only eight months in office.

  Theoretically, we still live in a republic, but the question is: Who exactly represents whom in Washington? By now, I think we can take a reasonable guess. When the inevitable conflicts arise and Donald Trump must choose between business and country, between himself and the American people, who do you think will get the pink slip? Who will be paying for the intermeshing of the two? Who, like the investors in his bankrupt casinos, will be left holding the bag? At this point, we’re all in the Washington casino and it sure as hell isn’t going to be Donald Trump who takes the financial hit. After all, the house always wins.

  

  

• The Awkward Moment When The State Department "Celebrates" Saudi Women Being Allowed To Drive

  "We're just happy!" State Department spokesperson Heather Naurt said with a huge grin on her face.

  The AP journalist immediately rains on her parade, "Would you still say they [Saudi Arabia] need to do… a lot more with women's rights?"

  "I think we're just happy today…" she said, this time with a frown, trying to hold back her angry scowl.

  Well that was awkward: the State Department's celebration party was over fast. It's like those embarrassing moments when parents catch themselves excessively gushing with praise over a horribly ill-behaved and out of control child that actually manages to sit still for a brief moment, or happens to do one minuscule task correctly. 

  .@statedeptspox on Saudi Arabia allowing women to drive: "We're happy…It's a great step in the right direction for that country." pic.twitter.com/AqAWC20J0p

  — CSPAN (@cspan) September 26, 2017

  //platform.twitter.com/widgets.js

  As we reported previously,  Saudi Arabia made the unexpected announcement that its longtime ban on women driving in the hardline Islamic kingdom is set to be lifted. The decree comes just days after President Donald Trump slammed the US ally’s human rights record during remarks at the UN. The new policy will reportedly take effect starting on June 24 of next year, after a Saudi commission examines implementation procedures, which includes having to train police on how to interact with women – something unusual in a country where women are not even allowed direct communication with men who are not their family members or guardians.

  
  Cartoon via "Finance twitter"

  Some activists and pundits are now non-ironically hailing the significance of today's decision as monumental in that Saudi Arabia has the dubious distinction of being "the last country on earth to allow women to drive." Well, this is true enough, yet there is something comical and at the same time deeply tragic in seeing feminists and western pundits alike celebrating the kingdom's "progress". It is not known for sure whether or not Saudi women will be able to drive without their male guardians, though it's not likely given that Saudi state media reported the royal decree as noting that driving will take place "in accordance with Sharia law." According to the New York Times:

  The decree said that the majority of the Council of Senior Scholars — the kingdom’s top clerical body, whose members are appointed by the king — had agreed that the government could allow women to drive if done in accordance with Shariah law.

  Next they will report that saudi women went to the toilet, making headlines across the globe https://t.co/6BfwJSpbhJ

  — Madawi Al-Rasheed (@MadawiDr) September 26, 2017

  //platform.twitter.com/widgets.js

  As recently as the past few years, women caught driving have been assigned to a special 'terror' court which has issued multiple months long sentences for what were essentially acts of protest. So no one should break out the champagne (also banned in Saudi Arabia) to celebrate the spectacle of fanatical Wahhabi clerics and religious police overseeing a program of "Sharia-compliant" female driving just yet.

  And this truly pathetic state of affairs within one of America's closest Middle East allies is perhaps what makes today's State Department press briefing so awkward. Spokesperson Heather Nauert's gleeful and overexuberant reaction to news of the Saudi decree created an awkward moment as AP correspondent Matt Lee tried to remind her that Saudi Arabia is still among the most repressive states in the world when it comes to human rights, and especially women's rights.

  Two years ago, we addressed the irony that Saudi Arabia was a leading candidate to lead a UN panel on human rights despite an international uproar at the time about the country's beheading of a teenaged political dissident (Saudi Arabia was eventually chosen to lead the panel). The influential panel helps shape the UN's human-rights policy and reports on violations. Earlier this year, the country was again bizarrely selected to lead the UN Commission on the Status of Women, a powerful committee focused on women's rights.

  2 pm: I took the floor @UN to call out Saudi ban on women driving.
  9 pm: Saudi Arabia announces end to ban on women driving.
  That was fast. pic.twitter.com/E3AhUBFBxf

  — Hillel Neuer (@HillelNeuer) September 26, 2017

  //platform.twitter.com/widgets.js

  Is it possible that Trump's calling them out, or perhaps other pressure from UN quarters resulted in the small change in Saudi treatment of women?  And we also wonder, what freedoms will the country’s repressive regime acquiesce to next? Will it be suffrage for women (they’re already involved in political life, though they can’t vote)? Or perhaps allowing them to show their faces in public?

  

  

• "This Is Not A Time To Buy Anything" – Sam Zell Warns Retail Real Estate Market Is A "Falling Knife"

  CNBC’s cheerleading staff had a very difficult time finding the silver lining in retail investing this morning as they relentlessly pressed Sam Zell on the value of commercial real estate.  Asked to offer up his thoughts on where retail real estate is headed over the next five years, Zell highlighted the significant excess inventory in the U.S., 4-5x more per capita than Europe, and said investing in the space right now is like catching a “falling knife.”

  “Like a falling knife.  You start with the fact that the U.S. has 4 or 5 times the amount of square footage per person of retail as anywhere else in the world.  So we start with an enourmously large inventory of retail.”

   

  “3 years ago your could buy an 8% mall…you could buy a B-mall and it was probably an 8% cap rate.  The same mall, 3 years later, is now selling at 13% and 14%.  So you’ve seen enourmous erosion of value.”

   

  “When the knife falls there’s going to be plenty of opportunities for people to step up and say ‘what are alternate uses?'”

  Pressed on whether now just might be the time to take a contrarian view on the collapsing retail space, Zell again was unable to satiate the desires for positive news from his eager hosts.

  “An area that’s in this much disarray, with so many weak players, is not an area where I would want to deploy capital at this time.  And I’m generally a contrarian but I think what we’re dealing with here is very significant.”

   

  Of course, things only went from bad to worse for the CNBC hosts when Zell offered up some positive commentary on Trump’s presidency. Per CNBC:

  Corporate America is willing to invest money on a longer-term basis under President Donald Trump than the previous “anti-business administration” of Barack Obama, real estate mogul Sam Zell told CNBC on Tuesday.

   

  “Bluntly, the only way I can square anything is I focus on what gets done, not what’s said,” the billionaire said on “Squawk Box.” “On a measure of what’s gotten done, I believe there’s been very significant change since Trump was elected in November, and change that is positive.”

   

  Zell points to deregulation and promises of tax cuts and massive infrastructure spending as major positives for business.

   

  “Just think that all of a sudden there are no industries that are pinata[s] of the president,” Zell said, referring as an example to what he called Obama’s campaign against fossil fuels.

   

  “I’m more optimistic than I was six months ago. But I’m not ready to party,” Zell told CNBC on Tuesday, adding the current business environment is not one of buy anything and win. Investors need to pick carefully, he added.

   

  Meanwhile, the most shocking part of the interview segments above is that CNBC didn’t encounter any “technical difficulties” as Zell offered up his positive comments on the Trump presidency while taking a shot a Obama.

  

  

• Africa's Richest Man: Oil Is Not The Way Forward

  Authored by Irina Slav via OilPrice.com,

  The richest man in Africa says crude oil prices would do Nigeria a favor if they stay lower for longer.

  

  Last week at the UN General Assembly, Nigerian billionaire Aliko Dangote, whose main business is in cement but also holds interests in agricultural commodities and petrochemicals, said that agriculture – not crude oil – is the way forward for Nigeria, and that Africa “will become the food basket of the world.”

  The latest economic data from Dangote’s home country tend to support his view. GDP grew by 0.55 percent in the second quarter of the year, which, although a meager growth rate, was welcomed because it signaled Nigeria’s exit from the recession that it plunged into due to the oil price crash.

  The problem with this recovery, according to local economists, is that it was mainly a result of improving international oil prices rather than any actual economic growth at home. The figure, in other words, once again highlighted Nigeria’s reliance on crude oil revenues for its growth prospects.

  Yet the country is already taking steps toward diversifying its economy away from the world’s most traded commodity. These steps were, like elsewhere, prompted by the oil price crash, and in Nigeria took the shape of a Zero Oil Agenda. The agenda, approved by President Muhammadu Buhari’s government, aims to wean the country off oil.

  Second-quarter export figures suggest that things are moving in the right direction slowly, but hopefully surely. According to the National Bureau of Statistics, Nigerian exports in the second quarter of this year grew by an impressive 73.5 percent on an annual basis. Crude oil accounted for the biggest portion of the exports, at 42.57 percent, with other oil products making up another 21.86 percent.

  This leaves less than a third for non-oil exports, but it seems that the government is happy: The head of the Nigerian Export Promotion Council, Olusegun Awolowo, noted that cashew nuts exports alone brought in $40 million (13.5 billion naira) in the second quarter.

  The prioritization of agriculture as a greater export revenue stream is in perfect tune with Dangote’s business plans, especially with strong government support for the growth of this stream. The billionaire has $5 billion invested and planned for agricultural projects at home through 2020. Incidentally, he also spent $11 billion on the construction of a 650,000 bpd oil refinery, so it seems that oil does have a place in a diversified portfolio of businesses.

  The subject of economic diversification away from oil has grown popular in the last couple of years, for obvious reasons. Yet efforts by major oil producers have shown that it’s easier said than done. Perhaps the biggest challenge to these efforts is the improvement in oil prices – it’s all too easy to slip back into the familiar rut. So, in this sense, Dangote is right: lower oil prices will provide the necessary stimulus to put more effort into diversification.

  Nigeria, which was exempted from OPEC’s oil production cut deal, said it is ready to join the pact when its daily output hits 1.8 million barrels. In August, according to OPEC’s secondary sources, this output averaged 1.86 million bpd. Nigerian records put it at 1.74 million bpd. It seems Africa’s second-largest oil producer isn’t willing to relinquish its hold on oil too quickly.

  

  

• DirecTV Will Allow Angry Customers To Request NFL Refunds

  In the first reported case of corporate blowback involving the ongoing Trump vs NFL feud, the WSJ reports that DirecTV is letting some angry customers cancel subscriptions to its Sunday Ticket package of NFL games and obtain refunds “if they cite players’ national anthem protests as the reason“, according to customer service representatives. While DirecTV’s regular Sunday Ticket policy doesn’t allow refunds once the season is under way, the representatives said they are making exceptions this season, which began in September, in response to the player’s growing protests, either kneeling or linking arms during the national anthem.

  DirecTV service representatives contacted by The Wall Street Journal had different understandings of the policy. One said refunds to those concerned about the anthem protests were only offered to subscribers with certain offers or plans. One representative said full refunds were available for those who complained about anthem protests. Another said such people could only get prorated refunds for the remainder of the season.

  While other representatives said the policy hadn’t changed and that no refunds were allowed for any reason, DirecTV subscribers contacted by the WSJ showed the satellite broadcaster was offering at least some refunds.

  Marc Hoffman, a longtime subscriber to Sunday Ticket, which gives sports fans the ability to watch every Sunday game, said in an interview he was able to cancel his subscription and receive a refund on Monday. The package costs around $280 per season. “I honestly didn’t think I’d get a refund,” Mr. Hoffman said. “I know their guidelines, I just wanted to make a point.”

  Chris Baker, who lives in Indiana, told the WSJ that he reluctantly canceled his Sunday Ticket subscription, but not precisely as a response to the protests. “I explained to them I was tired of politics in sports, and it’s not how I want to spend my Sunday, watching all that transpire,” he said he told a DirecTV representative. He said the representative “insinuated there was a high volume of calls calling in to cancel.”

  The shift is the latest twist in a controversy that has divided the nation after President Donald Trump blasted players who took a knee during the anthem and said they should be fired. He has called on people to walk out of stadiums when players are kneeling.

  To be sure, Trump added to the fire on Tuesday saying that “for people to disrespect that by kneeling during the playing of our national anthem, I think is disgraceful.”

  While several teams have issued statements defending the rights of their players to express their opinion – and the NFL also has shown solidarity with them – the stakes are much higher, and go beyond just the political. As the WSJ reports, football draws the biggest TV audiences of American sports and is a vital income source for a host of major media companies. For DirecTV, Sunday Ticket is a major customer draw and one of the NFL’s premier franchises, earning it $1.5 billion a year in licensing revenue.

  Aside from DirecTV, the NFL-owned channel RedZone, which provides live action and scoring from every game on Sundays, is also experiencing some cancellations due to the protests.

  Chuck Plavk, a veteran who resides in Wisconsin, canceled his subscription to the channel from Charter Communications ’ Spectrum Cable. He said when he called, the customer service representative said, “everybody’s calling about that today.” Unlike Sunday Ticket, which is only available through DirecTV, RedZone is available through a number of cable providers and streaming outlets.

  Needless to say, a spike in cancellations risk further damage to both viewership and revenues as the league tries to stem an ongoing decline in ratings. Viewership fell last year and, as Trump pointed out, continues to do so this year.

  Network executives and league officials attributed last year’s declines in part to viewing competition from the presidential election, consumer distaste with the pace and quality of games.

  And now, based on DirecTV’s announcement, one can add anthem protests to the list.

  

  

• Black Congresswoman 'Takes A Knee' On House Floor… Because "Trump's A Racist"

  Texas Rep. Sheila Jackson Lee kneeled during a speech on the House floor Monday as a show of support for NFL players who demonstrated this weekend against President Trump.

  

  As The Daily Caller reports, Jackson Lee said during remarks on the House floor…

  “There is no basis in the First Amendment that says that you cannot kneel before the national anthem or in front of the flag,”

  Jackson Lee, a member of the Congressional Black Caucus, took issue with a speech Trump gave on Friday in which he called on NFL owners to fire players who refused to stand for the national anthem.

  Jackson Lee claimed that the “son of a bitch” remark was a racist comment by Trump.

  “There is no regulation that says that these young men cannot stand against the dishonoring of their mothers by you calling them ‘fire the son of a b.’ You tell me which of those children’s mothers is a son of a b. That is racism. You cannot deny it. You cannot run for it, and I kneel in honor of them,” Jackson Lee said.

  And in case you wondered why she specifically decided to 'take a knee' during her House Floor speech, this is what she said…

  "…I kneel because I’m going to stand against racism. I kneel because I will stand with those young men, and I’ll stand with our soldiers. And I’ll stand with America, because I kneel…"

  Clear enough?

  Jackson Lee was not alone in her disdain as The Hill reports a second House Democrat kneeled on the House floor on Tuesday to show support for NFL players protesting police brutality.

  Rep. Mark Pocan (D-Wis.) took a knee behind his podium at the end of a floor speech denouncing President Trump’s attacks on athletes who have been kneeling during the national anthem to draw attention to law enforcement’s treatment of African Americans.

  “I think today, taking a knee is becoming a broader sign of patriotism and respect for our country,” Pocan said.

  .@Repmarkpocan displays word cloud from President Trump's tweets and kneels at end of his remarks. #TakeAKnee pic.twitter.com/Dnjq7AnxRV

  — CSPAN (@cspan) September 26, 2017

  //platform.twitter.com/widgets.js

  Moments later on the House floor, Rep. Alex Mooney (R-W.Va.) defended Trump for calling on NFL players to stand during the national anthem.

  “The president is right to publicly object to this disrespect to our flag and nation,” Mooney said.

   

  “While we can disagree on politics and policies, we should not denigrate our flag in our national anthem.”

  San Antonio Spurs coach Gregg Popovich went a little further than most, claiming on ESPN2’s “The Paul Finebaum Show” Monday that “people have to be made to feel uncomfortable,” specifically singling out white people.

  “If you read some of the recent literature, you’ll realize there really is no such thing as whiteness, but we kind of made that up. That’s not my original thought, but it’s true,” Popovich said.

   

  He added, “Because you were born white, you have advantages that are systemically, culturally, psychologically there. And they have been built up and cemented for hundreds of years. But many people can’t look at it. It’s too difficult.”

  

  

• Connecticut Lawmakers Scramble To Close $3.5 Billion Budget Shortfall As Fiscal Crisis Worsens

  Despite a series of credit-rating cuts by all three of the major ratings agencies earlier this year, Connecticut still boasts a higher rating than Illinois and New Jersey. But that could soon change.

  Lawmakers are squabbling over how to close a massive deficit expected to stretch to $3.5 billion over the next two years, which has left Connecticut as the only state in the US without a budget for the current fiscal year. And if lawmakers fail to pass a budget by the end of the month, it could trigger further cutbacks and in essential services.  

  

  The wealthiest state per capita, Connecticut has struggled to stabilize its deteriorating finances as generous (and underfunded) pension obligations and the departure of wealthy taxpayers like hedge-fund billionaire Paul Tudor Jones, Aetna and GE – two Fortune 500 companies that have decided to relocate their headquarters to New York City and Boston, respectively – have drained the state’s coffers, threatening to trigger a financial chain reaction that could end with the bankruptcy of the state’s historic capital, Hartford.

  Initially one of roughly a dozen states that faced last-minute budget battles in June, the state has now gone nearly three months without a budget. It has been operating under an emergency order signed by Gov. Dannel Malloy that includes dramatic cuts in state funding for social services programs. Those cutbacks will expand if the standoff continues for another week, growing to encompass essential funding that Connecticut cities and municipalities rely on to fund public services from education to public safety, according to the New York Times.

  The executive order that controls state spending has already frozen millions of dollars in contracts and grants and limited support sent to municipalities. If a new budget is not reached by Oct. 1, many towns and cities are expecting a much smaller fraction of the usual amount from the state – or nothing at all.

   

  This month, city officials in Hartford, which faces a nearly $50 million deficit, sent a letter to the state cautioning that a failure to reach a budget compromise with sufficient aid would make pursuing bankruptcy almost inevitable. The officials, including the mayor, Luke Bronin, noted that further cuts would force them to eliminate, and not simply reduce, essential city services.

  And now that Gov. Malloy has said he will reject a Republican sponsored proposal that passed both the Connecticut State Senate and the Assembly, lawmakers are scrambling to head back to the drawing board as their constituents warn of potentially devastating cuts if they’re not able to pass something – anything – that resembles a budget.

  To be sure, the Republican proposal also called for dramatic cutbacks to the state’s share of municipal spending, as well as its contribution to the state university system.

  “I was surprised when the budget went through,” said Sen. Len Fasano, a Republican leader, even though he helped orchestrated the effort. “I think it takes a lot of courage,” he added, referring to the Democrats who supported the plan.

   

  At the University of Connecticut, which stood to lose at least $200 million over two years, its president, Susan Herbst, wrote a letter to students, faculty and alumni, warning of closing campuses and departments, ending majors and programs, as well as reductions in research, athletics and financial aid.

   

  Mr. Malloy has vowed to veto the legislation, citing “irresponsible changes” to pensions, a lack of sufficient support for Hartford and other cities and cuts to school funding that he saw as excessive and threatening districts that struggled the most.

  Some towns would have their entire state contribution cut, forcing them to cut public services to the bare minimum.

  In Portland, a town of about 10,000 south of Hartford, officials said that if a budget were not reached by the start of next month, they stand to received just over $10,000 from the state – not the $4.6 million they had expected. “You just can’t do this to communities,” said Susan Bransfield, the first selectwoman.

   

  “They need to leave the partisanship at the door, and put Connecticut first.”

  Meanwhile, towns across the state have been unable to pass their budgets without knowing how much money they will receive from the state. Connecticut has seen its population decline over the past three years as Gov. Malloy has passed a series of tax hikes. Regardless of the outcome of this round of state-budget-chicken, Connecticut residents should probably brace for the possibility that taxes could rise further, while government services endure painful cutbacks. 

  

  

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• A Failing Empire, Part 1: Russia & China's Military Strategy To Contain The US

  Authored by Federico Pieraccini via The Strategic Culture Foundation,

  Looking at the global political landscape over the last month, two trends are becoming more apparent.

  1. The infamous military and economic power at America’s disposal is declining,
  2. whereas in the multipolar field, an acceleration has occurred in the creation of a series of infrastructures, mechanisms and procedures to contain and limit the negative effects of America’s declining unipolar moment.

  This series of three articles will focus firstly on the military aspect of these ongoing changes, then the economics at play, and finally, how and why smaller countries are transitioning from the unipolar camp to the multipolar field.

  

  One of the most tangible consequences of the decline of US military power can be observed in the Syrian conflict. Over the past few weeks, the Syrian Arab Army (SAA) and its allies have completed the historic and strategic liberation of Deir ez-Zor, a city besieged for more than five years by Islamists belonging to Al Qaeda and Daesh. The focus has now shifted to the oilfields south of the liberated city, with a frantic rush by both the US-supported Syrian Democratic Forces (SDF) and the SAA to free territories still held by Daesh. The final goal is to claim Syria's resources and strengthen a weak US position (the US is not even part of the Astana peace talks) in future negotiations concerning the country's future. To understand how much the US dream of partitioning Syria is failing, one only need note repeated US failures as seen in the liberation of Aleppo and then Deir Ez-Zor, and now the crossing of the Euphrates river. In spite of American intimidation, threats, and sometimes even direct aggression, the Syrian army continued to work against Daesh in the province of Deir Ez-Zor, advancing on oil rich sites. Thanks to the protection given by the Russian Federation Air Force during the conflict, Damascus has obtained a protective umbrella necessary to withstand attempts by the US of balkanize the country.

  Further confirmation of Washington’s failed strategy to divide the country a la Yugoslavia appears evident from the strategic realignment of the most loyal allies of Washington in the region and beyond. In the course of the last few weeks, several meetings have taken place in Astana and Moscow between the likes of Putin and Lavrov with their Turkish, Saudi, and Israeli counterparts. These meetings outlined the guidelines for Syria’s future thanks to Moscow’s red lines, especially regarding Israel’s desire to pursue regime change in Syria and an aggressive attitude towards Iran. Even the most loyal allies of the United States are beginning to plan a future in Syria with Assad as president. US allies have started showing a pragmatic shift towards a reconciliation with the factions that are clearly winning the war and are going to call the shots in the future. The long-held dreams and desires of sheikhs (Saudi-Qatar) and sultans (Erdogan) to reshape Syria and the Middle East in their image are over, and they know it. Washington's allies have been let down, with the US incapable of keeping its promises of fulfilling a regime change in Damascus. The consequences for the US have just begun. Without a military posture capable of bending adversaries and friends to her will, the US will have to start dealing with a new reality that involves compromise and negotiation, something the US is not accustomed to.

  An example of what can happen if Washington decides to go against a former friend can be seen with the Gulf Crisis involving Qatar. Since the beginning of the aggression against Syria, the small emirate has been at the center of plots and schemes aimed at arming and financing jihadists in the Middle East and Syria. Five years later, after billions of dollars spent and nothing to hold onto in Syria, the Gulf Cooperation Council, as expected, has plunged into a fratricidal struggle between Qatar and other countries like Saudi Arabia, Kuwait, UAE and Egypt. The latter accuse Doha of funding terrorism, an undeniable truth. But they omit to acknowledge their own ties to the jihadists (Egypt in this framework is excluded, fighting continually with terrorists inspired by the Muslim Brotherhood in the Sinai), showing a hypocrisy that only the mainstream media can rival.

  The consequences of Riyad’s actions against Doha, backed up by a large part of the American establishment, seems, almost six months later, to have finally pushed Qatar and Iran together, reopening diplomatic ties. These are two countries that have for years been on opposite sides of many conflicts in the Middle East, reflecting contrasts and divisions dictated by the respective positions of Tehran and Riyadh. This seems to be no more, with Doha and Tehran coming closer and circumnavigating sanctions and blockades, overcoming common difficulties. This shift can only be described as a strategic failure by Riyadh.

  Looking back six years, one of the reasons for the eruption of the conflict in Syria has everything to do with the famous pipeline that Iran intended to build connecting Iraq and Syria. Incredibly, the end of the conflict will see a new transport line emerging between countries that for years have had opposing and diverging strategic goals. Iran and Qatar are currently engaging in trade agreements, and rumors have it that a joint effort to build a new pipeline that should cross Iraq and Syria, to end in the Mediterranean, is in the making. The idea is to jointly exploit the world's largest gas field, and in so doing become a new supplier for a Europe that is looking to diversify its energy imports. Riyadh and Washington will have to take full responsibility for this failure of epic proportions.

  A clear sign of how fast things are changing in the region and beyond comes from Israel. Even the Jewish State has had to abandon any dream of territorial expansion into Syria, despite several attempts by Netanyahu to persuade Putin of the existential danger that Israel faces with Iran’s presence in Syria. A smart and pragmatic Putin is able to let Israel know that any request to impose conditions on Russian or its allies in Syria will be firmly refused. But at the same time, Moscow and Tel Aviv will continue to pursue good relations with each other. Russian political figures are far to smart to play double games with their long-standing allies in Syria or to underestimate the capacity that Israel has to disrupt the region and plunge it into chaos. Furthermore, Assad has invited Russia into Syria as well as Iran and Hezbollah. Even if Putin were willing to help Netanyahu, which is doubtful, international law prohibits this. If anything is clear, it is that Moscow respects international law as few nations do. All other foreign nations operating in Syria, or flying over Syrian skies, have no right to be there in the first place, let alone to impose decisions over a sovereign territory.

  If Tel Aviv’s goal was to expand the illegal border in the Golan Heights and proceed with regime change, the situation has ended up totally different six years later. Iran has expanded its influence in Syria thanks to aid provided to Damascus in combating terrorism. Hezbollah has increased its battle experience and arsenal, as well as expanded its network of contacts and sympathizers throughout the Middle East. Hezbollah and Iran are seen as Middle Eastern peacemakers, playing positive roles in fighting the plague of jihadist terrorism as well as against Israel and Saudi Arabia, states that have tried in every way to assist terrorist organizations with weapons and money. Washington, Riyadh and Tel Aviv six years later find themselves in a totally different environment, with hostile neighbours, less collaborative friends, and in general, a Middle East increasingly orbiting around the Iranian and Russian spheres of influence.

  Another indicator of American decline in military terms can be clearly seen on the Korean peninsula. The DPRK has obtained a full nuclear capability through a development program that has paid scant attention to American, South Korean and Japanese threats. The imperative for Pyongyang was to create a nuclear deterrent capable of dissuading the desire of many US policymakers enact regime change in North Korea. The strategic importance of a regime change in the DPRK follows the strategy of containment and encirclement of the People's Republic of China, a failed doctrine well known as the Asian pivot.

  Beside its nuclear deterrent, the US is unable to attack the DPRK because of the conventional deterrent that Pyongyang has patiently put in place. Trump and his generals continue the rhetoric of fire and flames, dragging Seoul and Tokyo into a dangerous game of chicken between two nuclear powers. Not surprisingly, Trump’s words worry everyone in the region, especially the Republic of South Korea, which would pay the heaviest price were war ever to break out. In light of this assessment, it is worth pointing out that the military option is simply unthinkable, with Seoul and perhaps even Tokyo ready to break with its American ally in case of disastrous unilateral action against Pyongyang.

  Kim Jong-un, as well as Assad and other world leaders facing pressure from Washington, have fully understood and taken advantage of America’s declining military power. Trump and his close circle of generals are full of empty threats, unable to change the course of events in different regions around the world, from the Middle East to the Korean peninsula. Whether it is through direct action or through proxies, little changes and the results remain the same, showing a continuous failure of goals and intents.

  The underlying rule guiding US policy makers is that if a country cannot be controlled, such as with a Saudi-style regime serving only American interests through something like the petrodollar, than that country is useless and ought to be destroyed in order to stop other peer competitors from expanding their ties with that country. The Libyan example is still fresh in everyone's minds. Luckily for the world, Russia has stepped in militarily, and on more than one occasion has, together with her allies, sabotaged or deterred the US military from taking reckless actions (Ukraine, Syria and DPRK).

  In this sense, Hillary Clinton's defeat, more than Trump's victory, seems to have instilled some sense into this declining empire, if one ignores the persisting strong rhetoric. One can only shudder on imagining a Clinton presidency in the current environment, with her predictably careening at full speed towards a conflict with Russia in Ukraine and Syria or a nuclear standoff with the DPRK in Asia.

  Trump and his generals are slowly adapting to a new reality where it is not only impossible to control countries, but where it is increasingly difficult to destroy them. The old doctrine of wreaking chaos on the world, with a view to emerging once the dust settles down as the world's hegemonic power, now seems like a distant memory. Just looking at the Middle East, even Syria, in spite of the unprecedented destruction, is on the road to reconstruction and pacification.

  Russian military power and Chinese economic might have thus played an invaluable role in restricting the US war machine. The DPRK even took a further step by attaining a formidable nuclear and conventional deterrent, effectively blocking the United States from influencing domestic events by bringing about destruction and chaos.

  While this reality is difficult for Washington to take, it must come to accept it. After almost seventy years of imperialistic chaos and destruction wrought all over the globe, America’s friends and enemies are starting to react to this situation. Washington is left with a president full of sound and fury, but a credible militarily posture is now but a thing of the past.

  The financial mechanisms that have allowed for this indiscriminate military spending are based on an intrinsic bond between dollar, oil, and the role of American money as the world reserve currency. The transition of the world order from a unipolar reality to a multipolar one is deeply tied to the economic and diplomatic strategies of Russia and China.

  The next article will explore the role of gold, investment, diplomacy and the petroyuan, which are all decisive factors that have accelerated the transformation and division of power on a global scale.

  

  

• Patriots And Protesters Should Take A Knee For The Constitution

  Authored by John Whitehead via The Rutherford Institute,

  By all means, let’s talk about patriotism and President Trump’s call for “respect for our Country, Flag and National Anthem.”

  At a time when the American flag adorns everything from men’s boxers and women’s bikinis to beer koozies, bandannas and advertising billboards (with little outcry from the American public), and the National Anthem is sung by Pepper the Parrot during the Puppy Bowl, this conveniently timed outrage over disrespect for the country’s patriotic symbols rings somewhat hollow, detracts from more serious conversations that should be taking place about critical policy matters of state, and further divides the nation and ensures that “we the people” will not present a unified front to oppose the police state.

  First off, let’s tackle this issue of respect or lack thereof for patriotic symbols.

  As the U.S. Supreme Court has made clear, Americans have a right to abstain from patriotic demonstrations and/or actively protest that demonstration, for example, by raising one’s fist during the Pledge of Allegiance. Likewise, Americans have a First Amendment right to display, alter or destroy the U.S. flag as acts of symbolic protest speech.

  In fact, in Street v. New York (1969), the Supreme Court held that the government may not punish a person for uttering words critical of the flag. The case arose after Sidney Street, hearing about the attempted murder of civil rights leader James Meredith in Mississippi, burned a 48-star American flag on a New York City street corner to protest what he saw as the government’s failure to protect Meredith. Upon being questioned about the flag, Street responded, “Yes; that is my flag; I burned it. If they let that happen to Meredith, we don’t need an American flag.”

  In Spence v. Washington (1974), the Court ruled that the right to display the American flag with any mark or design upon it is a protected act of expression. The case involved a college student who had placed a peace symbol on a three by five foot American flag using removable black tape and displayed it upside down from his apartment window.

  Finally, in Texas v. Johnson (1989), the Court held that flag burning was protected speech under the First Amendment.  The case arose from a demonstration near the site of the Republican National Convention in Dallas during which protesters marched through the streets, chanted political slogans, staged “die-ins” in front of several corporate offices to dramatize the consequences of nuclear war, and burned the flag as a means of political protest.

  In other words, if freedom means anything, it means that those exercising their right to protest are showing the greatest respect for the principles on which this nation was founded: the right to free speech and the right to dissent. Clearly, the First Amendment to the Constitution assures Americans of the right to speak freely, assemble freely and protest (petition the government for a redress of grievances).

  Whether those First Amendment activities take place in a courtroom or a classroom, on a football field or in front of the U.S. Supreme Court is not the issue: what matters is that Americans have a right—according to the spirit, if not always the letter, of the law—to voice their concerns without being penalized for it.

  Second, let’s not confuse patriotism (love for or devotion to one’s country) with blind obedience to the government’s dictates. That is the first step towards creating an authoritarian regime.

  One can be patriotic and love one’s country while at the same time disagreeing with the government or protesting government misconduct. Indeed, real patriots care enough to take a stand, speak out, protest and challenge the government whenever it steps out of line.

  It’s not anti-American to be anti-war or anti-police misconduct or anti-racial discrimination, but it is anti-American to be anti-freedom.

  America requires more than voters inclined to pay lip service to a false sense of patriotism. It requires doers—a well-informed and very active group of doers—if we are to have any chance of holding the government accountable and maintaining our freedoms.

  After all, it was not idle rhetoric that prompted the Framers of the Constitution to begin with the words “We the people.”

  This ultimate responsibility for maintaining our freedoms rests with the people.

  Third, we need to stop acting as if showing “respect” for the country, flag and national anthem is more important than the freedoms they represent.

  Listen: I served in the Army. I lived through the Civil Rights era. I came of age during the Sixties, when activists took to the streets to protest war and economic and racial injustice. As a constitutional lawyer, I defend people daily whose civil liberties are being violated, including high school students prohibited from wearing American flag t-shirts to school, allegedly out of a fear that it might be disruptive.

  I understand the price that must be paid for freedom. None of the people I served with or marched with or represented put our lives or our liberties on the line for a piece of star-spangled cloth or a few bars of music: we took our stands and made our sacrifices because we believed we were fighting to maintain our freedoms and bring about justice for all Americans.

  Love of country will sometimes entail carrying a picket sign or going to jail or taking a knee, if necessary, to preserve liberty and challenge injustice. And it will mean speaking up for those with whom you might disagree. Tolerance for dissent, we must remember, is a vital characteristic of the citizens of a democratic society.

  The problems facing our generation are numerous and are becoming incredibly complex.

  As I make clear in my book Battlefield America: The War on the American People, we’re at a very crucial crossroads in American history. We have to be well-informed, not only about current events but well-versed in the basics of our rights and duties as citizens. If not, in perceived times of crisis, we may very well find ourselves in the clutches of a governmental system that is alien to everything for which America stands.

  Therein is the menace to our freedoms.

  So stop falling for the distractions. Stop allowing yourself to be fooled by propaganda and partisan politics. Stop acting as if the only thing worth getting outraged about is whether a bunch of football players stand or kneel for the National Anthem.

  Stop being armchair patriots and start acting like foot soldiers for the Constitution.

  

  

• "Bitcoin Jesus" Is Trying To Create A Sovereign "Libertarian Utopia"

  Roger Ver – a.k.a bitcoin Jesus – and Olivier Janssens are trying to transform a long-sought after libertarian ideal into a reality. As CoinTelegraph reports, the pair has announced that they’re in the process of creating the first independent state governed by libertarian values – and they’ve invited any like-minded individuals to join them.

  The pair said Friday that they’re working with a team of lawyers to try and figure out how to legally create their own independent country. Ver is a longtime advocate of bitcoin who surrendered his US citizenship and became a citizen of St. Kitts and Nevis a few years back.

  The pair have yet to disclose the location, nor has indicated what entry standards would be required.

  

  The country, which would be reminiscent of Ayn Rand’s Galtian paradise, is intended to be a place where those who reject governmental controls and seek to maintain libertarian freedoms can gather and promote a truly free society.

  CoinTelegraph reports that the locations being evaluated include areas that are safe and conflict-free, but also enjoy proximity to economic centers in the US, Europe, and Asia, while also being accessible by water. The team is hoping to offer a stable government with substantial national debt a way to eliminate some of that debt with a land lease to FreeSociety. On its website, the team says they’ve started preliminary talks with governments and interest “is much higher than initially expected.”

  While Ver told CoinTelegraph that the country “isn’t an ICO”, it’s unclear how the FreeSociety team would acquire the money needed to purchase land upon which to build their sovereign nation.

  Learn more at https://t.co/btZyCQzXlk https://t.co/wlUJedYE9V

  — Roger Ver (@rogerkver) September 21, 2017

  //platform.twitter.com/widgets.js

  Of course, Ver & Co. aren’t the first to attempt this. In 2008, billionaire venture capitalist Peter Thiel launched an initiative to develop a floating city, called a seastead, that would serve as a permanent, politically autonomous settlement. He invested some $1.7 million in The Seasteading Institute, and resigned from its board in 2011. Back in February, he told the New York Times’s Maureen Dowd. However, it appears the Seasteading Institute plans to soldier on without Thiel.

  

  According to Business Insider, the group recently met with officials in French Polynesia, an island chain located in the South Pacific, and discussed plans to develop a seastead off its coast. If things go as planned, the institute might break ground as early as 2017.

  

  

• There Are Large Parts Of America Being Left Behind…

  Economic prosperity is concentrated in America's elite zip codes, but in an interesting report on Distressed Communities, from The Economic Innovation Group, it is increasingly clear that economic stability outside of those communities is rapidly deteriorating.

  As Axios noted, this isn't a Republican or Democratic problem. At every level of government, both parties represent distressed areas. But the economic fortunes of the haves and have-nots have only helped to widen the political chasm between them, and it has yet to be addressed by substantial policy proposals on either side of the aisle.

  Economic Prosperity Quintiles

  

  As MishTalk.com's Mike Shedlock writes below, the study notes:

  “America’s elite zip codes are home to a spectacular degree of growth and prosperity. However, millions of Americans are stuck in places where what little economic stability exists is quickly eroding beneath their feet.”

  Distress is based on an evaluation of seven metrics.

  1. No high school diploma
  2. Housing vacancy rate
  3. Adults not working
  4. Poverty rate
  5. Median income ratio
  6. Change in employment
  7. Change in business establishments

  Change in Distress Quintiles

  

  Underwater vs. 2000

  

  Percent Living in Distressed Areas

  

  Performance Averages

  

  Population Statistics

  

  Key Findings

  • Over half the population in distressed communities are minorities, compared to only about a quarter of the population in prosperous ones.
  • Asians and whites are more likely to live in a prosperous zip code than any other type of community.
  • Blacks and Native Americans are more likely to live in a distressed zip code than any other type of community, while Hispanics are most likely to reside in an at risk one.
  • Blacks and Native Americans are three times more likely to live in a distressed community than a prosperous one.
  • Majority-minority zip codes are two times more likely to be distressed than the average zip code.

  Political Distribution

  • Republicans dominate at the very top of the distribution, representing nine of the 10 most prosperous congressional districts in the country. Most of these are suburban enclaves around fast-growing metropolitan areas, for example on the outskirts of Dallas, Denver, Houston, Minneapolis, Phoenix, and Washington, DC. Expanding to the entire top quintile, Republicans represent 63 percent of the country’s prosperous districts compared to Democrats’ 37 percent.
  • Conversely, six of the country’s 10 most distressed congressional districts are represented by Democrats. Eight of the 10 are located in the South, with Ohio’s 11th (Cleveland) and Arizona’s 7th (Phoenix) as the two exceptions.

  Report Conclusion

  “It is fair to wonder whether a recovery that excludes tens of millions of Americans and thousands of communities deserves to be called a recovery at all.”

   

  

  

• Series Of Videos Reveal That ESPN's Transition To MSNBC-Lite Is Now Complete

  We should have known the moment that their Asian announcer, Robert Lee (did we mention he’s Asian), got pulled from the William and Mary vs. University of Virginia college football game last month for having the same name as a Confederate General that ESPN’s transition from sports commentary to ‘MSNBC-Lite’ was inevitable.  Now, just one month after that fateful decision, it appears that ESPN’s metamorphosis is complete.

  As the Daily Caller noted, the following series of clips from today on ESPN proves that the network has turned into a running political talk show centered around one man: President Trump.

  When asked if Sunday’s protests were primarily against Trump rather than against racial injustice, ESPN commentator and former NFL safety Louis Riddick simply responded, “Sure.”

   

  “Sure, because the players felt attacked and disrespected. The players are like, you are going there name calling because we are trying to protest against something we have a right and freedom to protest against peacefully, and you make it personal and use derogatory names and paint us all with a derogatory brush?” Riddick said.

   

  “[Trump] is what they were protesting yesterday in and of itself, and spurred on the spike [in protests]. But I think the players in general, African-Americans in general, minorities in general, still have a bigger picture in mind. There is something bigger they are after. They are after equality and fair treatment but we can’t get there because all we keep talking about is, ‘should you had stand or shouldn’t you stand,’” he complained.

   

  Meanwhile, Max Kellerman questioned whether President Trump would make it to the end of his first term in office just before launching into a tirade over Trump losing the popular vote.

   

  And here is Kellerman explaining why LeBron James has every right to call the President a bum…though we do wonder whether he would have held the same opinion if a player made the same comments about President Obama.

   

  Meanwhile, these guys managed to link the weekend’s entire controversy back to immigration reform!?!?

   

  It seems that an incredibly aggressive strain of Trump Derangement Syndrome is now spreading throughout television studios all across the country.

  

  

• A Constitutional Anniversary To Forget

  Authored by Antonius Aquinas,

  While not a jubilee year, last week marked the 230th anniversary of the US Constitution.

  Naturally, most of its devotees enthusiastically praised the document which by now is seen on a par with Holy Writ itself.  An editorial from Investor’s Business Daily provides an example of such hagiography:

  The Constitution’s beauty is that it not only delineates our rights as Americans, but expressly limits and defines government’s ability to interfere in our private lives.   This equipoise between citizens’ duties, responsibilities and rights makes it the defining document or our nation’s glorious freedom.

   

  But America is wonderful largely because of the Constitution and those who framed it . . . . What we have is too precious to squander . . . .

  Most of the piece laments about the widespread ignorance of its sacred contents among the denizens in which it rules over and encourages the unlearned “to bone up a bit on your constitutional heritage . . . .” 

  

  The editorial fails, as do most others on the Right, to understand that it is not a lack of knowledge of the Constitution’s contents among the populace which lies at the heart of America’s social, economic, and political problems, but the very document itself.

  One of the main reasons why the Constitution continues to be so widely venerated is due to the deliberate distortion of history that its “founders” promoted and that generations of its sycophants have continued to perpetuate to this very day. 

  The official narrative runs that the Constitution was enacted because of widespread popular support for a change to the supposed inadequacies and deficiencies of the Articles of Confederation.

  This is a myth.

  Instead, the Constitution was a coup deliberately schemed by the leading political and mercantile classes to set up a powerful central government where ultimate authority rested in the national state. 

  The use of the term “federal” to describe what was created in Philadelphia in those fateful days was a ruse much like the banksters and politicos used “Federal Reserve” to describe the central bank created in 1913.  It was neither “federal” – a decentralized monetary order – nor a “reserve” of gold, but a monetary institution which could create money out of thin air and eventually eliminate the gold standard.

  It was a similar political maneuver 230 years ago as a new American national state was established and touted as a decentralized form of government where power was evenly divided between state and national levels and between the different branches of the government itself  – “separation of powers.”  In actuality, however, the “federal system” was the elevation of central power at the expense of local authority which had previously existed.  Section VI of the Constitution says it all:

  The Constitution and the laws of the United States  . . . shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any state to the contrary notwithstanding.

  Elementary political science has shown and plain common sense knows that any person or institution given “supreme authority” will misuse and abuse such power.  Power tends to corrupt and absolute power corrupts absolutely is an undeniable dictum of human nature.  A truly decentralized system of governance would not contain a plank as “supreme law of the land” as part of its foundation.  Instead, real federalism would be dispersed, as it existed in the past in such political arrangements as confederacies, leagues, and, certainly, under the much maligned feudal social order.

  Even the Constitution’s celebrated Bill of Rights is flawed and has proven to be ineffective in protecting basic human freedoms.  It is the federal government which enumerates and interprets what freedom individuals should possess.  Thus, the meaning and extent of individual liberties will be in the hands of federal jurists and courts who will invariably rule on cases in favor of the state.  The ensnaring of individual rights within the central government’s authority did away with the venerable common law which was a far greater defender of liberty than federal courts.

  Just as important, the enactment of the Constitution, which brought all the individual states under it suzerainty, did away with one of the most significant checks on state power – “voting with one’s feet.”  When there are multiple governing authorities, if one jurisdiction becomes too oppressive, its subjects can move to freer domains.  This still happens on a local level as high tax and regulatory states such as California and New York have lost demographically to freer places like Nevada and Texas.  Yet, from the Federal Leviathan there is no escape, except expatriation.

  Unless and until Americans and all the other peoples of the Western world who live under constitutional rule recognize that it is the type of government which is the cause of most of the political turmoil, social unrest, and economic malaise  which they face, there is no hope of turning things around.

  

  

• Crowd Boos As Entire Cowboys Team, Owner, & G.M. 'Take A Knee' In Arizona

  In an apparent demonstration of unity, the entire Dallas Cowboys team, Cowboys owner and general manager Jerry Jones, as well as executive vice presidents Stephen Jones, Charlotte Anderson and Jerry Jones Jr., all decided to 'take a knee', notably before the national anthem was sung.

  

  Boos were heard from the crowd in Arizona which reportedly included a large number of Dallas fans…

  Crowd erupts in boos as owner Jerry Jones and entire Dallas Cowboys team kneel live on Monday Night Football pic.twitter.com/ZBKt3KMXYR

  — Jack Posobiec (@JackPosobiec) September 26, 2017

  //platform.twitter.com/widgets.js

  "…as they take a knee collectively, boos can be heard from this sell-out crowd in Arizona…"

  As ESPN reports, Jerry Jones and his daughter, Charlotte Jones Anderson, said their players wanted to take a knee as a statement for equality and unity, but also wanted to separate that message from the national anthem.

  A little less than an hour before kickoff, Jerry Jones said he respected the players "individually and collectively," but he did not want to get into the political element of the debate.

  "We want them to do what's in the best interest of the Dallas Cowboys," Jones said.

   

  "That's where the obligation is and again I don't want to get into this area of debate but I do want to emphasize how important it is to me that we respect the sanctity of the flag."

  Jones was one of seven NFL owners to donate to Trump's inauguration.

  

  

• Gold/King Dollar ratio breaking short-term support

  

  Gold has been weaker than King Dollar the majority of the time since 2011 highs. Gold has been stronger than King Dollar since Christmas of last year. Which trend is going to be the key trend over the next few months?

  Below looks at the Gold/US Dollar ratio over the past seven years and highlights that an important price pattern is taking place-

  

  CLICK ON CHART TO ENLARGE

  The Gold/US$ ratio has remained inside of the blue shaded channel for the past three years. The rally since last Christmas has the ratio testing the top of this channel and three other resistance lines came into play at (1). Since hitting the top of the channel and triple resistance, the ratio has turned lower (Dollar stronger than Gold) and broken below steep rising support at (2).

  Gold bulls would get caution/concerning message should further weakness at (2).

  Gold bulls want/need the ratio to breakout above quad resistance at (1), to send a quality bullish message.

   

   

  The Power of the Pattern at work to save people time, improve decision-making & results.   

  We identify high probability big pattern reversals and breakouts in global indices, sectors, commodities, several metals and select individual stocks

  Send us an email if you would like to see sample reports or a trial period to test drive our Premium or Weekly Research

   

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  Email services@kimblechartingsolutions.com 

   

  Call us Toll free 877-721-7217 international 714-941-9381

   

  Website: KIMBLECHARTINGSOLUTIONS.COM

  
  

   

   

   

   

  

  

• Massive Hack At Deloitte: Entire Internal Email System Compromised, Client Emails Exposed

  Another day, another major hacking.

  The Guardian reports that in the latest corporate cyber breach, one of the world’s “big four” accounting and consultancy firms, Deloitte, was been targeted by a sophisticated hack that “compromised the confidential emails and plans of some of its blue-chip clients.” And just like Equifax, New York-headquartered Deloitte was similarly the victim of a cybersecurity attack that went unnoticed for months. The Guardian understands Deloitte discovered the hack in March this year, but it is believed the attackers may have had access to its systems since October or November 2016.

  Responding to questions from the Guardian, Deloitte confirmed it had been the victim of a hack but insisted only a small number of its clients had been “impacted”. It would not be drawn on how many of its clients had data made potentially vulnerable by the breach. Alas, the company has yet to provide a full disclosure of just who and which clients were violated: an estimated 5 million emails were in the hacked email cloud and could have been been accessed by the hackers. Deloitte said the number of emails that were at risk was a fraction of this number but declined to elaborate.

  While unlike Equifax Deloite is not a public public company and is not accountable to countless shareholders, with $37 billion in revenue last year and over 263,000 worldwide employees, Deloitte is a corporate behemoth which provides auditing, tax consultancy and – like Equifax – high-end cybersecurity advice to some of the world’s biggest banks, multinational companies, media enterprises, pharmaceutical firms and government agencies.  Here the Guardian reports that Deloitte clients “across all of these sectors had material in the company email system that was breached. The companies include household names as well as US government departments.“

  So far, six of Deloitte’s clients have been told their information was “impacted” by the hack. Deloitte’s internal review into the incident is ongoing.

   

  The hacker compromised the firm’s global email server through an “administrator’s account” that, in theory, gave them privileged, unrestricted “access to all areas”.

  Embarrassingly, the administrator level hack required only a single password and did not have “two-step“ verification, much like Deloitte and other companies strongly urge everyone to do.

  As the Krebs on Security blog separately notes, “according to a source close to the investigation, the breach dates back to at least the fall of 2016, and involves the compromise of all administrator accounts at the company as well as Deloitte’s entire internal email system“

  The source told KrebsOnSecurity they were coming forward with information about the breach because, “I think it’s unfortunate how we have handled this and swept it under the rug. It wasn’t a small amount of emails like reported. They accessed the entire email database and all admin accounts. But we never notified our advisory clients or our cyber intel clients.”

   

  This same source said forensic investigators identified several gigabytes of data being exfiltrated to a server in the United Kingdom. The source further said the hackers had free reign in the network for “a long time” and that the company still does not know exactly how much total data was taken.

  Penetrating the unknown number of emails involved breaching the Microsoft cloud used the by the company. Emails to and from Deloitte’s 244,000 staff were stored in the Azure cloud service, which was provided by Microsoft. This is Microsoft’s equivalent to Amazon Web Service and Google’s Cloud Platform.

  In addition to emails, the Guardian adds the hackers had “potential access to usernames, passwords, IP addresses, architectural diagrams for businesses and health information. Some emails had attachments with sensitive security and design details.”

  Until today’s report, the hack had been disclosed to the public: the breach, which was US-focused, was regarded as so sensitive that only a handful of Deloitte’s most senior partners and lawyers were informed.

  The team investigating the hack is understood to have been working out of the firm’s offices in Rosslyn, Virginia, where analysts have been reviewing potentially compromised documents for six months.

   

  It has yet to establish whether a lone wolf, business rivals or state-sponsored hackers were responsible.

  Translation: while Putin wasn’t accused of hacking Equifax, he may yet get the blame this time.

  Making this breach even more complicated, it is still unknown what information the hackers acquired: Guardian sources said if the hackers had been unable to cover their tracks, it should be possible to see where they went and what they compromised by regenerating their queries. This kind of reverse-engineering is not foolproof, however.

  “In response to a cyber incident, Deloitte implemented its comprehensive security protocol and began an intensive and thorough review including mobilising a team of cybersecurity and confidentiality experts inside and outside of Deloitte,” a spokesman said. “As part of the review, Deloitte has been in contact with the very few clients impacted and notified governmental authorities and regulators.

   

  “The review has enabled us to understand what information was at risk and what the hacker actually did, and demonstrated that no disruption has occurred to client businesses, to Deloitte’s ability to continue to serve clients, or to consumers. We remain deeply committed to ensuring that our cybersecurity defences are best in class, to investing heavily in protecting confidential information and to continually reviewing and enhancing cybersecurity. We will continue to evaluate this matter and take additional steps as required.”

   

  “Our review enabled us to determine what the hacker did and what information was at risk as a result. That amount is a very small fraction of the amount that has been suggested.”

  Deloitte declined to say which government authorities and regulators it had informed, or when, or whether it had contacted law enforcement agencies.

  Of course, as noted above, the breach is a deep embarrassment for Deloitte, which offers clients advice on how to manage the risks posed by sophisticated cybersecurity attacks. If only the company had followed its own advice.  Even more awkward, in 2012 Deloitte was ranked the best cybersecurity consultant in the world and has a “CyberIntelligence Centre” to provide clients with “round-the-clock business focussed operational security.” It is unclear if that unit was also hacked.

  While we await an official statement from Deloitte, what comes next is lots of lawsuits and even more settlements. According to the Guardian, on 27 April Deloitte hired US law firm Hogan Lovells on “special assignment” to review what it called “a possible cybersecurity incident”. The Washington-based firm has been retained to provide “legal advice and assistance to Deloitte LLP, the Deloitte Central Entities and other Deloitte Entities” about the potential fallout from the hack.

  

  

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