• "You're Going To See A Rush For Gold" – Katusa Warns De-Dollarization Is Accelerating

  Authored by Mac Slavo via SHTFplan.com,

  Global strategist Marin Katusa is the New York Times best selling author of The Colder War, which details the geo-political power shift that threatens the global dominance of the United States. He’s also a well known resource hedge fund manager who legendary investor Doug Casey has called one of the best market analysts he’s ever worked with.

  His prior forecasts noted that countries around the world would soon stop trading commodities like oil in the U.S. dollar, something we’re already seeing with China, Russia, Iran, and Venezuela, all of which are preparing non-dollar, gold-backed mechanisms of exchange.

  

  This trend, according to Katusa in a must see interview with Future Money Trends, will only continue to weaken the U.S. dollar going forward and the result will be a massive capital flight to gold in coming years:

  I think we’ll have a near term bounce on the U.S. dollar… then it’s going to be very weak… and then it’s going to go much, much lower… With China and Russia working together to de-dollarize the U.S. dollar starting with oil, which is the biggest market… and then all the other commodities.

   

  You’re going to start seeing a massive unwind of these U.S. dollars in the emerging markets.

   

  …

   

  When that money comes back… which it will… and the world starts cluing in that the emerging markets need gold to convert the Yuan and the Ruble and all these different factors, you’re going to see a massive rush for gold.

  Watch the full interview:

  Katusa notes that he is preparing to “load up” on gold-based assets as the dollar strengthens and puts additional pressure on gold prices, but says that by next year major fund managers will start moving capital back into precious metals in response to dollar weakness, global de-dollarization and economic crisis:

  Everybody wants to rush in when something’s exciting… but you take your position before the massive flow of money…

   

  I think we have a near term dead cat bounce for the U.S. dollar… which will mean we’re going to have a little bit of weakness here in gold in the near term… the next six months is my time to load up.

   

  …And when the funds flow come in… it’s going to be the equivalent of Niagra Falls coming through your garden hose.

  The geo-political realignment taking place now stands to upend the financial and economic systems as we know them. This shift will not come without crisis and panic. The time to position yourself in gold-based assets is now.

  

  

• Complete Preview Of Theresa May's "Florence" Brexit Speech

  On Friday – a day many have called  “the most important day for Brexit since the referendum” – Theresa May will delivers her much anticipated Brexit speech in Florence. The roughly 5000-word speech is scheduled at begin around 09:15 EDT and is expected to provoke an immediate response from Brussels.

  Among the flurry of last minute preparations, earlier this week, the Telegraph reported that Foreign Secretary Boris Johnson will resign if May veers toward a “Swiss-style” EU arrangement in her speech (more here). Earlier today, BBC Political Editor Laura Kuenssberg reported that May’s Friday speech will say the UK willing to pay €20BN during transition period “BUT only if we have access to single market + some form of customs union.” As RanSquawk added, the €20BN does not cover long term liabilities, so the eventual total departure bill to taxpayers will potentially be far higher.

  Taking a step back, here is a bigger picture preview of what is known – and unknown – about tomorrow’s speech courtesy of RanSquawk

  What will May Say?

  Few specific details are available on what UK Prime Minister Theresa May will cover in her speech, to be delivered from Florence, Italy, on 22 September. However, it is expected that the material will be significant given that the UK delayed the fourth round of Brexit talks (which were set to take place in the week of 25 September). A spokesperson for May has been quoted as saying that the speech would outline the UK’s hopes for a “deep and special partnership” with the EU following Brexit. May was said to have discussed the particulars with her Cabinet on Thursday 21 September. At the time of publication, no firm details have been leaked, although a BBC reporter was told that May will seek a transitional agreement, with a time frame of two years being touted.

  “In the wake of slow progress on Brexit negotiations, the United Kingdom may be preparing to adjust its approach,” analysts at Stratfor write. “Brexit negotiations have achieved limited progress so far, and the EU side has warned that talks are still far from the ‘sufficient progress’ necessary to move to their second phase, which is meant to address the future bilateral relationship” which the UK was eager to begin in October.

  One theory that is gaining traction, therefore, is that the UK will offer some concessions to the EU which will help move the discussions on.

  Tensions Within May’s Cabinet

  The secrecy surrounding her speech was causing tension in May’s Cabinet. Reports in the Telegraph newspaper suggested that Foreign Secretary Boris Johnson would tender his resignation if May pivoted towards a ‘Swiss-style’ arrangement. The news drove sterling higher, with traders seemingly taking comfort from the idea that some of the more extreme, ‘hard’ voices around May would leave the Cabinet, allowing her to pursue a ‘softer’, more amenable deal.

  However, the story was denied and it has been subsequently reported that May made moves to appease Johnson; the Telegraph reported “the Cabinet truce over Britain’s future payments to the EU involves paying substantial sums to the bloc, but no further payments after Britain’s transition period.”

  The FT later wrote that PM May believes the UK can achieve a “bespoke” final deal with the EU, and May reportedly said neither a Canadian-style nor a Norway-style deal for single market was appropriate for the UK.

  Divorce Bill

  The Financial Times this week reported that the UK was set to make an “offer to fill a post-Brexit EU budget hole of at least €20bn” in an attempt to settle its so-called “diovrce bill.” The FT adds “UK officials have indicated Britain would ensure no member state would have to pay more into the EU budget or receive less money from it until 2020, the end of EU’s current long-term budget planning period. The expected hole in those two years after Brexit would be at least €20bn when payments the UK receives back from Brussels are excluded.

  “A figure of €20bn is pretty close to estimates for what the UK’s net contribution to the EU budget would have been under the status quo ‘Remain’ scenario,” say analysts at RBC Capital, “however, it is unlikely that monies relating to the current EU budget period will be the end of the financial settlement negotiation between the UK and the EU.” Later reports, which followed Ma’s Cabinet meeting, suggested any financial settlement – which May would not directly address in her speech – would be contingent on single market access.

  It is unclear how the EU might respond, given earlier demands from some suggesting a figure of as much as €60bln may be needed.

  “On the EU side, any response next week which hints progress is sufficient to move towards discussing the future UK-EU trade deal before year end should be supportive of a view that the two-year Article 50 process isn’t too far off-track,” RBC says.

  Transitional Period

  May is also expected to acknowledge the need for a transitional period to avoid a ‘Brexit cliff’, where the UK would continue to abide by EU rules in some areas, while phasing out a withdrawal in other areas. “While the British government seemed to be aiming for a two-year transition, we have been told May prefers a longer hiatus of three years, which would give her enough time to prepare for elections, to be held on their scheduled date, in 2022,” analysts at SGH Macro argue.

  * * *

  Want more? Here is another preview, this time from Barclays?

  Media speculation is mounting over the content of UK PM May’s Brexit Speech in Florence tomorrow. This is the first big Brexit-specific speech by the PM following the General Election. It is designed to outline the basis for negotiations at the fourth round of EU-UK negotiations in Brussels next week. Following that, the UK Conservative Party Conference will take place on 1-4 October, where PM May will need to satisfy her own party members with regards to the tone set over Brexit. Hence, the challenge for the PM in her speech will be to appear constructive to her EU partners, so as to advance the negotiation process, while at the same time not angering those within her own party, who may prefer a less accommodative course vis-a-vis the EU in the negotiations.

  May is expected to outline three key issues – The transition, the EU withdrawal bill, and the future relationship.

  • Transition – Highlights were provided by Chancellor Hammond last week. He insisted that the UK will leave the Single Market and the Customs Union in March 2019. The UK will seek to maintain the status quo of trade and access. A two-year transition period is seen as most likely to stop cabinet in-fighting.
  • EU Withdrawal bill – PM May is likely to commit to the UK paying what is deemed reasonable during a transition period. Her traditional style has been vague and there is a chance she may continue with this approach, and stop short of stating an actual figure that could leave herself open to attack during the upcoming Tory Party conference. However, press speculation is mounting of a £20bn figure as a starting point for negotiations, conditional upon access to the single market and some form of Customs Union (source: BBC). We expect an eventual figure in the region of £40-50bn may be negotiable. The reaction to this from Brussels and the UK media will be important for PM May going into the Tory Party conference.
  • Future relationship – Hammond gave some colour last week, focusing on financial services, and recognised concerns about the UK potentially deviating from high EU regulatory standards. We expect PM May to reiterate the importance of regulatory homogeneity in the short run. May is likely to try to insist on the need for the UK to negotiate trade deals, even if legally, this cannot begin until the second phase of negotiations.
  • Reaction following the speech: The key to watch here would be the reaction from EU’s chief Brexit negotiator, Michel Barnier, as well as the UK press. The speech lays the foundations for the EU-UK negotiations next week, and EU officials have voiced increasing frustration over delays, bearing in mind that the principles for the first phase of negotiations, covering  guarantees, commitments on citizens rights, are due to be agreed between October to December before it is possible to move on to trade issues in Phase 2.

  

  

• One Simple Chart Proves That Facebook Thinks You're A Moron

  Last week we jokingly wrote about a Facebook press release that was apparently an honest effort by the social media giant intended to summarize Russian efforts to undermine the 2016 election using their social media platform. That said, at least to us, it seemed as though Facebook unwittingly proved what a farce the entire ‘Russian collusion’ narrative had become as, after digging through advertising data for the better part of full year, Facebook reported that they found a ‘staggering’ $50,000 worth of ad buys that ‘MAY‘ have been purchased by Russian-linked accounts to run ‘potentially politically related’ ads.

  Not surprisingly, after being attacked by the mainstream media and even Hillary for “assisting” the Russians, Zuckerberg is once again in the press today fanning the flames of the ‘Russian collusion’ narrative by saying that Facebook will release to Congress the details of the 3,000 ads that ‘MAY‘ have been purchased by Russian-linked accounts.

  And while it seems obvious, please allow us to once again demonstrate why this entire process is so utterly bizarre… 

  The chart below demonstrates how the $50,000 worth of ad buys that ‘MAY‘ have been purchased by Russian-linked accounts to run ‘potentially politically related’ ads compares to the $26.8 billion in ad revenue that Facebook generated in the U.S. over the same time period between 3Q 2015 and 2Q 2017….If $50,000 can swing an entire presidential election can you imagine what $26.8 billion can do?

  

   

  Of course, not all of that $26.8 billion was spent on political advertising so we took a shot at breaking it down further.  While Facebook doesn’t disclose political spending as a percent of their overall advertising revenue, we did a little digging and found that political advertising represented ~5% of the overall ad market in the U.S. in 2016.  We further assumed that political share of the overall ad market is roughly half of that amount in non-election years, or 2.5%. 

  Using that data, we figure that Facebook may get ~3.5% of their annual revenue from political advertising in an average year, or nearly $1 billion per year…give or take a few million.  Unfortunately, as the chart below once again demonstrates, this still does little to support Zuckerberg’s thesis that the $50,000 he keeps talking about is in any way relevant to the 2016 election.

  

   

  Of course, the pursuit of this ridiculous narrative proves that Zuckerberg has no interest in spreading the truth about how his company impacted (and by “impacted,” we mean “had no impact at all”) the 2016 election, but rather is only interested in shoving his political agenda down the throats of an American public that he presumes is too stupid to question his propaganda. 

  That said, if Zuckerberg is really just on a mission for truth, as he says he is, perhaps he can stop patronizing the American public and disclose the full facts surrounding political advertising on Facebook.  We suspect a simple financial disclosure detailing how much political advertising was sold on Facebook from 3Q 2015 – 2Q 2017, broken down by political affiliation, would go a long way toward proving just how meaningless $50,000 is in the grand scheme of things. 

  That said, somehow we suspect ‘truth’ is not really Zuckerberg’s end goal, now is it?

  

  

• India Stack and Bitcoin (An Insider's View)

  By Chris at www.CapitalistExploits.at

  Before the good stuff… the fun stuff.

  Here’s a fan mail I received in response to this.

  

  I guess he/she never made it as far as this part:

  “Don’t get me wrong. I’m not against EVs, and I’m all for technological innovation.”

  Though, in all fairness, it may be the collagen talking. Either way, definitely not an Insider member, otherwise he/she/it would be well aware of where we’re actually invested. Ha!

  Dregs from the bottom of the barrel occasionally drift into my corner of cyberspace. That they respond like this must be due to this fascinating misconception that I give a damn.

  Still, if we poke them hard enough in the chest, they’ll bugger off leaving us with the fine specimens that make up the overwhelming majority of our distinguished readership. Which brings me neatly to:

  “Hi Chris,

   

  I’m not sure if this gets to you or is stuck in the admin box.

   

  Love your work, really enjoy it.

   

  Your current one on the knock off effects of banning gasoline and diesel cars made me want to bring up another point that is seldom discussed when people talk about the future of EVs… the profitability of refineries when they don’t have a market for gasoline.

   

  When a barrel of crude is refined, about half of its volume ends up as gasoline.  The other half ends up as diesel, jet fuel, bunker oil, chemical feedstocks, etc… Gasoline is great for running automobiles, but pretty lousy for any other industrial process.  Industrial processes such as mining, refining, transporting, and processing cobalt, lithium, and molybdenum into EV parts.  These processes depend on the other half of the barrel.

   

  Driving away (pun intended) the demand for gasoline by mandating EVs means that refineries have half of their product become much less valuable.  I don’t have the research or know of who has done the research, but I wonder what such a move would mean for the price of diesel, jet fuel, bunker oil, chemical feedstocks, etc…?

  

  Hope all is well, cheers!”

  Fair points and worth thinking about.

  For example. Do those industries taking up the “other half of a barrel” benefit? To what degree? For how long? And is the market pricing this?

  All fun stuff which we spend all most of our time doing here.

  Anyway, today I’ve got something special for you and it’s got nothing to do with EVs or gasoline.

  Bitcoin and India Stack

  It was Raoul Pal who first brought to my attention the incredible galactic sized project that is India Stack.

  I’ve since spoken with quite a variety of people both in India and out in order to better understand the dynamics of what’s taking place in India. I think it provides a fascinating and illuminating view into how certain problems can be dealt with.

  In particular (and I’ve not seen anyone mention this), the ability to recapitalise a banking system on the brink and to do so while transitioning over a billion citizens onto a digital system.

  Pre-cash elimination, India’s banks were in a shocking state. What better way to “fix” them than to get the poor to bail them out.

  Ever since man began forming communities, we’ve had a setup where those at the top manufacture ways and means to have those at the bottom pay for the things they want.

  Kings told stories about their “divine rights”, people believed it, priests told stories about the church’s relationship with God, people believed it. And today politicians tell stories about “the greater good”… and people believe it. Some things never change.

  

  Aside from the banking system being recapitalised…

  It’s been fascinating to watch what was up until recently one of the world’s largest cash economies and where millions never even had a bank account suddenly goes digital.

  So there were two steps here.

  The first being the elimination of cash in the economy, and the second bringing online the digital platform otherwise known as IndiaStack, an open source platform where information is a utility.

  The set of open API for developers includes:

  • The Aadhaar for authentication
  • The e-KYC documents that have been generated
  • Digital lockers
  • e-signatures (software based as against the present dongle based e-signs)
  • The Unified Payments Interface which rides on top of the National Payment Corporation of India’s Immediate Payment System.

  You can check out a presentation which provides a decent overview of it here.

  I’ve spoken with a lot of guys who see this as being a major boon for India’s economy, eliminating fraud, destroying swathes of bureaucracy, and bringing millions of people into the economy who previously never had access.

  I don’t disagree with any of this, but what I wanted to do was to find someone who wasn’t very bullish, someone who would challenge some of these thoughts. And with that in mind, I found and spoke to Deepankar Kapoor.

  Deepankar Kapoor – as you can probably infer from his name – is not only Indian but he’s also the founder of Bitcoinwiser, a well known face in the digital advertising industry in India with his most recent stint being as the Vice President & National Strategy Head at Ogilvy India.

  He has 9+ years of full time recognised experience in digital business transformation of Fortune 500 brands and won many accolades throughout his career. Academically, he holds an MBA from University of Calcutta wherein he majored in Marketing [Forecasting & Econometrics], BMS from Symbiosis International University and a Diploma in Cyber Laws from the Government Law College, Mumbai. Additionally, he is a Google and Twitter Certified Professional.

  You can listen to our conversation below. I apologise for the dodgy line at times – Kenyan Wi-Fi isn’t the best in the world.

  And a Question for This Week

  
  Cast your vote here and also see what others think

  – Chris

  “Change is opportunity.” — Suresh Prabhu, Union Minister for Commerce

  ————————————–

  Liked this article? Then you’ll probably like my other missives on

  this topic as well. Go here to access them (free, of course).

  ————————————–

  

• Are We Really Capable Of Shooting Down North Korean Missiles?

  Authored by Daisy Luther via The Organic Prepper blog,

  According to some analysts, Americans may be overly confident in our military’s ability to shoot down North Korean missiles if the country were to attempt to strike.

  

  Maybe the reason we haven’t shot down North Korea’s test missiles is that we can’t. While we all certainly hope that our military would be able to successfully defend the country against incoming missiles, we need to be prepared for any possibility.

  According to an article by Joe Cirincione of Defense One, the reason we don’t shoot down North Korea’s missiles when they fire them over Japan is because…

  We don’t have the capability.

  Joe Cirincione is the president of Ploughshares Fund and the author of several books about nuclear weapons, including Nuclear Nightmares: Securing the World Before It Is Too Late.

  According to Cirincione, when Japanese Chief Cabinet Secretary Yoshihide Suga said, “We didn’t intercept it because no damage to Japanese territory was expected,” this was only partially true. It wasn’t a threat, but they didn’t have the capability to shoot it down due to the altitude.

  Neither Japan nor the United States could have intercepted the missile. None of the theater ballistic missile defense weapons in existence can reach that high. It is hundreds of kilometers too high for the Aegis interceptors deployed on Navy ships off Japan. Even higher for the THAAD systems in South Korea and Guam. Way too high for the Patriot systems in Japan, which engage largely within the atmosphere.

   

  All of these are basically designed to hit a missile in the post-mid-course or terminal phase, when it is on its way down, coming more or less straight at the defending system. Patriot is meant to protect relatively small areas such as ports or air bases; THAADdefends a larger area; the advanced Aegis system theoretically could defend thousands of square kilometers. (source)

  Well, that’s unsettling. So, what if we engaged the missile before it reached that high?

  Cirincione says that too is unlikely to be successful.

  There is almost no chance of hitting a North Korean missile on its way up unless an Aegis ship was deployed very close to the launch point, perhaps in North Korean waters.

   

  Even then, it would have to chase the missile, a race it is unlikely to win. In the only one or two minutes of warning time any system would have, the probability of a successful engagement drops close to zero. (source)

  But don’t take Cirincione’s word for it. In his article, he cited other experts who echo his sentiments.  Jonathon McDowell, an astronomer at the Harvard-Smithsonian Center for Astrophysics, tweeted in response to someone questioning why we didn’t shoot down NK’s missiles:

  As well, he quoted Jerry Doyle, deputy business editor for Asia at The New York Times:

  “It’s actually virtually impossible to shoot down a missile on the way up. Midcourse or terminal are the only places you have a shot.” (source)

  While I’m not sure how a business editor has special knowledge of our nuclear defense system, all of these sentiments certainly raise the question:

  IF WE HAVE THE ABILITY TO SHOOT DOWN NORTH KOREAN MISSILES, WHY HAVEN’T WE DONE SO?

  If we attempted to shoot down a North Korean missile and missed, it would be a major propaganda coup for Kim Jong Un.

  When our military practiced this, they managed to shoot down 2 out of 3 missiles.

  A lot of people are putting a great deal of hope in American missile defense systems, but it’s important to note that a couple of weeks ago in a test over the Pacific, our defense system failed. This was subsequent to a previous success.

   

  A medium-range ballistic missile was launched from a test range in Hawaii at 7:20 pm local time, but the interceptor missile fired at sea from USS John Paul Jones, a guided-missile destroyer, missed the target.

   

  “A planned intercept was not achieved,” the statement said. (source)

   

  That’s disconcerting. After the failed test, there was a third test which was successful, but it’s very important to realize that our military isn’t infallible. If our rate is 2 out of 3 missiles shot down, that means that 1 out of 3 still gets through and wreaks destruction.

  So, could we actually shoot down a missile “gift package” as Kim Jong Un creepily calls it?

  The unsettling answer is, maybe.

  Maybe, if we were expecting it, if the conditions were right, if we were close enough, if it was low enough, if we were in a perfect position.

  There are way too many “ifs” in there for me to feel fully confident in our ability to shoot down North Korean missiles before they strike the mainland, which experts now believe they have the ability to reach. We also know that North Korea also possesses the ability to create hydrogen bombs. And as I’ve written before, if you believe this is all a big set up for a false flag event, that would hardly matter to those nearby if such a thing were to happen.

  If you aren’t prepped for the potential of a nuclear strike, it’s time to start learning what you need to do. (This article and this class can help you.)

  

  

• Florida Parents Outraged After Teacher Demands Her 5th Graders Use Gender Neutral Pronouns

  Over the past year or so, we’ve observed in amazement as one ‘institution of higher indoctrination’ (a.k.a. “university”) after another came up with replacement pronouns for politically incorrect ‘hate speech’ like ‘freshman’.  Vanderbilt even forced its teachers and administrators to wear name tags defining their pronouns just so there would be absolutely no gender confusion that might lead to a nasty “triggering” event or unnoticed “microaggression (see: Vanderbilt University Name Placards For Faculty Offices Will Now Include “Preferred Pronouns”).

  Vanderbilt made nametags recently & many included a preferred pronoun section. This is real life: pic.twitter.com/LeT7BCkdmA

  — Clay Travis (@ClayTravis) September 6, 2016

  //platform.twitter.com/widgets.js

   

  But, while such things are expected from our millennial youth on progressive college campuses, parents of a 5th grade class in Tallahassee, Florida were somewhat shocked when they received a letter from “Mx. (pronounced Mix)” Bressack demanding that her students only refer to her using gender neutral terms like ‘Mx.’ instead of ‘Ms.’ and “they, them, their” instead of “he, his, she, hers.”  Per the Tallahassee Democrat:

  “One thing that you should know about me is that I use gender neutral terms. My prefix is Mx. (pronounced Mix). Additionally, my pronouns are “they, them, their” instead of “he, his, she, hers”. I know it takes some practice for it to feel natural, but my experience students catch on pretty quickly. We’re not going for perfection, just making an effort! Please feel free to reach out to me or administration if you have any questions. My priority is for all of my students to be comfortable in my classroom and have a space where they can be themselves while learning.”

  

   

  Of course, it didn’t take long for the parents of Mx. Bressack’s students to post their outrage to a Facebook group called “Tally Moms Stay Connected.” One mom bluntly asked  “is this fucking for real?” while another dad wondered whether it might makes sense to just stick to teaching math and science if your job is to be a math and science teacher.

  

   

  Meanwhile, principal Paul Lambert assured parents that Mx. Bressack enjoyed his full support but that “teachers in our district will not be allowed to use their influence in
  the classroom to advance any personal belief or political agenda.”

  “We support her preference in how she’s addressed, we certainly do,” Lambert said. “I think a lot of times it might be decided that there is an agenda there, because of her preference — I can tell you her only agenda is teaching math and science at the greatest level she can.”

   

  Lambert acknowledged there have been some calls to the Canopy Oaks front office regarding the letter.

   

  “There has been some (contact from concerned parents), the thing that has brought good understanding is, it’s not a preference that’s being applied to anyone other than the teacher.”

   

  “According to Principal Lambert, the teacher addresses students daily by using the pronouns he, she, him and her.  The teacher also uses ma’am and sir when responding to students. As a personal preference, however, the teacher simply prefers to be referred to in gender neutral terms as that of a coach,” Hanna wrote.

   

  “I can assure you that teachers in our district will not be allowed to use their influence in the classroom to advance any personal belief or political agenda. At this time, I do not believe that is the case in this instance.”

  So what say you…necessary step toward forming a more perfect progressive society or just complete insanity?

  

  

• Dallas School Board Designates Founding Fathers As Having "Confederate Links"

  "Just if we saw Confederacy named in it, we then highlighted it" says a school board spokesperson while describing a list which contained Thomas Jefferson, Ben Franklin, and Sam Houston.

  The Dallas Independent School District is in damage control mode after an internal school board list was obtained by local press which shows schools under consideration for name changes due to possible "connections with slavery or the Confederacy." News of the list, obtained by the Dallas Morning News early this week, caused outrage for the fact that it includes Texas revolutionaries and founders such as Sam Houston, James Bowie and William Travis, as well as Dallas pioneers James Gaston and William Brown Miller. It further names other early American figures who very obviously lived long before the existence of the Confederacy such as U.S. presidents Thomas Jefferson, James Madison and, inexplicably, Ben Franklin.

  

  Battle of the Alamo: Even the Texas revolutionary defenders of the iconic Alamo were on a list of "controversial" historical figures which Dallas ISD needed to "research" for review of whether school names could stay.

  Of course, William Travis and Jim Bowie both died at the Alamo in 1836 while the Confederacy didn't come into existence until 1861. Sam Houston too lived most of his entire life before the civil war and was perhaps the greatest Native American rights supporter of the time, and was adopted as an "honorary Cherokee" by the tribe, having also married a Cherokee woman. Ben Franklin, one of the American founding fathers named on the Dallas ISD list, was a vocal abolitionist. It is stunning and extremely worrisome that school board trustees would be both so historically illiterate and politically correct that they would put such names on the list in the first place.

  
  Dallas school board member Dustin Marshall confirmed the list via social media. It's amazing that even founding fathers like Ben Franklin – an early vocal abolitionist – or Declaration of Independence author Thomas Jefferson should have to be debated. 

  But Dallas ISD is currently attempting to backtrack and spin the narrative now that the leaked list is receiving so much push back from Texans. There's likely some level of embarrassment which motivated the new stance as well. A subsequent Dallas Morning News update explained, "Instead of more research, the district is focusing on a narrow set of parameters to only rethink schools named after Confederate generals, said chief of school leadership Stephanie Elizalde." The board now claims that while the original list was merely for "research" purposes, it is only four schools that are being seriously considered to undergo a name change: Stonewall Jackson, Robert E. Lee, Albert Sidney Johnston and William L. Cabell elementary schools.

  Disturbingly, it appears that "research" into Confederate links is being conducted by a mere one person staff, this according to language used by board spokesperson Stephanie Elizalde. She was quoted further in The Dallas Morning News:

  The additional names were never part of any specific renaming plan. Instead, Elizalde said, the list was originally so broad because she wanted to do "due diligence" on the names of the district's 226 campuses.

   

  "The more I researched, the more I was going to find," she said.

  The more detailed explanation of her methodology is strange considering many of the names that actually made the school board's list:

  This was just a very quick review of looking at the biographies of the individuals, and if there was any association with Confederacy — not making a judgment for or against — just if we saw Confederacy named in it, we then highlighted it. We are now in the process of doing a second [look].

  Yet that doesn't explain how authors of America's founding documents and Texas revolutionary came to be "highlighted", unless the Dallas school board's knowledge of history is really that appalling (a real possibility it seems). 

  Rod Dreher, writing for The American Conservative, summarized the sad state of Dallas ISD with the following:

  Imagine the impoverishment of the minds who believe the most significant thing to know about Jefferson, Madison, and Franklin, is that they were in some way tainted by slavery. Imagine the ignorance of school leaders who are going to investigate whether William Travis and Jim Bowie — both of whom died in 1836 at the Alamo — could have been involved with the Confederacy, which came into existence in 1861…

   

  It’s disgusting, this iconoclasm. In 2015, 40 percent of DISD’s schools received a failing grade from the state. To be fair, over 90 percent of DISD’s students come from low income homes, meaning that the school system has tremendous barriers to overcome in educating them. Still, the fact that the DISD trustees are even considering a cosmetic, p.c. gesture like this is a farce.

  As we've asked many times before: who will the PC mob come for next? If there's talk of purging history – even Texas history in Texas schools – then clearly it can and likely will happen anywhere. Will there perhaps be a future time when Texans themselves will no longer "Remember the Alamo!"…?

  

  

• Jim Rickards Warns "QT1 Will Lead To QE4"

  Authored by James Rickards via The Daily Reckoning,

  There are only three members of the Board of Governors who matter: Janet Yellen, Stan Fischer and Lael Brainard. There is only one Regional Reserve Bank President who matters: Bill Dudley of New York. Yellen, Fischer, Brainard and Dudley are the “Big Four.”

  They are the only ones worth listening to. They call the shots. The don’t like dots. Everything else is noise.

  

  Here’s the model the Big Four actually use:

  1. Raise rates 0.25% every March, June, September and December until rates reach 3.0% in late 2019.

   

  2. Take a “pause” on rate hikes if one of three pause factors apply: disorderly asset price declines, jobs growth below 75,000 per month, or persistent disinflation.

   

  3. Put balance sheet normalization on auto-pilot and let it run “on background.” Don’t use it as a policy tool.

  Simple.

  What does this model tell us about a rate hike in December?

  Disinflation has been strong and persistent. The Fed’s main metric for this (core PCE deflator year-over-year) has dropped from 1.9% in January to 1.4% in July. The August reading comes out on September 29. This time series is moving strongly in the wrong direction from the Fed’s perspective. This is what caused the September “pause” (which we predicted for readers last March).

  After seven months of decline, one month of increase, if it comes, will not be enough to get the Fed to end the pause. It would take at least two months of increases to change the Fed’s mind.

  That’s unlikely given the impact of Hurricanes Harvey and Irma. Those effects may be temporary, but they come at exactly the time when the Fed was looking for a turnaround in core inflation. They won’t get it. The pause goes on.

  How do I know this?

  For one thing, the Fed explains this all the time. It’s just that the media won’t listen; they’re too busy chasing dots.

  But this was also explained to me in detail by the ultimate Fed insider. I call him, “The Man Without a Face,” and I identify him by name in chapter six of my New York Times bestseller, The Road to Ruin.

  It’s true that Stan Fischer is leaving the board soon, but the White House has been in no hurry to fill vacancies. The Big Four will still be The Big Three (Yellen, Dudley and Brainard) when the December meeting rolls around and the analysis will be the same.

  Eventually the markets will figure this out. Right now, markets are giving a 70% chance of a rate hike in December based on CME Fed Funds futures. That rate will drop to below 20% by Dec. 13 when the FOMC meets again with a press conference. (There’s another meeting on Nov. 1, but no one expects any policy changes then).

  

  Now, with respect to quantitative tightening (QT), the same way they tapered QE, they’re going to “taper” QT. This time however, they’re going to taper upward. Meaning they’re going to go from $10 billion a month not being rolled over to $20 billion, $30 billion, etc.

  Eventually, the amount of securities they don’t roll over will go up until the balance sheet controlled by the Fed comes down to the targeted figure. The projection is that it could take five years to achieve. The problem is we might not make it that far before the entire system collapses.

  We’re in a new reality. But the Fed doesn’t realize it.

  Here’s what the Fed wants you to believe…

  The Fed wants you to think that QT will not have any impact.

   

  Fed leadership speaks in code and has a word for this which you’ll hear called “background.”

   

  The Fed wants this to run on background. Think of running on background like someone using a computer to access email while downloading something on background.

  This is complete nonsense. They’ve spent eight years saying that quantitative easing was stimulative. Now they want the public to believe that a change to quantitative tightening is not going to slow the economy.

  They continue to push that conditions are sustainable when printing money, but when they make money disappear, it will not have any impact. This approach falls down on its face — and it will have a big impact.

  Markets continue to not be fully discounted because they don’t have enough information. Contradictions coming from the Fed’s happy talk wants us to believe that QT is not a contractionary policy, but it is.

  My estimate is that every $500 billion of quantitative tightening could be equivalent to one .25 basis point rate hike. The Fed is about to embark on a policy to let the balance sheet run down.

  The plan is to reduce the balance sheet $30 billion in the fourth quarter of 2017, then increase the quarterly tempo by an additional $30 billion per quarter until hitting a level of $150 billion per quarter by October 1, 2018.

  Under that estimate, the balance sheet reduction would be about $600 billion by the end of 2018, and another $600 billion by the end of 2019.

  That would be the equivalent of half a .25 basis point rate hike in each of the next two years in addition to any actual rate hikes.

  While they might attempt to say that this method is just going to “run on background,” don’t believe it.

  The decision by the Fed to not purchase new bonds will be just as detrimental to the growth of the economy as raising interest rates.

  The Fed’s QT policy that aims to tighten monetary conditions, reduce the money supply and increase interest rates will cause the economy to hit a wall, if it hasn’t already.

  The economy is slowing. Even without any action, retail sales, real incomes, auto sales and even labor force participation are all declining. Every important economic indicator shows that the U.S. economy is slowing right now. When you add in QT, we may very well be in a recession very soon.

  Because they’re getting ready for a potential recession where they’ll have to cut rates yet again. Then it’s back to QE. You could call that QE4 or QE1 part 2. The Fed has essentially trapped itself into a state of perpetual manipulation.

  The problem continues to be that the stock market is overpriced for this combination of higher rates and slower growth.

  The one thing to know about bubbles is they last longer than you think and they pop when you least expect it. Under such conditions, it’s usually when the last guy throws in the towel that the bubble pops. We’re not there yet.

  Is this thing ready to pop? Absolutely, and QT could be just the thing to do it.

  I would say the market is fundamentally set up for a fall. When you throw in the fact that the Fed continues to have no idea what they’re doing, and has taken a dangerous course anyway, I expect a very severe stock market correction coming sooner than later.

  As market perceptions catch up with reality, the dollar will sink, the euro and gold will rally, and interest rates will resume their long downward slide.

  Do you have your gold yet?

  

  

• Jamie Dimon Faces Market Abuse Claim Over "False, Misleading" Bitcoin Comments

  A week after Jamie Dimon made headlines by proclaiming Bitcoin a "fraud" and anyone who owns it as "stupid," the JPMorgan CEO faces a market abuse claim for "spreading false and misleading information" about bitcoin.

  Unless you have been living under a rock for the past week, you will be well aware of JPMorgan CEO Jamie Dimon's panicked outburst with regard the 'fraud' that Bitcoin's 'tulip-like' bubble is. To paraphrase:

  "It’s a fraud. It’s making stupid people, such as my daughter, feel like they’re geniuses. It’s going to get somebody killed. I’ll fire anyone who touches it."

  

  One week later, an algorithmic liquidity provider called Blockswater has filed a market abuse report against Jamie Dimon for "spreading false and misleading information" about bitcoin.

  The firm filed the report with the Swedish Financial Supervisory Authority against JPMorgan Chase and Dimon, the company's chief executive. Blockswater said Dimon violated Article 12 of the European Union's Market Abuse Regulation (MAR) by declaring that cryptocurrency bitcoin was "a fraud".

  The complaint said Dimon's statement negatively impacted "the cryptocurrency's price and reputation".

   

  It also said Dimon "knew, or ought to have known, that the information he disseminated was false and misleading".

   

  "Jamie Dimon's public assertions did not only affect the reputation of bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system,” said Florian Schweitzer, managing partner at Blockswater.

  Blockswater said JPMorgan traded bitcoin derivatives for their clients on Stockholm-based exchange Nasdaq Nordic before and after Dimon's statements (as we detailed here), which Schweitzer said "smells like market manipulation".

  Blockswater works with blockchain-based assets based in London and Austria. Its full complaint is below:

  Blockswater Files Market Abuse Report Against Jamie Dimon in Stockholm
  Blockswater LLP believes that Dimon violated EU’s Market Abuse Regulation by "spreading false and misleading information" about bitcoin

   

  STOCKHOLM/NEW YORK/LONDON/VIENNA, September 21, 2017 – Algorithmic liquidity provider Blockswater LLP filed a market abuse report with the Swedish Financial Supervisory Authority (FI) against JPMorgan Chase and Co. CEO Jamie Dimon. Blockswater believes that Dimon violated Article 12 of the European Union's Market Abuse Regulation (MAR) by declaring that cryptocurrency bitcoin was "a fraud.”

   

  The complaint filed with the Swedish authorities demonstrates how Dimon's statement negatively impacted "the cryptocurrency's price and reputation.” The document also lists evidence that suggests Dimon "knew, or ought to have known, that the information he disseminated was false and misleading.”

   

  "Jamie Dimon's public assertions did not only affect the reputation of bitcoin, they harmed the interests of some of his own clients and many young businesses that are working hard to create a better financial system,” says Florian Schweitzer, managing partner at Blockswater. JPMorgan traded bitcoin derivatives for their clients on Stockholm-based exchange Nasdaq Nordic before and after Dimon's statements fueled volatility in the market. “That’s a clear case of double standards and it smells like market manipulation.”

   

  Article 12 of the European Union's Market Abuse Regulation prohibits the manipulation of markets through practices such as spreading false or misleading information. Nasdaq Nordic, where exchange-traded notes on bitcoin are listed, defines the term “market manipulation” in accordance with the EU’s definition as “dissemination of information through the media, including the Internet, or by any other means that gives, or is likely to give, false or misleading signals as to Listed Products, including the dissemination of rumours and false or misleading news, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading.”

   

  FI confirmed receipt of the report but did not comment further except to state that the financial markets regulator "will handle it according to [FI's] procedures."

   

  Blockswater LLP is an algorithmic liquidity provider for blockchain-based assets based in London (UK) and Vienna (Austria).
   
   

  

  

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• Never Forget: The US Government Has A Known History Of Using False Flags

  Authored by Caitlyn Johnstone via Medium.com,

  When it comes to 9/11, there are two groups of people: those who don’t know exactly what happened, and those who orchestrated it.

  

  Nearly everyone on earth belongs in the former category, but a lot of folks like to pretend they have a rock solid understanding of the events which transpired on that fateful day in 2001. Scoffing mainstream adherents like to pretend they’re confident that the official narrative is accurate, but they aren’t. A lot of hardcore conspiracy analysts like to pretend they know the real story, but they don’t. There’s simply not enough publicly available information for anyone to be certain exactly how things went down that day; all we can know for sure is that (A) the official story is riddled with plot holes, and (B) the American power establishment has an extensive and well-documented history of using false flags and propaganda to manipulate the public into supporting evil acts of military interventionism.

  If you think you know for a fact that the official story of what happened on September 11, 2001 is the true account and that all conspiracy theories have been “debunked”, you are ignorant.

  If you think you know the precise details of how what really happened differs from the official story, you’ve spent way too much time diving down conspiracy theory rabbit holes and should probably ease off the weed. There’s no need to get all defensive and go bedding yourself down to one hard doctrine of certainty when the US power establishment has already discredited itself so thoroughly. It’s unnecessary to plunge deep into theory when these people’s track record is so firmly established in fact.

  Here are just a few of the times the US government is known to have distorted the reality of events in order to manufacture public support for military intervention, which is per definition what a false flag is:

  The False Nayirah Testimony

  On October 10, 1990 a 15 year-old girl known only as Nayirah testified before the Congressional Human Rights Caucus about the horrors that Iraqi troops were inflicting upon the people of Kuwait. Her testimony that hundreds of babies had been taken out of their incubators and left to die on hospital floors was repeated as fact by Amnesty International, the mass media, numerous senators, and President H. W. Bush, tugging at the heartstrings of America and manufacturing support for American action in the Gulf War.

  It was a lie. Nayirah was in fact the daughter of the Kuwaiti Ambassador to the US, and her TV-friendly “removing babies from incubators” testimony was false. It never happened.

  

  Former CIA Director Bush with the Kuwaiti Ambassador, who watched his daughter’s false testimony before congress

  The Gulf of Tonkin Incident

  In 2005 a declassified historical study by the NSA revealed that one of the two incidents which were used to propel America into the disastrous Vietnam War happened the opposite of the way it was reported to have happened, and the second of the two incidents did not happen at all. The allegation that there were “deliberate” and “unprovoked” attacks upon the US Navy in the Gulf of Tonkin on August 2 and August 4 of 1964 was solemnly affirmed by President Johnson, which led to the swift passage of the Gulf of Tonkin Resolution authorizing full presidential authority to commit US military power to the Vietnamese intervention.

  In reality the August 2 incident was not in any way “unprovoked”, and it was in fact America’s USS Maddox which fired upon North Vietnamese boats first. On August 4 there was no engagement with any ships whatsoever, with Johnson privately admitting a year later that “For all I know, our navy was shooting at whales out there.”

  The USS Maine

  “But when the smoke was over, the dead buried and the cost of the war came back to the people in an increase in the price of commodities and rent?—?that is, when we sobered up from our patriotic spree?—?it suddenly dawned on us that the cause of the Spanish-American War was the price of sugar.”

  ~ Emma Goldman

  This goes way back. The video above describes how the Spanish-American war was brought on by a highly suspicious explosion upon the USS Maine while it was docked at the Havana Harbor in 1898, combined with the anti-Spain narratives of the plutocrat-owned newspapers of that time. Like all US wars, it was extremely profitable and benefitted the very rich.

  *  *  *

  This tradition of using lies to rally the unwashed masses behind military endeavors on behalf of the rich and powerful has probably been going on since the dawn of civilization, and it is only humanity’s increasing adeptness at networking and sharing information which has enabled us to begin catching on to the deceitful manipulations of the people who rule us. Our history books are doubtless riddled with countless inaccuracies as to the real reasons underlying violent conflicts between various kingdoms and factions, because the few literate people who were permitted to write the official historic accounts of them had full control of the narrative at the time.

  This is why we’ve been seeing increasingly blatant panic from existing power structures about alternative media. Whoever controls the narrative controls the world. It is only by general societal consensus that power exists where it exists, that money works the way it works, etc. At any time the public could stop honoring existing power structures and create an entirely different model for itself, deciding to distribute resources and allocate responsibilities in a way that benefits more people more efficaciously than the current paradigm. It is only by their ability to manipulate and control the mainstream narrative that powerful people have been able to keep this from happening.

  If the power elites didn’t need the consent of the public to rule, they wouldn’t have to lie constantly about their reasons for war. The public would never consent to military interventions if politicians were allowed to appear on CNN and say “Yeah well America has become a stronghold for the most powerful plutocracy in the history of civilization and it needs to maintain its status as the world’s only superpower in order to protect the investments of that plutocracy. This is why we have to keep knocking the pillars of support out from underneath Russia and China, and why I get millions in re-election campaign donations.”

  My more pessimistic readers won’t like hearing this, but the reality is that Americans are basically good people who generally want what’s best for the world. If they weren’t, the unelected power establishment which rules over them wouldn’t have to keep making up lies about babies in incubators and protecting their family from Weapons of Mass Destruction in order to secure US hegemony. If they ever told the public the truth, they’d be dealing with hundreds of millions of heavily-armed Americans telling them to get their sociopathic asses out of here.

  Obama Urged Trump To Continue Neoconservative Foreign Policy#Trump #Obama #letter #neoconhttps://t.co/b4BMZqpof2

  — Caitlin Johnstone (@caitoz) September 4, 2017

  //platform.twitter.com/widgets.js

  What this means is that those of us who want what’s best for America and the world instead of endless war and economic oppression are necessarily locked in a media war with the plutocracy and its cronies. The populist alternative media owned and operated by ordinary people is the natural enemy of the plutocrat-owned mainstream media designed to prop up the existing power structure with establishment propaganda. Our ability to win this media war increases the more networked and internet-literate our society becomes, which is why the oligarchs have been working overtime to shut us down with corporate censorship.

  There is no reason to believe anything these lying sociopaths say, especially not about something that has served such a crucial role in their openly stated agenda to ensure US dominance over the world using its military and economic might. When you’ve got the extremely influential neoconservative think tank Project for the New American Century saying in September of 2000 that it would require “a new Pearl Harbor” to advance this agenda, and then getting exactly that one year later in an American tragedy which was used to manufacture support for greatly expanded US military interventionism, there’s no good reason to take all that in with a trusting “Yeah, that sounds legit.”

  These people are liars, and they are depraved. They have no problem using lies to kill a million Iraqis and thousands of US soldiers to advance their agendas, and there’s no reason to believe they wouldn’t kill US civilians as well. There’s no harm in familiarizing yourself with all the details about the various conspiracy theories surrounding 9/11 if that’s what you want to spend your brainpower on, but really all you need to know is that these people are known liars who have no problem slaughtering countless people to advance their agenda of global domination. There is no reason to trust them and many reasons not to. End of.

  *  *  *

  I’m a 100 percent reader-funded journalist so if you enjoyed this, please consider helping me out by sharing it around, liking me on Facebook, following me on Twitter, or throwing some money into my hat on Patreon.

  

  

• The Real Threat Remains – Brandon Smith Warns "Do Not Be Fooled By The Fed's Magic Show"

  Authored by Brandon Smith via Alt-Market.com,

  I remember back in mid-2013 when the Federal Reserve fielded the notion of a "taper" of quantitative easing measures. More specifically, I remember the response of mainstream economic analysts as well as the alternative economic community. I argued fervently in multiple articles that the Fed would indeed follow through with the taper, and that it made perfect sense for them to do so given that the mission of the central bank is not to protect the U.S. financial system, but to sabotage it carefully and deliberately. The general consensus was that a taper of QE was impossible and that the Fed would "never dare." Not long after, the Fed launched its taper program.

  

  Two years later, in 2015, I argued once again that the Fed would begin raising interest rates even though multiple mainstream and alternative sources believed that this was also impossible. Without low interest rates, stock buybacks would slowly but surely die out, and the last pillar holding together equities and the general economy (besides blind faith) would be removed. The idea that the Fed would knowingly take such an action seemed to be against their "best self interest;" and yet, not long after, they initiated the beginning of the end for artificially low interest rates.

  The process that the Federal Reserve has undertaken has been a long and arduous one cloaked in disinformation. It is a process of dismantlement. Through unprecedented stimulus measures, the central bank has conjured perhaps the largest stock and bond bubbles in history, not to mention a bubble to end all bubbles in the U.S. dollar.

  Stocks in particular are irrelevant in the grand scheme of our economy, but this does not stop the populace from using them as a reference point for the health of our system. This creates an environment rife with delusion, just as the open flood of cheap credit created considerable delusion before the crash of 2008.

  Today, we find our economic fundamentals in complete disarray, but the overwhelming fantasy within stocks still remains. Why? Because yet again, for some reason, no one is ready to accept the reality that the Fed is pulling the plug on America's fiscal life support. Nary a handful of economists in the world think that the Fed will raise interest rates one more time this year if ever again, and the threat of a balance sheet reduction is the furthest thing from everyone's mind. Daytrading investors are utterly convinced they have the Fed by the short hairs. I say, the situation is actually in reverse.

  The minutes from the Fed's July Open Market Committee Meeting indicate that while the central bank has been the savior of stock investors for several years, the party is about to end. Comments on the risks a bull market might pose to "financial stability" have been more frequent the past couple of months

  Only a few weeks ago, former Fed chairman Alan Greenspan commented that bond markets could collapse and bring stocks down with them do to overvaluations and increasing interest rates.

  Recent spikes in markets despite a steady stream of natural disasters, threats of war with North Korea, as well as "increased inflation" (according to Fed models) due to the damage wrought by Hurricane Harvey suggest that the Fed will indeed continue hiking rates into our ongoing financial collapse.

  The next FOMC meeting will conclude on the 20th of this month, and the question is, will the Fed surprise with a rate hike and/or balance sheet reduction program? I believe the odds are much higher than many people seem to think. [ZH: we now know that The Fed did announce the start of the balance sheet reduction program as Brandon forecast]

  First, let's be clear, historically the Fed's predictable behavior has been to skip major policy actions in September and then startle markets with renewed and aggressive actions in December. People placing bets on a Fed rate hike in September would look at this pattern and say "no way." However, the narrative I see building in Fed rhetoric and in the mainstream media is that stock markets have become "unruly children" and that the Fed must become a "stern parent," reigning them in before they are crushed under the weight of their own naive enthusiasm.

  In my view, the Fed will continue to do what it says it is going to do — raise interest rates and reduce and remove stimulus, and that the mainstream narrative will soon be adjusted to suggest that this is "necessary;" that stock markets need a bit of tough love.

  If the Fed means to follow through with its stated plans for "financial stability" in markets, then the only measure that would be effective in shell-shocking stocks back to reality would be a surprise hike, a surprise announcement of balance sheet reduction or both at the same time.

  If the Fed intends to continue cutting off life support to equities and bonds in preparation for a controlled demolition of the U.S. economy, then there is a high probability at the very least of a balance sheet reduction announcement this week with strong language indicating another rate hike in December. I also would not completely rule out a surprise rate hike even though September is usually a no-action month for central banks.

  This would fit the trend of central banks around the globe strategically distancing themselves from artificial support for the financial structure. Last week, the Bank of England surprised investors with an open indication that they may begin raising interest rates "in the coming months." The Bank Of Canada surprised some economists with yet another rate hike this month and mentions of "more to come." The European Central Bank has paved the way for a tapering of stimulus measures according to comments made during its latest meeting early this month. And, the Bank of Japan initiated taper measures in July.

  Even Forbes is admitting that there appears to be a "coordinated tightening of monetary policy" coming far sooner than the mainstream expects. If you understand how the Bank for International Settlements controls policy initiatives of national central bank members, then you should not be surprised that central banks all over the world are pursuing the same actions and the same rhetoric. The only difference between any of them is the pace they have chosen in taking the punch bowl away from the party.

  The point is, when it comes to the fiat peddlers, there are indeed a few sure things, but continued stimulus is not one of them. One thing that is certain is that they will act in concert as they are clearly doing now in terms of policy tightening. Another thing that is certain is that if they plant a notion in the mainstream media — such as the notion that they are "worried about overvaluations in stocks" and that interest rates must rise, then they will follow through as they always have. Perhaps not at the pace the mainstream expects, or the pace I expect, but certainly somewhere in-between.

  Finally, it behooves me to mention again that the Fed has done all of this before. In the lead up to the stock market crash of 1929, the central bank bloated stocks with easy credit measures and low interest rates, only to hike rates in the name of "quelling inflation." This hacked the legs out from under markets with a machete, and the rest is history. The hidden purpose behind this tactic is extraordinary centralization on a global scale. The Fed is not interested in the health of the U.S. economy, it is interested in total globalization of all economies under one totalitarian umbrella. To make an omelet, you have to break a few eggs.

  Of course, the Fed will not engineer a market crash in a vacuum. It is my suspicion that the next Fed meeting will be followed by a geopolitical distraction — the most likely candidate being increasing conflict with North Korea.

  Do not be fooled by the magic show. The real threat to us all is the central banking and international banking apparatus, including the BIS and the IMF. From now until the end of this year, remain vigilant.

  

  

• The Best Jobs Without A College Degree 2017 (In One Simple Chart)

  The Great Recession destroyed the job market for workers without college degrees, and the situation hasn’t gotten any better.

  This begs the question – can you still enjoy a high standard of living without a college degree? And what are the highest paying jobs for people without a traditional higher education?

  This new chart, from HowMuch.net, sheds some light on these pressing questions.

  

  The Bureau of Labor Statistics tracks which professions do not require a college education, how many people currently hold those jobs, and their median salaries. We combined this information into a scatter plot graph. The more dots you see, the more people work in that profession. And the higher the dots on the vertical axis, the more money they make.

  You can quickly see some pretty interesting trends. There are a lot of people without college degrees who make a great living. The median household income in the U.S. is $56,516. By that standard, all the jobs on our chart pay well above average.

  Specialization is the key to earning a high wage, especially in an area that cannot be outsourced. Elevator installers, power plant operators, transportation inspectors—these are all professions that require a high level of skill and must be done in person by someone with years of experience and certifications. Regardless of how automation affects the economy, you won’t ever be able to replace jobs like firefighting and law enforcement, despite what futuristic movies like Minority Report may have you believe.

  Top Ten Highest Paying Jobs Without Needing a Degree 

  1. Nuclear power reactor operator – $91,170 (salary) & 7,170 (workers)

  2. Transport manager – $89,190 (salary) & 113,270 (workers)

  3. Police supervisor – $84,840 (salary) & 100,200 (workers)

  4. Power distributor – $81,900 (salary) & 11,380 (workers)

  5. Elevator installer – $78,890 (salary) & 22,240 (workers)

  6. Detective – $78,120 (salary) & 104,980 (workers)

  7. Commercial pilot – $77,200 (salary) & 38,980 (workers)

  8. Media equipment worker – $75,700 (salary) & 18,620 (workers)

  9. Electrician – $75,670 (salary) & 23,060 (workers)

  10. Power plant operator – $74,690 (salary) & 35,010 (workers)

  And now, a word of caution. The top 25 professions where you don’t need a college degree only employ about 1.4 million people. That’s a lot of people, but the entire working population in the U.S. is over 205 million people. In other words, these jobs not only demand years of experience and specialization, but they’re also pretty rare. And don’t be mistaken: you may not need a college degree, but you do need some type of post-secondary training. You can’t just graduate high school and start your own electrical company. You have to work as an apprentice or join a training program first.

  That being said, it’s still possible for people without a formal college education to earn a respectable salary. The big takeaway from our chart is that you want to be in a position that can’t easily be replaced through automation or outsourcing. If you can find a career like that, then you’re in good shape to enjoy a high standard of living.

  

  

• Pepe Escobar Unmasks Trump Doctrine: Carnage For New Axis Of Evil

  Authored by Pepe Escobar via The Asia Times,

  North Korea, Iran, Venezuela are targets in "compassionate" America's war on the "wicked few." It's almost as though Washington felt its hegemony threatened…

  

  Paul Delaroche, Napoléon à Fontainebleau, 1840. With other global powers increasingly at odds with US foreign policy under Donald Trump, the nation's hegemony on the world stage may soon face its own crisis point.

  This was no “deeply philosophical address”. And hardly a show of  “principled realism” – as spun by the White House. President Trump at the UN was “American carnage,” to borrow a phrase previously deployed by his nativist speechwriter Stephen Miller.

  One should allow the enormity of what just happened to sink in, slowly. The president of the United States, facing the bloated bureaucracy that passes for the “international community,” threatened to “wipe off the map” the whole of the Democratic People’s Republic of Korea (25 million people). And may however many millions of South Koreans who perish as collateral damage be damned.

  Multiple attempts have been made to connect Trump’s threats to the madman theory cooked up by “Tricky Dicky” Nixon in cahoots with Henry Kissinger, according to which the USSR must always be under the impression the then-US president was crazy enough to, literally, go nuclear. But the DPRK will not be much impressed with this madman remix.

  That leaves, on the table, a way more terrifying upgrade of Hiroshima and Nagasaki (Trump repeatedly invoked Truman in his speech). Frantic gaming will now be in effect in both Moscow and Beijing: Russia and China have their own stability / connectivity strategy under development to contain Pyongyang.

  The Trump Doctrine has finally been enounced and a new axis of evil delineated. The winners are North Korea, Iran and Venezuela. Syria under Assad is a sort of mini-evil, and so is Cuba. Crucially, Ukraine and the South China Sea only got a fleeting mention from Trump, with no blunt accusations against Russia and China. That may reflect at least some degree of realpolitik; without “RC” – the Russia-China strategic partnership at the heart of the BRICS bloc and the Shanghai Cooperation Organization (SCO) – there’s no possible solution to the Korean Peninsula stand-off.

  In this epic battle of the “righteous many” against the “wicked few,” with the US described as a “compassionate nation” that wants “harmony and friendship, not conflict and strife,” it’s a bit of a stretch to have Islamic State – portrayed as being not remotely as “evil” as North Korea or Iran – get only a few paragraphs.

  The art of unraveling a deal

  According to the Trump Doctrine, Iran is “an economically depleted rogue state whose chief exports are violence, bloodshed and chaos,” a “murderous regime” profiting from a nuclear deal that is “an embarrassment to the United States.”

  Iranian Foreign Minister Mohammad Javad Zarif tweeted: “Trump’s ignorant hate speech belongs in medieval times – not the 21st century UN – unworthy of a reply.” Russian Foreign Minister Sergey Lavrov once again stressed full support for the nuclear deal ahead of a P5+1 ministers’ meeting scheduled for Wednesday, when Zarif was due to be seated at the same table as US Secretary of State Rex Tillerson. Under review: compliance with the deal. Tillerson is the only one who wants a renegotiation.

  Iran’s President Hassan Rouhani has, in fact, developed an unassailable argument on the nuclear negotiations. He says the deal – which the P5+1 and the IAEA all agree is working – could be used as a model elsewhere. German chancellor Angela Merkel concurs. But, Rouhani says, if the US suddenly decides to unilaterally pull out, how could the North Koreans possibly be convinced it’s worth their while to sit down to negotiate anything with the Americans ?

  What the Trump Doctrine is aiming at is, in fact, a favourite old neo-con play, reverting back to the dynamics of the Dick Cheney-driven Washington-Tehran Cold War years.

  This script runs as follows: Iran must be isolated (by the West, only now that won’t fly with the Europeans); Iran is “destabilizing” the Middle East (Saudi Arabia, the ideological foundry of all strands of Salafi-jihadism, gets a free pass); and Iran, because it’s developing ballistic that could – allegedly – carry nuclear warheads, is the new North Korea.

  That lays the groundwork for Trump to decertify the deal on October 15. Such a dangerous geopolitical outcome would then pit Washington, Tel Aviv, Riyadh and Abu Dhabi against Tehran, Moscow and Beijing, with European capitals non-aligned. That’s hardly compatible with a “compassionate nation” which wants “harmony and friendship, not conflict and strife.”

  Afghanistan comes to South America

  The Trump Doctrine, as enounced, privileges the absolute sovereignty of the nation-state. But then there are those pesky “rogue regimes” which must be, well, regime-changed. Enter Venezuela, now on “the brink of total collapse,” and run by a “dictator”; thus, America “cannot stand by and watch.”

  No standing by, indeed. On Monday, Trump had dinner in New York with the presidents of Colombia, Peru and Brazil (the last indicted by the country’s Attorney General as the leader of a criminal organization and enjoying an inverted Kim dynasty rating of 95% unpopularity). On the menu: regime change in Venezuela.

  Venezuelan “dictator” Maduro happens to be supported by Moscow and, most crucially, Beijing, which buys oil and has invested widely in infrastructure in the country with Brazilian construction giant Odebrecht crippled by the Car Wash investigation.

  The stakes in Venezuela are extremely high. In early November, Brazilian and American forces will be deployed in a joint military exercise in the Amazon rainforest, at the Tri-Border between Peru, Brazil and Colombia. Call it a rehearsal for regime change in Venezuela. South America could well turn into the new Afghanistan, a consequence that flows from Trump’s assertion that “major portions of the world are in conflict and some, in fact, are going to hell.”

  For all the lofty spin about “sovereignty”, the new axis of evil is all about, once again, regime change.

  Russia-China aim to defuse the nuclear stand-off, then seduce North Korea into sharing in the interpenetration of the Belt and Road Initiative (BRI) and the Eurasia Economic Union (EAEU), via a new Trans-Korea Railway and investments in DPRK ports. The name of the game is Eurasian integration.

  Iran is a key node of BRI. It’s also a future full member of the SCO, it’s connected – via the North-South Transport Corridor – with India and Russia, and is a possible future supplier of natural gas to Europe. The name of the game, once again, is Eurasian integration.

  Venezuela, meanwhile, holds the largest unexplored oil reserves on the planet, and is targeted by Beijing as a sort of advanced BRI node in South America.

  The Trump Doctrine introduces a new set of problems for Russia-China. Putin and Xi do dream of reenacting a balance of power similar to that of the Concert of Europe, which lasted from 1815 (after Napoleon’s defeat) until the brink of World War I in 1914. That’s when Britain, Austria, Russia and Prussia decided that no European nation should be able to emulate the hegemony of France under Napoleon.

  In sitting as judge and executioner, Trump’s “compassionate” America certainly seems intent on echoing such hegemony.

  

  

• Digital-Currency Milestone: Somebody Just Bought A House With Bitcoin

  A day after Bridgewater Associates Founder Ray Dalio claimed that bitcoin was "definitely in a bubble" partly because he said the digital currency was too difficult to spend, CoinTelegraph is reporting that the first-ever bitcoin-only real-estate transaction has been completed in Texas.

  The transaction "illustrates crypto's potential to transform how financial transactions are conducted," according to Futurism.com.

  The Texas-based real estate brokerage firm Kuper Sotheby’s International Realty, the firm that reperesented the buyer, declined to disclose the number of bitcoins that were exchanged for the home. Futurism.com noted the ease with which the transaction was conducted. "The buyer simply transferred the bitcoin to the seller, who then converted it into US dollars."

  

  “In all of my 33 years of closing transactions, I honestly couldn’t have expected something so unique to go so smoothly,” Kuper Sotheby’s Sheryl Lowe, the buyer’s agent, said in a press release. “In a matter of 10 minutes, the bitcoin was changed to U.S. dollars and the deal was done!”

  Located in the central part of Austin, the property is just a few miles away from downtown.

  Futurism opines that the real estate transaction is "further proof" that bitcoin isn’t “a fraud." Instead, the transaction is another example of the increasing acceptance of cryptocurrencies, which are poised to revolutionize a variety of industries beyond finance, from transportation to entertainment to politics.

  According to Futurism, the home has grand entertaining areas, a master suite, and a chef-worthy kitchen. Sheryl Lowe of Kuper Sotheby’s that she “honestly couldn’t have expected something so unique to go so smoothly.” She said the seller was able to convert the bitcoin into US dollars in a matter of minutes.

  “In a matter of 10 minutes, the Bitcoin was changed to US Dollars and the deal was done!” she said in a statement.

  News of the sale comes about a week after one UK company focused on building affordable housing for young professionals said it would begin accepting bitcoin for down payments on its properties.

  Hear that, Ray?

  * * *

  Bitcoin has largely recovered from a selloff earlier in the month that was triggered by news that Chinese authorities were cracking down on local exchanges after banning initial coin offerings. The selloff worsened after JP Morgan Chase & CO CEO Jamie Dimon called bitcoin a "fraud" and said he would fire any traders caught speculating in it. One coin was trading at $4,006 on CoinDesk Wednesday morning.

  Earlier today, we noted that the price of a share of the Swiss National Bank climbed back above the price of one bitcoin on Wednesday thanks to a 13% jump. The bitcoin price, meanwhile, was largely flat.

  

  

  

• "Racist" UCLA Professor Claims "Excessive Immigration" Is Hurting American Citizens

  Authored by Toni Airaksinen via CampusReform.org,

  University of California, Los Angeles research professor recently slammed the impact of “excessive immigration” on the labor market in a message to the campus community.

  

  Benjamin Zuckerman, professor of Astronomy and president of Californians for Population Stabilization, argued in an essay for The Daily Bruin that immigration, both legal and illegal, has a negative impact on native-born Americans.

  “For many years the United States has admitted a million legal immigrants a year. This, combined with illegal immigration, has had a significant impact on low-income American workers, who are disproportionately persons of color,” Zuckerman contends.

  Due to high rates of immigration, there is an unusually “abundant pool of cheap labor,” which he argues “contributes to the transfer of wealth from lower to upper strata of society, thus increasing income inequality.”

  “This is one reason why Californians for Population Stabilization supports reduced levels of immigration, and not because of ‘racism’ or ‘xenophobia,’” he assures his readers, responding to an op-ed written by UCLA alum Hector Prado, which alleged that Zuckerman’s anti-immigration work is rooted in exactly those prejudices.

  While students at UCLA have been quick to allege that Zuckerman is racist, his arguments are undergirded by concern with overpopulation, not immigration per se, and the mission of his own organization is rooted in concern over California’s burgeoning population.

  “California’s population has doubled, from 20 million to nearly 40 million in just the last forty years,” the website states.

   

  “More population growth has meant more pollution, more degradation of our environmental treasures, more traffic, overcrowded schools, higher taxes, longer waits at emergency rooms, [and] even more job competition.”

  However, Californians for Population Stabilization take care to note that immigration itself isn’t bad, but simply that “America’s antiquated immigration policy” causes problems, arguing that the country imports “millions of people with little to no regard for whether they have a skill set that matches the country’s economic needs.”

  In his essay for The Bruin, Zuckerman even suggests that population stabilization is consistent with left-wing values such as concern over climate change.

  "The importance of a prompt stabilization of the U.S. population is not a newfound concept,” he writes.

   

  “In fact, it was highlighted as one of the two most important steps the U.S. must take toward sustainability, according to the 1996 Population and Consumption Task Force Report of former President Bill Clinton’s Council on Sustainable Development.”

  Zuckerman concludes by insisting that “this nation can no longer afford to delay reasoned discussion about explosive population growth.”

  Campus Reform reached out to Zuckerman for an interview, but he was unable to respond in time for publication.

  

  

• "No-Call, No-Show" Employees: Opioid Addiction Is Devastating American Manufacturers

  We’ve spent a lot of time of late discussing the impact of opioids on the American workforce.  While it is unclear exactly how much of an impact opioids are having on the steadily declining labor force participation rate, one thing is clear: nearly half of working age men not in the labor force today take some form of opioids on a daily basis.

  But, as Bloomberg points out today, drug abuse among those still gainfully employed is perhaps an even bigger problem for American manufacturing employers because of the safety concerns it presents.  Meanwhile, the additional drug testing costs associated with maintaining a safe work environment, in an era in which opioid addiction is spiraling out of control, tend to “mount up” as additional employees are required just to manage rigorous testing programs.

  At Philip Tulkoff’s food-processing plant in Baltimore, machines grind tough horseradish roots into puree. “If you put your arm in the wrong place,” the owner says, “and you’re not paying attention, it’s going to pull you in.” It’s not a good place to be intoxicated.

   

  Drug abuse in the workforce is a growing challenge for American business. While economists have paid more attention to the opioid epidemic’s role in keeping people out of work, about two-thirds of those who report misusing pain-relievers are on the payroll. In the factory or office, such employees can be a drag on productivity, one of the U.S. economy’s sore spots. In the worst case, they can endanger themselves and their colleagues.

   

  That’s why Tulkoff practices zero-tolerance. One randomly chosen employee gets tested every month, “and we’re gonna move it to two.” The costs mount up: He has to hire a third-party company to select the worker, and pay the clinic to conduct tests. Money is wasted training workers who subsequently drop out when they fail the screening.

   

  “We caught someone recently, saw him injecting,’’ said Jay Steinmetz, chief executive of Barcoding Inc. The Baltimore company creates software, and provides equipment, that helps businesses manage their inventory. It’s a desk environment, with none of the grinding machinery that poses risks for Tulkoff’s staff.

  Of course, other manufacturing companies have decided to take the opposite approach on drug testing as too rigorous a program would inevitably just result in excessive layoffs in an already tight labor market.

  It’s no wonder that not every boss is as rigorous as Tulkoff. “I know people who’ve said, ‘I can’t do it, I would lose too many people’,” he says.

   

  At the moment, 57 percent of employers say they perform drug tests, according to the National Safety Council. Out of those, more than 40 percent don’t screen for synthetic opioids like oxycodone — among the most widely abused narcotics, and one of the substances that new federal rules are targeting.

   

  “I have heard manufacturers over the years say, ’We wish we didn’t have to test for drugs,’ because they lose money when they can’t fill those positions,’’ he said.

  

   

  Meanwhile, “no-call, no-show” employees, those who simply take a job just long enough to score their next hit, are devastating to workplace productivity.

  And there’s no guarantee that new hires will stick around. Drug problems are accelerating the turnover among staff.

   

  “In the last three weeks, we’ve had six people come, get trained, and then are no-call, no-shows,’’ Greenblatt said. He said the biggest loss comes from taking high-performing employees out of the production process so they can train new hires. “That person is diverted into the completely unproductive task of teaching someone who’s going to leave in a day or two.’’

   

  Productivity growth in the U.S. economy has been slowing for decades. There’s little consensus about the causes. But there are signs that the spread of drug-abuse could be contributing to the problem.

  One Ohio factory owner shared her story with WTVR saying that although she has numerous blue-collar jobs available at her company, she struggles to fill positions because so many candidates fail drug tests. Regina Mitchell, co-owner of Warren Fabricating & Machining in Hubbard, Ohio, told The New York Times that four out of 10 applicants otherwise qualified to be welders, machinists and crane operators will fail a routine drug test. While not quite as bad as the adverse hit rate hinted at by the Beige Book, this is a stunning number, and one which indicates of major structural changes to the US labor force where addiction and drugs are keeping millions out of gainful (or any, for that matter) employment.

  Speaking to CNN’s Michael Smerconish, Mitchell said that her requirements for prospective workers were simple: “I need employees who are engaged in their work while here, of sound mind and doing the best possible job that they can, keeping their fellow co-workers safe at all times,” she said.

  This has proven to be a problem.

  “We have a 150-ton crane in our machine shop. And we’re moving 300,000 pounds of steel around in that building on a regular basis. So I cannot take the chance to have anyone impaired running that crane, or working 40 feet in the air.”

  While President Trump addressed his blue-collar base in Ohio this week, returning to his campaign theme of getting local communities back to work and returning jobs to America from overseas, the problem may not be a scarcity of jobs: it is workers who are not under the influence. As Mitchell said she has jobs… she just doesn’t have sober applicants. For 48 of the 50 years her company has been around, drug abuse had never been an issue, she told Smerconish.

  “It hasn’t been until the last two years that we needed to have a policy, a corporate policy in place, that protects us from employees coming into work impaired,” she said.

  Maybe instead of focusing how to perpetuate the US waiter and bartender job recovery, the BLS – and the administration – should contemplate how to eliminate the pervasive addiction problem which is rapidly becoming a structural hurdle for America’s millions of unemployed.

  

  

• Even Bartenders And Personal Trainers Can Receive Whistleblower Awards From The SEC

  Authored by Jordan A. Thomas, chair of the whistleblower practice at the law firm of Labaton Sucharow

  Crafted by an ad agency immediately following 9/11, the slogan “if you see something, say something” took hold with astonishing speed. The tagline reflected a tectonic cultural shift; the serious and growing need for public participation in the nation’s enforcement paradigm. In many ways, those six words have come to define a change in guard in which government has effectively deputized everyday citizens to be its eyes and ears.

  The Securities and Exchange Commission sought a similar kind of cooperation with a revolutionary program that provides whistleblowers the ability to report anonymously and receive significant monetary awards and employment protections for tipping the agency to federal securities violations.  Its “deputies” are rewarded handsomely. Since its launch, the program has received tens of thousands of tips and has paid out approximately $158 million from a replenishing account funded by penalties, not taxpayer dollars.   

  

  Remarkably, only about half of whistleblower award recipients were current or former employees of the subject companies, according to a 2015 report to Congress by the SEC. While that figure inched up in the subsequent year, even at our firm's practice, over one-quarter of whistleblower clients were not employed by the companies on which they reported. So who are these outsiders and how are they changing the game?

  Who Can Blow the Whistle?

  Almost anyone can be an SEC whistleblower. Eligibility is more defined by the nature of the intelligence, than the source. That is, qualifying information provided by a tipster must be original and derived from either independent knowledge or independent analysis. Generally, where a whistleblower works does not factor into the eligibility calculus. Whistleblowers can be analysts, forensic accountants, secretaries, investors and even journalists. We have also met successful whistleblowers who gained their knowledge from a personal relationships with individuals at the subject companies. The net is wide; even bartenders, hair stylists and personal trainers could be eligible to receive a monetary award if they learn about possible securities violations from their clients.   

  This broad eligibility also extends to outside advisors of the company in question. Pursuant to the SEC guidelines, so-called gatekeepers such as officers, directors, attorneys, accountants and compliance professionals can be whistleblowers, although they must satisfy special procedural requirements. For instance, lawyers must carefully navigate their professional responsibilities, such as the attorney-client privilege.

  Outsiders In Action: Historical Awards

  When it comes to shining a light on corporate wrongdoing outsiders play a vital role. Consider the case of medical device company Orthofix International NV, which earlier this year agreed to pay over $14 million to settle charges that it improperly booked revenues and made payments to Brazilian doctors in violation of the Foreign Corrupt Practices Act. Four former executives also agreed to pay penalties to settle cases related to the accounting failures.

  The case is significant because my firm's clients, the Orthofix whistleblowers, were two independent financial analysts who performed the extensive detective work that enabled the SEC to bring its case. The analysts initially had a hunch that something about the company’s financial performance looked “odd.” They examined publicly available financial information and compared Orthofix’s reported sales and inventory turnover data with that of its peers to unearth evidence of suspicious practices. The whistleblower submission, supported by work from our in-house investigative team, included extensive briefing documents and analysis, which armed the SEC for a successful enforcement action. The analysts will be well rewarded for their diligence and determination: their award is expected to total at least $2.5 million.

  In a more recent example, on July 25, 2017, the SEC announced a whistleblower award of nearly $2.5 million to an employee of a domestic government agency. The related SEC order noted that, in general, an employee of a federal, state or local government agency can be a qualified whistleblower. There are some exceptions that apply to employees of certain regulatory agencies or law enforcement organizations, who are charged with uncovering legal violations as part of their responsibilities.

  Last year, in announcing an award of more than $700,000 to an outsider who provided the SEC with a detailed analysis that led to a successful enforcement action, Andrew Ceresney, then Director of the SEC’s Enforcement Division, affirmed the important role of outsiders in the new enforcement paradigm: “The voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders.”

  Finally, what was likely the first award issued to an outsider was also one of the largest SEC whistleblower awards ever made. In October 2013, the SEC awarded $14.7 million to an individual who provided key information to halt an ongoing scheme. Years later, in subsequent litigation with his partners, the whistleblower was identified as an investment fund manager who provided information regarding a visa-for-sale scam perpetrated by a Chicago man who raised $147 million from Chinese investors.

  What’s A Outsider To Do?

  In some respects, outsiders are free from certain pressures that plague employee whistleblowers who anticipate workplace retaliation or may have executed secrecy agreements that attempt to bar the reporting of misconduct. While both are illegal, such instruments and behaviors force employee whistleblowers to operate from positions of fear. Outsiders, on the other hand, can stand up and speak out against wrongdoing from an entirely different platform. And there is no doubt that in crafting the guidelines, the SEC fully intended and expected that outsiders would play a key role in helping to detect and deter securities violations. Indeed, during my tenure at the SEC, I was a part of the small group that developed the statutory and regulatory provisions of the whistleblower program. Recognizing that a panoply of individuals outside of the defendant companies could have actionable intelligence, we designed a program that ensures that virtually all knowledgeable individuals can speak up about possible securities violations—regardless of whether they are insiders or outsiders.    

  Nevertheless, it can be tricky for outsiders to move from hunch to knowledge and suspicion to proof. When information about potential violations is based on professional judgment rather than firsthand knowledge, it is mission critical to verify suspicions with in-depth analysis or other tangible (legally acquired) evidence. In our practice, our investigative team is led by a former FBI agent who calls upon seasoned investigators and financial analysts to support our clients’ submissions. This is particularly important for our clients outside the violating company, who want to confirm their suspicions or fill in any evidentiary gaps.

  At the end of the day, whether an individual suspects fraud from a distance or is smack dab in the midst of its damaging spiral, law enforcement authorities need the public’s help and should haven’t to go it alone. Frauds are too complex, too far-reaching and our enforcers stretched too thin. This is a public-private partnership of the highest order and the greatest necessity. If tiplines and overt vigilance are the ‘new normal,’ those who report misconduct are the heroes of our generation. And the government will reward their courage.

  So much for “tattletales.”

  

  

• This $700 Billion Public Employee Ticking Time Bomb Is Only 6.7% Funded; Most States Are Under 1%

  We’ve spent a lot of time of late discussing the inevitable public pension crisis that will eventually wreak havoc on global financial markets.  And while the scale of the public pension underfunding is unprecedented, with estimates ranging from $3 – $8 trillion, there is another taxpayer-funded retirement benefit that has been promised to union workers over the years that puts pensions to shame…at least on a percentage funded basis.

  Other Post-Employment Benefits (OPEB), like pensions, are a stream of future payments that have been promised to retirees primarily to cover healthcare costs.  However, unlike pensions, most government entities don’t even bother to accrue assets for this massive stream of future costs resulting in $700 billion of liabilities that most taxpayer likely didn’t even know existed. 

  As a study from Pew Charitable Trusts points out today, the average OPEB plan in the U.S. today is only 6.7% funded (and that’s if you believe their discount rates…so probably figure about half that amount in reality) and many states around the country are even worse.

  States paid a total of $20.8 billion in 2015 for non-pension worker retirement benefits, known as other post-employment benefits (OPEB).  Almost all of this money was spent on retiree health care. The aggregate figure for 2015, the most recent year for which complete data are available, represents an increase of $1.2 billion, or 6 percent, over the previous year. The 2015 payments covered the cost of current-year benefits and in some states included funding to address OPEB liabilities. These liabilities—the cost of benefits, in today’s dollars, to be paid in future years—totaled $692 billion in 2015, a 5 percent increase over 2014.

   

  In 2015, states had $46 billion in assets to meet $692 billion in OPEB liabilities, yielding a funded ratio of 6.7 percent. The total amount of assets was slightly higher than the reported $44 billion in 2014, though the funding ratio did not change. The average state OPEB funded ratio is low because most states pay for retiree health care benefits on a pay-as-you-go basis, appropriating revenue annually to pay retiree health care costs for that year rather than pre-funding liabilities by setting aside assets to cover the state’s share of future retiree health benefit costs.

   

  State OPEB funded ratios vary widely, from less than 1 percent in 19 states to 92 percent in Arizona. As Figure 1 shows, only eight have funded ratios over 30 percent. These states typically follow pre-funding policies spelled out in state law. Many of them also make use of the expertise of staff from the state pension system to invest and manage plan assets.

  

   

  Looking at the problem on a relative basis, you find that several states have accrued net OPEB liabilities totaling in excess of 10% of the personal income generated within their borders.

  Pew compared states 2015 OPEB liabilities with 2015 state personal income to show these liabilities in relation to the potential resources that states could draw on to cover the liabilities. The major ratings agencies and other financial research organizations commonly use personal income as a metric to illustrate untapped revenue sources and as an indicator of how flexible states can be in meeting their obligations under changing budget conditions. The research shows significant overall reported OPEB liabilities, but the relative size varies widely. (See Figure 2).

   

  The primary driver for the variation in OPEB liabilities is the difference in how states structure health care benefits for retirees. As a percentage of personal income, the liabilities range from less than 1 percent in 16 states to 16 percent in New Jersey.  Alaska, which has the highest ratio of liabilities to personal income at 42 percent, is a clear outlier among the 50 states because of generous benefit levels that can reach up to 90 percent of premiums for some retired workers. States that provide eligible retirees a monthly contribution equal to a flat percentage of the health insurance coverage premium report the largest liabilities—and could face the greatest fiscal challenges because their costs automatically increase as plan premiums do.

   

  Conversely, those states with fixed-dollar premium subsidies provide a smaller benefit and report lower liabilities. Their exposure to health care cost inflation is also lower, because a fixed-dollar subsidy does not rise with the plan premium.  Lastly, the states that only provide access to a retiree health plan, with no subsidy, have the lowest liabilities as a percentage of personal income.  Although these plans do not make an explicit monthly premium contribution to retirees, many offer retirees a reduced premium through a group rate, which is an implicit subsidy. The Governmental Accounting Standards Board (GASB), the private, independent organization that sets accounting and financial reporting standards for U.S. state and local governments, requires plans to recognize these implicit subsidies in plan financial reporting.

  

   

  Meanwhile, the cost increases of healthcare premiums seem to massively exceed inflation and/or wage growth year after year.

  In contrast, a number of states with higher premium contributions—including California and New Jersey—reported significantly greater liabilities beginning in 2014, reflecting increases in assumed future costs.   California’s plan actuary attributed $7.1 billion of the state’s $7.9 billion liability increase to changing demographic assumptions to account for longer retiree life expectancy in that year.New Jersey’s 2014 hike included a 5 percent increase in liabilities caused by changes in its mortality assumptions and a 9 percent jump linked to changes in health care cost assumptions. For states with the largest year-over-year change in OPEB liabilities, changes in assumptions were the largest driver in increasing costs.

  But we’re sure it’s OK, it’s not as if there is a massive wave of baby boomers that are about to retire and ask for these benefits to be paid anytime in the near future…

  

  

  

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• How The Military Defeated Trump's Insurgency

  Via Moon of Alabama blog,

  Trump was seen as a presidential candidate who would possibly move towards a less interventionist foreign policy.

  

  That hope is gone. The insurgency that brought Trump to the top was defeated by a counter-insurgency campaign waged by the U.S. military. (Historically its first successful one).

  The military has taken control of the White House process and it is now taking control of its policies.

  It is schooling Trump on globalism and its "indispensable" role in it. Trump was insufficiently supportive of their desires and thus had to undergo reeducation:

  When briefed on the diplomatic, military and intelligence posts, the new president would often cast doubt on the need for all the resources.

   

  Defense Secretary Jim Mattis and Secretary of State Rex Tillerson organized the July 20 session to lay out the case for maintaining far-flung outposts — and to present it, using charts and maps, in a way the businessman-turned-politician would appreciate.

  Trump was hauled into a Pentagon basement 'tank' and indoctrinated by the glittering four-star generals he admired since he was a kid:

  The session was, in effect, American Power 101 and the student was the man working the levers. It was part of the ongoing education of a president who arrived at the White House with no experience in the military or government and brought with him advisers deeply skeptical of what they labeled the “globalist” worldview.

   

  In coordinated efforts and quiet conversations, some of Trump’s aides have worked for months to counter that view, hoping the president can be persuaded to maintain — if not expand — the American footprint and influence abroad.

  Trump was sold the establishment policies he originally despised. No alternative view was presented to him.

  It is indisputable that the generals are now ruling in Washington DC. They came to power over decades by shaping culture through their sponsorship of Hollywood, by manipulating the media through "embedded" reporting and by forming and maintaining the countries infrastructure through the Army Corps of Engineers. The military, through the NSA as well as through its purchasing power, controls the information flow on the internet. Until recently the military establishment only ruled from behind the scene. The other parts of the power triangle, the corporation executives and the political establishment, were more visible and significant. But during the 2016 election the military bet on Trump and is now, after he unexpectedly won, collecting its price.

  Trump's success as the "Not-Hillary" candidate was based on an anti-establishment insurgency. Representatives of that insurgency, Flynn, Bannon and the MAGA voters, drove him through his first months in office. An intense media campaign was launched to counter them and the military took control of the White House. The anti-establishment insurgents were fired. Trump is now reduced to public figure head of a stratocracy – a military junta which nominally follows the rule of law.

  Stephen Kinzer describes this as America’s slow-motion military coup:

  Ultimate power to shape American foreign and security policy has fallen into the hands of three military men […]

   

  …

   

  Being ruled by generals seems preferable to the alternative. It isn’t.

   

  …

   

  [It] leads toward a distorted set of national priorities, with military “needs” always rated more important than domestic ones.

   

  …

   

  It is no great surprise that Trump has been drawn into the foreign policy mainstream; the same happened to President Obama early in his presidency. More ominous is that Trump has turned much of his power over to generals. Worst of all, many Americans find this reassuring. They are so disgusted by the corruption and shortsightedness of our political class that they turn to soldiers as an alternative. It is a dangerous temptation.

  The country has fallen to that temptation even on social-economic issues:

  In the wake of the deadly racial violence in Charlottesville this month, five of the Joint Chiefs of Staff were hailed as moral authorities for condemning hate in less equivocal terms than the commander in chief did.

   

  …

   

  On social policy, military leaders have been voices for moderation.

  The junta is bigger than its three well known leaders:

  Kelly, Mattis and McMaster are not the only military figures serving at high levels in the Trump administration. CIA Director Mike Pompeo, Attorney General Jeff Sessions, Energy Secretary Rick Perry and Interior Secretary Ryan Zinke each served in various branches of the military, and Trump recently tapped former Army general Mark S. Inch to lead the Federal Bureau of Prisons.

   

  …

   

  the National Security Council [..] counts two other generals on the senior staff.

  This is no longer a Coup Waiting to Happen The coup has happened with few noticing it and ever fewer concerned about it. Everything of importance now passes through the Junta's hands:

  [Chief of staff John] Kelly initiated a new policymaking process in which just he and one other aide […] will review all documents that cross the Resolute desk.

   

  …

   

  The new system [..] is designed to ensure that the president won’t see any external policy documents, internal policy memos, agency reports and even news articles that haven’t been vetted.

  To control Trump the junta filters his information input and eliminates any potentially alternative view:

  Staff who oppose [policy xyz] no longer have unfettered access to Trump, and nor do allies on the outside [.. .] Kelly now has real control over the most important input: the flow of human and paper advice into the Oval Office. For a man as obsessed about his self image as Trump, a new flow of inputs can make the world of difference.

  The Trump insurgency against the establishment was marked by a mostly informal information and decision process. That has been destroyed and replaced:

  Worried that Trump would end existing US spending/policies (largely, still geared to cold war priorities), the senior military staff running the Trump administration launched a counter-insurgency against the insurgency.

   

  …

   

  General Kelly, Trump's Chief of Staff, has put Trump on a establishment-only media diet.

   

  …

   

  In short, by controlling Trump's information flow with social media/networks, the generals smashed the insurgency's OODA loop (observe, orient, decide, act). Deprived of this connection, Trump is now weathervaning to cater to the needs of the establishment …

  The Junta members dictate their policies to Trump by only proposing to him certain alternatives. The one that is most preferable to them will be presented as the only desirable one. "There are no alternatives," Trump will be told again and again.

  Thus we get a continuation of a failed Afghanistan policy and will soon get a militarily aggressive policy towards Iran.

  Other countries noticed how the game has changed. The real decisions are made by the generals, Trump is ignored as a mere figurehead:

  Asked whether he was predicting war [with North Korea], [former defence minister of Japan, Satoshi] Morimoto said: "I think Washington has not decided … The final decision-maker is [US Defence Secretary] Mr Mattis … Not the president."

  Climate change, its local catastrophes and the infrastructure problems it creates within the U.S. will further extend the military role in shaping domestic U.S. policy.

  Nationalistic indoctrination, already at abnormal heights in the U.S. society, will further increase. Military control will creep into ever extending fields of once staunchly civilian areas of policy. (Witness the increasing militarization of the police.)

  It is only way to sustain the empire.

  It is doubtful that Trump will be able to resist the policies imposed on him. Any flicker of resistance will be smashed. The outside insurgency which enabled his election is left without a figurehead, It will likely disperse. The system won.

  

  

• The Future Of Artificial Intelligence (According To Pop Culture)

  The unpredictable nature of super-intelligent, self-improving machines lends itself quite nicely to the dramatic storylines of movies and books.

  It’s a science fiction writer’s dream – as Visual Capitalist's Jeff Desjardins warns: if AI becomes smart enough to create more advanced versions of itself, pretty much every outcome is on the table. Machines could empower humanity to become enlightened and virtuous. On the less optimistic side? Machines could instead ruthlessly enslave all of humankind to tickle their own warped sense of satisfaction.

  POP CULTURE PERSPECTIVES

  From the plot of movies like The Terminator to The Matrix, pop culture offers up innumerable examples of what could happen from the rise of the machines – and most of them, as you can imagine, steer towards the less optimistic side of the spectrum.

  Today’s infographic from BBC Future provides an entertaining take on these scenarios, organized by potential likelihood.

  

  Courtesy of: Visual Capitalist

  Some experts see AI having a $15.7 trillion impact on our economy, but pop culture offers up a slightly different perspective of what the future may hold.

  FUTURE AI SCENARIOS

  Here are just some of the scenarios offered up in mainstream movies, books, and television shows. Some are apocalyptic and dystopian, and some seem just plain bizarre:

  Seductive Siris: In 2013’s Her, Joaquin Phoenix falls in love with an intelligent operating system named Samantha.

   

  Self-Replicating AI: In 1995’s Screamers, scientists create a self-replicating weapon with one purpose: to destroy all life.

   

  The Singularity: AI vies to take over the world in 1982’s classic Tron.

   

  Rampaging Robots: In 1973’s Westworld, recently re-envisioned as a different TV series by HBO, murderous androids go on a killing spree in a futuristic Disney-style theme park.

   

  Feeling Machines: In the 1999 movie Bicentennial Man, a household robot experiences emotions, creative thoughts, and eventually develops sentience.

   

  Androids Among Us: Artificial beings infiltrate society undetected in TV series Battlestar Galactica.

   

  Human Enslavement: In the 1999 movie The Matrix, all life on Earth is an elaborate facade. The robots are really the ones in command, but you wouldn’t know it until you take the “red pill”.

   

  Mind Upload: Digitized humans gain immortality and then wreak havoc, such as in 2014’s Transcendence.

  ONE CERTAINTY

  While some of these ideas seem far-fetched, it’s worth noting that not all future scenarios are as distant as they may seem.

  With computing power increasing exponentially, the tail end of the hockey stick could happen sooner than we may think.

  

  

  

• Paul Craig Roberts Exhorts "Whatever Happened To America?"

  Authored by Paul Craig Roberts,

  Dear Friends and Supporters, this is my quarterly call for your financial support. There is no one who will write for you more frankly and truthfully than I do. This article is long. Read it. Twice, three times. You will learn an important part of your history that has been cast into the Memory Hole. You will learn the nature of the danger that we as a people face. And you will learn a lot about yourselves. PCR

  Whatever Happened to America?

  Over the course of my lifetime, America has become an infantile country.

  When I was born America was a nation. Today it is a diversity country in which various segments divided by race, gender, and sexual preference, preach hate toward other segments. Currently white heterosexual males are losing in the hate game, but once hate is unleashed it can turn on any and every one. Working class white males understand that they are the new underclass in a diversity country in which everyone has privileges except them. Many of the university educated group of heterosexual white males are too brainwashed to understand what is happening to them. Indeed, some of them are so successfully brainwashed that they think it is their just punishment as a white male to be downtrodden.

  Donald Trump’s presidency has been wrecked by hate groups, i.e., the liberal/progressive/left who hate the “racist, misogynist, homophobic, gun nut working class” that elected Trump (see Eric Draitser, “Why He Won,” in CounterPunch, vol. 23, No. 1, 2017). For the liberal/progressive/left Trump is an illegitimate president because he was elected by illegitimate voters.
  Today the American left hates the working class with such intensity that the left is comfortable with the left’s alliance with the One Percent and the military/security complex against Trump.

  America, the melting pot that produced a nation was destroyed by Identity Politics. Identity Politics divides a population into hate groups. This group hates that one and so on. In the US the most hated group is a southern white heterosexual male.

  To rule America, Identity Politics is competing with a more powerful group – the military/security complex supported by the neoconservative ideology of American world hegemony.

  Currently, Identity Politics and the military/security complex are working hand-in-hand to destroy President Trump. Trump is hated by the powerful military/security complex because Trump wanted to “normalize relations with Russia,” that is, remove the “Russian threat” that is essential to the power and budget of the military/security complex. Trump is hated by Identity Politics because the imbeciles think no one voted for him but racist, misogynists, homophobic gun-nuts.

  The fact that Trump intended to unwind the dangerous tensions that the Obama regime has created with Russia became his hangman’s noose. Designated as “Putin’s agent,” President Trump is possibly in the process of being framed by a Special Prosecutor, none other than member of the Shadow Government and former FBI director Robert Mueller. Mueller knows that whatever lie he tells will be accepted by the media presstitutes as the Holy Truth. However, as Trump, seeking self-preservation, moves into the war camp, it might not be necessary for the shadow government to eliminate him.

  So the Great American Democracy, The Morally Pure Country, is actually a cover for the profits and power of the military/security complex.

  What is exceptional about America is the size of the corruption and evil in the government and in the private interest groups that control the government.

  It wasn’t always this way.

  In 1958 at the height of the Cold War a young Texan, Van Cliburn, 23 years of age, ventured to show up at the International Tchaikovsky Piano Competition in Moscow. Given the rivalry between the military powers, what chance did an American have of walking away with the prize? The cold warriors of the time would, if asked, had said none.

  But Van Cliburn electrified the audience, the Moscow Symphony, and the famous conductor. His reception by the Soviet audience was extraordinary. The judges went to Khrushchev and asked, “Can we give the prize to the American?” Khrushchev asked, “Was he the best.” The answer, “Yes.” “Well, then give him the prize.”

  The Cold War should have ended right there, but the military/security complex would not allow it.

  You can watch the performance here:

  In other words, the Soviet Union, unlike America today, did not need to prevail over the truth. The Soviets gave what has perhaps become the most famous of all prizes of musical competition to an American. The Soviets were able to see and recognize truth, something few Americans any longer can do.

  The supporters of this website are supporters because, unlike their brainwashed fellows who are tightly locked within The Matrix, they can tell the difference between truth and propaganda. The supporters of this website comprise the few who, if it is possible, will save America and the world from the evil that prevails in Washington.

  Van Cliburn came home to America a hero. He went on to a grand concert career. If Van Cliburn had been judged in his day, as Donald Trump is today for wanting to defuse the dangerously high level of tensions with Russia, Van Cliburn would have been greeted on his return with a Soviet prize as a traitor. The New York Times, the Washington Post, CNN, NPR and the rest of the presstitutes would have denounced him up one street and down another. How dare Van Cliburn legitimize the Soviet Union by participating in a music competition and accepting a Soviet prize!

  Did you know that Van Cliburn, after his talented mother had provided all the music instruction she could, studied under a RUSSIAN woman? What more proof do you need that Van Cliburn was a traitor to America? Imagine, he studied under a RUSSIAN! I mean, really! Isn’t this a RUSSIAN connection?!

  How can we avoid the fact that all those music critics at the New York Times and Washington Post were also RUSSIAN agents. I mean, gosh, they actually praised Van Cliburn for playing RUSSIAN music in MOSCOW so well.

  Makes a person wonder if Ronald Reagan wasn’t also a RUSSIAN agent. Reagan, actually convinced Van Cliburn to come out of retirement and to play in the White House for Soviet leader Gorbachev, with whom Reagan was trying to end the Cold War.

  I am making fun of what passes for reasoning today. Reason has been displaced by denunciation. If someone, anyone, says something, that can be misconstrued and denounced, it will be, the meaning of what was said not withstanding.

  Consider the recent statement by the Deputy Prime Minister of Japan, Taro Aso, in an address to members of his ruling political party. He said: “I don’t question your motives to be a politician. But the results are important. Hitler, who killed millions of people, was no good, even if his motives were right.”

  To anyone capable of reason, it is perfectly clear that Aso is saying that the ends don’t justify the means. “Even if” is conditional. Aso is saying that even if Hitler acted in behalf of a just cause, his means were impermissible.

  Aso, a man of principle, is instructing his party’s politicians to be moral beings and not to sacrifice morality to a cause, much less an American cause of Japanese rearmament so as to amplify Washington’s aggression toward China.

  The response to a simple and straight forward statement that not even in politics do the ends justify the means was instant denunciation of the Deputy Prime Minister for “shameful” and “dangerous” remarks suggesting that Hitler “had the right motives.”

  Arrgh! screamed the Simon Wiesenthal Center which saw a new holocaust in the making. Reuters reported that Aso had put his foot in his mouth by making remarks that “could be interpreted as a defense of Adolf Hitler’s motive for genocide during World War Two.” Even RT, to which we normally look for real as opposed to fake news, joined in the misreporting. The chairman of the Japanese opposition party joined in, terming Aso’s statement that the ends don’t justify the means “a serious gaffe.”

  Of course the South Koreans and the Chinese, who have WWII resentments against Japan, could not let the opportunity pass that the Western media created, and also unloaded on Japan, condemning the Deputy Prime Minister as a modern advocate of Hitlerism. The Chinese and South Koreans were too busy settling old scores to realize that by jumping on Aso they were undermining the Japanese opposition to the re-militarization of Japan, which will be at their expense.

  Aso is astonished by the misrepresentation of his words. He said, “I used Hitler as an example of a bad politician. It is regrettable that my comment was misinterpreted and caused misunderstanding.”

  It seems that hardly anyone was capable of comprehending what Aso said. He clearly denounced Hitler, declaring Hitler “no good,” but no one cared. He used the word, “Hitler,” which was sufficient to set off the explosion of denunciation. Aso responded by withdrawing Hitler as his example of a “bad politician.” And this is a victory?

  The media, even RT alas, was quick to point out that Aso was already suspect. In 2013 Aso opposed the overturning of Japan’s pacifist constitution that Washington was pushing in order to recruit Japan in a new war front against China. Aso, in the indirect way that the Japanese approach dissent, said “Germany’s Weimar Constitution was changed [by the Nazis] before anyone knew. It was changed before anyone else noticed. Why don’t we learn from the technique?” Aso’s remarks were instantly misrepresented as his endorsement of surreptitiously changing Japan’s constitution, which was Washington’s aim, whereas Aso was defending its pacifist constraint, pointing out that Japan’s pacificist Contitution was being changed without voters’ consent.

  An explanation of Aso’s words, something that never would have needed doing prior to our illiterate times, has its own risks. Many Americans confuse an explanation with a defense. Thus, an explanation can bring denunciation for “defending a Japanese nazi.” Considering the number of intellectually-challenged Americans, I expect to read many such denunciations.

  This is the problem with being a truthful writer in these times. More people want someone to denounce than want truth. Truth-tellers are persona non grata to the ruling establishment and to proponents of Identity Politics. It is unclear how much longer truth will be permitted to be expressed. Already it is much safer and more remunerative to tell the official lies than to tell the truth.

  More people want their inculcated biases and beliefs affirmed by what they read than want to reconsider what they think, expecially if changing their view puts them at odds with their peers. Most people believe what is convenient for them and what they want to believe. Facts are not important to them. Indeed, Americans deny the facts before their eyes each and every day. How can America be a superpower when the population for the most part is completely ignorant and brainwashed?

  When truth-tellers are no more, it is unlikely they will be missed. No one will even know that they are gone. Already, gobs of people are unable to follow a reasoned argument based on undisputed facts.

  Take something simple and clear, such as the conflict over several decades between North and South leading to the breakup of the union. The conflict was economic. It was over tariffs. The North wanted them in order to protect northern industry from lower priced British manufactures. Without tariffs, northern industry was hemmed in by British goods and could not develop.

  The South did not want the tariffs because it meant higher prices for the South and likely retaliation against the South’s export of cotton. The South saw the conflict in terms of lower income forced on southerners so that northern manufacturers could have higher incomes. The argument over the division of new states carved from former Indian territories was about keeping the voting balance equal in Congress so that a stiff tariff could not be passed. It is what the debates show. So many historians have written about these documented facts.

  Slavery was not the issue, because as Lincoln said in his inaugural address, he had no inclination and no power to abolish slavery. Slavery was a states rights issue reserved to the states by the US Constitution.

  The issue, Lincoln said in his inaugural address, was the collection of the tariff. There was no need, he said, for invasion or bloodshed. The South just needed to permit the federal government to collect the duties on imports. The northern states actually passed an amendment to the Constitution that prohibited slavery from ever being abolished by the federal government, and Lincoln gave his support.

  For the South the problem was not slavery. The legality of slavery was clear and accepted by Lincoln in his inaugural address as a states right. However, a tariff was one of the powers given by the Constitution to the federal government. Under the Constitution the South was required to accept a tariff if it passed Congress and was signed by the President. A tariff had passed two days prior to Lincoln’s inaugeration.

  The South couldn’t point at the real reason it was leaving the union—the tariff—if the South wanted to blame the north for its secession. In order to blame the North for the breakup of the union (the British are leaving the European Union without a war), the South turned to the nullification by some northern states of the federal law and US Constitutional provision (Article 4, Section 2) that required the return of runaway slaves. South Carolina’s secession document said that some Northern states by not returning slaves had broken the contract on which the union was formed. South Carolina’s argument became the basis for the secession documents of other states.

  In other words, slavery became an issue in the secession because some Northern states—but not the federal government—refused to comply with the constitutional obligation to return property as required by the US Constitution.

  South Carolina was correct, but the northern states were acting as individual states, not as the federal government. It wasn’t Lincoln who nullified the Fugative Slave Act, and states were not allowed to nulify constitutional provisions or federal law within the powers assigned to the federal government by the Constitution. Lincoln upheld the Fugative Slave Act. In effect, what the South did was to nullify the power that the Constitution gives to the federal government to levy a tariff. Apologists for the South ignore this fact. The South had no more power under the Constitution to nullify a tariff than northern states had to nullify the Fugative Slave Act.

  Slavery was not, under the Constitution, a federal issue, but the tariff was. It was the South’s refusal of the tariff that caused Lincoln to invade the Confederacy.

  You need to undersand that in those days people thought of themselves as citizens of the individual states, not as citizens of the United States, just as today people in Europe think of themselves as citizens of France, Germany, Italy, etc., and not as citizens of the European Union. In was in the states that most government power resided. Robert E. Lee refused the offer of the command of the Union Army on the grounds that it would be treasonous for him to attack his own country of Virginia.

  Having explained history as it was understood prior to its rewrite by Identity Politics, which has thrown history down the Orwellian Memory Hole, I was accused of “lying about the motivations of the South” by a reason-impaired reader.

  In this reader we see not only the uninformed modern American but also the rudness of the uninformed modern American. I could understand a reader writing that perhaps I had misunderstood the secession documents, but “lying about the motivations of the South”? It is extraordinary to be called a liar by a reader incapable of understanding the issues. President Lincoln and the northern states gave the South complete and unequivable assurances about slavery, but not about tariffs.

  The reader sees a defense of slavery in the secession documents but is unable to grasp the wider picture that the South is making a states rights argument that some northern states, in the words of the South Carolina secession document, “have denied the rights of property . . . recognized by the Constitution.” The reader saw that the documents mentioned slavery but not tariffs, and concluded that slavery was the reason that the South seceded.

  It did not occur to the reason-impaired reader to wonder why the South would secede over slavery when the federal government was not threatening slavery. In his inaugural address Lincoln said that he had neither the power nor the inclination to forbid slavery. The North gave the South more assurances about slavery by passing the Corwin Amendment that added to the existing constitutional protection of slavery by putting in a special constitutional amendment upholding slavery. As slavery was under no threat, why would the South secede over slavery?

  The tariff was a threat, and it was a tariff, not a bill outlawing slavery, that had just passed. Unlike slavery, which the Constitution left to the discretion of individual states, tariffs were a federal issue. Under the Constitution states had no rights to nullify tariffs. Therefore, the South wanted out.

  It also does not occur to the reason-impaired reader that if the war was over slavery why have historians, even court historians, been unable to find evidence of that in the letters and diaries of the soldiers on both sides?

  In other words, we have a very full context here, and none of it supports that the war was fought over slavery. But the reader sees some words about slavery in the secession documents and his reasoning ability cannot get beyond those words.

  This is the same absence of reasoning ability that led to the false conclusion that the Deputy Prime Minister of Japan was an admirer of Hitler.

  Now for an example of an emotionally-impaired reader, one so emotional that he is unable to comprehend the meaning of his own words. This reader read Thomas DiLorenzo’s article (http://www.paulcraigroberts.org/2017/08/21/lincoln-myth-ideological-cornerstone-america-empire/) and my article (http://www.paulcraigroberts.org/2017/08/28/weaponization-history-journalism/) as an “absolution of the South” and as “whitewashing of the South.” Of what he doesn’t say. Slavery? Secession? All that I and DiLorenzo offer are explanations. DiLorenzo is a Pennsylvanian. I grew up in the South but lived my life outside it. Neither of us are trying to resurrect the Confederacy. As I understand DiLorenzo, his main point is that the so- called “civil war” destroyed the original US Constitution and centralized power in Washington in the interest of Empire. I am pointing out that ignorance has spawned a false history that is causing a lot of orchestrated hate. Neither of us thinks that the country needs the hate and the division hate causes. We need to be united against the centralized power in Washington that is turning on the people.

  Carried away by emotion, the reader dashed off an article to refute us. My interest is not to ridicule the reader but to use him as an example of the emotionally-impaired American. Therefore, I am protecting him from personal ridicule by not naming him or linking to his nonsensical article. My only interest is to illustrate how for too many Americans emotion precludes reason.

  First, the reader in his article calls DiLorenzo and I names and then projects his sin upon us, accusing us of “name-calling,” which he says is “a poor substitute for proving points.”

  Here is his second mistake. DiLorenzo and I are not “proving points.” We are stating long established known facts and asking how a new history has been created that is removed from the known facts.

  So how does the emotionally-disturbed reader refute us in his article? He doesn’t. He proves our point.

  First he acknowledges “what American history textbooks for decades have acknowledged: The North did not go to War to stop slavery. Lincoln went to war to save the Union.”

  How does he get rid of the Corwin Amendment. He doesn’t. He says everyone, even “the most ardent Lincoln-worshipping court historian,” knows that the North and Lincoln gave the South assurances that the federal government would not involve itself in the slavery issue.

  In other words, the reader says that there is nothing original in my article or DiLorenzo’s and that it is just the standard history, so why is he taking exception to it?

  The answer seems to be that after agreeing with us that Lincoln did not go to war over slavery and gave the South no reason to go to war over slavery, the reader says that the South did go to war over slavery. He says that the war was fought over the issue of expanding slavery into new states created from Indian territories.

  This is an extremely problematic claim for two indisputable reasons.

  First, the South went to war because Lincoln invaded the South.

  Second, the South had seceded and no longer had any interest in the status of new territories.

  As I reported in my article, it is established historical record that the conflict over the expansion of slavery as new states were added to the Union was a fight over the tariff vote in Congress. The South was trying to keep enough representation to block the passage of a tariff, and the North was trying to gain enough representation to enact protectionism over the free trade South.

  It is so emotionally important to the reader that the war was over slavery that he alleges that the reason the South was not seduced by the Corwin Amendment is that it did not guarantee the expansion of slavery into new states, but only protected slavery in those states in which it existed. In other words, the reader asserts that the South fought for an hegemonic ideology of slavery in the Union. But the South had left the Union, so clearly it wasn’t fighting to expand slavery outside its borders. Moreover, the North gave the South no assurances over the South’s real concern—its economic exploitation by the North. The same day the North passed the Corwin Amendment the North passed the tariff. Clearly, it was not assurances over slavery that mattered to the South. Slavery was protected by states rights. It was the tariff that was important to the South.

  Whereas the tariff was the issue that brought the conflict to a head, correspondence between Lord Acton and Robert E. Lee shows that the deeper issue was liberty and its protection from centralized power. On November 4, 1866, Lord Acton wrote to Robert E. Lee: “I saw in State Rights the only availing check upon the absolutism of the sovereign will, and secession filled me with hope, not as the destruction but as the redemption of Democracy.” Acton saw in the US Constitution defects that could lead to the rise of despotism. Acton regarded the Confederate Constitution as “expressly and wisely calculated to remedy” the defects in the US Constitution. The Confederate Constitution, Acton said, was a “great Reform [that] would have blessed all the races of mankind by establishing true freedom purged of the native dangers and disorders of Republics.” 

  Lee replied: “I yet believe that the maintenance of the rights and authority reserved to the states and to the people, not only essential to the adjustment and balance of the general system, but the safeguard to the continuance of a free government. I consider it as the chief source of stability to our political system, whereas the consolidation of the states into one vast republic, sure to be aggressive abroad and despotic at home, will be the certain precursor of that ruin which has overwhelmed all those that have preceded it.”

  A present day American unfamiliar with the 18th and 19th century efforts to create a government that could not degenerate into despotism will see hypocrisy in this correspondence and misread it. How, the present day American will ask, could Acton and Lee be talking about establishing true freedom when slavery existed? The answer is that Acton and Lee, like George Washington and Thomas Jefferson, understood that there were more ways of being enslaved than being bought and sold. If the battle is lost over the character of government and power becomes centralized, then all are enslaved.

  Lee’s prediction of a government “aggressive abroad and despotic at home” has come true. What is despotism if not indefinite detention on suspicion alone without evidence or conviction, if not execution on suspicion alone without due process of law, if not universal spying and searches without warrants?

  What I find extraordinary about today’s concern with slavery in the 1800s is the lack of concern with our enslavement today. It is amazing that Americans do not realize that they were enslaved by the passage of the income tax in 1913. Consider the definition of a slave. It is a person who does not own his own labor or the products of his own labor. Of course, if the slave is to live to work another day some of his labor must go to his subsistance. How much depended on the technology and labor productivity. On 19th century southern plantations, the slave tax seems to have been limited short of the 50% rate.

  When I entered the US Treasury as Assistant Secretary, the top tax rate on personal income was 50%. During the medieval era, serfs did not own all of their own labor. At the time I studied the era, the top tax rate on serfs was believed to have been limited to one-third of the serf’s working time. Given labor productivity in those days, any higher tax would have prevented the reproduction of the labor force.

  So what explains the concern about wage slavery in 1860 but not in 2017?

  The answer seems to be Diversity Politics. In 1860 blacks had the burden of wage slavery. In 2017 all have the burden except for the rich whose income is in the form of capital gains and those among the poor who don’t work. Identity Politics cannot present today’s wage slavery as the unique burder of a “preferred minority.” Today those most subjected to wage slavery are the white professionals in the upper middle class. That is where the tax burden is highest. Americans living at public expense are exempted from wage slavery by lack of taxable income. Consequently, the liberal/progressive/left only objects to 19th century wage slavery. 20th Century wage slavery is perfectly acceptable to the liberal/progressive/left. Indeed, they want more of it.

  People can no longer think or reason. There seems to be no rational component in their brain, just emotion set into action by fuse-lighting words.

  Here is an example hot off the press. This month in Cobb County, Georgia, a car was pulled over for driving under the influence of alcohol. The white police lieutenant requested the ID of a white woman. She replied that she is afraid to reach into her purse for her license, because she has read many stories of people being shot because police officers conclude that they are reaching for a gun. Instead of tasering the woman for non-compliance, yanking her out of the car, and body slamming her, the lieutenant diffused the situation by making light of her concern. “We only shoot black people, you know.” This is what a person would conclude from the news, because seldom is a big stink made when the police shoot a white person.

  The upshot of the story is that the lieutenant’s words were recorded on his recorder and when they were entered as part of the incident report, the chief of police announced that the lieutenant was guilty of “racial insensitivity” and would be fired for the offense.

  Now think about this. A little reasoning is necessary. How are the words racially insensitive when no black persons were present? How are the words racially insensitive when the lieutenant said exactly what blacks themselves say? And now the clincher: Which is the real insensitivity, saying “we only shoot black people” or actually shooting black people? How is it possible that the officer who uses “racially insensitive” words to diffuse a situation is more worthy of punishment that an officer who actually shoots a black person? Seldom is an officer who has shot a black, white, hispanic, Asian, child, grandmother, cripple, or the family dog ever fired.

  The usual “investigation” clears the officer on the grounds that he had grounds to fear his life was in danger—precisely the reason the woman didn’t want to reach into her purse.

  For a person who tries to tell the truth, writing is a frustrating and discouraging experience. What is the point of writing for people who cannot read, who cannot follow a logical argument because their limited mental capabilities are entirely based in emotion, who have no idea of the consequence of a population imbued with hate that destroys a nation in divisiveness?

  I ask myself this question everytime I write a column.

  Indeed, given the policies of Google and PayPal it seems more or less certain that before much longer anyone who speaks outside The Matrix will be shut down.

  Free speech is only allowed for propagandists. Megyn Kelly has free speech as long as her free speech lies for the ruling establishment. Her lies are proteced by an entire media network backed by the Shadow Goverment and the Deep State.

  My truth is backed only by your support.

  So, if you want the truth, or as close as I can get to it, support my website.

  

  

• "It's All Fun & War-Games" In Russia, Until…

  Amid Russia's largest wargames yet, with over 100,000 taking part in "Zapad 2017" according to NATO, independent news site Fontanka.ru has released footage of a rather shocking event.

  

  Reuters reports that a military helicopter on a rural training exercise in western Russia mistakenly fired rockets at a group of parked vehicles, knocking at least one person to the ground, footage posted by Russian news sites and on social media showed.

  The clip below shows a helicopter firing a salvo of rockets at a military truck covered in camouflage netting in open countryside, with three vehicles with no military markings visible, parked a few meters away. A man in civilian clothes who had been standing close to the truck was engulfed in a cloud of dust. The person filming the clip, who was slightly further away, could be seen sprawled on the ground.

  The Russian Defence Ministry’s western military district, in a statement cited by Interfax news agency, said that during a training exercise a helicopter’s targeting system had mistakenly acquired a target, but denied anyone had been injured.

  The representative cited by Interfax did not say when the incident happened, or where, or if the exercise was part of the “Zapad-2017” war games.

  “As a result of a strike by an unguided rocket, a cargo vehicle with no people on board was damaged,” Interfax quoted a representative of the military district as saying.

  

  

• Russian Collusion? New Emails Reveal Hillary Clinton Invited Putin To "Pay For Play" Event

  Authored by Mac Slavo via SHTFplan.com,

  In newly released emails which the mainstream media is willfully ignoring, Hillary Clinton invited Russian president Vladimir Putin to a Clinton Foundation event. The Russian collusion between Hillary Clinton is becoming very apparent.

  

  Hillary Clinton likes to talk a tough game about Russian President Vladimir Putin. And she likes to put him on the list of those at fault for her loss in the election last November to Donald Trump. But that didn’t stop her from inviting him and other top Russian officials to a Clinton Foundation gala right after she became Secretary of State.

  Clinton Foundation director of foreign policy Amitabh Desai sent dozens of invitations to world leaders including then-Russian Prime Minister Vladimir Putin, Russian President Dmitry Medvedev, and Former President of the Soviet Union Mikhail Gorbachev, emails recently obtained by Judicial Watch revealed.

  While Democrats blast any Republican who has the nerve to even look Russia’s direction, Hillary and her minions in the Clinton Foundation were begging the Russians to come to an event put on by the “pay for play” organization.

  Hillary offered political favors in exchange for money filtered through the Clinton Foundation.

  On March 13, 2009, Desai emailed the list of invitations to Assistant Secretary of State Andrew Shapiro, who then forwarded the email to top Clinton aide, Jake Sullivan. This happened at approximately the same time that the newly appointed Clinton tried to “reset” U.S. relations with Russia. Yet, Donald Trump has been blasted for trying to do the same thing. The propaganda in the media is becoming clear as they continue to brush this story under the rug too.

  Hillary Clinton repeatedly attacked Putin during her 2016 presidential campaign and often tried to link president Donald Trump to the Russian leader. Clinton and her staff, with help from Barack Obama and the media also allegedly concocted the “Russian hacking” narrative within 24-hours of her election defeat, as documented in the Clinton campaign tell-all book, Shattered: Inside Hillary Clinton’s Doomed Campaign:

  That strategy had been set within twenty-four hours of her concession speech. Mook and Podesta assembled her communications team at the Brooklyn headquarters to engineer the case that the election wasn’t entirely on the up-and-up.

   

  For a couple of hours, with Shake Shack containers littering the room, they went over the script they would pitch to the press and the public. Already, Russian hacking was the centerpiece of the argument.

  Clinton’s public display of contempt for Putin does not match her track record of how she interacted with the Russian leader in the past as controversy swirled following a uranium deal she approved while at the State Department. The deal was quickly followed by a massive donation to her foundation, proving the “pay for play” policy she herself used to become wealthy.

  “One year after inviting Putin to the Clinton Foundation event, she approved the sale of 20% of America’s uranium capacity to Russia,” Conservative Review noted.

   

  “Shortly thereafter, donors connected to the company that was sold to Russia contributed $145 million in donations to the Clinton Foundation.”

  These newly released emails simply prove what most already knew – Hillary Clinton’s collusion with Russia is far deeper than Donald Trump’s.

  

  

• The Obamacare "Death Spiral": Health Plans Now Cost Employers More Than A New Car

  With the Graham-Cassidy Obamacare replacement now officially dead, it appears Senate Republicans will be unable to pass a repeal-and-replace bill before the Sept. 30 deadline announced by the Senate Parliamentarian arrives – though it’s impossible to rule out another long-shot plan gaining momentum in the coming days.

  After the deadline, Senate Republicans would need 60 votes for their repeal-and-replace bill, effectively killing the repeal-and-replace effort, at least for now.

  As Republicans struggle to fulfill their campaign promises to the American people, the Wall Street Journal has published a report showing that rising premiums are forcing some small business owners to stop offering benefits, the latest sign that Democrats ignored Republican rhetoric about the bill’s job-killing potential at their own political peril.

  As we’ve reported time and time again, the bill has increased cost pressures on businesses, forcing them lay off employees or pare back benefits to stay in business.

  According to WSJ, the average cost of health coverage offered by employers pushed toward $19,000 for a family plan this year, while the share of firms providing insurance to workers continued to edge lower, according to a major survey by the Kaiser Family Foundation.

  

  Annual premiums rose 3% to $18,764 for an employer plan in 2017, from $18,142 last year, the same rate of increase as in 2016, according to an annual poll of employers conducted by Kaiser and the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.

  Premiums for employers have been climbing for several years, though, as WSJ notes, their rise has been slowed somewhat by a shift toward larger out-of-pocket costs for employees in the form of higher deductibles. That move slowed this year, as deductibles were roughly flat, compared with 2016.

  

  Kaiser foundation officials said it wasn’t clear why the growth in deductibles appeared to pause this year. The average general deductible for single coverage among all workers, including those with no deductible, this year was $1,221 – the same as last year, but up sharply from $802 in 2012. This year, 28% of covered workers were enrolled in high-deductible plans that can be paired with savings accounts that aren’t taxed, compared with 29% last year and 19% five years ago.

  Drew Altman, chief executive of the Kaiser foundation, said it was too soon to tell if the growth in deductibles would quickly resume next year, or if employers are reluctant to keep pushing the tactic.

  “We’ll have to watch it,” Mr. Altman said. “It’s possible it’s playing itself out or reaching some kind of natural limit.”

  Still, the rise of premiums over time has resulted in family health plans that can annually cost more than a new car, though often most of the cost is borne by employers. Employees paid on average $5,714, or 31%, of the premiums, for a family plan in 2017, according to Kaiser.

  In what should be interpreted as clear-cut evidence of the bill’s job-killing potential, Gary Claxton, a vice president at the foundation, said that the overall cost of insurance appears to be driving small firms, particularly those with low-wage workers, to stop offering health benefits. Indeed, among small employers that didn’t offer health insurance, 44% said the biggest reason for not providing the benefit was its cost. “It’s harder for them to maintain coverage when it’s so expensive,” Mr. Claxton said.

  However, among small employers that didn’t provide health coverage, 16% did give workers some money they could use toward purchasing a plan themselves.

  None of this should surprise readers, as we've been writing for years that the entire Obamacare system is on the "verge of collapse" as premiums soar, risk pools deteriorate and insurers were pull out of exchanges all around the country leaving many Americans with just a single 'option' for health insurance.

  

  Meanwhile, for an individual worker, the average annual cost of employer coverage was $6,690 in the 2017 survey, up 4% from last year, with employees paying 18% of that.

  In another troubling trend highlighted by WSJ, the number of employers offering health insurance as a benefit to employees has been declining even as the labor market has purportedly been tightening. This appears to jive with stagnant hourly earnings, which have shown little movement as most of the new jobs being created in the US are low-level, low-skill and low-pay.

  The Kaiser survey was conducted between January and June of this year and included 2,137 randomly selected employers that responded to the full telephone survey.
   

  

  

• Did Obama Know About Comey's Surveillance?

  Authored by James Freman op-ed via The Wall Street Journal,

  The media is less interested in Obama Administration wiretapping than in how Trump described it…

  

  This week CNN is reporting more details on the Obama Administration’s 2016 surveillance of people connected to the presidential campaign of the party out of power. It seems that once President Obama’s appointee to run the FBI, James Comey, had secured authorization for wiretapping, the bureau continued its surveillance into 2017. CNN reports:

  US investigators wiretapped former Trump campaign chairman Paul Manafort under secret court orders before and after the election, sources tell CNN, an extraordinary step involving a high-ranking campaign official now at the center of the Russia meddling probe.

   

  The government snooping continued into early this year, including a period when Manafort was known to talk to President Donald Trump.

   

  Some of the intelligence collected includes communications that sparked concerns among investigators that Manafort had encouraged the Russians to help with the campaign, according to three sources familiar with the investigation. Two of these sources, however, cautioned that the evidence is not conclusive.

  This means the wiretapping was authorized more than ten months ago and perhaps more than a year ago.

  It was presumably a tough decision for a judge to issue a secret warrant under the Foreign Intelligence Surveillance Act, enabling the administration to spy on someone connected with the presidential campaign of its political adversaries.

  One would presumably only approve such an order if the request presented by the executive branch was highly compelling and likely to produce evidence that the subject of the wiretap was in fact working with Russia to disrupt U.S. elections.

  Roughly a year later, as the public still waits for such evidence, this column wonders how this judge is feeling now, especially now that CNN has reported that at least two of its three sources believe the resulting evidence is inconclusive.

  One would also presume—or at least hope—that seeking to wiretap associates of the leader of the political opposition is not an everyday occurrence in any administration. At the very least, it seems highly unlikely that such a decision would be made by a mid-level official. CNN notes,

  “Such warrants require the approval of top Justice Department and FBI officials, and the FBI must provide the court with information showing suspicion that the subject of the warrant may be acting as an agent of a foreign power.”

  It seems reasonable for the public to know exactly which officials made this decision and who else they consulted or informed of their surveillance plans. Was the President briefed on the details of this investigation?

  And as for the information showing suspicion, where did the FBI come up with that? A September 7 column from the Journal’s Kim Strassel raises disturbing questions, based on recent events and a Washington Post story from last winter. Ms. Strassel writes:

  The House Intelligence Committee’s investigation took a sharp and notable turn on Tuesday, as news broke that it had subpoenaed the FBI and the Justice Department for information relating to the infamous Trump “dossier.”

   

  That dossier, whose allegations appear to have been fabricated, was commissioned by the opposition-research firm Fusion GPS and then developed by a former British spook named Christopher Steele. ..

   

  The Washington Post in February reported that Mr. Steele “was familiar” to the FBI, since he’d worked for the bureau before. The newspaper said Mr. Steele had reached out to a “friend” at the FBI about his Trump work as far back as July 2016. The Post even reported that Mr. Steele “reached an agreement with the FBI a few weeks before the election for the bureau to pay him to continue his work.”

  Oddly, even though CNN is the source of this week’s news, the media outlet seems less interested in President Obama’s knowledge of the surveillance activities that occurred on his watch and against his political adversaries than in how President Trump has described them.

  CNN’s scoop doesn’t even mention Mr. Obama except in the context of Mr. Trump’s accusations of wiretapping against the former president that appeared on Twitter in March. CNN has followed up with another story saying that Mr. Trump’s accusations have still not been proven.

  That’s true, although Mr. Trump’s argument may be getting stronger. And whatever Donald Trump’s tweets say, Americans deserve to know how our government came to spy on people associated with the presidential campaign of the party out of power.

  

  

• Fed’s Massive QE is Ending – Here Comes the Boom! By Michael Carino

  The Federal Reserve has manipulated bond prices for the last
  10 years.  Yields in the US and abroad
  are lower now than during the Great Depression – a period in time that could
  justify such low yields.  For those with
  short memories, bond markets are more expensive than before and right after the
  financial crisis of 2008.  Longer dated
  yields are at least 300 basis points richer than typical when inflation is
  running around 2% as it is today.  Yes,
  the bond market in the US and globally are the most overpriced ever.  We are now on the precipice of the catalyst
  for the greatest bond market trade unwind ever – the end of the Fed’s quantitative
  easing program.

  I have heard all the arguments for why yields are so
  low.  Inflation is low, growth is slow,
  the Fed is raising rates or lowering rates, buying bonds or selling bonds and a
  plethora of the sky is falling fodder is credited for reasons to buy or hold
  onto current positions in the bond market. 
  You can backfill this story any way you like.  The truth is that the bond market has been
  manipulated by the Federal Reserve lowering the Fed Funds rates to zero, buying
  5 trillion of bonds and giving forward guidance that it is safe to come along
  on the Fed induced bond buying binge. 
  The Fed’s commitment that they would not take the punch bowl away from
  the party had definitely contributed to the bond buying bonanza.

  Party Over!  The Fed
  has been warning the markets that the party has come to an end, Fed Funds will
  keep going higher and their portfolio will be rolling off and reduced.  Even though it’s last call, many participants
  are lining up to load up on drinks, hoping the lights to the bar stay on a
  little longer.  Long term bond yields
  have been manipulated by some of the largest bond trading firms during low
  volume periods pushing yields back down to lows seen only during depressions or
  catastrophes.  These market distorting
  strategies are masked by the Fed’s market distorting strategies.  Even though short term rates are pinned near
  the Fed Funds rate, long term rates have been manipulated to where the yield
  curve is rather flat.  You pick up very
  little yield to compensate for the embedded duration risk, or price risk from
  rising interest rates as you look out the interest rate curve.

  As the Fed continues to raise rates and now unwinds their
  massive bond purchases, the historically low bond yields leave the market is in
  a tenuous position.  Any day, and for any
  reason, the bond market can experience parabolic moves higher in yield.  As volatility increases, more bond managers
  will evacuate the market place that has limited yield to compensate for the
  volatility risk.  Cash is now a viable
  alternative and there is only a minimal yield give up with none of the risks in
  longer dated bonds.

  To be honestly blunt, investors are taking massive amounts
  of risk in the bond market – consciously or unconsciously.  Yes, some of the biggest risks with little
  compensation.  We have learned nothing
  since the 2008 bond market meltdown.  And
  now we are at lower yields and higher prices since then.  Worse, the bond market has almost doubled in
  the last 10 years.  I have to repeat
  myself again.  Doubled in the last 10
  years!!!   Lower yields in a market that
  is twice as large and we still think this is going to end well?

  The Fed has fostered and encouraged the current bond market
  situation.  They know their departure
  from the market will be disruptive and have been trying to set the market up
  for this for some time.  Instead of
  positioning accordingly, large participants have been high volume trading the
  markets at the detriment to those that have tried to prepare for this next
  chapter.  This leaves the market poorly
  positioned for the Fed’s withdrawal of market support.

  The bond market has changed greatly from that of a decade
  ago and there are a few large balance sheets that hold significantly large
  positions.  This distribution in the bond
  market makes it impossible for the largest holders to ever sell their
  positions.  Any attempt to sell (to who?)
  and yields would shoot higher.  The best
  they can do is to keep providing liquidity, supporting markets at these most
  expensive levels and hope some event comes along to bluff the market into
  holding these levels until they retire or sell their firms.

  So what should the markets expect?  I was vocally warning anyone who would listen
  in 2006 and 2007 that the risks built in the system would be catastrophic when
  they unwound.  I continue to ring the
  alarms now.  After 10 years of driving
  and pinning yields to ultimate lows and the fundamentals significantly divergent
  from the market, market participants are unprepared for the end of the Fed’s QE
  program.

  With the end of QE and the largest buyer of Treasuries non-existent,
  volatility will increase.  Yields cannot
  be justified when volatility increases and selling in the bond market will
  begin.  Money will move to cash and
  redemptions submitted to bond funds and other fixed income hedge funds.  But yields will move higher before the bond
  fund redemptions are paid leaving larger losses and more panicked investors.  Higher bond yields will not be met with the
  buy the dips attitude.  Rather, selling
  will beget selling, liquidity will disappear and yields will start to gap
  higher.  Funds that knew nothing except
  inflows will, unfortunately, need to limit redemptions and gate their
  investors.  As volatility increases and
  liquidity decreases, the markets will crescendo into a financial debacle that
  will only end when a large or a couple of large and popular funds that have
  outperformed over the past 10 years have to close down.  This will alleviate selling, but more
  importantly, reprice the bond markets to a yield level that compensates for
  risks and starts to attract sound investors.

  This may seem like a dire prediction but it’s not.  This is part of any normal market process
  where prices go up and down.  The
  unfortunate result of 10 years of Fed market manipulation is that many bond
  market managers are clueless as to how normal markets operate.  Some traders were 10 years old during the last
  bond market debacle!  What worked for the
  last 10 years will not work for the next 10. 
  As the Fed turns off the lights and locks up the bar, don’t find yourself
  stuck inside looking for a way out.  

   

  by Michael Carino, Greenwich Endeavors, 9/19/17

   

  Michael Carino is the CEO of Greenwich Endeavors and has
  been a fund manager and owner for more than 20 years.  He has positions that benefit from a
  normalized bond market and higher yields.  

  

  

• Full Preview Of Tomorrow's "Historic" FOMC Meeting

  It is virtually guaranteed that tomorrow the FOMC will make history by officially announcing the Fed’s plan to begin shrinking its balance sheet through the gradual phasing out of bond reinvestments, which however in a world in which other central banks continue to pump $125 billion per month, will hardly by noticed by markets at least in the beginning.

   

  

  So aside from the start of balance sheet renormalization what else should traders expect tomorrow? Earlier today, we showed a cheat sheet from ING that broke down the various USD bullish and bearish permutations of how Yellen could still surprise the market, including the Fed’s signalling on policy rates, economic projections, a shift in the “dots”, comments on asset prices and, last but not least, whether Yellen will stay or leave when her term expires in Feb 2018.

   

  

  * * *

  For those seeking a more in-depth preview, here courtesy of RanSquawk, is the full “historic” September 20 FOMC Preview.

  • FOMC likely to maintain rates between 1.00-1.25%; there will be focus on whether it flattens the rate hike trajectory
  • The formal announcement of balance sheet reduction is expected; it’s unclear what size the Fed wants to return it to
  • Growth and unemployment projections unlikely to see major changes; inflation may be trimmed again

  RATES

  • Money markets price a very slim chance that the FOMC will hike rates this week, with an overwhelming 98.6% implied probability that the Federal Funds Rate target will remain between 1.00% to 1.25%. Looking ahead, markets now assign a 58% chance that rates will be lifted again in 2017.
  • Federal Funds futures currently price in just two more hikes over the Fed’s current forecast horizon; the FOMC’s June forecasts pencilled in seven rate rises over that timeframe. Note, this week’s forecast will extend the horizon out to 2020.
  • Given the cautious tone of comments from FOMC participants in recent weeks, it will be interesting to see whether the central bank lowers its trajectory for the rate path down, in line with the market’s view. However, analysts at Barclays do not expect a major revision to the median view of the rate profile, but sees the average falling: “We expect the median policy path to remain unchanged, but the average policy path should decline. We believe the average funds rate will decline by 15-25bp across the forecast horizon, and we believe as many as seven participants may signal that they prefer no further rate hikes this year (against nine participants who view one or more as appropriate).”

  BALANCE SHEET

  • It is an almost a forgone conclusion that the FOMC will formally announce the start of its balance sheet programme; indeed, ‘several’ were ready to make the announcement in July. The Fed has also been given some leeway not that the debt ceiling has been extended until December.
  • In June, the FOMC suggested a plan where it will allow $6bln of maturing Treasuries and $4bln of maturing MBS to roll-off per month for a three-month period; that amount would then be raised to $12bln for Treasuries and $8bln for MBS for another three months, and after a year, redemptions would be capped at $30bln for Treasuries and $20bln for MBS per month.
  • The plan ensures the Fed wouldn’t have to outright sell any of its holdings immediately, which would cause a market reaction. In fact, Fed commentary suggests that the central bank wants to avoid any “shock and awe”; Loretta Mester (non-voter) said the intention is to set the policy, then “forget it”, suggesting that balance sheet would not be an active policy tool.
  • Some questions remain unanswered; for instance, what size the FOMC is ultimately seeking to cut the balance sheet to. It is currently around $4.5trln; pre-crisis, it was around $800mln, but it is unlikely that the Fed intends to bring it down to that size. It seems as though the FOMC is still undecided: William Dudley (NY Fed, permanent voter) sees the balance sheet falling to between $2.4trln and $3.5trln – a wide range, but there doesn’t seem to be any firm consensus as yet.

  STAFF ECONOMIC PROJECTIONS

  • The Fed meets amid an improving tone in US economic data: The labour market has been ticking along nicely for some time, with the rate of joblessness beneath the Fed’s estimate of NAIRU. The second estimate of growth in Q2 was revised higher to 3.0%, well above the Fed’s longer-term view between 1.8% and 2.0%. Inflation has been the Achilles heel, but there are some signs of improvement here too. Recent CPI data showed upside surprises to headline and core rates; but the Fed’s preferred measure – core personal consumption expenditures – lingers at the lowest since Q4 2015 at (1.4% vs Fed’s June forecast of 1.7% in 2017); additionally, wage growth continues to disappoint, which may give the Fed ammunition to remain dovish.
  • Analysts at Oxford Economics say “a key focus will be on the FOMC’s view of recent inflation readings and its degree of conviction about whether inflation will hit the 2% target over the medium-term,” adding “this in turn will underpin the committee’s decision about raising rates further this year and the pace of rate increases next year.” FOMC Chair Janet Yellen has previously attributed the weak inflation to temporary factors and called for patience. Many will look out for commentary on whether the Committee has reached a consensus on the extent to which low inflation is transitory, and how much patience should be extended. The likes of Neel Kashkari (voter, dovish) expressed outright concerns on inflation, whereas centrists like William Dudley see a return to target in the medium-term; others, like Robert Kaplan (voter) want to see more evidence before committing to a tighter monetary policy path.
  • It is worth noting that the Fed’s forecast horizon will be extended out to 2020, and the FOMC’s June forecasts and the current market view are generally in line, with the exception of inflation, suggesting growth and unemployment forecasts will be little changed, though its short-term inflation views may be cut.

  

  PRESS CONFERENCE WITH CHAIR YELLEN

  • Chair Janet Yellen will likely adopt her usual balanced approach in her press conference, according to SGH Macro Advisors, to ensure that the FOMC still has the option of a rate hike in 2017. “She will certainly give voice to dovish concerns over the persistence in low inflation and the possibility of a new inflation dynamic emerging,” SGH says, “but on balance, we still expect her to modestly tilt her remarks to a base rate path that would warrant a possible third-rate hike in December.”
  • In addition to inflation, the Fed’s forecasts, and the immediacy of near-term rates hikes, Yellen may also be quizzed on FOMC personnel following the early resignation of Stanley Fischer. Tradition dictates that outgoing Governors do not usually attend the last meeting of their term; however, the Fed has confirmed that Fischer will be in attendance, though it is unclear whether he will be submitting economic forecasts.
  • The upshot of Fischer’s resignation means that there would be four vacancies on the Fed’s Board of Governors; but additionally, there remains doubt around Chair Yellen’s own position when her term expires next year, and on top of that, the position of President of the Richmond Fed (which will have a vote in 2018) remains unfilled.

  

  * * *

  Finally, here are select sellside research takes on what to expect tomorrow:

  • Barclays: We believe the Fed will begin balance sheet normalization as described in the June 2017 Addendum to the Committee’s Policy Normalization Principles and Plans. Beyond this, the committee will likely engage in extensive discussions about how much the underlying trend rate of inflation has slowed. We do not believe the committee will reach consensus on the extent to which slower inflation is transitory and, in turn, how much “patience” is needed before proceeding with further policy rate normalization or whether it is worth the risk to financial stability to run the domestic economy hotter. Yet, we believe some members will reflect their view that some of the slowing in inflation will be persistent and mark down modestly their inflation forecast for 2018. Although we do not expect the median policy rate path to change, we do expect the average federal funds rate projection to decline.
  • Credit Suisse: We expect the Fed to keep the fed funds rate unchanged and to begin reducing the size of their balance sheet. We expect an announcement in line with their June policy normalization plan which stated that reinvestments are ended up to a gradually-increasing cap. The caps are likely to begin at a modest $10bn per month, but are scheduled to rise every quarter before levelling off at $50bn. Aside from the balance sheet reduction, we expect a dovish tone from the September meeting.
  • Goldman Sachs: We expect the FOMC to officially announce next week that balance sheet runoff will begin in October. As the Fed has already communicated extensively about its plan for a gradual and predictable runoff, we expect markets to focus instead on the outlook for the federal funds rate. The key question is whether the committee’s expectations for the federal funds rate have declined in light of the surprising deceleration in the inflation data since the start of the year. Several Fed officials have expressed reduced confidence in the view that the recent decline is a blip and that inflation will reaccelerate. Despite this week’s stronger-than-expected CPI report, Fed officials will still be looking at year-over-year core PCE and CPI inflation rates that are three tenths and five tenths lower, respectively, than in March. We therefore look for lower core inflation in the Summary of Economic Projections (SEP) and expect the “dot plot” to show a decline in the average projected funds rate path. While risks are tilted to the downside, we still expect the median projection to continue to show a third rate hike this year, 3 hikes in 2018 and a longer-run funds rate at 3%. Ultimately, there are three reasons why we expect only minor dovish changes. First, several influential FOMC members have highlighted that there is not yet enough data in hand to abandon the view that the economy is close to full employment and that diminishing spare capacity will gradually push inflation back up to the target. Second, growth momentum has remained very firm and while hurricanes will make the activity data noisier in the near term, they are unlikely to derail firm underlying trend growth. Third, financial conditions have continued to ease even as the FOMC moved to a path of quarterly tightening last December.
  • ING: We think this may be one of the more difficult meetings and press conferences for Chair Yellen to navigate, not least because of the growing dichotomy within the FOMC over the appropriate near-term policy approach. Our base case is for the doves to prevail, with a lower conviction over the pace and extent of future policy tightening visible in the Fed’s dot plot. While the median 2017 dot is still set to tentatively pencil in a Dec rate hike, we expect to see more members calling for a pause for the remainder of the year; anything more than five would suggest that hopes of a Dec hike stand on a fragile footing. More telling of a dovish shift would be if the 2018 dot also moves lower; here we require five or more members to downgrade their views over future policy hikes, a scenario that cannot be ruled out given the softer US inflation dynamics. What is highly likely is that we’ll see the 2019 and longer-run dots moving lower – with Fed officials acknowledging that a 2% handle for the terminal Fed funds rate is more realistic in the prevailing US economic environment.
  • Morgan Stanley: Our US economists expect the Fed to announce balance sheet normalization at its September meeting. They also expect the median dots to remain as they were in June, with the Fed adding a final rate hike in 2020 (see FOMC Preview: Auto Pilot). In our view, the risks to this outcome are that the 2018 median dot falls to 1.875% from 2.125% and the longer-run median dot falls to 2.75% from 3.00%. To assess the risks, we constructed the September 2017 dot-plot scenario in Exhibit 4. First, we attempted to match up dots in 2017 with dots in 2018. This allows us to create the following scenarios we felt were reasonable. We assume: 2 more FOMC participants pencil in no further hikes in 2017 and decrease the # of subsequent hikes in 2018 to 2from 3; 2 participants keep the third hike in 2017, but decrease the # of subsequent hikes in 2018 to 2 from 3;and 2 participants decrease the # of hikes in 2017 to 3 from 4, but keep 4 hikes in 2018. Given we assumed only 2 more participants join the “no more hikes in 2017” camp, the 2017 median dot remains at 1.375%. However, given our other assumptions, half of the Committee ends up with a 2018 dot below 2.00% and half ends up with a dot above 2.00% – leaving the median between 1.875 and 2.125% versus its 2.125% position in June. It is possible that Randal Quarles is confirmed by the Senate and sworn in before the meeting, thereby allowing a 17th dot to be added. But, at this point, the Senate has not scheduled his confirmation hearing. As a result of our scenario analysis, we think there is a reasonable risk that the 2018 median dot falls by 25bp,even though it’s not our base case.

  

  

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• Scientists Say Italian Supervolcano Is "Becoming More Dangerous" As Magma Builds Beneath It

  After the long-dormant supervolcano Campi Flegrei awakened late last year, a team of scientists that has pinpointed the now-active volcano's magma source says a potentially devastating eruption could be just around the corner.

  Campi Flegrei is a volcanic caldera to the west of Naples that last erupted in the sixteenth century. It has been mostly quiet since then, with the exception of a few small tremors in the 1980s. Seismographic data from those rumbles allowed scientists to pinpoint the source of the magma that flooded into Campi Flegrei's chamber and caldera, according to United Press International. The results are unequivocal: An analysis of the supervolcano's hot zone suggests Campi Flegrei could be nearing an eruption.

  "What this means in terms of the scale of any future eruption we cannot say, but there is no doubt that the volcano is becoming more dangerous," De Siena said.

   

  "The big question we have to answer now is if it is a big layer of magma that is rising to the surface, or something less worrying which could find its way to the surface out at sea."

  Researchers liken the volcano's hot zone to a boiling pot of soup. Over the last several years, the volcano has gotten considerably hotter.

  

  The Campi Flegrei "hot zone"

  Four years ago, scientists warned any eruption could kill millions living near or on top of the volcano.

  "These areas can give rise to the only eruptions that can have global catastrophic effects comparable to major meteorite impacts," said Giuseppe De Natale, head of a project to monitor the volcano's activity.

  Now, based on an assessment of the current flows, scientists are worried that a potentially deadly eruption could happen close to a population center like the city of Naples.

  "During the last 30 years the behaviour of the volcano has changed, with everything becoming hotter due to fluids permeating the entire caldera," Dr De Siena explained.

   

  "Whatever produced the activity under Pozzuoli in the 1980s has migrated somewhere else, so the danger doesn't just lie in the same spot, it could now be much nearer to Naples which is more densely populated.

   

  "This means that the risk from the caldera is no longer just in the centre, but has migrated. Indeed, you can now characterise Campi Flegrei as being like a boiling pot of soup beneath the surface.

   

  "What this means in terms of the scale of any future eruption we cannot say, but there is no doubt that the volcano is becoming more dangerous.

  The study, which Phys.org reports provides a benchmark that could help determine the timing of future eruptions, was led by Dr. Luca De Siena at the University of Aberdeen in conjunction with the INGV Osservatorio Vesuviano, the RISSC lab of the University of Naples, and the University of Texas at Austin.

  Still, scientists have some questions.

  "One question that has puzzled scientists is where magma is located beneath the caldera, and our study provides the first evidence of a hot zone under the city of Pozzuoli that extends into the sea at a depth of 4 km," Dr De Siena said.

   

  "While this is the most probable location of a small batch of magma, it could also be the heated fluid-filled top of a wider magma chamber, located even deeper."

  Dr De Siena's study suggests that magma was prevented from rising to the surface in the 1980s by the presence of a one-to-two-kilometer-deep rock formation that blocked its path, forcing it to release energy along a different route. While the implications of this are still not fully understood, the relatively low amount of seismic activity in the area since the 1980s suggests that pressure is building within the caldera, raising the risk of an eruption.

  Just days ago, scientists warned that Mount Paektu, a long dormant supervolcano in North Korea, could be roused to a potentially humanity-threatening eruption if the isolated nation continues to conduct nuclear tests at its Punggye-ri nuclear test site.

  Meanwhile, US government officials are monitoring a similar situation unfolding at the Yellowstone Caldera in Wyoming, another “supervolcano.” An eruption at Yellowstone could plunge the Earth into a volcanic winter, according to scientists at NASA, who’ve devised an incredibly risky plan to save the US from the volcano.

  Of course, some scientists say NASA’s plan risks triggering the eruption it's trying to prevent.

  NASA believes the most viable solution could be to drill up to 10km down into the super volcano and pump down water at high pressure. The circulating water would return at a temperature of around 350C (662F), thus slowly day by day extracting heat from the volcano. And while such a project would come at an estimated cost of around $3.46 billion, it comes with an enticing catch which could convince politicians (taxpayers) to make the investment.

  

  Of course, drilling into a supervolcano comes with its own risks, like the eruption that scientists are desperate to prevent.
   

  

  

• Flags, Symbols, And Statues Resurgent As Globalism Declines

  Authored by Wayne Madsen via The Strategic Culture Foundation,

  As the forces of globalism retreat after numerous defeats in the United States, the United Kingdom, Turkey, and other nations, there is a resurgent popularity in national, historical, and cultural symbols. These include flags, statues of forbearers, place names, language, and, in fact, anything that distinguishes one national or sub-national group from others. The negative reactions to cultural and religious threats brought about by the manifestations of globalism – mass movement of refugees, dictates from supranational organizations like the European Union and the United Nations, and the loss of financial independence – should have been expected by the globalists. Caught up in their own self-importance and hubris, the globalists are now debasing the forces of national, religious, and cultural identity as threats to the “world order.”

  

  The most egregious examples of globalist pushback against aspirant nationhood and the symbols of national identity are Catalonia and Kurdistan.

  Two plebiscites on independence, a September 25, 2017 referendum on the Kurdistan Regional Government declaring independence from Iraq and an October 1 referendum on Catalonia beginning the process of breaking away from the Kingdom of Spain, are expected to achieve “yes” votes. Neither plebiscite is binding, a fact that will result in both votes being ignored by the mother countries.

  Iraq, the United States, Turkey, and Iran have warned Kurdish Iraq against holding the independence referendum. The United States is prepared to double-cross its erstwhile Kurdish allies for a fourth time. President Woodrow Wilson, who has been cited as the “first neoconservative or neocon, reneged on Kurdish independence during the post-World War I Versailles peace conference. Henry Kissinger double-crossed Kurdish leader Mustafa Barzani in 1975 with the Algiers Accord between Iraq and Iran, a perfidious act that forced 100,000 of Barzani’s Kurdish forces into exile in Iran. George H. W. Bush promised the Kurds help after Operation Desert Storm in 1991 if they revolted against Saddam Hussein’s government. US military aid was not forthcoming and the Kurds were forced into a small sliver of northern Iraq, over which a US “no-fly zone” was imposed. Now, Donald Trump’s administration has warned the Kurds not to even think about independence, even though the Kurdish peshmerga forces helped the US and its allies to drive the Islamic State out of Kirkuk and the rest of northern Iraq.

  In Spain, the conservative prime minister is trying to emulate the Spanish fascist dictator Generalissimo Francisco Franco in making threats against Catalonia’s independence wishes.

  In response to the Catalan Parliament's vote to hold an October 1 referendum on Catalonia's independence from Spain, Prime Minister Mariano Rajoy and his People's Party government have promised to round up the pro-independence members of the Catalan government, as well as pro-independence legislators of the parliament and mayors, and criminally charge them with sedition.

  Rajoy's stance should be no surprise since his party, the Popular Party, is the political heir of Franco's Falangist party. Franco's version of the Nazi Gestapo, the Guardia Civil, brutally suppressed Catalan and Basque identity. Particular targets for suppression, according to Falangist doctrine, were "anti-Spanish activists," "Reds," "separatists," "liberals," "Jews," "Freemasons," and "judeomarxistas."

  The Falange was eventually replaced by the National Movement, which continued many of Franco's policies, including repression of the Catalan and Basque culture, autonomy, and language.

  The Francoist People's Alliance, founded in 1989 by Franco's Interior Minister, Manuel Fraga Iribarne, eventually morphed into the People's Party of Rajoy. The People's Party considers itself "Christian Democratic," but it receives support from Franco's fascist Roman Catholic order, the Opus Dei.

  Rajoy is using a decision by Spain's Constitutional Court, suspending the independence referendum in Catalonia, as justification for his threats against the region. Apparently, the neo-fascist government of Spain has been trawling Twitter to collect the names of Catalan mayors who have posted photographs of themselves and messages of support for the “Junts pel Si” (Together for Yes) pro-independence coalition. The mayors, along with members of parliament and the government in Barcelona, are being placed on a Guardia Civil list targeting them with arrest and incarceration if the referendum is carried out.

  Rajoy has also warned officials of local municipal councils that their cooperation in holding a referendum vote will be considered an act of sedition and that they, too, face arrest and detention.

  Rajoy's channeling of Franco will only solidify anti-Spanish feelings in Catalonia, even among those not keen on independence. The iron boot of Rajoy and the People's Party in Catalonia will only boost support for Catalan independence from those mildly opposed to it or neutral. If Catalonia's regional and local government leaders are paraded off to prisons, the peaceful independence movement in the region could easily turn violent. There is also widespread support for Catalan independence in the separatist Basque region, where parades have been held in support of the Catalan cause. In August, 3000 pro-Catalan independence Basques marched in the Basque city of San Sebastian. If Rajoy carries through with his threat against Catalonia, the Basque region will also see it as a threat to them and join in a renewed campaign of violence against the Madrid neo-fascists. The Basque secessionist terrorist group ETA agreed to disarm in 2011 but it has not turned in all its weapons.

  The Basque party EH Bildu has already submitted a bill in the regional Basque parliament that is a copy of the Catalan independence referendum bill that passed the parliament in Barcelona.

  People around the world are rejecting the notion that states, harboring more than one nation, ethnic group, or tribal entity, should be recognized by globalist institutions like the EU and UN as representing all the constituent parts.

  Currently, the Republic of Macedonia is negotiating with Greece, the EU, and NATO on membership under a nation-state name that suits Greece. Greece does not recognize Macedonia by that name because it believes Macedonia harbors irredentist designs on Greek Macedonia. Greece insists the country use the provisional name of FYROM, which stands for the “Former Yugoslav Republic of Macedonia.” Macedonian nationalists scoff at such a name, likening it to being forced to use the fictional Klingon language of “Star Trek.”

  As a result of the United Kingdom’s exit from the EU, Scotland, Wales, and Northern Ireland are demanding that London grant them the right to maintain their own economic and other links with the Eurocrats in Brussels. Scotland may hold a second independence referendum with or without the blessing of London. The Welsh Assembly in Cardiff is sounding more and more like the Scottish Parliament in demanding a separate deal with the EU for Wales. Even in the heart of the EU bureaucracy – Belgium – Flanders and Wallonia show no signs of abandoning their march toward independence, leaving Brussels as its own independent city-state hosting the headquarters of the EU, NATO, and Godiva Chocolatier. Rather than the Belgian flag, one is more likely to find Flemish flags flying from poles in Antwerp and Walloon flags adorning buildings in Liège.

  Around the world, statues of historical figures are being defaced and removed by contrarian groups who bear ethnic or political grudges. They include Confederate General Robert E. Lee throughout the United States, Captain James Cook in Australia, Father Junipero Serra in California, Christopher Columbus in New York, King Kamehameha in Hawaii, Hugo Chavez in Venezuela, and Marthinus Pretorius and Paul Kruger in South Africa. This all represents the trend toward dissolution of the nation-state.

  Nation-state flags, monuments of past political and religious figures, and other nation-state symbols are not only being questioned but, in some cases, ignored or cast aside completely. The world is “going tribal” and there is little the governing globalists and elites can do about it. They brought this situation upon themselves with their aloofness and ignorance. The UN General Assembly will soon welcome 193-member state leaders to its plenary session in New York. The UN may do well to plan for future sessions at which 300 or more member-state leaders, from Åland to Zanzibar and Baltistan to Mthwakazi, converge on New York.

  

  

• "As Much Gold As You Can Eat…"

  Over six years ago, former-Goldmanite and head of The New York Fed Bull Dudley proudly proclaimed how the price of iPads was dropping when confronted by an unruly audience demanding to know why their food costs were soaring, prompting guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf," and another quipping "I can't eat an iPad."

  Dudley's infamous ignorance will never be forgotten and as The Fed continues to pump the prices of stocks up (which you also cannot eat) and the price of putting a roof over your head is soaring (also non-edible), Martin Armstrong put us straight on one potential inflation hedge… that it turns out you can eat…

  I am working from the Abu Dhabi office this week meeting with clients in town.

  

  I thought I would post something unusual.

  In the Emirates Palace, you can have a cup of coffee with gold on top you can drink.

  

  You can also order ice cream made from camel milk top with real gold you can eat.

  

  Interesting use of gold.

  

  

• Freedom Is A Myth: We Are All Prisoners Of The Police State's Panopticon Village

  Authored by John Whitehead via The Rutherford Institute,

  "We're run by the Pentagon, we're run by Madison Avenue, we're run by television, and as long as we accept those things and don't revolt we'll have to go along with the stream to the eventual avalanche…. As long as we go out and buy stuff, we're at their mercy… We all live in a little Village. Your Village may be different from other people's Villages, but we are all prisoners.”

  – Patrick McGoohan

  First broadcast in Great Britain 50 years ago, The Prisoner – a dystopian television series described as “James Bond meets George Orwell filtered through Franz Kafka” – confronted societal themes that are still relevant today: the rise of a police state, the freedom of the individual, round-the-clock surveillance, the corruption of government, totalitarianism, weaponization, group think, mass marketing, and the tendency of humankind to meekly accept their lot in life as a prisoner in a prison of their own making.

  

  Perhaps the best visual debate ever on individuality and freedom, The Prisoner (17 episodes in all) centers around a British secret agent who abruptly resigns only to find himself imprisoned, monitored by militarized drones, and interrogated in a mysterious, self-contained, cosmopolitan, seemingly tranquil retirement community known only as the Village.

  The Village is a virtual prison disguised as a seaside paradise: its inhabitants have no true freedom, they cannot leave the Village, they are under constant surveillance, their movements are tracked by surveillance drones, and they are stripped of their individuality and identified only by numbers.

  The series’ protagonist, played by Patrick McGoohan, is Number Six.

  “I am not a number. I am a free man,” was the mantra chanted on each episode of The Prisoner, which was largely written and directed by McGoohan.

  In the opening episode (“The Arrival”), Number Six is told that he is in The Village because information stored “inside” his head has made him too valuable to be allowed to roam free “outside.”

  Throughout the series, Number Six is subjected to interrogation tactics, torture, hallucinogenic drugs, identity theft, mind control, dream manipulation, and various forms of social indoctrination and physical coercion in order to “persuade” him to comply, give up, give in and subjugate himself to the will of the powers-that-be.

  Number Six refuses to comply.

  In every episode, Number Six resists the Village’s indoctrination methods, struggles to maintain his own identity, and attempts to escape his captors. “I will not make any deals with you,” he pointedly remarks. “I’ve resigned. I will not be pushed, filed, stamped, indexed, debriefed or numbered. My life is my own.”

  Yet no matter how far Number Six manages to get in his efforts to escape, it’s never far enough.

  Watched by surveillance cameras and other devices, Number Six’s getaways are continuously thwarted by ominous white balloon-like spheres known as “rovers.” Still, he refuses to give up. “Unlike me,” he says to his fellow prisoners, “many of you have accepted the situation of your imprisonment, and will die here like rotten cabbages.”

  Number Six’s escapes become a surreal exercise in futility, each episode an unfunny, unsettling Groundhog’s Day that builds to the same frustrating denouement: there is no escape.

  The series is a chilling lesson about how difficult it is to gain one’s freedom in a society in which prison walls are disguised within the trappings of technological and scientific progress, national security and so-called democracy.

  As Thill noted when McGoohan died in 2009, “The Prisoner was an allegory of the individual, aiming to find peace and freedom in a dystopia masquerading as a utopia.”

  The Prisoner’s Village is also an apt allegory for the American Police State: it gives the illusion of freedom while functioning all the while like a prison: controlled, watchful, inflexible, punitive, deadly and inescapable.

  The American Police State, much like The Prisoner’s Village, is a metaphorical panopticon, a circular prison in which the inmates are monitored by a single watchman situated in a central tower. Because the inmates cannot see the watchman, they are unable to tell whether or not they are being watched at any given time and must proceed under the assumption that they are always being watched.

  Eighteenth century social theorist Jeremy Bentham’s panopticon has become a model for the modern surveillance state in which the populace is constantly being watched, controlled and managed by the powers-that-be and funding its existence.

  Nowhere to run and nowhere to hide: this is the new mantra of the architects of the police state and their corporate collaborators (Facebook, Amazon, Netflix, Google, Instagram, etc.).

  We now find ourselves in the unenviable position of being monitored, managed and controlled by our technology, which answers not to us but to our government and corporate rulers.

  Consider that on any given day, the average American going about his daily business will be monitored, surveilled, spied on and tracked in more than 20 different ways, by both government and corporate eyes and ears.

  This is the electronic concentration camp—the panopticon prison—the Village—in which we are now caged.

  It is a prison from which there will be no escape if the government gets it way.

  Even now, the Trump Administration is working to make some of the National Security Agency’s vast spying powers permanent.

  In fact, Attorney General Jeff Sessions is pushing for Congress to permanently renew Section 702 of the Foreign Intelligence Surveillance Act, which allows government snoops to warrantlessly comb through and harvest vast quantities of our communications.

  And just like that, we’re back in the Village, our escape plans foiled, our future bleak.

  Except this is no surprise ending, as I make clear in my book Battlefield America: The War on the American People: for those who haven’t been taking the escapist blue pill, who haven’t fallen for the Deep State’s phony rhetoric, who haven’t been lured in by the promise of a political savior, we never stopped being prisoners.

  So how do we break out?

  For starters, wake up. Resist the urge to comply.

  Think for yourself. Be an individual. As McGoohan commented in 1968, “At this moment individuals are being drained of their personalities and being brainwashed into slaves… As long as people feel something, that's the great thing. It's when they are walking around not thinking and not feeling, that's tough. When you get a mob like that, you can turn them into the sort of gang that Hitler had.”

  We have come full circle from Bentham’s Panopticon to McGoohan’s Village to Huxley’s Brave New World.

  You want to be free? Break out of the circle.

  

  

• US Is Sending Another Aircraft Carrier To Korea: Yonhap

  After carrying out bombing drills over the Korean peninsula on Monday following North Korea’s firing of an intermediate-range missile over the Japanese island of Hokkaido, US and South Korean forces are planning to continue their displays of military might early next month, according to a report from Yonhap, the South Korean news agency. However, in a move that is sure to provoke a barrage of threats from North Korea, the US is reportedly sending a nuclear-armed aircraft carrier to the waters off the Korean peninsula, where it will take part in an upcoming round of military drills.

  Earlier this year, the US sent three aircraft carriers to waters near North Korea in an unprecedented show of force. However, it's unclear if any of those carriers are still positioned so closely to the peninsula. Here's the latest map of US naval strike groups, which was compiled by Stratfor using publicly-available information. Deployments considered "sensitive" would not be included on this map.

  

  As Yonhap reports, the aircraft carrier will participate in a series of naval drills with South Korean forces. Yonhap didn’t reveal the name of the carrier. South Korea and the US will also conduct a “combined missile alert drill” in late September or early October, for which they will be joined by Japan, Yonhap said, citing a source in South Korea’s Ministry of Defense. The US is also expected to once again send B-1B strategic bombers stationed in Guam to Korea later this month in a warning to the North.

  

  However, given UN Ambassador Nikki Haley’s revelation that the UN Security Council may have reached the limits of its ability to economically pressure the isolated country, it’s understandable that the US would want to signal an escalation in its flexing of military muscle, to show. After all, the US needs to maintain the illusion that “military options” remain on the table. Even though, as former White House Chief Strategist Steve Bannon confirmed in an interview before he was ousted from the West Wing, there aren’t any options available to the US that wouldn’t lead to millions of civilian deaths in Seoul from conventional weapons fire.

  US, Japanese and South Korean officials believe North Korea is “in the final stages” of developing a long-range ballistic missile that would be able to reliably strike the Continental US. The North believes obtaining such a weapon is essential to the regime's survival, but the prospect of a nuclear-armed North Korea – which is already, in a sense, a reality – has horrified the international community.

  According to Yonhap, the South Korean defense ministry expects the North to soon carry out more missile tests, as well as an expected seventh nuclear test.

  To be sure, news of the aircraft carrier being sent to the waters around the Korean peninsula may remind readers of President Donald Trump’s promise to send a strike force of nuclear-armed submarines to the waters of the peninsula earlier this year, only for media reports to confirm that the submarines were, in fact, headed in the other direction.

  Assuming the carrier is, in fact, headed to its reported post, such an act would be interpreted as an unprecedented provocation by Kim Jong Un and his generals, and likely demand a response in kind.

  

  

• America's Slow-Motion Military Coup

  Authored by Stephen Kinzer via The Boston Globe,

  In a democracy, no one should be comforted to hear that generals have imposed discipline on an elected head of state. That was never supposed to happen in the United States. Now it has.

  

  Among the most enduring political images of the 20th century was the military junta. It was a group of grim-faced officers — usually three — who rose to control a state. The junta would tolerate civilian institutions that agreed to remain subservient, but in the end enforced its own will. As recently as a few decades ago, military juntas ruled important countries including Chile, Argentina, Turkey, and Greece.

  These days the junta system is making a comeback in, of all places, Washington. Ultimate power to shape American foreign and security policy has fallen into the hands of three military men: General James Mattis, the secretary of defense; General John Kelly, President Trump’s chief of staff; and General H.R. McMaster, the national security adviser. They do not put on their ribbons to review military parades or dispatch death squads to kill opponents, as members of old-style juntas did. Yet their emergence reflects a new stage in the erosion of our political norms and the militarization of our foreign policy. Another veil is dropping.

  Given the president’s ignorance of world affairs, the emergence of a military junta in Washington may seem like welcome relief. After all, its three members are mature adults with global experience — unlike Trump and some of the wacky political operatives who surrounded him when he moved into the White House. Already they have exerted a stabilizing influence. Mattis refuses to join the rush to bomb North Korea, Kelly has imposed a measure of order on the White House staff, and McMaster pointedly distanced himself from Trump’s praise for white nationalists after the violence in Charlottesville.

  Being ruled by generals seems preferable to the alternative. It isn’t.

  Military officers, like all of us, are products of their background and environment. The three members of Trump’s junta have 119 years of uniformed service between them. They naturally see the world from a military perspective and conceive military solutions to its problems. That leads toward a distorted set of national priorities, with military “needs” always rated more important than domestic ones.

  Trump has made clear that when he must make foreign policy choices, he will defer to “my generals.” Mattis, the new junta’s strongman, is the former head of Central Command, which directs American wars in the Middle East and Central Asia. Kelly is also an Iraq veteran. McMaster has commanded troops in Iraq and Afghanistan almost without interruption since he led a tank company in the 1991 Gulf War.

  Military commanders are trained to fight wars, not to decide whether fighting makes strategic sense. They may be able to tell Trump how many troops are necessary to sustain our present mission in Afghanistan, for example, but they are not trained either to ask or answer the larger question of whether the mission serves America’s long-term interest. That is properly the job of diplomats. Unlike soldiers, whose job is to kill people and break things, diplomats are trained to negotiate, defuse conflicts, coolly assess national interest and design policies to advance it. Notwithstanding Mattis’s relative restraint on North Korea, all three members of Trump’s junta promote the confrontational approach that has brought protracted war in Afghanistan, Iraq and beyond, while fueling tension in Europe and East Asia.

  Our new junta is different from classic ones like, for example, the “National Council for Peace and Order” that now rules Thailand. First, our junta’s interest is only international relations, not domestic policy. Second, it did not seize power in a coup, but derives its authority from the favor of an elected president. Third and most important, it main goal is not to impose a new order but to enforce an old one.

  Last month, President Trump faced a crucial decision about the future of America’s war in Afghanistan. This was a potential turning point. Four years ago Trump tweeted, “Let’s get out of Afghanistan.” If he had followed that impulse and announced that he was bringing American troops home, the political and military elite in Washington would have been stunned. But junta members swung into action. They persuaded Trump to announce that instead of withdrawing, he would do the opposite: reject “rapid exit” from Afghanistan, increase troop strength, and continue “killing terrorists.”

  It is no great surprise that Trump has been drawn into the foreign policy mainstream; the same happened to President Obama early in his presidency. More ominous is that Trump has turned much of his power over to generals. Worst of all, many Americans find this reassuring. They are so disgusted by the corruption and shortsightedness of our political class that they turn to soldiers as an alternative.

  It is a dangerous temptation.

  

  

• Offshore Yuan Tumbles To 2-Week Lows, Biggest Drop Since Election

  Offshore yuan has now dropped almost 16 handles in the last 8 days since Chinese officials voiced their concerns "about a rallying yuan as exporters come under strain."

  

  Tonight's tumble pushes the Yuan to its lowest since August for the biggest 8-day drop since the election...

  

   

  And offers Trump some excuses to be mad at China for 'devaluing' their currency after the dollar dumped for most of the year…

  

   

  Notably, while Yuan is tumbling, Hong Kong Dollar spiked back toewards the peg…

  

  

  

• Why Is Google Hiring 1,000 Journalists To Flood Newsrooms Around America?

  So what do you do when you fail to elect your chosen candidate and your former political allies and mainstream media turn against you by painting you not as the ‘progressive’, open-minded, friendly tech company that you used to be but as an evil, racist, Russian-colluding corporate villain intent upon destroying all that is sacred in the world?  Well, you just buy the media, of course.

  As Poynter notes today, after a series of public relations debacles in recent weeks, from the firing of James Damore to news last week that Google’s algos served up some fairly disturbing keywords to potential advertising buyers (e.g. “Why Do Black People Ruin Neighborhoods“), Google is ramping up its media presence with the announcement that the Google News Lab will be working with Report For America (RFA) to hire 1,000 journalists all around the country. 

  Many local newsrooms have been cut to the bone so often that there’s hardly any bone left. But starting early next year, some may get the chance to rebuild, at least by one.

   

  On Monday, a new project was announced at the Google News Lab Summit that aims to place 1,000 journalists in local newsrooms in the next five years. Report For America takes ideas from several existing organizations, including the Peace Corps, Americorps, Teach for America and public media.

   

  Unlike foreign or domestic service programs or public media, however, RFA gets no government funding. But they are calling RFA a national service project. That might make some journalists uncomfortable  – the idea of service and patriotism. But at its most fundamental, local journalism is about protecting democracy, said co-founder Charles Sennott, founder and CEO of the GroundTruth Project.

   

  “I think journalism needs that kind of passion for public service to bring it back and to really address some of the ailments of the heart of journalism,” he said.

   

  Here’s how RFA will work: On one end, emerging journalists will apply to be part of RFA. On the other, newsrooms will apply for a journalist. RFA will pay 50 percent of that journalist’s salary, with the newsroom paying 25 percent and local donors paying the other 25 percent. That reporter will work in the local newsroom for a year, with the opportunity to renew.

  

   

  Of course, while the press release above tries to tout the shared financial responsibility of these 1,000 journalists, presumably as a testament to their ‘independence’, it took about 35 seconds to figure out that the primary funder of the journalists’ salaries, RFA, is funded by none other than Google News Lab.

  

   

  Meanwhile, as a further testament to RFA’s ‘independence, we noticed that their Advisory Board is flooded with reputable, ‘impartial’ news organizations like the New York Times, NPR, CBS, ABC, etc….

  

   

  That said, as Jeff Bezos found out this morning, you can buy the media outlet but that doesn’t necessarily mean you can buy their loyalty (see: Did WaPo Break The Law When It Disciplined A Writer For This Negative Article On Jeff Bezos?)….

  

  

• PBOC Researcher: China Should Start Its Own Sovereign Digital Currency "As Soon As Possible"

  The past two weeks have been quite a rollercoaster for bitcoin and other cryptocurrencies. In loose chronological order, we have seen:

  • Rumors that China would halt bitcoin exchange trading
  • Confirmation that China would halt bitcoin exchange trading
  • Reports China will proceed with further bitcoin crackdown
  • JPM CEO Jamie Dimon slamming bitcoin (even as JPM allows its clients to use its platform to transact in what Dimon has publicly called a fraud… for a fee of course)
  • A hit piece by JPM’s head quant
  • A hit piece by the Bank of International Settlements
  • A hit piece by the Wall Street Journal

  In the process Bitcoin went from $4,200 to under $3,000 in just days… and then rocketed back to over $4,000 today as the influence of governments in determining the fate of cryptocurrencies was strongly questioned.

  Meanwhile, as reported yesterday, first India announced it may issue its own bitcoin-like cryptocurrency as legal tender, and now, in a publication of the Chinese central bank, Huang Zhen, a researcher at Central University of Finance and Economics writes that the “the PBOC it should start its own sovereign digital currency as soon as possible” according to a commentary in the PBOC’s own Financial News.

  Here is the key excerpt, roughly translated:

  In order for the Chinese government to prevent and control the risk of virtual currency, it decided to prohibit the issuance of ICO tokens, and stop the trading of cryptocurrencies and other virtual currencies on exchanges, to better protect the interests of China’s financial consumers, and to prevent the spread of currency risk to China’s financial system, safeguard China’s financial security and the stability of important economic initiatives. The sovereign state is still the fundamental player in global politics, and carries with it the characteristics of the world financial system. Cryptocurrencies and other virtual currencies attempt to challenge the sovereign state’s right to issue currency, requiring the nationalization of currency issuance. China has a clear understanding of digital forms of money, and is actively engaging in relevant work. The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money. After this round of virtual money markets supervision, we expect under the auspices of the Chinese central bank to launch our own sovereign digital currency as soon as possible to help maintain China’s leadership in the development of global digital finance.

  Translation: decentralized cryptocurrencies, in which the money creation process is no longer controlled by the state (as a reminder, cryptos are not a liability to any central bank and are thus not backed by any official government entity), are the enemy and deserve the scorn and condemnation of every spoke of the establishment, from the central banks’ central bank, to commercial banks, to financial newspapers of record, all the way down to brown-nosing wannabe establishment “hanger-on” lackeys. Meanwhile, centralized digital currencies, which are controlled by the state, which can be adjusted and modified anywhere and at any time at a the flick of a switch, and which can be extinguished or multiplied at will during times of NIRP or hyperinflation, are wondrous creations, and China – for one – can’t wait to launch one.

  Or as the BIS explained, left bad, right good.

  

   

  … or even simpler, the difference between Fedcoin and Bitcoin.

  

  

  

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• Which Countries Have The Most Economic Complexity?

  As Visual Capitalist's Jeff Desjardins notes, rvery country has an economy that is unique.

  In some places, such as the United States or Germany, economies are able to produce many different goods and services that get exported around the world. These countries tend to house world-class businesses in sectors like financials, technology, consumer goods, and healthcare, with companies that produce highly specialized goods like automobiles, software, or pharmaceutical products. Ultimately, these are innovative economies that can roll with the punches, creating growth even when prospects are dim.

  In other places, this level of sophistication is just not there. Innovation and knowledge are stunted or non-existent for most industries, and these countries may focus exclusively on one or two goods to pay the bills. Venezuela’s reliance on oil is an obvious example of this, but there are even many Western countries that miss the mark here as well.

  MEASURING ECONOMIC COMPLEXITY

  In 2009, a team at Harvard formalized a measure of economic complexity that compared nations based on the sophistication of their economies. Now known as the Economic Complexity Index (ECI), the exact measurement is complicated, but it essentially uses data on two main things to uncover the underlying level of economic complexity:

  1. Economic Diversity 
  Measures how many different products a country can produce.

   

  2. Economic Ubiquity
  Measures how many countries are able to make those products.

  In other words: if a country produces only a few goods, that economy is not very complex. Further, if a country produces many different products, but they are all simple ones that can be replicated elsewhere, the economy is still not complex. See full details on the project here.

  RANKING THE MOST COMPLEX ECONOMIES

  Here are the most complex economies in order, along with the changing rankings over time:

  As you’ll notice, the most recent set of data is from 2015.

  Topping the list are the economies of Japan (1st), Switzerland (2nd), Germany (3rd), and South Korea (4th). The United States sits in 9th place, and Canada is further down at 33rd.

  Australia, which relies heavily on commodities, ranks notably low for Western countries in 73rd place, where it is sandwiched between Kazakhstan and the Dominican Republic.

  MOVERS AND SHAKERS

  The most recent iteration of the index also highlighted some movers and shakers over the last 10 year period:

  

  In particular, the crisis in Venezuela has had an effect on economic complexity, eroding any sophistication that existed.

  Meanwhile, Cuba’s economy is also in the decline in terms of sophistication – and with major exports including raw sugar (27%), rolled tobacco (15%), nickel (12%), oil (11%), hard liquor (7%), and crustaceans (4%), it’s not hard to see why.

  

  On the opposite side of the spectrum, the Philippines is the biggest mover upwards, ascending 28 spots.

  Some African countries are also moving fast up the rankings: Botswana, Malawi, Uganda, and Cameroon each jumped over 20 spots.

  

  

• The Death Of Free Speech Is Imminent: Government Begins Censorship Of Media Through Disingenuous Means

  Authored by Mac Slavo via SHTFplan.com,

  The death of free speech is imminent.

  

  Anyone with access to a computer and the internet can see that the United States mainstream media is nothing more than a propaganda machine designed to brainwash the masses into a lemming-like agreement with the government.

  And now, it’s oh-so-ironic that the same government that tells the media what to report on in order brainwash the public is seeking to quiet those who disagree and label them as “propaganda.”  Some may call it fake news, others just want a different opinion rather than the left-leaning media hysteria we are accustomed to.

  But now, media outlet RT (Russia Today), founded in Russia will have to register with the United States as “foreign media;” which will forever give it the inaccurate title of “propaganda.”

  This doesn’t apply to merely the Russian version of the news outlet, but the American-run and operated site as well. According to The Hill, in a report on Monday, RT did not name the company that the Department of Justice (DOJ) has compelled to file paperwork under the Foreign Agents Registration Act, but blasted the edict as overreaching.

  “The war the US establishment wages with our journalists is dedicated to all the starry-eyed idealists who still believe in freedom of speech. Those who invented it, have buried it,” Margarita Simonyan, RT’s editor-in-chief, said about the registration.

  Media organizations have been exempted from the law, which is wide-ranging in its disclosure requirements and generally applies to political consultants and those working in lobbying or public relations.

   

  It would be a felony if RT is found to have willfully failed to register as a foreign agent, however.

   

  The registration would not stop the organization from operating, but requires regularly submitted paperwork that lists its sources of foreign government-tied revenue and the contacts it makes in the United States, and it would require any reporting to be labeled as being influenced or financed by the Russian government. –The Hill

  RT has also contracted with Julian Assange, who runs WikiLeaks and is suspected of leaking internal emails from the Democratic National Committee, so the fact that they are being singled out with attempts to silence their reporting is not a big surprise to anyone with functioning neurons.

  RT must be a threat to the political elites and the establishment, or they would be left alone while outlets like CNN brainwash and lie for profit to prop up the wealthy and powerful politicians they will stop at nothing to protect.

  

  

• Ron Paul: Here's The Truth About The War Between The Alt Right And Cultural Marxists

  Despite recently being demonetized by YouTube, possibly for his anti-establishment views and slamming President Trump’s decision to increase troop levels in Afghanistan, former Texas Congressman Ron Paul is back with a video addressing the widening left-right political divide in the US – and the role that the “immoral use” of government force has played in fomenting the US’s present political crisis.

  Claiming that the US is "witnessing a battle between authoritarian groups in America", the prominent libertarian and former politician says that the "Alt-Right" and Cultural Marxists are fighting to control a government that is bankrupt, doesn't follow the Constitution, and controls a foreign empire that is running on fumes.  Ron Paul describes our dilemma.

  “Most Americans agree the violent confrontation between the alt-right and the cultural Marxist is serious, dangerous and getting worse. Understanding economics, cultural differences and the acceptance of authoritarianism is required to find the answer to the crisis.

   

  Rejecting a society based on personal liberty led to the conflict we are now witnessing: replacing authoritarianism with volunteerism must be our goal. The immoral use of government force caused this crisis and expanding it will only increase the hatred between the two sides.

   

  Though there are leaders on both sides promoting violence, large numbers are attracted to the raging culture war for emotional reasons in response to the lies and the incitement by those whose ulterior motive is seeking power, wealth and promoting a dangerous new world order.”

  The biggest problem that Paul sees is that neither the left or the right have made liberty – both economic and political – a priority. In fact, just the opposite is happening. Both the left and the right are moving in a more authoritarian direction.

  Meanwhile, the left’s penchant for labeling all of their ideological opponents as Nazis and racists is helping to sow chaos and division, Paul says.

  “One side has been labeled the alt-right, the other cultural Marxism. The right would like to reduce the debate to the differences between Communism and a populist government that emphasizes caring for Americans over foreigners. The Left would have us believe it's merely a conflict with supporters of racism and injustice and cultural Marxism. Neither side speaks of Liberty. The alt-right is made up of conservatives, populists, and pro white enthusiasts, but all are labeled Nazis and fascists by the left.”

  “Some are just fed up with the false charges and the penalties toward whites by leftist racists and the extremism of political correctness. The vicious labeling of all those who are frustrated and who join with those who are angry as Nazis and racist is only for the purpose of creating chaos. The left demands that all Trump supporters fit into this category. This is the strategy for fomenting race riots and civil war. No doubt Trump makes himself vulnerable to these inaccurate and wild charges by his enemies. The left promotes cultural Marxism and class warfare yet there are fellow travelers who represent typical liberal activists progressives and white haters. Many on the Left generally despise any minority who chooses to be a conservative or libertarian.”

  Leftists, Paul says, are far more cynical than their idealistic proclamations would suggest. White leftists only see minorities as important within the context of their votes, and are quick to treat minorities who identify as conservative or libertarian as traitors to the cause. Meanwhile, neither side understands how liberty leads to economic prosperity for the largest number of citizens.

  “Too many on the left see minorities as only important when their votes can be corralled. From their viewpoint as minorities, well-being success must come only from benefiting from doctrines promoted by forced wealth redistribution by the liberal left it's all about control it's cynical racism.”

  “The philosophic issues that divide us are what matters. Both sides accept the principle of government aggression as a proper tool of government. Neither side understands how true freedom leads to the prosperity that both sides pay lip service to. Neither side understands the shortcomings of deceptive, short-lived prosperity that comes with government deficits and monetary inflation which always ends badly, especially for the people who are supposed to be benefiting by government welfare spending. The ending of such a period of artificial wealth is now apparent and since it's not understood by either side of the current raging conflict, both are proposing different government solutions with sharp disagreements in the blame game.”

  Both the left and the right claim to be the torchbearers of the American experiment. But neither side cares about what the Constitution says, Paul said. Furthermore, both sides banded together to support the Bush doctrine, a willingness to countenance foreign interventionism that persists across the modern political spectrum. Leftists and conservatives take advantage of superficial differences to divide people – the left via identity politics and the right via their racist views.  

  “Both sides claim patriotic loyalty and ownership of the American tradition. Neither group cares about what the Constitution says both sides support America's world Empire its militarism the military industrial complex and horribly dangerous Bush doctrine of pre-emptive war. Neither side condemns our aggression or foreign interventionism. There is extensive support by both for economic planning by government though in different degrees and for different purposes.”

  “This means no complaints about protectionism, Federal Reserve power or subsidies to the special interest groups. For our bipartisan leaders, it is only who gets to distribute the loot that matters. Identity politics has taken over in forming alliances. This encourages lying, race preferences demagoguery and inciting hatred since the concept of Liberty is something that applies to individuals rather than special interest groups it is therefore rejected.”

  “Liberty is not something that can be distributed according to the various groups that claim victimization and a right to other people's earnings. The tool used especially by the far left is extreme political correctness that regulates speech by claiming hateful motivation by anyone with whom they disagree. These charges are inevitably spread with a broad brush by a complicit media advocating both types of authoritarianism. Left and right purposely divide people by natural and acceptable differences. Pursuing the cause of Liberty unites all those who honestly seek peace and prosperity in distinction from those who resort to authoritarianism. Divisiveness will cause both sides to fail with their half-hearted efforts to force an escalation of violence and the destruction of the middle class.”

  Unfortunately, neither the left or the right has expressed concern with the “deeply flawed” US monetary system, Paul said. The Federal Reserve has been allowed to debase the US dollar through the complicity of both left- and right-leaning politicians. And now, as Paul notes, the bills are all coming due.

  “Neither side will face up to the economic reality of a deeply flawed economic system and the pending collapse of the American Empire. Sadly neither side complains about the danger of the Bush Doctrine of preemptive strikes and decisions being made to go to war without congressional approval, the dependency on deficit spending, and the monetary mischief of the Fed. The bills are now coming due and the political chatter associated with the current social strife serves to distract from the philosophical impurities from which we have been infected for many decades. The number of enemies that we have generated by our foreign policy is ignored and the problem made worse by our economic and military meddling around the world our inability to pay our bills and meet our unfunded liabilities will be the limiting factor.”

  In short, the US’s economic and military meddling around the world have led to a reliance on unsustainable deficit spending. This, Paul contends, is the greatest threat facing American society – and neither side is talking about a solution.

  His full video is below.

  

  

• How Rich Chinese Use Visa Fixers To Move To The U.S.

  Authored by Peter Robison, Karen Weise, Wenxin Fan, and Yan Zhang via Bloomberg.com,

  Have a spare $500,000 to invest in an economically distressed American area (that actually isn’t distressed at all)? China’s EB-5 fixers will help you every step of the way…

  

  One summer Saturday in 2013, Vivian Ding took the stage in the grand ballroom of Shanghai’s Shangri-La Hotel to hold forth on a subject in which she was both an expert and an inspiration: emigrating to the U.S.

  Tall, with a commanding presence, Ding is what you might get if Tony Robbins were a Chinese woman capable of both pumping up a cavernous ballroom and filling out an I-526, the Immigrant Petition by Alien Entrepreneur form. Standing next to a 6-foot-high pyramid draped in black velvet, she recounted her own move to America and described the prestigious U.S. high school her daughters attended, thanks to a program that lets immigrants invest in new commercial enterprises in exchange for permanent residency visas—green cards. The cloth was pulled to reveal a model of a Manhattan building: the glassy residences on the Hudson River now known as Via 57 West. Sign a contract that day to lend $500,000, help build a “landmark for mankind”—and take home a prize, Ding implored the audience. That day, the prize was an iPad mini.

  Ellis Liu, a finance manager at a company that runs internet cafes, was in the audience. He didn’t sign up on the spot, but he couldn’t shake the idea. Shanghai had become so smoggy; his young son was constantly sneezing. A few months later, he paid $50,000 in fees to Ding’s company, Qiaowai, and got money from his father to make a $500,000 investment in another New York project, to bring Wi-Fi to the city’s subway system. Then he settled in for the four-year wait before, conditional visa in hand, he’d be able to begin job hunting in Los Angeles.

  Some immigrants pile into rafts or fishing boats to get to America. Others try to slip past the cameras and sensors along the southern border. And many simply pay up via the EB-5 visa program, through which U.S. Citizenship and Immigration Services issues 10,000 conditional green cards annually. By investing $500,000 in areas deemed economically distressed, prospective immigrants can get temporary U.S. residence for themselves and their families. Anyone whose investment creates 10 jobs can apply to become a permanent resident.

  When the program started, in 1990, Congress was squeamish about creating the impression that U.S. visas were for sale, so the law specifies that investors’ money must be at risk. The hope was that the program would jump-start development in moribund rural areas. But it languished unused for years, until developers in New York and other large cities figured out how to get just about any area to qualify as distressed, and the program took off. In recent years more than 90 percent of EB-5 investments have been in cities, and about three-quarters in real estate—often luxury residential properties in Manhattan. Most of the money comes from Chinese investors lined up by fixers such as Ding, who flood WeChat with advertisements and bring over American politicians to attach their names to projects, like Hollywood stars hawking whiskey in Japan.

  Post-Brexit, mid-Trump, borders appear to be tightening, but China’s visa fixers still sell a world of limitless possibilities. They’ve turned some of the world’s most forbidding bureaucratic machinery into a kind of consumer good for China’s rising wealthy class. “No other country in the world comes anywhere near the Chinese market in terms of the network of agents,” says Philadelphia attorney Ron Klasko, who heads the American Immigration Lawyers Association’s EB-5 committee. At least 1,000 migration agents are registered in China, and industry participants say there are many more unofficial ones. “Some operate at an exceedingly high level,” Klasko says, “and some do not.”

  Ding’s company, Qiaowai, inadvertently put the industry under additional scrutiny in May when it hosted an event at the Beijing Ritz-Carlton headlined by Nicole Meyer, the sister of Jared Kushner, President Trump’s son-in-law and a White House adviser. She was seeking investors for One Journal Square, a pair of apartment towers Kushner Cos. is building in Jersey City overlooking Manhattan. Meyer said the project “means a lot to me and my entire family.” At one point in the session, a photo of Trump was displayed on a giant screen. Qiaowai had published advertisements inviting investors to consider the “government-supported” development, which, it claimed, “in a real sense guarantees a permanent green card and the safety of the investment principal.”

  Meyer’s remarks were immediately reported by international news agencies, and a Kushner Cos. spokesman apologized. Qiaowai pulled the advertisements. Federal prosecutors later sought emails and documents from Kushner Cos., which said it “did nothing improper” and is “cooperating with legal requests for information.” Kushner Cos.’ partner in One Journal Square, KABR Group, told CNN in August that the two companies were no longer seeking EB-5 financing for the project.

  The incident was a gift for the significant number of congressional members who’ve grown to despise the EB-5 program. Some can’t get over the idea that it smacks of selling citizenship. Others say the program is dirty and point to a series of scams that have defrauded foreign investors and put U.S. citizens in jail. Still others say the program has enriched middlemen and a few big-city developers while doing almost nothing for the parts of the country it was designed to help. Republican Senator Charles Grassley of Iowa—a state that hasn’t seen an EB-5 project since 2010, according to the Iowa Economic Development Authority—is perhaps the most vocal and vehement critic. He’s asked the Department of Homeland Security, which oversees immigration to the U.S., to investigate “potentially fraudulent statements and misrepresentations” made by Qiaowai in promoting the Kushner buildings.

  Chinese agents have heard this all before. “An agent said to me once, ‘You know, we make a lot of money every time you cry wolf,’ ” recalls Robert Whyte, a Los Angeles banker who advises U.S. developers on EB-5 compliance. “They go out there and sell ‘This is your last opportunity!’ knowing full well it’s not.”

  Mickey Rowley was running the Greater Philadelphia Hotel Association when Pennsylvania Governor Ed Rendell named him, in 2003, deputy secretary for tourism, film, and economic development marketing. A few years into his tenure, someone asked him to look into using EB-5 funding to attract film production to the state. After all, moviemaking, like condo construction, creates jobs. His colleagues shrugged when he told them he was headed to China to round up $60 million from immigrant investors. “They were like, ‘Go get ’em, sport,’ ” he recalls.

  

  He had the commitments in 12 days. EB-5 loans were eventually used to make the Russell Crowe thriller The Next Three Days and the slasher flick My Bloody Valentine 3D, among others, in Pittsburgh. And Rowley—suddenly regarded as a China expert—returned a half-dozen times to raise money for projects across the state.

  What made it so easy, Rowley says, were the agents. They waited in his hotel lobby each morning. They stood at attention until he took his seat at dinner. And during meals, he says, “no one takes food off the Lazy Susan until I take food off the Lazy Susan. These agents really suck up to you.” They would offer him a car and driver, restaurant reservations, invitations to karaoke. “I never paid for anything,” Rowley says. “I was never alone. I was handled right up to the hotel lobby.”

  

  He also came to understand the extent to which the agents traded in proximity to power—sometimes physically. One agent sublet space in Pennsylvania’s trade office in Shanghai to impress clients. At presentations, Rowley spoke in English as an agent translated. It could be awkward. Standing before an audience in Wuhan, wearing a tie with a map of Pittsburgh on it, he tried to connect by saying he felt at home because rivers flowed through both cities. But what he’d meant as a little flourish died as the agent held up his own tie, pointed to it, and told the audience something like, “This guy’s tie has a map of Pittsburgh.” As Rowley gave more speeches, he noticed that people listened intently when the governor’s name came up. So he made it part of his talks. “I always made casual mention of a conversation when ‘I was just speaking to our governor the other day about Chinese investment,’ ” he says.

  Agents sometimes exploited the language barrier. Rowley remembers one having a long and animated discussion in Chinese with an audience member. Others jumped in. A Chinese-speaking American told him afterward that the agent had reassured the audience member he didn’t need to worry that he’d been in the Communist Party. Someone told the agent she was mistaken. The U.S. generally denies visas to current and former party members.

  With EB-5 loans, developers pay interest rates of 4 percent to 8 percent a year, compared with commercial alternatives of 10 percent to 18 percent. The developers latched onto the program during the Great Recession and now count on it for a big part of their financing; the value of all EB-5 loans jumped from $240 million in 2007 to $4.4 billion in 2015, according to financial adviser Brandlin & Associates.

  Agents make money on both sides of the deal. In addition to a fee of about $50,000 paid by each investor, they claim as much as half of the interest payments made by the developer. Middlemen in the U.S., who bundle EB-5 investments for developers, get most of the rest. The immigrant investor typically gets 0.5 percent or less.

  But many aren’t interested in their rate of return. They want the visa—and a project that’s sure to succeed. If it fails, there’s a chance they’ll lose both their principal and their shot at a green card. Agents who can quickly deliver investors likely to get initial approval from U.S. immigration can get a bigger piece of the interest payments from developers, Klasko says. And agents connected to good projects can charge investors more. “China is nothing if not a capitalist society—it’s all negotiated,” he says.

  The pay quickly adds up, particularly for large companies such as Qiaowai, which says it has 600 employees in 15 Chinese cities. Last year the U.S. received about 11,000 immigration petitions from Chinese investors, and Qiaowai claims it accounts for a third of the EB-5 market in China. If each of those approximately 3,700 petitioners who were Qiaowai clients paid a typical $50,000 fee, Ding’s company made something like $185 million, not including interest payments. Qiaowai and Ding didn’t respond to multiple requests for comment for this article.

  

  Ding places her personal American success story at the center of Qiaowai’s marketing, sometimes inviting her twin daughters, who went to the same prep school in Dallas as George W. Bush’s twins, to join her on stage. The company has posted photos on social media of Ding at Trump’s inauguration and at a post-inaugural party called the Liberty Ball.

  Agents are responsible for finding the hook that will make each project appeal to Chinese investors. Often, it’s an American politician or celebrity. “They completely trust the American government,” Rowley says, “despite the fact they don’t trust their own government.” Last year former New York Mayor Rudy Giuliani spoke in Beijing and Shanghai at Qiaowai seminars for Maefield Development’s renovation of a Times Square theatre. Giuliani, who was billed as “the father of the Times Square revival,” gave short speeches on the strength of the New York economy.

  In 2013, Qiaowai helped raise $50 million in EB-5 loans for a Jersey City tower known as Trump Bay Street, built by Kushner Cos. It was a fallow moment for the family brand. “Nobody knew who Kushner was, and we felt Trump was a funny character,” recalls Lily Wang, a former Qiaowai manager who now runs the competing Guanyi Investment Consulting Group. “He was no Buffett, and leveraging on him could not be convincing.” Qiaowai instead promoted the project’s proximity to Manhattan. A video put viewers behind the wheel of a car driving through Jersey City as Woke Up This Morning, the theme song from The Sopranos, played. It was still a difficult sell; Wang says it took Qiaowai a year to find 100 investors for the Trump-Kushner project.

  

  In June, a month after Qiaowai held the event in Beijing featuring Nicole Meyer and the big photo of Trump, people crowded into the grand ballroom in Shanghai’s Four Seasons Hotel for another Qiaowai seminar. Two massive TV screens looped a video profile of Ding and shorter stories about successful immigrants. “These are all true stories,” Song Ying, a sales manager, told the crowd. Qiaowai hadn’t had an easy start with the EB-5 program, she confided. Early clients doubted they’d get their $500,000 back. When the first of them did, Song recalled, they threw a party.

  This day, Song was announcing the company’s newest project (its 88th, according to the company website), a Criterion Group development on the Astoria waterfront in Queens, N.Y. Even though congressional critics were calling for an investigation of Qiaowai’s claims at the Kushner event, Song repeated the pitch. “Choose Qiaowai,” she told attendees, “you will get what you want. Guaranteed.”

  At the seminar’s next session, a tax expert highlighted an important benefit of emigrating to the U.S.: The country hasn’t signed on to an automated international information exchange, designed to reduce tax evasion, that China had just joined. “The Chinese government won’t know how much money you have in the U.S.,” he said to a room of investors, some of whom rose to snap photos of his slide presentation.

  The families, some with toddlers, spilled from the ballroom into a foyer. There, more experts stood by to answer prospective investors’ questions on housing, education, and other aspects of resettlement. Jannie Zhang, a business development officer from the China offices of Standard Chartered Plc, was there to advise on perhaps the most important concern: getting money out of the country. China allows its citizens to move only $50,000 abroad each year, far below the minimum EB-5 investment of $500,000. To get around this, investors often line up friends and family, or even pay strangers, to wire money overseas, a process known as “ant moving.”

  China monitors transfers from multiple sources into a single overseas account. Zhang told people that transferring money out of mainland China into multiple overseas accounts, instead of just one, should be enough to avoid the government’s attention. She said investors could open an account at one of the bank’s branches in China for 500,000 yuan ($76,500) and get additional accounts in Hong Kong or Singapore. From there, the money could be routed freely to the U.S. “This is a service that we are not allowed to promote proactively,” Zhang said. “But we can answer questions.”

  Not every agent can afford Qiaowai’s trappings at the Four Seasons. Two smaller operations set up shop in smaller conference rooms next door, and in the lobby, a man approached every person leaving the hotel who carried one of Qiaowai’s gray tote bags. “Do you need immigration service?” he asked. “Take my card.”

  In 2009, as Chinese investors were flocking to EB-5, Larry Wang, founder of Well Trend United Consulting, a large immigration agency based in Beijing, joined a nationally televised debate about the program. Some participants argued that it was unfair to China—just a way for the U.S. to squeeze money out of the country during the Great Recession. Wang, an EB-5 supporter, countered that the program was good so long as agents brought solid projects to their customers. Thinking back on that debate today, he says, he wishes he’d been more critical. “It’s getting too popular in China,” he says. “Are most Chinese clients knowledgeable enough? Are most agents good enough, capable enough to handle the situations? I don’t think so.” Wang learned the hard way about the risk that clients will be swept up in fraud. In 2010, Well Trend found four investors to supply $500,000 apiece in EB-5 funding for a factory that a Beverly Hills businessman was proposing to build in Moberly, Mo., 130 miles east of Kansas City. The facility was meant to produce Sweet-O, an artificial sugar substitute developed by a company called Mamtek. The city of Moberly sold $39 million in bonds to help fund the project.

  A year later, Mamtek was broke. The businessman, Bruce Cole, was charged with theft and fraud after it emerged that he’d used the money to avoid foreclosure on his California home. He pleaded guilty and was sentenced in 2014 to seven years in prison. The city defaulted on its bonds, and investors lost their money. Wang says he personally repaid his clients $2.5 million to cover their lost investment and other fees.

  In 2013 the U.S. Securities and Exchange Commission issued an alert warning investors to avoid companies that guarantee returns or visas or that claim to be supported by the U.S. government. But frauds big and small continue to haunt the program. In Seattle, a Tibetan monk-turned-developer was recently sentenced to four years in federal prison for misusing money he raised from more than 280 Chinese investors. Another developer misused $200 million in EB-5 money raised from 731 investors to build a biotech center in rural Vermont, according to the SEC. The commission also says it’s stopped some scams in progress, including one in which a man raised about $160 million from more than 290 Chinese nationals for the “World’s First Zero Carbon Emission Platinum LEED certified” hotel in Chicago, then never even went so far as to apply for building permits. The investors got $147 million of their money back—and those who were still interested had no choice but to start the process over again.

  The U.S. hit its annual quota of 10,000 EB-5 visas for the first time in 2014. Eighty-five percent of them went to Chinese nationals. The quota system stipulates that no country’s citizens can claim more than 7 percent of the total EB-5 visas in a year, as long as any other country wants them. But demand from outside China is small—though it’s growing—so in practice, citizens of every other country go directly to the front of the line and Chinese investors hoover up whatever’s left. The most visas ever claimed by a country other than China was 903, by South Korea in 2009.

  

  Just before Trump took office, Homeland Security proposed rules that would raise the minimum investment for an EB-5 visa to $1.35 million and tighten the qualifications for distressed areas. The Trump administration hasn’t yet made clear whether the rules will go into effect.

  Congress, for its part, continues to scrutinize the program. Primarily because of opposition by Grassley, Democratic Senator Dianne Feinstein of California, and a few others, EB-5 has been surviving on short-term extensions for the past two years. Feinstein wants to kill the program entirely.

  But that appears to be a minority view. Most politicians find it hard to turn down any program that promises economic development, and even some of those who take a hard line on immigration can stomach EB-5. In July, Senator Ted Cruz spoke in San Francisco at the EB-5 & Investment Immigration Convention. The Texas Republican told attendees that EB-5 creates jobs at zero taxpayer expense. The program also meshes with the priorities Trump set in his immigration proposal to curtail family preferences while maintaining those based on skills or wealth. Trump and his son-in-law, of course, have benefited from the program themselves through the Jersey City project. Kushner says he’s recused himself from any administration decisions on EB-5.

  It may be that the only losers in this system are the prospective immigrants. Over the past four years, 13 percent of EB-5 loans failed to perform, more than twice the rate of commercial mortgage-backed securities, according to Mark Elletson, managing director at Brandlin & Associates. Lance Jurich, a Los Angeles bankruptcy attorney, says he’s been hearing lately from more EB-5 investors, and they’re often in a tough spot, because their loans are typically junior to others in bankruptcy proceedings. In addition to getting their principal back, Jurich’s EB-5 clients want help proving their money created jobs while the project was still viable, so they can maintain their immigration status. “When you’re representing a financial institution like a bank, the loan officers don’t get deported if the project fails,” Jurich says.

  Basic math is also working against aspiring immigrants. The number of visas available to Chinese nationals is falling—to about 7,500 in 2016—as more people from other countries apply for the program. There are now so many pending applications from China that the U.S. government estimates a Chinese investor filing now may have to wait 10 years from the time he forks over his $500,000 to when he gets approval to move to the U.S. Liu, who paid his money in late 2013, didn’t get an interview with a U.S. visa officer until this May. He flew to Guangzhou, where a visa officer at a U.S. field office, seemingly without a glance at the files Qiaowai had prepared for him, granted him, his wife, and their son conditional visas good for two years.

  In September, Liu plans to visit Los Angeles and see Disneyland with his family. Then he’ll start looking for a job in the area. He’s trying not to share his unease about the uncertainty of the visa process. “I’m actually quite worried,” he says. “But I leave the pressure to myself.”

  As the backlog in the U.S. builds, Chinese agents see a new kind of opportunity: They’re trying to sell clients on destinations where investor visas are easier to obtain. At the seminar in June, Qiaowai’s Song suggested investors check out Malta, which is part of the European Union. It’s pricey, but fast. And there are other options. Whyte, the consultant, isn’t convinced of the potential. “The agents say to me, ‘My clients are also considering Australia,’ ” he says. “And I say, ‘Let them go to Australia. Go ahead!’ They want to come to America.”

  

  

• Muddy Waters' Carson Block Sues Equifax For $500,000

  Disgraced credit-monitoring company Equifax, which has seen its stock drop by nearly 40% since disclosing what will likely be remembered as one of the most damaging data breaches in US history, eliciting dozens of class-action lawsuits, calls for investigations by at least one state attorney general, and requests from multiple Congressional committees for more information about the exact timeline of when Equifax learned about the hack, and when it was disclosed – because somewhere between those two events, several of the company’s executives, including its CFO, cashed out of some $2 million in stock and options.

  

  In the latest humiliating blow to a company that failed at its only job – safeguarding Americans’ sensitive personal and financial data – famed short-seller Carson Block has announced that he has decided to sue the company over its “abysmal” handling of the hack.

  And here’s the kicker: He doesn’t even have an open short position against the company. In other words: There’s no profit motive here. Block – like millions of Americans – is just really, really pissed.

  Here’s the Financial Times:

  “Veteran short-seller Carson Block has launched a private lawsuit against Equifax, accusing the credit-reporting company of an “abysmal” handling of one of the worst cyber security incidents in history. Equifax said on September 7 that its systems were breached by criminals in a raid that went on for more than two months — an admission that has prompted a flood of regulatory inquiries, dozens of private lawsuits and a more than one-third collapse in the company’s share price. The data of up to 143m Americans was compromised, the company said, along with up to 400,000 people in the UK.

   

  One of those was Mr Block, whose suit filed on Friday accuses Equifax of negligence in failing to safeguard and protect his personal identifying information from criminals, as well as a failure to disclose the breach in a timely fashion.”

  Apparently, Block has learned that his personal information was compromised in the hack because he’s suing for personal damages. He has also accused the company of failing to disclose the breach in a timely fashion. The company’s CEO, Rick Smith, who is expected to deliver Congressional testimony early next month, has said that the company at first believed the hack was relatively minor."

  According to the FT, the famed short sellers is seeking $500,000 in damages, a paltry sum considering Muddy Waters reportedly produced double-digit returns last year.

  “Mr Block’s firm, Muddy Waters, has no short position that would benefit from a fall in the stock. In the suit, filed in the Northern District of California, San Francisco division, he seeks damages of at least $500,000 for the “stress, nuisance and annoyance” of dealing with issues stemming from the breach.

   

  The suit notes that Equifax’s business revolves around being a “secure storehouse” for data and providing a clear financial profile of consumers that lenders and other businesses can rely on. According to its own description, Equifax organises, assimilates and analyses data on more than 820m consumers and more than 91m businesses worldwide.

   

  Equifax could not be reached for comment at the time of publication.”

  As the FT explains, hackers gained access to the company’s systems by exploiting a vulnerability in Apache Struts, a popular open-source framework for developing web applications in the Java programming language. On Friday, Equifax said that it had patched the hole on July 30, one day after it had detected strange activity on its servers. But cybersecurity experts note that the fix had been available since March, when the Apache Foundation put out an update which had been widely disseminated in tech circles. In short, the company’s cybersecurity experts committed an unforced error by neglecting to invest the meager resources required to patch the fix.

  

  Amid the firestorm of controversy that has engulfed the company in the aftermath of the hacking disclosure, Equifax has actively tried to cover up the fact that Susan Mauldin, Equifax’s chief information security officer, and the person who was responsible for keeping the highly confidential and secret information of over 100 million Americans, has zero security or technology credentials…in fact, she was a music major at the University of Georgia.

  Smith, Mauldin and nine other executives are named in Block’s lawsuit.  Mauldin, Equifax said, would retire immediately from the company on Friday, along with David Webb, chief information officer.

  According to the suit, Equifax should’ve been more careful following two big breaches in 2016. In one of those, 430,000 names and other vital pieces of information were lost as a result of the company using “alarmingly poor” security for the generation of PINs from the last four digits of a social-security number and the four-digit year of birth.

  Of course, with North Dakota Democrat Heidi Heitkamp calling for a criminal investigation into securities fraud, Block’s lawsuit for a meager half a million is probably the least of the company’s worries…
   

  

  

• "Lies, Lies, & OMFG More Lies!"

  Authored by Jim Quinn via The Burning Platform blog,

  “There are three types of lies — lies, damn lies, and statistics.” – Benjamin Disraeli

  

  Every month the government apparatchiks at the Bureau of Lies and Scams (BLS) dutifully announces inflation is still running below 2%. Janet Yellen then gives a speech where she notes her concern inflation is too low and she needs to keep interest rates near zero to save humanity from the scourge of too low inflation. I don’t know how I could survive without 2% inflation reducing my purchasing power.

  This week they reported year over year inflation of 1.9%. Just right to keep Janet from raising rates and keeping the stock market on track for new record highs. According to our beloved bureaucrats, after they have sliced, diced, massaged and manipulated the data, you’ve experienced annual inflation of 2.1% since 2000. If you believe that, I’ve got a great real estate deal for you in North Korea on the border with South Korea.

  “Lies sound like facts to those who’ve been conditioned to mis-recognize the truth.” ? DaShanne Stokes

  

  Ignore that silly Shiller PE ratio far surpassing 1929 and 2007 levels. Ignore every historically accurate valuation method showing the stock market 70% to 129% overvalued. Wall Street shysters like Jamie Dimon, faux financial analysts, corporate media talking heads and even Donald Trump tell you this time is different. Tax cuts, amnesty for illegals, more wars, and eliminating the debt ceiling will surely spur massive economic growth. Trillion dollar deficits are always bullish. Making America Great with More Debt should drive the stock market to 30,000 in no time.

  

  All is well. Real median household income just surpassed the level achieved in 1999. Think about that for a second. It took seventeen years for the average American family to get back to a household income of $59,000. The $59,000 of household income in 2017 doesn’t quite go as far as it did in 1999, with even BLS manipulated inflation showing an 87% increase in medical costs, 80% increase in energy costs, 51% increase in food costs, 53% increase in housing costs, and a 115% increase in college education. And of course the BLS changed their methodology, boosting household income by $1,700 in 2013. So, in reality it is still below 1999 levels.

  

  When you consider 50% of all households make less than $59,000, have not benefited one iota from the Fed/Wall Street debt engineered stock bull market, have less than $1,000 in savings, and less than $50,000 of retirement savings, you realize your Deep State masters must propagandize economic data and manipulate inflation and unemployment figures to keep the masses confused, deluded, and misinformed. The Big Lie is their strategy of choice.

  The lies built into the politically motivated CPI figure are designed to screw senior citizens, bond investors, and average hard working Americans who depend upon annual salary increases to keep their heads above water. Corporations are able to point to the low levels of CPI as the reason they don’t need to provide higher salary increases. The government can get away with providing little or no Social Security increases to senior citizens by purposely under-reporting inflation based upon academic theories put forth by captured Ivy League pinheads paid off by the Deep State.

  The chart below provides the government reported cumulative increases in key categories since 2000. Not only does the government purposely under-report the increases in these costs, they also purposely under-weight the significance of particular categories in order to reduce the reported level of inflation. Some of these categories show significant increases, but they are far lower than what average Americans are actually experiencing in the real world.

  

  One of the outrageous examples of how the government uses academic gibberish about product improvements to drastically under-report CPI is how they report new vehicle inflation. The average price of a new car in 2000 was $22,000. Today, the average price is $34,500. That’s a 57% increase. The BLS bullshit artists have the gall to report new vehicle inflation of a whopping 2% since 2000.

  They have “adjusted” away 55% of the actual increase by saying airbags and other unnecessary technological baubles improved automobiles to such an extent, prices didn’t really go up. What a fucking joke. Having your ass warmed with the push of a button didn’t put the extra $12,500 in your bank account to pay for that car. And new vehicles account for 3.6% of the CPI calculation, while health insurance accounts for 1% of the weighting. Yeah, that reflects reality.

  Another outrageous example of under-reporting inflation is in the highest weighted category of housing. It is supposed to reflect the cost of rent and home ownership. The owners equivalent rent calculation is purposely opaque in order to suppress the true cost increase. Median home prices were $165,000 in 2000 and are currently $317,000, a 92% increase. The average rent of $475 in 2000 has risen to $910 today, also a 92% increase. So it makes total sense for the BLS drones to report a 53% increase in housing since 2000. I’m sure their academic model adjusted the true increase downward by 39% due to some obscure algorithm created by a Princeton economics professor.

  

  Medical care advancing by 87% since 2000 sounds substantial, but that only equates to annual inflation of 3.5%. I’d love to find anyone in this country who has only seen their medical costs rise by 3.5% per year. The blatantly shameful falsification of medical inflation is evident to anyone living through the current Obamacare nightmare. According to these BLS prevaricators, health insurance has only risen by 21% since the passage of the Obamacare abortion bill. That lie is beyond comprehension as anyone living in the real world has likely experienced insurance premium increases exceeding 100% since 2009.

  I work for the largest employer in Philadelphia, with the most leverage in negotiating insurance premiums with the health insurance complex. I also have tracked my expenditures by category since the 1990’s with Quicken. I know exactly what my medical costs and health insurance costs were in 2009 and what they are today. Let’s do a reality check on the BLS inflation figures of 26% for medical services and 21% for health insurance premiums.

  Back in 2009 we had no individual or family deductibles, no co-pays for lab work, and low co-pays for doctor visits. Today, with $1,500 individual deductibles and co-pays 70% higher, our annual medical expenses are 140% higher than they were in 2009, with one less person in the house. That’s slightly more than the BLS fraudulent figure of 26%. Our annual health insurance premiums aren’t 21% higher than 2009. They are 90% higher. And I work for an employer that has negotiating leverage. Many Americans are experiencing 200% to 400% increases. This is the real world, not some excel spreadsheet model world created by academics, politicians and bureaucrats.

  Could the BLS be as incompetent in capturing medical inflation as they appear or are they massively under-reporting the true inflation and the weighting for the average American family on purpose? I would contend it is purposeful and directed by those in power as a last ditch effort to keep the masses from revolting and hanging them from the nearest lamppost. The Federal Reserve and their Deep State co-conspirators must massively understate true inflation because reporting the truth would require interest rates to be raised, Social Security payments to be increased, and wages to be elevated – blowing a gaping hole in the federal budget and initiating a stock, bond and housing market collapse.

  Those in power know their decades of propaganda and social engineering in public schools have dumbed down the masses to such an extent not one in ten could even tell you what CPI stands for, let alone how it is measured. Any critical thinking intelligent person aware of their daily costs knows their true annual inflation rate isn’t 1.9%. It exceeds 5% and has exceeded 5% since 2000.

  Anyone reading and understanding this article is a dangerous man to the government. We know they are dishonest, insane and intolerable. Our job is to spread discontent until a tipping point is reached. I don’t think we are too far away.

  

  “The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are.” ? H.L. Mencken

  

  

• Pension Storm Coming: "This Will Become One Of The Most Heated Battles Of My Lifetime"

  By John Mauldin from Mauldin economics

  This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)

  Nevertheless, I uttered those four words in last week’s letter. I stand by them, too. In the next 20 years, we’re going to see changes that humanity has never seen before, and in some cases never even imagined, and we’re going to have to change. I truly believe this. We have unleashed economic and technological forces we can observe but not entirely control.

  I will defend this bold claim at greater length in my forthcoming book, The Age of Transformation.

  Today we will zero in on one of those forces, which last week I called “the bubble in government promises,” which I think is arguably the biggest bubble in human history. Elected officials at all levels have promised workers they will receive pension benefits without taking the hard steps necessary to deliver on those promises. This situation will end badly and hurt many people. Unfortunately, massive snafus like this rarely hurt the politicians who made those overly optimistic promises, often years ago.

  Earlier this year I called the pension mess “The Crisis We Can’t Muddle Through.” Reflecting since then, I think I was too optimistic. Simply waiting for the floodwaters to drop down to muddle-through depth won’t be enough. We face an entire new ocean, deeper and wider than we can ever cross unaided.

  

  Storms from Nowhere?

  This year marks the first time on record that two Category 4 hurricanes have struck the US mainland in the same year. Worse, Harvey and Irma landed directly on some of our most valuable and vulnerable coastal areas. So now, in addition to all the problems that existed a month ago, the US economy has to absorb cleanup and rebuilding costs for large parts of Texas and Florida, as well as our Puerto Rico and US Virgin Islands territories.

  Now then, people who live in coastal areas know full well that hurricanes happen – they know the risk, just not which hurricane season might launch a devastating storm in their direction. In a note to me about Harvey, fellow Rice University graduate Gary Haubold (1980) noted just how flawed the city’s assumptions actually were regarding what constitutes adequate preparedness. He cited this excerpt from a recent Los Angeles Times article:

  The storm was unprecedented, but the city has been deceiving itself for decades about its vulnerability to flooding, said Robert Bea, a member of the National Academy of Engineering and UC Berkeley emeritus civil engineering professor who has studied hurricane risks along the Gulf Coast.

  The city’s flood system is supposed to protect the public from a 100-year storm, but Bea calls that “a 100-year lie” because it is based on a rainfall total of 13 inches in 24 hours.

  “That has happened more than eight times in the last 27 years,” Bea said. “It is wrong on two counts. It isn’t accurate about the past risk and it doesn’t reflect what will happen in the next 100 years.” (Source)

  Anybody who lives in Houston can tell you that 13 inches in 24 hours is not all that unusual. But how do Robert Bea’s points apply to today’s topic, public pensions? Both pension plan shortfalls and hurricanes are known risks for which state and local governments must prepare. And in both instances, too much optimism and too little preparation ultimately have devastating results.

  Admittedly, public pension liabilities don’t come out of nowhere the way hurricanes seem to – we know exactly where they will strike. In many cases, we know approximately when they’ll strike, too. Yet we still let our elected officials make impossible-to-fulfill promises on our behalf. The rest of us are not so different from those who built beach homes and didn’t buy hurricane or storm surge insurance. We just face a different kind of storm.

  Worse, we let our government officials use predictions about future returns that are every bit as unrealistic as calling a 13-inch rain in Houston a 100-year event. And while some of us have called pension officials out, they just keep telling lies – and probably will until we reach the breaking point.

  Puerto Rico is a good example. The Commonwealth was already in deep debt before Irma blew in – $123 billion worth of it. There’s simply no way the island can repay such a massive debt. Creditors can fight in the courts, but in the end you can’t squeeze money out of plantains or pineapples. Not enough money, anyway. Now add Irma damages, and the creditors have even less hope of recovering their principal, let alone interest.

  Puerto Rico is presently in a new form of bankruptcy that Congress authorized last year. Court proceedings will probably drag on for years, but the final outcome isn’t in doubt. Creditors will get some scraps – at best perhaps $0.30 on the dollar, my sources say – and then move on. We’re going to find out how strong those credit insurance guarantees really are.

  “That’s just Puerto Rico,” you may say if you’re a US citizen in one of the 50 states. Be very careful. Your state is probably not so much better off. In 10 years, your state may well be in the same place where Puerto Rico is now. I’d say the odds are better than even.

  Are your elected leaders doing anything about this huge issue, or even talking about it? Probably not.

  As it stands now, states can’t declare bankruptcy in federal courts. Letting them do so would raises thorny constitutional issues. So maybe we’ll have to call it something else, but it’s going to end the same way. Your state’s public-sector retirees will not get what they were promised, and they won’t take the outcome kindly.

  Blood from Turnips

  Public sector bankruptcy, up to and including state-level bankruptcy, is fundamentally different from corporate bankruptcy in ways that many people haven’t considered. The pension crisis will likely expose those differences as deadly to creditors and retirees.

  Say a corporation goes bankrupt. A court will take all its assets and decide how to divvy them up. The assets are easy to identify: buildings, land, intellectual property, cash, etc. The parties may argue over their value, but everyone knows what the assets are. They won’t walk away.

  Not so in a public bankruptcy. The primary asset of a city, county, or state is future tax revenue from households and businesses within its boundaries. The taxpayers can walk away. Even without moving, they can bypass sales taxes by shopping elsewhere. If property taxes are too high, they can sell and move. When they take a loss on the sale, the new owner will have established a property value that yields the city far less revenue than it used to receive.

  Cities and states don’t have the ability to shed their pension liabilities. They are stuck with them, even as population and property values change.

  We may soon see an example of this in Houston. Here in Texas, our property taxes are very high because we have no income tax. Your tax is a percentage of your home’s taxable value. So people argue to appraisal boards that their homes are falling apart and not worth anything like the appraised value. (Then they argue the opposite when it’s time to sell the home.)

  About 200 entities in Harris County can charge taxes. That includes governments from Houston to Baytown to Hedwig Village, plus 20 independent school districts.

  There’s a hospital district, port authority, several college districts, the flood control district, a multitude of utility districts, and the Harris County Department of Education. Some homes may fall within 10 or more jurisdictions.

  What about those thousands of flooded homes in and around Houston; how much are they worth? Right now, I’d say their value is zero in many cases. Maybe they will have some value if it’s possible to rebuild, but at the very least they ought to receive a sharp discount from the tax collector this year.

  Considering how many destroyed or unlivable properties there are all over South Texas, I suspect cities and counties will lose billions in revenue even as their expenses rise. That’s a small version of what I expect as city and state pension systems all over the US finally face reality.

  Here in Dallas I pay about 2.7% in property taxes. When I bought my home over four years ago, I checked our local pension and was told we were 100% funded. I even mentioned in my letter that I was rather surprised. Turns out they lied. Now, realistic assessments suggest they will have to double the municipal tax rate (yes, I said double) to be able to fund fire and police pension funds. Not a terribly popular thing to do. At some point, look for taxpayers to desert the most-indebted cities and states. Then what? I don’t know. Every solution I can imagine is ugly.

  Promises from Air

  Most public pension plans are not fully funded. Earlier this year in “Disappearing Pensions” I shared this chart from my good friend Danielle DiMartino Booth:

  

  Total unfunded liabilities in state and local pensions have roughly quintupled in the last decade. You read that right – not doubled, tripled or quadrupled: quintupled. That’s nice when it happens on a slot machine, not so nice when it’s money you owe.

  You will also notice in the chart that much of that change happened in 2008. Why was that? That’s when the Fed took interest rates down to nearly zero, meaning it suddenly took more cash to fund future payments. Also, some strapped localities conserved cash by promising public workers more generous pension benefits in lieu of pay raises.

  According to a 2014 Pew study, only 15 states follow policies that have funded at least 100% of their pension needs. And that estimate is based on the aggressive assumptions of pension funds that they will get their predicted rate of returns (the “discount rate”).

  Kentucky, for instance, has unfunded pension liabilities of $40 billion or more. This month the state budget director notified local governments that pension costs could jump 50-60% next year. That’s due to a proposed reduction in the system’s assumed rate of return from 7.5% to 6.25% – a step in the right direction but not nearly enough.

  Think about this as an investor. Do you know a way to guarantee yourself even 6.25% average annual returns for the next 10–20 years? Of you don’t. Yes, some strategies have a good shot at doing it, but there’s no guarantee.

  And if you believe Jeremy Grantham’s seven-year forecasts (I do: His 2009 growth forecast was spot on), then those pension funds have very little hope of getting their average 7% predicted rate of return, at least for the next seven years.

  

  Now, here is the truth about pension liabilities. Let’s assume you have $1 billion in funding today. If you assume a 7% compound return – about the average for most pension funds – then that means in 30 years that $1 million will have grown to $8 billion (approximately). Now, what if it’s a 4% return? Using the Rule of 72, the $1 billion grows to around $3.5 billion, or less than half the future assets in 30 years if you assume 7%.

  Remember that every dollar that is not funded today means that somewhere between four dollars and eight dollars will not be there in 30 years when somebody who is on a pension is expecting to get it. Worse, without proper funding, as the fund starts going negative, the funding ratio actually gets worse, sending it into a death spiral. The only way to bring it out of the spiral is with huge cuts to other needed services or with massive tax cuts to pension benefits.

  The State of Kentucky’s unusually frank report regarding the state’s public pension liability sums up that state’s plight in one chart:

  

  The news for Kentucky retirees is quite dire, especially considering what returns on investments are realistically likely to be. But there’s a make or break point somewhere. What if pension plans must either hit that 6% average annual return for 2018–2028 or declare bankruptcy and lose it all?

  That’s a much greater problem, and it’s a rough equivalent of what state pension trustees have to do. Failing to generate the target returns doesn’t reduce the liability. It just means taxpayers must make up the difference.

  But wait, it gets worse. The graph we showed earlier stated that unfunded pension liabilities for state and local governments was $2 trillion. But that assumes an average 7% compound return. What if we assume 4% compound returns? Now the admitted unfunded pension liability is $4 trillion. But what if we have a recession and the stock market goes down by the past average of more than 40%? Now you have an unfunded liability in the range of $7–8 trillion.

  

  We throw the words a trillion dollars around, not realizing how much that actually is. Combined state and local revenues for the US total around $2.6 trillion. Following the next recession (whenever that is), the unfunded pension liabilities for state and local governments will be roughly three times the revenue they are collecting today, and that’s before a recession reduces their revenues. Can you see the taxpayer stuck between a rock and a hard place? Two immovable objects meeting? The math just doesn’t work.

  Pension trustees don’t face personal liability. They’re literally playing with someone else’s money. Some try very hard to be realistic and cautious. Others don’t. But even the most diligent can’t control when the next recession comes, or when the stock market will crash, leaving a gaping hole in their assets while liabilities keep right on rising.

  I have had meetings with trustees of various government pensions. Many of them want to assume a more realistic discount rate, but the politicians in their state literally refuse to allow them to assume a reasonable discount rate, because owning up to reality would require them to increase their current pension funding dramatically. So they kick the can down the road.

  Intentionally or not, state and local officials all over the US made pension promises that future officials can’t possibly keep. Many will be out of office when the bill comes due, protected from liability by sovereign immunity.

  We are starting to see cities filing for bankruptcy. That small ripple will be a tsunami within 7–10 years.

  But wait, it gets still worse. (Do you see a trend here?) Many state and local governments have actually 100% funded their pension plans. Some states and local governments have even overfunded them – assuming they get their projected returns. What that really means is that the unfunded liabilities are more concentrated, and they show up in unlikely places. You think Texas is doing well? Look at some of our cities and weep. Look, too, at other seemingly semi-prosperous cities all over the country. Do you think the suburbs of Dallas will want to see their taxes increased to help out the city? If you do, I may have a bridge to sell you – unless you would rather have oceanfront properties in Arizona.

  This issue is going to set neighbor against neighbor and retirees against taxpayers. It will become one of the most heated battles of my lifetime. It will make the Trump-Clinton campaigns look like a school kids’ tiddlywinks smackdown.

  I was heavily involved in politics at both the national and local levels in the 80s and 90s and much of the 2000s. Trust me, local politics is far nastier and more vicious. And there is nothing more local than police and firefighters and teachers seeing their pensions cut because the money isn’t there. Tax increases of up to 100% are going to become commonplace. But even these new revenues won’t be enough… because we will be acting with too little, too late.

  This is the core problem. Our political system gives some people incentives to make unrealistic promises while also absolving them of liability for doing so. It also places the costs of those must-break promises on innocent parties, i.e. the retirees who did their jobs and rightly expect the compensation they were told they would receive.

  So at its heart the pension crisis is really not a financial problem. It’s a moral and ethical problem of making and breaking promises that profoundly impact people’s lives. Our culture puts a high value on integrity: doing what you said you would do.

  We take a job because the compensation package includes x, y and z. Then someone says no, we can’t give you z, so quit and go elsewhere.

  The pension problem is going to get worse as more and more retirees get stuck with broken promises, and as taxpayers get handed higher and higher bills. These are irreconcilable demands in many cases. It’s not possible to keep contradictory promises.

  What’s the endgame? I think much of the US will end up like Puerto Rico. But the hardship map will be more random than you can possibly imagine. Some sort of authority – whether bankruptcy courts or something else – will have to seize pension assets and figure out who gets hurt and how much. Some courts in some states will require taxes to go up. But courts don’t have taxing authority, so they can only require cities to pay, but with what money and from whom?

  In many states we literally don’t have the laws and courts in place with authority to deal with this. And just try passing a law that allows for states or cities to file bankruptcy in order to get out of their pension obligations.

  The struggle will get ugly, and innocent people on both sides will be hurt. We hear stories about retired police chiefs and teachers with lifetime six-digit pensions and so on. Those aberrations (if you look at the national salary picture) are a problem, but the more distressing cases are the firefighters, teachers, police officers, or humble civil servants who served the public for decades, never making much money but looking forward to a somewhat comfortable retirement. How do you tell these people that they can’t have a livable pension? We will see many human tragedies.

  On the other side will be homeowners and small business owners, already struggling in a changing economy and then being told their taxes will double. This may actually happen in Dallas; and if it does, we won’t be alone for long.

  The website Pension Tsunami posts scores of articles, written all across America, about pension problems. We find out today that in places like New York and Chicago and Cook County, pension funds have more retirees collecting than workers paying into the fund. There are more retired cops in New York and Chicago than there are working cops. And the numbers of retirees just keep growing. On an individual basis, it is smart for the Chicago police officer to retire as early possible, locking in benefits, go on to another job that offers more retirement benefits, and round out a career by working at least three years at a private job that qualifies the officer for Social Security. Many police and fire pensions are based on the last three years of income; so in the last three years before they retire, these diligent public servants work enormous amounts of overtime, increasing their annual pay and thus their final pension payouts.

  As I’ve said, this is the crisis we can’t muddle through. While the federal government (and I realize this is economic heresy) can print money if it has to, state and local governments can’t print. They actually have to tax to pay their bills. It’s the law. It’s also an arrangement with real potential to cause political and social upheaval that Americans have not seen in decades. The storm is only beginning. Think Hurricane Harvey on steroids, but all over America. Of all the intractable economic problems I see in the future (and I have a vivid imagination), this is the most daunting.

  

  

• Beijing Start-Up Now Offers Sex Dolls For Rent

  It's official: China's sharing economy has reached its peak.

  After shared workout pods, stools luxury cars, and, of course, bicycles, Shanghaist reports that a Beijing-based startup now has come up with a "mesmerizingly grotesque" idea: what if people could rent sex dolls through an app and return them after a period of time so that other silicone slammers could take advantage of the very same product?

  And no, sadly this is not a joke.

  

  The Chinese app, which is called Ta Qu, or "Touch" in English, was launched in 2015 as a platform for discussing issues about sex and sexuality. Over the past two years, it has pivoted or "(d)evolved" into a sex doll sharing app, which is now being tested in Beijing.  The Global Times reports that daily rentals cost 298 yuan, or less than $50, while users of the app can rent dolls for a week for the price of 1,298 yuan, after making an 8,000 yuan deposit.

  

  The dolls then get delivered right to the user's doorstep.

  According to the Chinese outlet, there are currently five models to choose from: "Greek bikini model," "US Wonder Woman," "Korean housewife," "Russian teenager" and "Hong Kong car race cheerleader." Users can customize the dolls to their liking by picking out hair and eye color, as well as their outfits. 

  

  Here is what $50 per day rents you:

  

  

  

  

  For those asking the obvious question, the company states that it also has hygiene on its mind, as explained by their official policy.

  "The dolls' lower parts are changed for every customer," reads the app. "Please remove the lower parts before returning. After the lower parts are cleaned, the doll can be used repeatedly."

  The sex rental-sharing app is currently trying to make a name for itself in China's booming adult toy market. On Weibo, where the company has more than 300,000 followers, it announced it would be giving out 20,000 free condoms as a way of promotion. It has also established several "pop-up" locations in Beijing to inform residents about their services, while even allowing people to pose for photos with their dolls while riding on the city's subway.

  

  Hoping to capitalize on China's infamous gender imbalance, as well as its online gaming culture which breeds hordes of lonely young men, it remains to be seen whether Ta Qu will actually be able to translate the sharing economy model to sex dolls. But hey, at least it's a better idea than shared umbrellas.

  

  

• China Orders No Market Turbulence Ahead Of Party Congress

  The most important event in China in five years is about to take place, and Beijing isn’t taking any chances.

  Ahead of the Communist Party’s twice-a-decade congress – an event so massive that according to Bloomberg “nothing escapes its pull” – which is slated to start on October 18 in Beijing, regulators have made it clear to the nation’s top brokers, bankers and financiers that they don’t want to see any major turbulence in markets.

  In a repeat of the fiasco that followed the bursting of China’s equity bubble in the summer of 2015 when Beijing effectively nationalized the stock market, and went so far as to throw prominent hedge fund managers and assorted “speculators” in prison, the China Securities Regulatory Commission has ordered local brokerages to “mitigate risks” and ensure stable markets before and during the Communist Party’s leadership congress next month, according to Bloomberg. Additionally, to leave virtually nothing to chance – and to have ready scapegoats in case someone does in fact sell – the CSRC also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends.

  Brokerage bosses were told to avoid travel of any kind from Oct. 11 until the congress ends, including business trips.

   

  Luckily for them, China’s national day holidays are coming up in the first week of October. Local markets will be shut for an entire week, providing plenty of time to recharge for the congress.

  Since the congress, which is expected to replace about half of China’s top leadership, is of paramount importance to President Xi Jinping who will use it as a foundation to cement his influence into the next decade, nothing is allowed to spoil the optics of supreme control at this critical moment.

  

  And while China routinely takes steps to reduce market swings during key political gatherings, the travel ban on brokerage chiefs illustrates how seriously regulators are taking next month’s meeting, according to Bloomberg.

  Still, the news will hardly come as a surprise to most market participants, and explains why Chinese markets have already rallied significantly this year amid expectations of government support, while equity volatility has tumbled to the lowest level in over 2 decades. The Shanghai Composite Index touched a 20-month high on Tuesday, while the yuan has strengthened 6.4% against the dollar this year.

  

  In addition to the travel ban, China’s regulator told brokerages and futures companies to check for risks in their liquidity, operations and financial health, effectively warning that it does not want to see any selling. The regulator also ordered firms to assess their information system security and credit risks and report their findings before October, Bloomberg’s sources added.

  Of course, with so much focus on how effective China will be at keeping its equity markets growing at a steady, controlled pace and avoiding turbulence ahead of the critical summit, anyone hoping to make a political statement against the Xi regime – whether domestically or offshore – could do so simply by causing even a modest market correction sometime in mid-October, especially since even the smallest spike in volatility could lead to a panicked selloff in light of such an unexpected move.

  

  

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• The Gentleman’s Guide to Self-Defense Part 4: Inexpensive Self-Defense Tools

  Preface: Also take a look at the BulletProof Shirt and Knife-Resistant Clothing.

   

  Here's a quick round-up of inexpensive but effective self-defense tools …

   

  Hoffner Folding Knife

  In many "blue" states like mine, it's illegal to carry switchblades or even assisted-opening knives …

  A reader suggested a Hoffner knife. Made by a top firearm and knife trainer to U.S police departments – law enforcement officer Brian Hoffner – the Hoffner folding knife is incredible.

  It is legal in my blue state, because it does not have a spring-assisted opening. However, the Hoffer cleverly uses gravity to easily open with one hand. So even with my tendinitis (I injured my wrists lifting way too much at the gym), I can easily open the Hoffner one-handed with a quick flick of my wrist.

  Bottom line: Even in my big brotherish anti-self-defense state, I can legally carry a knife with which I can handily protect myself with quick-deploying, one-handed action.

  Purpleheart Armoury Hickory Cane

  If you'd like to carry a baseball bat around – but don't want to look so conspicuous – you can carry an elegant, all-hickory cane with a beefy metal handle. This thing is incredibly well-made, solid hickory, and as elegant as they come:

  

  (My pictures don't do it justice.)

  It is built like a tank – one whack on the noggin and the bad guy is going night-nite – and as classy as any cane in the world.

  You can leave it in the car, in your bedroom, or take it with you. 

  $85 from Purpleheart Armoury.

  Nitecore P12GT 1,000 Lumen Flashlight

  I conducted hours of research to find a small, portable, tactical flashlight which would actually work to blind an attacker long enough to mount a defense or get away.

  It turns out that there are 4 criteria for an effective self-defense flashlight:

  (1) It has to be really bright

  (2) It has to have a "strobe" mode. Specifically, it is very hard for a thug's eyes to adjust to a bright strobe than a constant bright light. It is also disorienting af.

  (3) It has to be a great "thrower". That is, it has to shine really far, as opposed to casting a wide arc. Thinking of being able to reach the bad guy's eyes, and (metaphorically) have the light basically hit the back of their head.

  (4) It has to be small enough to easily fit in your pocket.

  When I started looking, nothing met all 4 criteria …

  But recently, Nitecore released the P12GT, and it passes all 4 tests with flying color.

  At 1,000 lumens, this is crazily bright (there are also 3 other settings for normal household uses).

  It has a good strobe. And you can program the button on the thumb-end of the flashlight to "remember" the last setting you used. So you can auto-program the main button to go straight to the self-defense strobe setting.

  It is a crazy good thrower … the light shines 401 yards. (That's more than 3 football fields!)

  And at only 1 inch in diameter and 5.5 inches at length, it can easily fit in your front or back pocket.

  I haven't received a cent for writing these reviews. I received a test sample of one of the above-described tools … but not the other two. I vouch for all three of them.

  

• The Russia-China Plan For North Korea: Stability & Connectivity

  Authored by Pepe Escobar via The Asia Times,

  Moscow has been busy building agreements that would extend Eurasian connectivity eastward. The question is how to convince the DPRK to play along…

  

  Chinese President Xi Jinping (centre) and his wife Peng Liyuan welcome Russian President Vladimir Putin ahead of a banquet dinner during the BRICS Summit in Xiamen, Fujian province, on September 4, 2017

  The United Nations Security Council’s 15-0 vote to impose a new set of sanctions on North Korea somewhat disguises the critical role played by the Russia-China strategic partnership, the “RC” at the core of the BRICS group.

  The new sanctions are pretty harsh. They include a 30% reduction on crude and refined oil exports to the DPRK; a ban on exports of natural gas; a ban on all North Korean textile exports (which have brought in US$760 million on average over the past three years); and a worldwide ban on new work permits for DPRK citizens (there are over 90,000 currently working abroad.)

  But this is far from what US President Donald Trump’s administration was aiming at, according to the draft Security Council resolution leaked last week. That included an asset freeze and travel ban on Kim Jong-un and other designated DPRK officials, and covered additional “WMD-related items,” Iraqi sanctions-style. It also authorized UN member states to interdict and inspect North Korean vessels in international waters (which amounts to a declaration of war); and, last but not least, a total oil embargo.

  “RC” made it clear it would veto the resolution under these terms. Russian Foreign Minister Sergey Lavrov told the US’ diminishing Secretary of State Rex Tillerson Moscow would only accept language related to “political and diplomatic tools to seek peaceful ways of resolution.” On the oil embargo, President Vladimir Putin said, “cutting off the oil supply to North Korea may harm people in hospitals or other ordinary citizens.”

  

  Russian Foreign Minister Sergei Lavrov. Photo: Reuters

  “RC” priorities are clear: “stability” in Pyongyang; no regime change; no drastic alteration of the geopolitical chessboard; no massive refugee crisis.

  That does not preclude Beijing from applying pressure on Pyongyang. Branch offices of the Bank of China, China Construction Bank and Agricultural Bank of China in the northeastern border city of Yanji have banned DPRK citizens from opening new accounts. Current accounts are not frozen yet, but deposits and remittances have been suspended.

  To get to the heart of the matter, though, we need to examine what happened last week at the Eastern Economic Forum in Vladivostok – which happens to be only a little over 300 km away from the DPRK’s Punggye-ri missile test site.

  It’s all about the Trans-Korean Railway

  In sharp contrast to the Trump administration and the Beltway’s bellicose rhetoric, what “RC” proposes are essentially 5+1 talks (North Korea, China, Russia, Japan and South Korea, plus the US) on neutral territory, as confirmed by Russian diplomats. In Vladivostok, Putin went out of his way to defuse military hysteria and warn that stepping beyond sanctions would be an “invitation to the graveyard.” Instead, he proposed business deals.

  Largely unreported by Western corporate media, what happened in Vladivostok is really ground-breaking. Moscow and Seoul agreed on a trilateral trade platform, crucially involving Pyongyang, to ultimately invest in connectivity between the whole Korean peninsula and the Russian Far East.

  South Korean Prime Minister Moon Jae-in proposed to Moscow to build no less than “nine bridges” of cooperation: “Nine bridges mean the bridges of gas, railways, the Northern Sea Route, shipbuilding, the creation of working groups, agriculture and other types of cooperation.”

  Crucially, Moon added that the trilateral cooperation would aim at joint projects in the Russian Far East. He knows that “the development of that area will promote the prosperity of our two countries and will also help change North Korea and create the basis for the implementation of the trilateral agreements.”

  

  Russian President Vladimir Putin and his South Korean counterpart Moon Jae-in visit the Far East Street exhibition at Russky Island in Vladivostok. Photo: Sputnik / Mikhail Klimentyev

  Adding to the entente, Japanese Foreign Minister Taro Kono and South Korean Foreign Minister Kang Kyung-wha both stressed “strategic cooperation” with “RC”.

  Geo-economics complements geo-politics. Moscow has also approached Tokyo with the idea of building a bridge between the nations. That would physically link Japan to Eurasia – and the vast trade and investment carousel offered by the New Silk Roads, aka, the Belt and Road Initiative (BRI) and the Eurasia Economic Union (EAEU). It would also complement the daring plan to link a Trans-Korean Railway to the Trans-Siberian one.

  Seoul wants a rail network that will physically connect it with the vast Eurasian land bridge, which makes perfect business sense for the fifth largest export economy in the world. Handicapped by North Korea’s isolation, South Korea is in effect cut off from Eurasia by land. The answer is the Trans-Korean Railway.

  Moscow is very much for it, with Putin noting how “we could deliver Russian pipeline gas to Korea and integrate the power lines and railway systems of Russia, the Republic of Korea and North Korea. The implementation of these initiatives will be not only economically beneficial, but will also help build up trust and stability on the Korean Peninsula.”

  Moscow’s strategy, like Beijing’s, is connectivity: the only way to integrate Pyongyang is to keep it involved in economic cooperation via the Trans-Korean-Trans-Siberian connection, pipelines and the development of North Korean ports.

  The DPRK’s delegation in Vladivostok seemed to agree. But not yet. According to North Korea’s Minister for External Economic Affairs, Kim Yong Jae: “We are not opposed to the trilateral cooperation [with Russia and South Korea], but this is not an appropriate situation for this to be implemented.” That implies that for the DPRK the priority is the 5+1 negotiation table.

  Still, the crucial point is that both Seoul and Pyongyang went to Vladivostok, and talked to Moscow. Arguably the key question – the armistice that did not end the Korean War – has to be broached by Putin and the Koreans, without the Americans.

  While the sanctions game ebb and flows, the larger strategy of “RC” is clear – a drive aimed at Eurasian connectivity. The question is how to convince the DPRK to play along.

  

  

• North Korea's Nuclear Tests Could Trigger "Supervolcano" Eruption

  After North Korea’s latest nuclear test, scientists are worried that more underground explosions in the isolated country’s rocky north could set the stage for a deadly volcanic eruption not unlike the one that NASA fears could be brewing in the Yellowstone caldera.

  Following the North’s sixth nuclear test, which produced a blast that, by some estimates, was as powerful as 300 kilo hertz, Chinese authorities have stepped up radiation monitoring and even closed part of their border with North Korea as fallout fears have intensified.

  And now, as Newsweek reports, China has limited access to a nature reserve on its border with North Korea after a mysterious series of seismic shakes at the rogue nation's nuclear test site were detected less than 10 minutes after it conducted its latest test, which also triggered a sizable tremor. The severity of the tremors prompted Beijing to close the site over fears that underground detonations by the North Koreans at a facility near Punggye-ri could lead to rockslides, or worse, trigger an eruption of the active "super volcano" Mount Paektu, according to Disclose.tv.

  

   

  According to Disclose.tv, the magma and sulfur booms during a supervolcano eruption could kill millions of people in the surrounding area, and potentially endangering all of humanity.

  The volcano, which is sacred to North Korea, is located right on its border with China. China’s closure is in effect for a 70-mile-radius around the detonation site. A blast from a super volcano could be catastrophic, with ash traveling thousands of miles, potentially causing hundreds of thousands of deaths

  "For the safety and convenience of travelers, we have temporarily closed the southern tourist zone of Changbai Mountain," read the message from Chinese authorities, translated by UPI. "Officials are thoroughly investigating the safety of the tourist area." The area will remain closed to the public until "the potential risks disappear," it said.

  But besides radioactive risks, scientists are worried that North Korea’s nuclear tests could disturb could disturb mountains in the Changbai range, along with the still-active Mt. Paektu, triggering the first eruption since 1903.

  

  A new article in scientific journal Nature’s Scientific Reports states that “an underground nuclear explosion test near an active volcano constitutes a direct threat."

  Scientists wrote that it could “disturb the magma chamber of a volcano, thus accelerating the volcanic activity,” scientists argue.

  “This is an interesting mystery at this point,” Göran Ekström, a seismologist at Columbia University in New York City, told Nature.

  The US Geological Survey estimated the second burst of seismic energy, only eight and a half minutes after the detonation, had a magnitude of 4.1; the detonation itself registered at 6.3. While satellite images do show signs of structural collapse, the movement of rock more closely resembles a landslide.

  North Korea is hardly alone in facing a potentially deadly eruption. Recently, NASA scientists have spoken out about the threat of super volcanoes and the risky methods that could be used to prevent a devastating eruption.

  

  Lying beneath the tranquil and beautiful settings of Yellowstone National Park in the US is an enormous magma chamber called a caldera. It’s responsible for the geysers and hot springs for which the area is known, but for scientists at NASA, it’s also one of the greatest natural threats to human civilization as we know it.

  Following an article published by BBC about super volcanoes last month, a group of NASA researchers got in touch with the media to share a report previously unseen outside the space agency about the threat Yellowstone poses, and what they hypothesize could possibly be done about it. As one researcher described it, the threat from super volcanos is much higher than the risk from asteroids

  “I was a member of the NASA Advisory Council on Planetary Defense which studied ways for NASA to defend the planet from asteroids and comets,” explains Brian Wilcox of Nasa’s Jet Propulsion Laboratory (JPL) at the California Institute of Technology.  

   

  “I came to the conclusion during that study that the supervolcano threat is substantially greater than the asteroid or comet threat.”

  So, the agency has devised a plan that could ameliorate the volcano threat. The plan, which has yet to be authorized or implemented, would drill up to 10km down into the super volcano and pump down water at high pressure. The circulating water would return at a temperature of around 350C (662F). Thus, slowly day by day, extracting heat from the volcano. And while such a project would come at an estimated cost of around $3.46 billion, it comes with an enticing catch which could convince politicians (taxpayers) to make the investment.

  “Yellowstone currently leaks around 6GW in heat,” Wilcox says. “Through drilling in this way, it could be used to create a geothermal plant, which generates electric power at extremely competitive prices of around $0.10/kWh. You would have to give the geothermal companies incentives to drill somewhat deeper and use hotter water than they usually would, but you would pay back your initial investment, and get electricity which can power the surrounding area for a period of potentially tens of thousands of years. And the long-term benefit is that you prevent a future supervolcano eruption which would devastate humanity.”

  Of course, drilling into a super volcano comes with its own risks – in fact, it could inadvertently cause the eruption scientists are trying to prevent.

  Talk about a volcanic irony…

  

  

• The Race For Deir Ezzor: Russian Jets Strike US-Backed Forces In Syria

  One week ago we wrote that in “The Race For Deir Ezzor: US And Syrian Forces Are About To Collide“, explaining that “as ISIS continues to rapidly collapse in its last two strongholds (Raqqa and Deir Ezzor cities), the competition for recovery of territory seems in full gear between the US-SDF and Syria-Russia alliances.” More importantly, “Deir Ezzor province happens to be Syria’s most oil-rich territory, which means the future of some of Syria’s largest oil fields remains up for grabs.”

  

  Furthermore, we added that “it looks increasingly like US-backed SDF forces and the Syrian Army could be set to clash as both roll back ISIS lines from either side of the Euphrates. The SDF’s surprisingly rapid advance Friday and Saturday was assisted by US and coalition airstrikes and was further made possible by the Syrian Army’s weakening of ISIS defenses on the southeast side of the river. The airspace over Deir Ezzor is potentially growing even more dangerous as there are substantial rumors that the US coalition has declared a no fly zone (NFZ) over the north side of the Euphrates. In the meantime, Syrian and Russian air operations in the area will only increase with Deir Ezzor military airport’s returning to full service.”

  One week later, that’s precisely what happened, and overnight we got the first glimpse of just what this next stage of the Syria proxy war, now largely devoid of ISIS, will look like, when according to Reuters “U.S.-backed militias”, which have included various and assorted Al-Qaeda offshots, spinoffs and reverse mergers, said they came under attack on Saturday from Russian jets and Syrian government forces in Deir al-Zor province.

  The Syrian Democratic Forces – an alliance of Kurdish and Arab militias fighting with the U.S.-led military coalition –  said the strikes wounded six of its fighters. In a statement carried by Reuters, the SDF said that “our forces east of the Euphrates were hit with an attack from the Russian aircraft and Syrian regime forces, targeting our units in the industrial zone.”

  

  A Deir Ezzor military council fighter which fights under the SDF holds the council’s flag.

  And, as has been the case for years now, ISIS was used as the strawman to justify escalation on both sides. The SDF accused Damascus of trying to obstruct its battle against Islamic State. Such attacks “waste energies that should be used against terrorism … and open the door to side conflicts,” it said. Right… terrorism. Meanwhile, the real reason for the scramble for Deir Ezzor, imposing one’s influence on this key resources rich region, remains unmentioned even as assaults by the Russian-backed Syrian army and the U.S.-backed SDF have at times raised fears of clashes that could stoke tensions between the competing world powers.

  With Russian and Iran-backed Syrian troops closing in from the west, while US-backed SDF forces operating mostly on the east side, the two factions have mostly stayed out of each other’s way in their “fight against ISIS” with the Euphrates acting as a dividing line.

  

  And while talks have been under way to extend a formal demarcation line, there has been little progress on the issue. Meanwhile, as Deir Ezzor is set to fall shortly to either government or SDF forces, and any imaginary demarcation line is voided, the simmering proxy war may once again suffer an explosive breakout.

  Ahmed Abu Khawla, the commander of the SDF’s Deir al-Zor military council, said Russian or Syrian fighter jets flew in from government-held territory before dawn.

   

  The warplanes struck as the SDF waged “heated and bloody battles” in the industrial zone on the eastern bank, seizing factories from Islamic State militants, he said.

   

  ”We have requested explanations from the Russian government,“ he told Reuters. ”We have asked for explanations from the coalition … and necessary action to stop these jets.

  There was no immediate comment from the Syrian government or Moscow, and there certainly has been no comment from the US-led coalition on action to stop Russian jets. Incidentally, if anyone wants a sign from Trump that he has truly turned his back on Putin, it won’t come from the confiscation of some unneeded Russian assets or confiscation of Russian diplomatic buildings in the US, but from the US launching a firm Russian counter-offensive in Syria.

  Also on Saturday, a senior aide to President Bashar al-Assad said the government would fight any force, including the U.S.-backed militias, to recapture the entire country. ”I‘m not saying this will happen tomorrow … but this is the strategic intent,” Bouthaina Shaaban said in a TV interview according to Reuters.

  Ironically, The U.S.-led coalition said last week that the SDF did not plan to enter Deir Ezzor city, where Syrian troops recently broke an Islamic State siege that had lasted three years. Just a few days later, however, they appears to have changed their mind.

  Meanwhile, seeking to maintain the offensive momentum, a pro-Damascus military alliance launched attacks on Saturday from the southern corner of Deir Ezzor province to drive Islamic State from the Iraqi border. The last local vestige of the Islamic State is also coming under attack by U.S.-backed Iraqi government forces just over the border from Syria’s Deir Ezzor inside Iraq.

  With the fate of Deir Ezzor – and much of the oil in the region – set to be sealed in the coming days, the Syrian war which has gradually disappeared from both the front pages and the public consciouness, may make a strong comeback, especially if it is Syria/Russia/Iran that first gains control of this key regional outpost.

  

  

• Here's What Your Identity Sells For On The Dark Web

  Millions of Americans who trusted Equifax with sensitive personal and financial data, including social security numbers and credit-card information, are now nervously wondering whether they will be among the unlucky minority of affected customers whose identities are successfully “repurposed” by online criminal groups.

  One researcher from security firm SecureWorks shared some details about today’s burgeoning marketplace for stolen data with Bloomberg, and the conclusion is clear: It is now easier – and cheaper – for criminals to access and abuse illicit data than ever before. In fact, a high-limit American express card with a high chance of working can be purchased online for less than $20. Criminals can buy files with thousands of low-limit card numbers for pennies on the dollar.

  According to Bloomberg, “verified” high-limit credit cards from developed countries like the US, Japan, and South Korea are selling on the dark web for the bitcoin equivalent of about $10 to $20.

  

  “Verified” means the seller has tested out transactions on the card and found it hasn’t been canceled yet. For scammers on a budget, there’s unverified stolen credit card data, which comes out to pennies a card when bought in bulk.

  Here’s a screengrab from one dark-web marketplace.

  

  Luckily for criminals, cards generally aren’t selling any cheaper on the dark web these days, said Alex Tilley, a researcher at Secureworks. Today’s buyers are more likely to get higher-quality cards, ones with sizable limits that can be used fraudulently with ease. It isn’t as hit-or-miss as it used to be, a welcome change for criminals, chilling news for most of us.

  Criminals have even set up sophisticated “rating systems” to help value the data. Business cards are preferred, Tilley said, because they don’t have a limit. Those and high-end personal cards—say, a Platinum American Express that has been verified and has an 85 percent rating (judged by the seller to have an 85 percent chance of being successfully used in a fraud)—will go for $15 to $20. A regular Mastercard that doesn’t have a high limit might go for $9.

  

  One underground hacker market inexplicably called Trump’s Dumps is selling full identities of individuals just like you for as little as $10 apiece. They’re called fullz, “dossiers that provide enough financial, geographic and biographical information on a victim to facilitate identity theft or other impersonation-based fraud.” Fullz can help a criminal get past those irritating “secret questions” that sites ask to verify your identity.

  Recently, Secureworks’ researchers have seen more offers of bulk pre-verified card details, along with more identifying information about the owners. In some cases, offers even include the cardholder’s mother’s maiden name. Still, they cost just $10 to $12. Below is a fullz offer with a lot of personal identification on a Korean consumer.

  In a massive breach like Equifax, hackers can easily walk away with hundreds of millions of dollars in profits from selling the data. Meanwhile, the identity thieves who purchased it can reap their own fortune running their scams.

  Congress, the FTC and Equifax customers – enraged by both the company’s reluctance to initially disclose the breach and its carelessness (some would say tight-fistedness) concerning its cybersecurity defenses – have buried the company in lawsuits and official inquiries.

  As USA Today revealed yesterday, hackers took advantage of an Equifax security vulnerability two months after an industry group discovered the coding flaw and shared a fix for it, raising questions about why Equifax didn't update its software successfully when the danger became known.

  We’re looking forward to hearing the whole story from CEO Rick Smith when he testifies before Congress early next month. Whether Smith manages to hang on to his job remains to be seen – calls for his resignation after a 12-year-long scandal-free tenure are mounting. CNBC's Jim Cramer said last night that Smith "should be fired today."

  But perhaps more worrying for Smith and his C-Suite companions are calls from North Dakota Sen. Heidi Heitkamp, who has demanded a criminal investigation into whether the company's executives – several of whom sold stock during the period between when the company first learned about the hack and when it disclosed it to the public – commited securities fraud.

  "If that happened, then somebody needs to go to jail," she said.

   

  

  

• How Does Your State Measure Up On Student Free Speech?

  Authored by Casey Mattox via Alliance Defending Freedom,

  More than four decades ago, the Supreme Court made it clear that public college students do not sacrifice their constitutional rights when they arrive on campus, finding “no room for the view that … First Amendment protections should apply with less force on college campuses than in the community at large.”

  Yet the reality of most students does not reflect the promise of the “marketplace of ideas.” Universities are regulating what students may say, when and where they can say it, and even who will speak for them. Increasingly, state legislatures are responding by enacting laws to protect student free speech.

  We are pleased to release today a review of these state laws – highlighting the states that have protected free speech on their state-funded campuses … and those that have a lot of work to do.

  

  The Problem

  For decades, universities have enacted “speech codes” to regulate student expression. These policies limit what students may say and often take the form of “harassment,” “civility,” or similar policies that lump constitutionally protected speech in with true threats, harassment, and other unprotected speech. For instance, just last year, Alliance Defending Freedom (ADF) successfully challenged an Iowa State policy that deemed speech “harassment” if other students thought it was not “legitimate” or “necessary” or “lacked a constructive purpose.” Despite these policies being clearly unconstitutional, they are very common.

  In addition to restricting what students may say, many universities have also strictly limited when and where students may speak – often combining these limits with requirements that administrators approve student speech or literature distribution in advance. North Carolina State required students to notify the administration five days in advance of any oral or written communication anywhere on campus until we sued and a federal court ordered the policy changed. And one school has even arrested Young Americans for Liberty members for distributing the Constitution on their campus.

  Finally, free speech is only free if students decide who speaks for them. Students regularly join together with like-minded students to advocate for any number of religious, political, or other causes, building community with one another and enriching the campus environment through their advocacy. Like all student groups, they seek to elect leaders who actually share the views that the group intends to promote. But some universities have tried to prevent religious and political student organizations from having that choice.

  Why It Matters

  Free speech on campus affects all of us. Today’s college students are tomorrow’s legislators, judges, teachers, and voters.

  The lessons they are learning about how the First Amendment works will impact our future because what happens on campus will not stay on campus.

  Indeed, the Supreme Court has even warned that if we do not protect free speech on campus, “our civilization will stagnate and die.” As dramatic as that sounds, when two-thirds of all Americans now attend college it is only natural that our broader culture will be shaped by what we learn about the value of free speech and religious freedom in those formative years.

  How States Are Responding

  While the First Amendment protects free speech, universities continue to violate these core constitutional freedoms. The ADF Center for Academic Freedom has litigated federal lawsuits against over a dozen colleges and universities in the last year alone. And we have a 90 percent success rate in challenging these violations of students’ First Amendment rights. If you’re a student, you should know your rights, exercise them, and ensure that your campus is respecting the First Amendment.

  Appalled that their public institutions are suppressing rather than supporting free speech and association, states are increasingly enacting legislation to ensure that public universities affirm and protect those values. There are a number of model bills – all of which have their merits. But the American Legislative Exchange Council’s new “FORUM Act” would address all three of these threats to student free speech: ending speech codes, speech zones, and violations of students’ freedom of association. The legislation would also allow students to pursue legal action in state or federal court when their rights are violated.

  As state legislatures consider ways to address the threats to free speech on their tax-funded campuses, we are pleased to provide this guide to current state laws protecting the rights of free speech and association on public university campuses. It is our hope that we will have to update this information frequently as more states join the fight to defend the First Amendment on our campuses, teaching students to know their own constitutional rights and respect the constitutional rights of others.

  

  

• The 30 US Metros With The Highest And Lowest Incomes

  Authored by Wolf Richter via WolfStreet.com,

  Breath-taking differences in a vast country.

  

  The Census Bureau released another data trove this week for 2016, based on the American Community Survey. Among many other data points, the survey details median household incomes by geographic location, such as by metro area, county, or state. And they show just how enormous the income differences in the US are from city to city.

  Of the 382 metropolitan statistical areas (MSA) that the US government recognizes, the median income of $110,000 in Silicon Valley is over three times the median income of $35,600 in Laredo, TX.

  These MSAs can be large. For example, the extended San Francisco Bay Area is divided in several metros including the two biggest:

  • San Jose-Sunnyvale-Santa Clara, which is the southern portion of Silicon Valley and includes Palo Alto.
  • San Francisco-Oakland-Hayward, which includes five counties (San Francisco, Alameda, Marin, Contra Costa, and San Mateo) that make up the northern part of Silicon Valley, San Francisco, parts of the East Bay, and a part of the North Bay.

  These two are also the metros that had the highest median household incomes in the US in 2016, of $110,040 and $96,677 respectively.

  “Household income” is income by all household members and from all sources of money, including “earnings” (wages, salaries, and the like) and investment income such as interest, dividends, and rents (#11-#13):

  1. Earnings
  2. Unemployment compensation
  3. Workers’ compensation
  4. Social security
  5. Supplemental security income
  6. Public assistance
  7. Veterans’ payments
  8. Survivor benefits
  9. Disability benefits
  10. Pension or retirement income
  11. Interest
  12. Dividends
  13. Rents, royalties, and estates and trusts
  14. Educational assistance
  15. Alimony
  16. Child support
  17. Financial assistance from outside of the household
  18. Other income

  Below are the 30 metros in the US with the highest household incomes. Those in California are color-coded: bright red for the extended Bay Area, burgundy (sort of) for Southern California, and neon-pink for the Central Coast.

  In total, nine of the 30 metros with the highest median incomes are in California. There are many up and down the East Coast and a number of them in the middle of the country. Hawaii has two metros on the list, as has Alaska. But even within the top 30, the median household income of Number One is 57% higher than that of Number 30:

  

  Below here are the 30 of the 382 metros with the lowest median household incomes. Note these lists represent the extremes in the US. There are 322 MSAs in between the two lists, and their income levels cluster closely around the national median household income:

  

  The comparison shows just how vast the income differences by geographical regions are in a vast country, and it also explains a host of other differences, such as home prices and rents, where $1.2 million, for example, buys a median condo in San Francisco (these are nothing special) or a palatial house in Laredo, TX.

  But “median household income” is an aggregate number that hides as much as it reveals. Here are some details. Read…  The Chilling Fact “Record Median Household Income” is Hiding

  

  

• S&P On The Verge Of History

  U.S. stocks have risen more in the past eight years than in almost any other post-World War II time of economic growth, as defined by the National Bureau of Economic Research.

  The logic here is that economic expansions fuel bull markets and so it’s reasonable to measure market recoveries after a period of macro contraction ends.

  Using that definition, let’s review how the S&P 500 has performed during the last ten economic recoveries. To be precise, the birth of the stock market’s bull market is dated as the first day after an NBER-defined recession has ended. The market run continues through the peak.

  The S&P 500 Index jumped 172 percent from July 2009, when the current expansion started, through Wednesday. The biggest advance was about 300 percent and occurred from April 1991 to March 2001, when Internet-related stocks soared.

  

  As Capital Speculator blog's James Picerno notes, the question before the house: Will the momentum of late endure long enough to overtake the 1991-2001 record in duration and/or magnitude?

  If so, the bull market in the here and now has to last another 463 trading days, which translates into a market rally that goes deep into 2019.

  There's just one thing wrong…

  

  Remember – the 'market' is not the 'economy'… or maybe it is in the new normal?

  

  

• Is the Difference Now Permanent?

  From the Slope of Hope: I will start off with a chart that, in a sea of tens of thousands of charts, stood out as shocking:

  

  What the chart represents is the percentage drop from whatever the record high was. In other words, it shows the percentage loss a person would have had if they had bought at the highest point in the history of the market.

  What stunned me about the chart was how for nearly half a decade stocks have been absolutely “pinned” to the top. There was a tiny dip in late 2015, but since that time, there hasn’t been a single drop in the market of even 5%, and even those tiny 1% and 2% drops have been utterly healed.

  In other words, hell on earth for an equity bear. Absolute. Living. Hell.

  Of course, equity bulls are doing fine, and those who didn’t trade the market prior to 2012 must figure this is the easiest thing in the known universe. Indeed, they probably feel like geniuses. Because all you do is deposit some money, pick a few random stocks, and voila, you have more money than before.

  Why should anybody even bother working, with such easy money out there?

  Of course, those of us who study markets for a living know that there’s a pretty simple reason for this unidirectional “market” of ours……

  

  Hell, it even applies right down to the individual stocks!

  

  So the question I ponder with increasing frequency now – – and it’s a question whose potential answer chills me to the bone – – is this: what if it really is different this time? And, more important, what if this difference is permanent?

  What if, in the relatively brief history of public equity markets, it simply took this much progress in technology, central bank knowledge, and economic scholarship to finally figure out how to completely control the market without serious price inflation?

  What if, as recent history shows, equities will merely increase in price in perpetuity? They might not move that swiftly, but they will, more or less, become more valuable, with a sprinkling of tiny drops here and there to make sure people don’t go completely hog wild.

  Let’s think of this from a different angle: as you probably know, the market for diamonds is tightly controlled. De Beers has mastered the art of the cartel. If diamonds were simply in a huge global open market, with price discovery fully allowed, there is no doubt prices would be far lower (albeit more volatile), because they actually are NOT that rare or precious.

  As it is, though, De Beers has balanced massive marketing (“a diamond is forever“………”how can you make two months’ salary last forever?”) with artificially-controlled supply to yield a market with pretty much zero volatility and a steadily increasing price.

  

  Maybe the chart above is the future of stocks. I really don’t know.

  But do you notice there’s no active public market for buying and selling diamond as a commodity? And that there aren’t any technical analysts for diamond charts? Or that there’s no national network devoted to news related to diamonds? It’s because all of that stuff would be drop-dead boring, because prices are controlled, and predictable, and not worthy of examination. Someone figured out how to control the market. And thus the “market” no longer exists.

  God help us all…………us chartists especially………..if this is the new world order for equities.

  

  

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• A Glimmer Of Hope? Russia, US Officials Revive Dialogue On Arms Control

  Authored by Andrei Akulov via The Strategic Culture Foundation,

  The New Start Treaty was in focus of the talks held in Helsinki between Russian Deputy Foreign Minister Sergei Ryabkov and US Undersecretary of State Thomas Shannon on September 11-12. The parties agreed that the treaty should be implemented without exception. It was revealed that expert consultations on the future of the agreement had begun. A meeting of the US-Russian bilateral commission on implementing the New START would take place in the near future so that the two sides could continue their discussion of the technical aspects of implementation.

  

  In force since 2011, New START foresees the reduction of both countries' nuclear arsenals to 1,550 warheads and 700 operationally deployed launch systems by 2018. The treaty also obliges Moscow and Washington to exchange information about their nuclear weapon stockpiles. It is one of the few nuclear agreements still being honored amid the current strained relations between Washington and Moscow. The treaty is set to expire in 2021 and stipulates that the parties may agree to extend it for a period of no more than five years.

  With no negotiations in sight on a new strategic arms reduction agreement, it would be prudent to extend the treaty till 2026. True, it would be even more beneficial to have a new treaty, if possible, but there are obstacles on the way. At this level of reductions, other nuclear powers should join. This prospect is hardly feasible at present, and yet step-by-step progress toward constructive consultations on nuclear arms reductions and transparency measures is possible. The US program of creating a global missile defense is also a hindrance. There is also a problem of mistrust against the background of the relationship at its lowest ebb.

  An agreement to extend the landmark treaty is the way to stabilize the ties and prevent a competition. It would revive the hopes for saving the arms control regime, which is being eroded, to put the world back to the brink of nuclear war where it had been before the Partial Nuclear Test Ban Treaty was signed in 1963. The mutual limits and the robust verification and compliance regime, including satellites, on-site inspections, required notifications, and data exchanges enhance stability and reduce incentives for engaging in an arms race. With no verification procedures in place, the leaderships of both countries would lose a critical source of intelligence, hampering policymakers’ ability to make informed decisions. By extending New START, the parties could add stability at the time of increasing tensions.

  In February, President Trump decried the New START Treaty. He said it was one-sided and «Just another bad deal that the country made, whether it's START, whether it's the Iran deal … We're going to start making good deals», he said in an interview with Reuters. He also responded negatively to Russian President Putin’s suggestion to extend that treaty in a January phone call.

  The military leaders appear to have a different view. Gen. John Hyten, the head of US Strategic Command, told Congress in March that he is a “big supporter” of the treaty. According to him, “bilateral, verifiable arms control agreements are essential to our ability to provide an effective deterrent.” Secretaries of Defense and State, support New START. The Federation of American Scientists supports the treaty. European allies also back the idea of keeping New START in force. According to Federica Mogherini, European Union High Representative for Foreign Affairs and Security Policy, “The right path is the one marked by the New START Treaty and its implementation. This is the kind of cooperation between Russia and the United States that we Europeans like to see.”

  The United States is currently pursuing a near-complete overhaul of all elements of its strategic nuclear potential. Over the next 30 years, it plans to have a new ICBM, a new strategic submarine, a new bomber, and a new nuclear cruise missile. However, none of the plans are inhibited by New START. Russia is going through modernization of its nuclear triad. It’s absolutely important to keep the limitations and verification procedures in place to ensure adequate planning.

  Extending New START could help create a positive atmosphere for improving the US-Russia relationship.

  It would help head off unconstrained nuclear arms race and global security. Failing to pursue an extension would be a major missed opportunity.

  Nobody expects spectacular breakthroughs, but it’s good news the issue of strategic stability was at last addressed during a high level Russia-US meeting. It was abnormal that the nuclear arms reductions were not part of the bilateral agenda for such a long period of time. It’s hard to overestimate the importance of the fact that the dialogue is revived at the time when the entire arms control and non-proliferation regime is unraveling. Looks like at last a glimmer of light appeared at the end of the tunnel.

  

  

• Fearful Californians Prepare For A Nuclear Attack: "A Lot Of People Will Be Killed"

  With each passing day and each new ICBM launch from a seemingly unhinged North Korean dictator, the fears of an attack on the U.S. mainland, though faint, increasingly weigh on the hearts and minds of Americans, particularly those in California.  As The Guardian points out today, those fears have even prompted a group of California public health officials and emergency responders to gather for a strategy session with Hal Kempfer, a retired marine lieutenant colonel, to discuss which areas are the most likely targets and how citizens should respond to an attack.

  Hal Kempfer, a noted international security expert, is getting a roomful of California public health officials and emergency responders to think about the unthinkable – a nuclear bomb exploding at the port of Long Beach, about four miles away.

   

  “A lot of people will be killed,” he said, “but a large percentage of the population will survive. They will be at risk and they will need help.”

   

  “If you want to mess up southern California, if you want to mess up the west coast, if you want to mess up our country – where do you attack?” Kempfer asks. “If I’m sitting in North Korea and looking at possible targets, I’m going to be looking at Long Beach very closely.”

   

  He talks about the port and downtown Long Beach being “toast” – no exaggeration, since the blast wave is likely to vaporize everything in its immediate path. But the city health department, the Long Beach airport and fire department might not be; they are all somewhat protected by a hilly area that is likely to halt the initial blast wave. And so the city can, tentatively, think about setting up a center of emergency operations.

   

  Of course, the radioactive fallout created as the explosion gathers up tremendous quantities of dust and ocean water and spits them into the atmosphere would represent a secondary grave risk, especially in the first hours after an attack.

   

  Not to mention the electromagnetic pulse that is likely to knock out electronic systems including phones and computers, the pile-ups expected on the freeways as drivers are blinded by the flash of the explosion, the rush for food, water and gasoline as millions of Angelenos attempt to drive out of the region, and the terror triggered by even the idea of a second, follow-up attack.

  Meanwhile, lest you think this was all just a creative way for some public employees to skip work for a day, Ventura County, located just northwest of Los Angeles, has even taken the unusual step of prepping a 250-page plan on how to respond to the humanitarian crisis that would result from a nuclear attack in Los Angeles. 

  In fact, their efforts even include this truly bizarre public service announcement that instructs folks to shelter in place and cover windows with plastic.

  Of course, as we pointed out back in August, while a global nuclear confrontation is generally viewed as a bad thing, for Ron Hubbard, President of Atlas Survival Shelters in Los Angeles, it has resulted in an economic windfall as a staggering number of Californians have suddenly turned into doomsday preppers.

  “It’s crazy, I’ve never seen anything like it,” Ron Hubbard, president of Atlas Survival Shelters, told Fox11. “It’s all over the country. I sold shelters today in North Carolina, Tennessee, Texas, Oklahoma, Louisiana, Oregon, Washington, Arizona, California.”

   

  The company, based in Montebello in eastern Los Angeles, sells shelters priced from $10,000 to $100,000. Hubbard told the station that the shelters are designed to be buried 20 feet below ground and can sustain survivors for up to one year, depending on the size and model.

   

  He told the station he had sold more than 30 units in recent days, including to customers in Japan.

   

  All that said, Kempfer points out that there is a silver lining here because any attack from North Korea likely wouldn’t result in “your traditional nuclear apocalypse scenario” because Kim Jong-Un probably only has weapons capable of destroying about 1 square mile at a time.

  Rather, it’s likely to be a Hiroshima-sized bomb – large enough to obliterate everything within a square-mile radius and kill tens of thousands of people, either immediately or through the lingering effects of radiation. But still leaving millions of survivors across the region who would need help.

   

  “We’re talking about smaller North Korean things,” Kempfer emphasized, though the word “smaller” sounds very far from reassuring. “This is not your traditional nuclear apocalypse scenario.”

  So, Californians at least have that going for them, which is nice.

  

  

• Jim Rickards' "Golden Solution" To America's Debt Crisis

  Authored by Jim Rickards via DailyReckoning.com,

  Right now, the United States is officially $20 trillion in debt. Over half of that $20 trillion was added over the past decade.

  And it looks like annual deficits will be at the trillion dollar level sooner than later when projected spending is factored in.

  Basically, the United States is going broke.

  I don’t say that to be hyperbolic. I’m not looking to scare people or attract attention to myself. It’s just an honest assessment, based on the numbers.

  Now, a $20 trillion debt would be fine if we had a $50 trillion economy.

  The debt-to-GDP ratio in that example would be 40%. But we don’t have a $50 trillion economy. We have about a $19 trillion economy, which means our debt is bigger than our economy.

  When is the debt-to-GDP ratio too high? When does a country reach the point that it either turns things around or ends up like Greece?

  Economists Ken Rogoff and Carmen Reinhart carried out a long historical survey going back 800 years, looking at individual countries, or empires in some cases, that have gone broke or defaulted on their debt.

  They put the danger zone at a debt-to-GDP ratio of 90%. Once it reaches 90%, they found, a turning point arrives…

  At that point, a dollar of debt yields less than a dollar of output. Debt becomes an actual drag on growth.

  What is the current U.S. debt-to-GDP ratio?

  105%.

  We are deep into the red zone, that is. And we’re only going deeper.

  The U.S. has a 105% debt to GDP ratio, trillion dollar deficits on the way, more spending on the way.

  We’re getting more and more like Greece. We’re heading for a sovereign debt crisis. That’s not an opinion; it’s based on the numbers.

  How do we get out of it?

  

  For elites, there is really only one way out at this point is, and that’s inflation.

  And they’re right on one point. Tax cuts won’t do it, structural changes to the economy wouldn’t do it. Both would help if done properly, but the problem is simply far too large.

  There’s only one solution left, inflation.

  Now, the Fed printed about $4 trillion over the past several years and we barely have had any inflation at all.

  But most of the new money was given by the Fed to the banks, who turned around and parked it on deposit at the Fed to gain interest. The money never made it out into the economy, where it would produce inflation.

  The bottom line is that not even money printing has worked to get inflation moving.

  Is there anything left in the bag of tricks?

  There is actually. The Fed could actually cause inflation in about 15 minutes if it used it.

  How?

  The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce.

  They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold.

  They will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks.

  The Fed would target the gold price rather than interest rates.

  The point is to cause a generalized increase in the price level. A rise in the price of gold from $1,350 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy.

  There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.

  Don’t think this is possible? It’s happened in the U.S. twice in the past 80 years.

  The first time was in 1933 when President Franklin Roosevelt ordered an increase in the gold price from $20.67 per ounce to $35.00 per ounce, nearly a 75% rise in the dollar price of gold.

  He did this to break the deflation of the Great Depression, and it worked. The economy grew strongly from 1934-36.

  The second time was in the 1970s when Nixon ended the conversion of dollars into gold by U.S. trading partners. Nixon did not want inflation, but he got it.

  Gold went from $35 per ounce to $800 per ounce in less than nine years, a 2,200% increase. U.S. dollar inflation was over 50% from 1977-1981. The value of the dollar was cut in half in those five years.

  History shows that raising the dollar price of gold is the quickest way to cause general inflation. If the markets don’t do it, the government can. It works every time.

  But what people don’t realize is that there’s a way gold can be used to work around a debt ceiling crisis if an agreement isn’t reached in the months ahead.

  I call it the weird gold trick, and it’s never seen discussed anywhere outside of some very technical academic circles.

  It may sound weird, but it actually works. Here’s how…

  When the Treasury took control of all the nation’s gold during the Depression under the Gold Reserve Act of 1934, it also took control of the Federal Reserve’s gold.

  But we have a Fifth Amendment in this country which says the government can’t seize private property without just compensation. And despite its name, the Federal Reserve is not technically a government institution.

  So the Treasury gave the Federal Reserve a gold certificate as compensation under the Fifth Amendment (to this day, that gold certificate is still on the Fed’s balance sheet).

  Now come forward to 1953.

  The Eisenhower administration actually had the same debt ceiling problem we have today. And Congress didn’t raise the debt ceiling in time. Eisenhower and his Treasury secretary realized they couldn’t pay the bills.

  What happened?

  They turned to the weird gold trick to get the money. It turned out that the gold certificate the Treasury gave the Fed in 1934 did not account for all the gold the Treasury had. It did not account for all the gold in the Treasury’s possession.

  The Treasury calculated the difference, sent the Fed a new certificate for the difference and said, “Fed, give me the money.” It did. So the government got the money it needed from the Treasury gold until Congress increased the debt ceiling.

  That ability exists today. In fact, it is exists in much a much larger form, and here’s why…

  Right now, the Fed’s gold certificate values gold at $42.22 an ounce. That’s not anywhere near the market price of gold, which is about $1,330 an ounce.

  Now, the Treasury could issue the Fed a new gold certificate valuing the 8,000 tons of Treasury gold at $1,330 an ounce. They could take today’s market price of $1,330, subtract the official $42.22 price, and multiply the difference by 8,000 tons.

  I’ve done the math, and that number comes fairly close to $400 billion.

  In other words, tomorrow morning the Treasury could issue the Fed a gold certificate for the 8,000 tons in Fort Knox at $1,330 an ounce and tell the Fed, “Give us the difference over $42 an ounce.”

  The Treasury would have close to $400 billion out of thin air with no debt. It would not add to the debt because the Treasury already has the gold. It’s just taking an asset and marking it to market.

  If the debt ceiling isn’t raised, this gold certificate trick could finance the government for almost an entire year, because we have about a $400 billion deficit.

  It’s not a fantasy. It was done twice. It was done in 1934 and it was done again in 1953 by the Eisenhower administration. It could be done again. It doesn’t require legislation.

  Is the government working on this gold trick I just described? I don’t know.

  But it’s suspicious that Treasury Secretary Mnuchin recently went to inspect the Fort Knox gold. He was only the third Treasury secretary in history to visit Fort Knox, and the first since 1948. The visit was highly, highly unusual.

  I’ll be keeping an eye on this space, but the real message is that the solutions to current debt levels are inflationary.

  They involve a dollar reset, or a dollar reboot. That means revaluing the dollar either through a higher gold price or marking the gold to market and giving the government money.

  There’s a lot of moving parts here, but they all point in one direction, which is higher inflation. It’s the only way to keep America from going broke. Unfortunately, it will also make your money worth less.

  

  

• Apple's New "FaceID" Could Be A Powerful Mass Spying Tool

  Authored by Mac Slavo via SHTFplan.com,

  On Tuesday, Apple revealed their newest phone. The new line was anticipated by Apple users and is another cult favorite.  But many are rightly skeptical of the “FaceID” feature.

  

  FaceID, is a tool that would use facial recognition to identify individuals and unlock their phones for use. Unsurprisingly, this has generated some major anxiety about mass spying and privacy concerns. Retailers already have a desire for facial recognition technology. They want to monitor consumers, and without legally binding terms and Apple could use FaceID to track consumer patterns at its stores or develop and sell data to others.

  That seems minor on the surface, but the ramifications could be enormous. 

  It’s also highly possible that police would be able to more easily unlock phones without consent by simply holding an individual’s phone up to his or her face, violating the rights of the person to privacy.

  But FaceID should create fear about another form of government surveillance too. And this one is a rights violation of every person on earth: mass scans to identify individuals based on face profiles. Law enforcement is rapidly increasing their use of facial recognition; one in two American adults are already enrolled in a law enforcement facial recognition network, and at least one in four police departments has the capability to run face recognition searches. This could make Apple the target for a new mass surveillance order.

  While Facebook has a powerful facial recognition system, it doesn’t maintain the operating systems that control the cameras on phones, tablets, and laptops that stare at us every day.

  Apple’s new system completely changes that. For the first time, a company will have a facial recognition system with millions of profiles, and the hardware to scan and identify faces throughout the world.

  According to Wired, this is a system already ripe for government abuse. The government could issue an order to Apple with a set of targets and instructions to scan iPhones, iPads, and Macs to search for specific targets based on FaceID, and then Apple would provide the government with those targets’ location based on the GPS data of devices’ that receive a match. Apple has a good record of fighting for user privacy, but there’s only so much the company could do if its objections to an order are turned down by the courts. And the government is already looking into how this could benefit them, but are hiding behind the guise of “privacy.” On Wednesday Sen. Al Franken (D-Minnesota) released a letter to Apple CEO Tim Cook, asking how the company will handle the technology’s security and privacy implications.

  But this type of sleazy “Big Brother” activity by the government is not new.

  Over the last decade the government has increasingly embraced this type of mass scan method. Edward Snowden’s disclosures revealed the existence of Upstream, a program under FISA Section 702 (set to expire in just a few months). With Upstream, the NSA scans all internet communications going into and out of the United States for surveillance targets’ emails, as well as IP addresses and what the agency has called cybersignatures. And last year Reuters revealed that Yahoo, in compliance with a government order, built custom software to scan hundreds of millions of email accounts for content that contained a digital signature used by surveillance targets. –Wired

  Mass facial recognition scans are unconstitutional and a gross violation of human privacy rights. But that has yet to stop the overreaching government from its pursuit of an even more effective method of their goal of dystopian mass surveillance.

  

  

• Syria's President Exposed A Flaw In US Foreign Policy That No One Wants To Talk About

  Authored by Darius Shahtahmasebi via TheAntiMedia.org,

  In an interview with RT in 2015, Syrian President Bashar al-Assad uttered perhaps one of his most intriguing statements since the Syrian conflict erupted in 2011. Assad stated:

  “Western propaganda has, from the very beginning, been about the cause of the problem being the president. Why? Because they want to portray the whole problem in Syria lies in one individual; and consequently the natural reaction for many people is that, if the problem lies in one individual, that individual should not be more important than the entire homeland. So let that individual go and things will be alright. That’s how they oversimplify things in the West.”  [emphasis added]

  He continued:

  “Notice what happened in the Western media since the coup in Ukraine. What happened? President Putin was transformed from a friend of the West to a foe and, yet again, he was characterized as a tsar…This is Western propaganda. They say that if the president went things will get better.” [emphasis added]

  Putting aside Assad’s vast and extensive list of war crimes and crimes against humanity, Assad highlighted one of the major flaws in Western thinking regarding America’s hostile policies toward a number of independent states.

  

  Just look at the current to-and-fro-ing between North Korea and the United States to gather an accurate picture of what is being referred to here. The problem of North Korea is consistently portrayed in the media as caused by one person (current leader Kim Jong-un), a narrative that ultimately ignores the role America and its allies have played in this current crisis. As Anti-Media previously highlighted:

  “…the problem [North Korean crisis] is constantly framed as one caused by North Korea alone, not the United States. ‘How to Deal With North Korea,’ the Atlantic explains. ‘What Can Trump Do About North Korea?’ the New York Times asks. ‘What Can Possibly Be Done About North Korea,’ the Huffington Post queries. Time provides 6 experts discussing ‘How We Can Solve the Problem’ (of North Korea). ‘North Korea – what can the outside world do?’ asks the BBC.”

  What the media is really advancing here – particularly when one talks about a military option as a response to dealing with North Korea’s rogue actions – is the notion that if the U.S. could only take out Kim Jong-un, the problem of North Korea would disappear.

  Would the death of one man rid every single North Korean of the hostility and hatred they harbor toward the United States when many know full well that in the early 1950s the U.S. bombed North Korea so relentlessly they eventually ran out of targets to hit — that the U.S. military killed off at least 20 percent of the civilian population?

  If Kim Jong-un is removed, will North Koreans suddenly forget that nearly every North Korean alive today has a family relative that was killed by the United States in the 1950s?

  In the simple corporate media narrative, yes they will. Killing that one person and removing them from office will not only save the country they brutalize but will also provide security and stability for the rest of the world.

  Never mind that prior to the U.S.-NATO onslaught of Libya in 2011, Libya had the highest standard of living in the African continent. The Times once admitted that its healthcare system was the “envy of the region.” Now, the country has completely collapsed, with well over two million children out of school, countless migrants drowning in its waters, extremism running unchecked and unchallenged, and traders openly selling slaves like a commodity.

  Let’s suppose every single accusation against Libyan leader Muammar Gaddafi was true (they weren’t); how can it be said that destroying a country’s infrastructure and assassinating its leader in flagrant disregard of international law is a realistic solution to any problem? If you oppose Donald Trump, would a Russian-led military intervention solve your problems with the country he rules over?

  Forget what you think you know about Saddam Hussein, Muammar Gaddafi, Kim Jong-un, Bashar al-Assad, Vladimir Putin, and Venezuela’s Nicolas Maduro – the narrative Western governments and their media mouthpieces have promulgated for the last few decades remains completely nonsensical. You can’t solve Syria’s or Venezuela’s problems by removing their current leaders, especially if you attempt to do it by force. Anyone who claims this is possible is lying to you and is also too naïve and indolent to bother researching the current situations in Afghanistan, Yemen, Libya, Iraq – to name a few.

  The fact that the U.S. evidently doesn’t want to solve any problems at all – that it merely seeks to overthrow leaders that don’t succumb to its wishes – is a topic for a separate article but is certainly worth mentioning here as well.

  The same can ultimately be said of Donald Trump. Since his election victory, many celebrities, media pundits, and members of the intelligence community have sought to unseat and discredit him. Yet Donald Trump is merely a horrifying symptom of America’s problems; to think he alone caused them and that by removing him from office the U.S. would suddenly become a safe-haven of freedom and liberty is nothing short of idiotic.

  If you agree with the latter sentiment, you must also concede that the problems facing North Korea, Syria, Venezuela, and elsewhere could never be solved by the U.S. forcibly removing their leaders.

  If Assad was removed from Syria, would extremism disappear or would it thrive in the political vacuum as it did in Iraq? Could Syria’s internal issues — which are much more extensive than the corporate media would have us believe — be solved by something as simple as removing its current leader? Can anyone name a country where this has been tried and tested as a true model for solving a sovereign nation’s internal crises? Anyone who truly believes a country’s problems can be solved in this facile way needs to do a bit more reading.

  If you can recognize this dilemma, you can agree that it’s time for the media to completely undo the simplicity in its coverage of these issues and start reporting on the genuine diplomatic options that could be pursued, instead.

  

  

• Irma's Aftermath: "For The First Time In 300 Years, There's Not A Single Living Person On Barbuda"

  Exactly one week ago, Prime Minister Gaston Browne surveyed the damage on his tiny Caribbean island of Barbuda and declared that Hurricane Irma had completely devastated the island and left 90% of all dwellings leveled.  Browne went on to say that Irma’s “absolute devastation” meant that Barbuda was “basically uninhabitable” for the 1,800 people who called it home.

  Now, according Barbuda’s Ambassador to the United States, Ronald Sanders, the entire island has been evacuated for the first time in 300 years leaving “not a single living person on the island of Barbuda.”  Per the USA Today:

  “The damage is complete,” says Ambassador Ronald Sanders, who has served as Antigua and Barbuda’s ambassador to the U.S. since 2015. “For the first time in 300 years, there’s not a single living person on the island of Barbuda — a civilization that has existed on that island for over 300 years has now been extinguished.”

   

  “This was a huge monster,” he says. “The island and the people on the island had absolutely no chance.”

   

  “We’ve had most of the people we’ve brought over to Antigua in shelters,” says Sanders. “We’ve tried to make living accommodations as good as humanly possible in these circumstances. Fortunately, we had planned ahead for this hurricane, and we had ordered supplies in from Miami and the United States before the hurricane hit.”

  First images out of Barbuda from a Facebook broadcast live by ABS Radio & TV.

  Widespread destruction has occurred on the island. pic.twitter.com/0MGShjxuU8

  — TTWeatherCenter (@TTWeatherCenter) September 6, 2017

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  As the following aerial footage from the BBC shows, not a single structure was left untouched by Irma’s 185 mph winds.

   

  Meanwhile, even though Barbuda residents have been evacuated to safety on Antigua, Sanders says the mass evacuation has resulted in an unsustainable situation with massively overcrowded schools and unsanitary living quarters in government facilities.

  Though Barbudan evacuees are safe, Sanders says the situation is not ideal — people are living in cramped quarters in government facilities and nursing homes, including some 500 school-aged children. Now that school is back in session, Antigua must find room for these students.

   

  “The situation is unacceptable, and it’s costly,” he says. “We’re going to have to keep this going for sometime because Barbuda’s not going to be rebuilt in a hurry, and when we do rebuild it, we’re going to have to rebuild to massive hurricane standards. This is going to take a while. There is no electricity there, there is no potable water anymore, there is no structure in which people can survive. We have a mammoth task on our hands.”

   

  Sanders says the world must step up and help Barbuda.

   

  “We are a small island community — the gross domestic product of Antigua is $1 billion a year,” he says. “We cannot afford to take on this responsibility by ourselves. Barbuda is not just a disaster, it’s a humanitarian crisis. We are hopeful that the international community will come to our aid, not because we’re begging for something we want, but because we’re begging for something that is needed.”

  Finally, Sanders took the opportunity to remind us all that, in his scientific opinion as an Ambassador, Hurricane Irma was the direct result of all of our contributions to global warming….

  “We believe climate change is here to stay — it’s a reality, despite all of the naysayers,” he says. “We know that these things have occurred as a result of the profligacy of the countries that are rich, and have abused the system. We, unfortunately, who contribute less than naught point naught percent of pollution of the world’s atmosphere, are the world’s greatest victims.”

  …except this…

  

  …and this…

  

  Oh well, we probably just don’t understand the math…

  

  

• Germany Launches Probe After Pentagon's Syrian Arms Smuggling Story Goes Viral

  The German government has opened an probe into an illegal Pentagon arms trafficking operation after a bombshell investigative report on the secret program went viral this week.

  On Wednesday we reported on the continuing Pentagon arms pipeline to Syria which runs through Europe, the Balkans, and Caucuses, and which is based on a shady network of private contractors and altered US government paperwork. The Organized Crime and Corruption Reporting Project (OCCRP) and the Balkan Investigative Reporting Network (BIRN) produced conclusive evidence and internal memos proving that not only is the Pentagon currently involved in shipping up to $2.2 billion worth of (mostly old Soviet) weapons from private dealers to US-backed Syrian militants, but is actually manipulating paperwork such as end-user certificates in order to conceal the ultimate destinations of the weaponry (in this case Syria).

  The new investigation also confirms Bulgarian journalist Dilyana Gaytandzhieva's prior findings, which exposed the role of Azerbaijan-operated Silk Way Airlines in the weapons airlifts. Though independent journalists and regional monitoring groups have been digging into the Pentagon arms shipments throughout the summer, mainstream European and American press were reluctant to cover the story, even as a steady flow of incontrovertible proof emerged online in the form of documents, photos, and videos of mysterious cargo planes being loaded with weapons. Over the past two weeks WikiLeaks has also highlighted the emerging details of a developing story which saw at least one journalist come under scrutiny by European security officials.

  Public records reveal that the Pentagon is shipping billions of dollars of arms to Syrian insurgents https://t.co/8idPs57GnI pic.twitter.com/2qQDLzymZk

  — WikiLeaks (@wikileaks) September 13, 2017

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  After a week of the story picking up momentum, it appears we may finally be seeing the beginnings of public and governmental investigations forming as European governments perhaps reluctantly take stock of Pentagon arms pipelines in their territories now coming under public attention and outrage. As Stripes reports, Germany announced a new legal inquiry early Friday:

  The German prosecutor’s office in Kaiserslautern said Friday it is looking into a report that the Pentagon used Ramstein Air Base to transport weapons covertly to rebel fighters in Syria — an allegation, that if true, might have broken German law.

   

  …The weapons transfer through Ramstein would have required permission from the German government, the report stated.

   

  Officials with Germany’s Economic Affairs Ministry told Stars and Stripes that the ministry did not give the U.S. military permission to transport weapons to Syria through the country. They denied having any knowledge of such activities.

  Part of the OCCRP and BIRN investigation spotlighted Ramstein as one of the many key transport hubs used in the Syria weapons trafficking program. The arms monitoring groups jointly published a side report on the Pentagon's questionable activities at the German US installation as part of its broader findings on Tuesday.

  That report included a newly unearthed internal email authored by the Pentagon’s US Special Operations Command Mission (SOCOM) instructing its partnering contractors to, as BIRN summarizes, "stop trucking Soviet-style weapons from the Balkans through Germany" because "officials in Berlin became concerned about the deliveries."

  The closing line of the SOCOM email explicitly acknowledges that, "Germany has become very sensitive to these requests."

  
  SOCOM email published by BIRN's Balkan Insight on Tuesday: "Germany has become very sensitive to these requests."

  BIRN questioned the German government over the findings this week and immediately caught German officials lying about their knowledge of the Pentagon weapons transfers. According to the BIRN/OCCRP summary of the exchange:

  The German government earlier declined to comment on the nature of its “sensitivities”, and at a press conference on Thursday, continued to insist it has no knowledge of the movement of weapons to Syria.

   

  German laws, however, dictate that licences to transport weapons must be accompanied by end user certificates which states the final destination of the shipment and who will be using the equipment.

   

  According to the German government, no such licence has been issued for deliveries to Syria or neighbouring countries since 2010.

   

  This claims jars with a report in the Serbian press in December 2015, revealing that a number of US air force C-17 cargo planes had delivered Serbian weapons to the Ramstein airbase.

   

  The report was backed up by one of SOCOM’s most important contractors on its Syrian contract, Global Ordnance, which shared the story on Facebook adding: “Glad Global Ordnance could contribute to support our military!”

  

  Both leaked and public documents confirm Serbia to be another key logistical hub in the Syria weapons transport program. Multiple weapons end-user certificates were proven to be falsified or altered by the Pentagon, which is likely exactly what the newly announced German probe will look into. One of the weapons trafficking investigators told Foreign Policy this week that, “The Pentagon is removing any evidence in their procurement records that weapons are actually going to the Syrian opposition.”

  Yet it appears that some of the very contracting companies and individuals involved in the shadowy scheme have over the years taken to Facebook and other social media platforms to brag about their role in the program and huge profits that resulted. BIRN's Balkan Insight has just today published a trove of photographs and postings it culled from social media which connect various arms dealers – some of them with known links to organized crime – to the Pentagon weapons program.

  

  Arms dealer and Pentagon contractor for the Syria covert program, Marc Morales, uploaded photos on January 29, 2015 from the Zastava factory, Kragujevac, Serbia. He openly bragged about the contracts he procured: 'Another day in the office,' he wrote.

  As the latest BIRN report notes, what is depicted in the Hollywood film War Dogs is sadly not at all a thing of the past or mere of recent history, but is current and ongoing. And unlike in the movies, real people – specifically Syrians and Iraqis – are dying as a result. But with the new German government probe just announced which was surely the result the story going viral this week, there is perhaps some hope that public outrage could continue to shine a light on such disgusting US government criminality.

  Interview with journalist fired for exposing how #CIA and #Saudi ran weapons to Syrian insurgents @dgaytandzhieva https://t.co/eTvDAtAG0M

  — WikiLeaks (@wikileaks) September 2, 2017

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• High-Ranking CIA Agent Blows Whistle On The Deep State And Shadow Government

  Authored by Aaron Kesel via ActivistPost.com,

  A CIA whistleblower, Kevin Shipp, has emerged from the wolves den to expose the deep state and the shadow government which he calls two entirely separate entities.

  

  “The shadow government controls the deep state and manipulates our elected government behind the scenes,” Shipp warned in a recent talk at a Geoengineeringwatch.org conference.

  Shipp had a series of slides explaining how the deep state and shadow government functions as well as the horrific crimes they are committing against U.S. citizens.

  Some of the revelations the former CIA anti-terrorism counter intelligence officer revealed included that “Google Earth was set up through the National Geospatial Intelligence Agency and InQtel.” Indeed he is correct, the CIA and NGA owned the company Google acquired, Keyhole Inc., paying an undisclosed sum for the company to turn its tech into what we now know as Google Earth. Another curious investor in Keyhole Inc. was none other than the venture capital firm In-Q-Tel run by the CIA according to a press release at the time.

  Shipp also disclosed that the agency known as the Joint Special Ops Command (JSOC) is the “president’s secret army” which he can use for secret assassinations, overturning governments and things the American people don’t know about.

  FBI warrantless searches violate the Fourth Amendment with national security letters, which Shipp noted enables them to walk into your employer’s office and demand all your financial records and if he or she says anything about them being there they can put your supervisor in jail or drop a case against themselves using the “State’s Secret Privilege law.”

  “The top of the shadow government is the National Security Agency and the Central Intelligence Agency,” Shipp said.

  Shipp expressed that the CIA was created through the Council on Foreign relations with no congressional approval, and historically the CFR is also tied into the mainstream media (MSM.) He elaborated that the CIA was the “central node” of the shadow government and controlled all of other 16 intelligence agencies despite the existence of the DNI. The agency also controls defense and intelligence contractors, can manipulate the president and political decisions, has the power to start wars, torture, initiate coups, and commit false flag attacks he said.

  As Shipp stated, the CIA was created through executive order by then President Harry Truman by the signing of the National Security Act of 1947.

  According to Shipp, the deep state is comprised of the military industrial complex, intelligence contractors, defense contractors, MIC lobbyist, Wall St (offshore accounts), Federal Reserve, IMF/World Bank, Treasury, Foreign lobbyists, and Central Banks.

  In the shocking, explosive presentation, Shipp went on to express that there are “over 10,000 secret sites in the U.S.” that formed after 9/11. There are “1,291 secret government agencies, 1,931 large private corporations and over 4,800,000 Americans that he knows of who have a secrecy clearance, and 854,000 who have Top Secret clearance, explaining they signed their lives away bound by an agreement.

  He also detailed how Congress is owned by the Military Industrial Complex through the Congressional Armed Services Committee (48 senior members of Congress) giving those members money in return for a vote on the spending bill for the military and intelligence budget.

  He even touched on what he called the “secret intelligence industrial complex,” which he called the center of the shadow government including the CIA, NSA, NRO, and NGA.

  Shipp further stated that around the “secret intelligence industrial complex” you have the big five conglomerate of intelligence contractors – Leidos Holdings, CSRA, CACI, SAIC, and Booz Allen Hamilton. He noted that the work they do is “top secret and unreported.”

  The whistleblower remarked that these intelligence contractors are accountable to no one including Congress, echoing the words of Senator Daniel Inouye when he himself blew the whistle on the shadow government during the Iran-Contra hearings in 1987.

  At the time Inouye expressed that the “shadow government had its own funding mechanism, shadowy Navy, and Air Force freedom to pursue its own goals free from all checks and balances and free from the law itself.”

  Shipp further added that the shadow government and elected government were in the midst of a visible cold war.

  So who is Shipp and is he credible as a whistleblower, does he have credentials for the CIA? Aim.org wrote:

  Shipp held several high-level positions in the CIA. He was assigned as a protective agent for the Director of Central Intelligence, a counterintelligence investigator, a Counter Terrorism Center officer, a team leader protecting sensitive CIA assets from assassination, a manager of high-risk protective operations, a lead instructor for members of allied governments, an internal staff security investigator, and a polygraph examiner. He was tasked with protecting the CIA from foreign agent penetration and the chief of training for the CIA federal police force.  Mr. Shipp functioned as program manager for the Department of State, Diplomatic Security, and Anti Terrorism Assistance global police training program.  He is the recipient of two CIA Meritorious Unit Citations, three Exceptional Performance Awards and a Medallion for overseas covert operations.  He is the author of From the Company of Shadows–CIA Operations and the War on Terrorism.

  Shipp noted he was working with former NSA whistleblower William Binney but didn’t state what the two were working on together. Shipp is highly credible and may just be the highest level whistleblower. This leak is huge. He has been previously mentioned in the New York Times for blowing the whistle on the mistreatment of him and his family when they were put in a mold-contaminated home. He is also mentioned in a WikiLeaks cable during the GiFiles that I was able to dig up. Is this the beginning of whistleblowers coming forward to end the shadow government and deep state? You can watch Shipp’s full explosive presentation below.

  

  

• "Unprecedented Thefts" Force Baltimore Bike-Sharing Program To Suspend Operations

  In 2016, the city of Baltimore partnered with Bewegen Technologies to launch North America’s largest electrical-assisted cycling (or pedelec) bike sharing program. The system is located in Baltimore’s metropolitan area with over 25 stations available. Fast forward one-year later, this grand “sharing economy” experiment in America’s most dangerous city has imploded due to what the company’s CEO says is a level of theft he has never experienced before.

  As of today, Baltimore officials have suspended all operations of the bike fleet until October 15, 2017. According to the Baltimore Sun, the temporary shutdown is due to “thieves ripping the bicycles out at an unprecedented pace”, said Alain Ayotte, CEO of Bewegen Technologies, the Canadian manufacturer. The manufacturer of the $2.36 million Baltimore Bike Share system said his company has “never experienced the level of theft” that caused officials to announce a temporary shutdown of the program to allow additional locking devices to be installed to the bike docks.

  Per Baltimore Sun,

  “We don’t have this issue anywhere else, not at this level,” Ayotte said Wednesday. “Our locking system is recognized [as] very, very up to industry standard, but due to the issues that occurred in Baltimore this summer, we did add additional security.”

   

  The bike-share program launched last fall with 200 bicycles at 20 stations and was supposed to grow to 500 bicycles at 50 stations in the spring. Instead, it has suffered so many thefts and maintenance backups that most of the bicycles are out of service. The program will close Sunday and reopen Oct. 15.

  Unwittingly, some bicycle stations were placed in areas of extreme wealth inequality and high violent crime. Even though, each bicycle is outfitted with GPS, it did not deter thieves. Baltimore is suffering from a racial wealth divide according to JPM. The report highlights African Americans are 63% of the total 620k population with nearly 1/3 having a net worth of zero.

  At one point, the thefts became so rampant, maintenance employees spent a majority of time searching for stolen bikes. The Department of Transportation had to apologized for misleading millennials about the true nature of the bicycle problem calling it a ‘rebalancing issue’.

  In particular, a citizen named Brian Seel, wrote a Medium piece titled: “Baltimore Bike Share Only Has Four Bikes”. Recently, he rode to all 25 bike sharing docks and only found four working bikes. In the article, he explains how the ‘real problem’ is communication issues with the bike sharing company…

  Mr. Steel rode to all 25 stations. In his first finding, he stopped at Baltimore City where there were no bikes, but 5 listed on the APP.

  

  At Baltimore Visitors Center there were no bikes, but 7 listed on the APP.

  

  In Baltimore’s financial district there were no bikes, but 6 listed on the APP.

  

  Baltimore Bike Sharing’s twitter plays it cool….

  @BmoreBikeShare any news about what’s happening with the bike share bikes? are they being retrofitted to stop theft, or where are they?

  — Yargl Blargl (@evoinvitro) August 31, 2017

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  It’s a ‘manageable situation’

  Know that most city bike share systems shut down for maintanance at least once a year. This is a manageable situation.

  — Baltimore Bike Share (@BmoreBikeShare) September 13, 2017

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  The last one is hilarious: “This is not unusual”…..

  Most city bike share systems shut down at least once a year for general maintenance. This is not unusual. We feel ya though.

  — Baltimore Bike Share (@BmoreBikeShare) September 13, 2017

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  Baltimore is a shrinking city with a population at a 100-year low. Officials are unwittingly throwing money at anything, such as a bike-sharing system, to attract millennials. Unfortunately, there is too much overhang in a city where 50-years of democrat-controlled leadership, in-conjunction with decades of deindustrialization. This should be a big clue to millennials that the narrative of city life continues to crack.

  

  

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• Comparing Bitcoin, Ether, & Other Cryptos

  Unless you’ve been hiding under a rock, you’re probably aware that we’re in the middle of a cryptocurrency explosion. In one year, the value of all currencies increased a staggering 1,466% – and newer coins like Ethereum have even joined Bitcoin in gaining some mainstream acceptance.

  And while people like Jamie Dimon of J.P. Morgan and famed value investor Howard Marks have been extremely critical of cryptocurrencies as of late, many other investors are continuing to ride the wave. As Visual Capitalist's Jeff Desjardins has noted in the past, the possible effects of the blockchain cannot be understated, and it could even change the backbone of how financial markets work.

  However, even with the excitement and action that comes with the space, a major problem still exists for the layman: it’s really challenging to decipher the differences between cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.

  For this reason, we worked with social trading network eToro to come up with an infographic that breaks down the major differences between these coins all in one place.

  (click image for massive legible version)

  

  Courtesy of: Visual Capitalist

  A DESCRIPTION OF MAJOR COINS

  Here are descriptions of the major cryptocurrencies, which make up 84% of the coin universe.

  BITCOIN

  Bitcoin is the original cryptocurrency, and was released as open-source software in 2009. Using a new distributed ledger known as the blockchain, the Bitcoin protocol allows for users to make peer-to-peer transactions using digital currency while avoiding the “double spending” problem.

  No central authority or server verifies transactions, and instead the legitimacy of a payment is determined by the decentralized network itself.

  Bottom Line: Bitcoin is the original cryptocurrency with the most liquidity and significant network effects. It also has brand name recognition around the world, with an eight-year track record.

  LITECOIN

  Litecoin was launched in 2011 as an early alternative to Bitcoin. Around this time, increasingly specialized and expensive hardware was needed to mine bitcoins, making it hard for regular people to get in on the action. Litecoin’s algorithm was an attempt to even the playing field so that anyone with a regular computer could take part in the network.

  Bottom Line: Other altcoins have taken away some of Litecoin’s market share, but it still has an early mover advantage and some strong network effects.

  RIPPLE

  Ripple is considerably different from Bitcoin. That’s because Ripple is essentially a global settlement network for other currencies such as USD, Bitcoin, EUR, GBP, or any other units of value (i.e. frequent flier miles, commodities).

  To make any such a settlement, however, a tiny fee must be paid in XRP (Ripple’s native tokens) – and these are what trade on cryptocurrency markets.

  Bottom Line: Ripple runs on many of the same principles of Bitcoin, but for a different purpose: to serve as the middleman for all global FX transactions. If it can successfully capture that market, the potential is high.

  ETHEREUM:

  Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.

  In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn ether, a type of crypto token that fuels the network. Beyond a tradeable cryptocurrency, ether is also used by application developers to pay for transaction fees and services on the Ethereum network.

  Bottom Line: Ethereum serves a different purpose than other cryptocurrencies, but it has quickly grown to displace all but Bitcoin in value. Some experts are so bullish on Ethereum that they even see it becoming the world’s top cryptocurrency in just a short span of time – but only time will tell.

  ETHEREUM CLASSIC:

  In 2016, the Ethereum community faced a difficult decision: The DAO, a venture capital firm built on top of the Ethereum platform, had $50 million in ether stolen from it through a security vulnerability.

  The majority of the Ethereum community decided to help The DAO by “hard forking” the currency, and then changing the blockchain to return the stolen proceeds back to The DAO. The minority thought this idea violated the key foundation of immutability that the blockchain was designed around, and kept the original Ethereum blockchain the way it was. Hence, the “Classic” label.

  Bottom Line: As time goes on, Ethereum Classic has been carving out a separate identity from its bigger sibling. With similar capabilities and a different set of principles, Ethereum Classic could still have upside.

  DASH:

  Dash is an attempt to improve on Bitcoin in two main areas: speed of transactions, and anonymity. To do this, it has a two-tier architecture with miners and also “masternodes” that help the network perform advanced functions such as near-instant transactions and coin-mixing to provide additional privacy.

  Bottom Line: The innovations behind Dash are interesting, and could help to make the coin more consumer-friendly than other alternatives.

  BONUS: BITCOIN CASH

  Although not included in the graphic, we also wanted to add a quick word on Bitcoin Cash. This new currency “hard forked” from Bitcoin about a month ago, as a result of miner disagreements about the future of Bitcoin. Here’s a detailed summary of the announcement.

  

  

• State-Sponsored Intimidation, Or When FARA Goes Too Far

  Authored by Andrew Korybko via OrinetalReview.org,

  The US government is blatantly violating the most basic tenets of its purportedly “sacred” ideology of “human rights” and “free speech” by egregiously overstepping the bounds of FARA to engage in the same type of state-sponsored intimidation that it regularly accuses its geopolitical opponents of for far less.

  

  Yahoo broke the story earlier on Monday that the FBI questioned former Sputnik employee Andrew Feinburg following his public complaints to the media about how the company is supposedly being run, and this reportedly came after another former employee, Joseph John Fionda, allegedly contacted the FBI on his own initiative to share “a big packet” of information accusing Sputnik of breaking the law. The legislation at the center of this scandal is the “Foreign Agents Registration Act” (FARA), a 1938 law originally passed to expose Nazi influence operations inside of the US. It’s since been used for registering anyone who works as a “foreign agent”, which stereotypically refers to Congressional lobbyists hired by foreign governments but is nowadays being proposed by some US voices to apply to Sputnik and RT as well.

  The basis for this move is that both companies are publicly funded by the Russian government, and that this therefore supposedly makes them “propaganda” because it’s assumed by the American authorities that all of their employees lack “editorial independence” from the Kremlin. As could have been expected, the same forces pushing for Sputnik and RT to register as “foreign agents” under FARA aren’t interested in equally applying these expanded “standards” to other publicly financed international media outlets such as Al Jazeera and the BBC.

  Using the same criteria as is being applied against these two companies, one could rhetorically question the “independence” of US Congressmen and American government-connected “think tanks” to the “deep state”, which is another word for its permanent military, intelligence, and diplomatic bureaucracies that hold disproportionate influence over policymaking decisions.

  In any case, what’s important to focus on is the difference between publicly financed institutions and those which are “government-run”. The first one simply means that taxpayers are paying the bills, whereas the second refers to government employees being the final decision makers on all matters. All government employees work for publicly financed institutions, but not all employees at publicly financed institutions are government employees. Sputnik, for example, is a publicly financed media platform where the editors always have the final say as decision makers in what is a globally recognized industry-wide hierarchical standard. This doesn’t indicate “censorship” or a “cover-up” – it’s just plain journalism.

  If Washington-funded media platforms happen to accuse Sputnik and RT of being “government-run”, then it might possibly be that they’re falsely projecting their own unstated but widely assumed internal arrangements onto their Russian counterparts.

  Moreover, just because two disgruntled employees seem to have experienced communication issues with their superiors and failed to resolve – or in some cases, even address – them prior to continuing with their given assignments doesn’t mean that there’s a “Kremlin conspiracy” because their bosses were displeased with their overall work at the company as a result. Outcomes like that happen in those situations. It’s life – nothing more, nothing less – and should be used as a personal learning experience, not as someone’s “15 minutes of fame” driven by their desire to more easily land a new job elsewhere, whether in the same industry or the “think tank” one. It’s natural for people to have divergent views on any given subject, especially when it’s related to politics, but editors always have the final say when it comes to the journalism industry, and employees are supposed to respect that.

  One of the more popular fake news claims going around about Sputnik and RT is that the two outlets were heavily biased in favor of Trump during the 2016 election, but that’s frankly not true, as anyone would know by listening to Sputnik’s radio programs from that time, watching RT’s shows, or reading both of their websites’ archives. Both platforms lean closer to the liberal-progressive side of things as opposed to the conservative one. Simply reporting on the many unfavorable stories surrounding Hillary Clinton and not blindly fawning over her candidacy doesn’t qualify as “institutional bias”, though in largely controlled systems such as the American one where most of the media openly back the Democrats, then the Overton window concept would suggest that Sputnik and RT’s balanced reporting and analyses would understandably stand out as attention-grabbing and exemplary.

  In addition, it should never be forgotten that it was the on-the-fence population of the Rust Belt who surprisingly turned the election in Trump’s favor. One would presume that the liberal-progressive masses in the solidly Democratic states on each coast would be Sputnik and RT’s core audiences given how these two outlets’ more leftist-leaning stance on many matters overlap with the prevailing preferences there, so it’s ridiculous to believe that these Russian companies somehow convinced voters to want to “Make America Great Again” in the more stereotypically nationalistic heartland with their liberal-progressive messaging. In fact, it’s uncertain how many people in that part of the US listen to, watch, or read Sputnik and RT in the first place when Fox News, CNN, and Rush Limbaugh dominate those media markets, and whether these Russian companies are even capable of making any difference at all in those swing states.

  

  Another point that’s often brought up in the course of this conversation is that individual writers, analysts, and presenters might be “biased”, but human beings are unique and have their own way of understanding and relaying information, which in the media field leads to them expressing their individual viewpoints and perspectives in their work. There’s nothing wrong with this, and it should be celebrated that people feel comfortable enough in their professional environment to express themselves as they see fit, though provided that they’re not obnoxiously – and perhaps even deliberately – doing something to cross the line of the editorial standards which vary according to the media outlet. The Sputnik and RT employees that are in the public limelight sometimes have opinions that are just as passionate as their counterparts in The Washington Post and The New York Times, though the latter two are rarely – if ever – condemned for their zeal by the US government.

  The double standard that’s being applied when it comes to Sputnik and RT should be clear for all to see, and it’s that the American “deep state” doesn’t tolerate foreigners having an opinion about the US unless they present it on a US-based media platform or on one of Washington’s allies’. Otherwise, as the witch-hunting “logic” now goes, they’re “foreign agents” possibly “spreading propaganda”, and their outlets need to be registered as such with the intimidating “scarlet letter(s)” of FARA if they’re foreign-funded. Even worse, the hysterical zeitgeist has now peaked at such a point that Americans are unable to talk about American-related issues (whether domestic or foreign) on non-American international media outlets publicly funded by a foreign government without potentially having to register as a “foreign agent” in their homelands, whether they still live there or emigrated already.

  This is nothing less than state-sponsored intimidation, since Washington is implying that the Americans who work for and comment on these platforms might be “national security threats” because of their supposedly undeclared “foreign agent” status.

  If Russia implemented the same media version of FARA that the US is seriously considering and decided to decree that its citizens working for publicly funded American information outlets both in the country and abroad are “foreign agents” that are forced to register with the Kremlin, then the US government would instantly condemn it as state-sponsored intimidation and political oppression, possibly even extending political asylum and an expedited path to citizenship for those said nationals who might be working in the US and are too afraid to ever go home again. Frighteningly, however, it’s not Russians who have to fear the long arm of their government in this respect, but Americans, though it’s “politically incorrect” for anyone to say so.

  

  In the Twilight Zone of the New Cold War, Russia could plausibly – and with full ethical and legal backing behind it –contemplate granting its Russian-based American employees political asylum and potential citizenship because of the state-sponsored intimidation that they might become reasonably subjected to back home just because they decided to “Tell The Untold” and “Question More”. If the US government demands that Sputnik and RT employees register as “foreign agents” under FARA but selectively ignores enforcing this new “standard” against other publicly financed international media companies and their employees, then it’s not unrealistic to imagine that Edward Snowden might end up sharing a toast with some fellow American political refugees in Moscow before too long.

  

  

• Do 40,000 Lightning Strikes Over SoCal Point To A Mega Quake On The Horizon?

  Authored by Mac Slavo via SHTFplan.com,

  A volatile storm has ignited a slew of 40,000 lightning strike in southwestern California.

  

  The strikes have hit Los Angeles, Santa Barbara, San Luis Obispo, and Ventura counties – all between September 10-11.

  The electric storm was most active on Sunday with an amazing 5,000 lightning bolts in the area over a three-hour period. NWS Los Angeles took to Twitter to report the tremendous display. The intense storm brought plenty of lightning to the Golden state’s southern region, but almost no rain.  The greatest rain total of .44 inches at Sudden Peak on Sunday. By Monday morning, heavy showers, thunderstorms, and 35-mph winds were reported in eastern Los Angeles County.

  Tremendous number of lightning strikes & in-cloud flashes over SW CA in last 24-hours. Nearly 40,000 in total! #CAwx #LAWeather #LARain pic.twitter.com/bXoEvdqHx6

  — NWS Los Angeles (@NWSLosAngeles) September 11, 2017

  //platform.twitter.com/widgets.js

  But now conspiracy is swirling around this fascinating and unique electric storm.  Strange lights and electrons acting oddly seem to have been appearing either before or during major earthquakes – like the recent 8.2 magnitude quake in Mexico. Could these lightning strikes be a sign that California’s mega quake is on the horizon?

  Like California, Mexico is a seismically active region that has seen smaller quakes that have caused death and destruction. But Thursday’s temblor is a reminder that even larger quakes — while rare — do occur. Scientists say it’s possible for Southern California to be hit by a magnitude 8.2 earthquake. Such a quake would be far more destructive to the Los Angeles area because the San Andreas fault runs very close to and underneath densely populated areas.

  It’s often stated that California is ripe for a devastating mega earthquake and after some noticed the strange lights in the sky above Mexico during its quake, this conspiracy conclusion was an easy one to jump to.

  

  

• Visualizing The Side Hustle Economy: 25 Ways To Make Extra Dough

  Popularized in recent years by people like Gary Vaynerchuk, the “side hustle” has quickly become a preferred mentality for aspiring entrepreneurs to make additional money on the side.

  As Visual Capitlsist's Jeff Desjardins explains, the gist of it is: by working hard outside the traditional hours of a 9-to-5, a side hustle allows you to build a business around what you are truly passionate about. And if that endeavor is successful, it can also help you make the full transition into permanent entrepreneurship later on.

  ENTER THE SIDE HUSTLE ECONOMY

  Today’s practical infographic from Quid Corner highlights 25 different ways to dip your toes into the side hustle economy.

  

  Courtesy of: Visual Capitalist

  Some of these side hustles, like building courses or writing eBooks on your area of expertise, are great ways to begin building your personal thought leadership brand.

  Meanwhile, other hustles listed here are more appropriate for supplementing your regular income. Getting extra cash in your pocket – and on your own terms – can help give you the confidence to start a business, or invest in further education.

  GOING FROM 0 TO 60

  If you are ready to make the dive into entrepreneurship, we previously posted 5 Ideas for Online Businesses in 2017.

  If you’re still just getting your feet wet, it’s side hustle time. Work on the side for additional capital, get a proof-of-concept for your idea, or find ways to build your personal brand.

  Even if your ambitions are huge, start slow, start small, build gradually, build smart.

   

  – Gary Vaynerchuk, Serial Entrepreneur

  Side hustling allows you to get a start while still having two feet on the ground. However, that’s not to say that side hustling is easy – it takes lot of work and commitment, and you have to be prepared to spend evenings and weekends to pursue your passion, with no guarantee for immediate results.

  

  

• America's Weapons: "The Dollar And The Drone"

  Authored by Brian Maher via DailyReckoning.com,

  It was said that “the guinea and the gallows” were the true instruments of British imperial power.

  The guinea represented the coined wealth of Great Britain.

  The gallows represented its… constabulary zeal in policing restless natives.

  This is the 21st century of course… a time of enlightenment.

  Today’s instruments of imperial power are no longer the guinea and the gallows.

  No. Today’s instruments of imperial power are “the dollar and the drone.”

  The dollar and the drone are America’s weapons.

  

  Like the 19th-century pound (which replaced the guinea), today’s dollar is the world’s reserve currency.

  Like the 19th-century pound, the dollar finances some two-thirds of global trade.

  And the gallows?

  Britain hanged its foreign trouble. America explodes its own in drone attacks.

  Here is civilization; here is progress.

  The sun eventually sank on the British Empire… the gallows came down… and the pound lost its global reserve status.

  The U.S. will have its drones. But is its other weapon, the dollar, close to losing global reserve status?

  Recent developments may tell…

  The global oil trade has centered on the dollar since 1974, when Saudi Arabia agreed to enthrone the dollar as currency of the oil market.

  If it was oil you wanted… it was dollars you needed.

  But now China — world’s top oil importer — is preparing to create an oil market that bypasses the dollar entirely.

  The plan would let China buy oil from Russia and Iran with its own currency, the yuan.

  But the yuan is not a major reserve currency like the dollar.

  Under this plan, Russia and Iran would be able to swap yuan for an asset far more desirable than Chinese scraps of paper — gold itself.

  Perhaps that explains why China’s been hoarding so much gold in recent years?

  Jim Rickards says this system marks the beginning of the end for the petrodollar:

  China, Russia and Iran are coordinating a new international monetary order that does not involve U.S. dollars. It 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 marks the beginning of the end of the petrodollar system that Henry Kissinger worked out with Saudi Arabia in 1974, after Nixon abandoned gold.

  But it’s not only China, Russia and Iran that are out to dethrone King Dollar.

  They’re joined by the rest of the “BRICS” nations — Brazil, India, South Africa.

  Together they represent 25% of global economic output.

  At last week’s annual BRICS summit in China, members announced full-throated support for China’s plan.

  The message, clear as gin: The dollar’s days of “exorbitant privilege” must end.

  And yesterday brought news that could further accelerate China’s de-dollarization plans…

  Treasury Secretary Steve Mnuchin announced the U.S. would consider locking China out of the international dollar system if Beijing doesn’t cooperate with new sanctions against North Korea:

  If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system. And that’s quite meaningful.

  “Meaningful” might be one word for it. “Menacing” would be another.

  SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a network that facilitates trillions of dollars in international money transfers each year.

  It is the oil that lubricates the machinery of the international financial system — or as Jim Rickards styles it, “the oxygen supply that keeps the global financial system alive.”

  And to cut off China’s oxygen?

  “That is why China buys gold,” Jim Rickards tweeted this morning from London.

  Our colleague Dave Gonigam of The 5 Min. Forecast half-jestingly wonders, “Is the Trump administration trying to kill off the U.S. dollar’s status as the globe’s reserve currency?”

  Of course, the dollar will not lose reserve status tomorrow, next week, next year.

  But the direction of travel seems clear enough.

  Jim:

  In 2000, dollar assets were about 70% of global reserves. Today, the comparable figure is about 62%. If this trend continues, one could easily see the dollar fall below 50% in the not-too-distant future.

  How does one go bankrupt?

  Slowly at first, said Hemingway — then all at once.

  That’s how the dollar will likely lose its reserve status… slowly at first… then all at once…

  

  

• Former Citi CEO Vikram Pandit: "AI Could Kill 30% Of Back-Office Banking Jobs By 2023"

  Just as the development of electronic trading led to mass downsizing on sales desks across Wall Street, advances in artificial intelligence could decimate the ranks of banks’ back-office staff, according to former Citigroup CEO Vikram Pandit. And given the rapid pace of technological advance, jobs in operations and retail banking could begin disappearing in as few as five years.

  Pandit, who shared his thoughts about the future of the banking industry during an interview with Bloomberg, said that the industry’s focus on technology as a cost-saving measure – Bank of America Corp.’s Chief Operating Officer Tom Montag said in June that the bank is searching for more ways for technology to replace people – has inspired him to move up his timeline aggressively.  

  

  As Bloomberg points out, Pandit’s forecast for job losses is in step with one made by Citigroup last year. In a March 2016 report, the lender estimated a 30% reduction between 2015 and 2025, as banks find more applications for automation in their retail businesses. That could lead to job losses numbering 770,000 in the US, and as much as 1 million in Europe, Citigroup said.

  “Everything that happens with artificial intelligence, robotics and natural language – all of that is going to make processes easier,” said Pandit, who was Citigroup’s chief executive officer from 2007 to 2012. “It’s going to change the back office.”

  This pressure on employees to prove that they’re more productive than the technology has transformed banking into an “enormously competitive” industry, Pandit said, adding that he expects the shift to produce yet another wave of consolidation in an industry that’s already dangerously concentrated, a flaw that was both exposed and exacerbated by the financial crisis.

  Though he also believes advances in technology will lead to the development of “specialist providers,” making the financial system “a bit more decentralized.”

  Pandit achieved lasting notoriety after becoming CEO of Citigroup in December 2007 just as the cascading subprime mortgage crisis was driving the US economy into a recession. He had previously led a hedge fund that was acquired by the bank, and, upon taking the top job, was widely criticized in the press for his inexperience in managing many of Citigroup’s core businesses like, for example, banking.

  He’s now the CEO of Orogen Group, an investment firm that he co-founded last year, five years after being forced out as Citi’s CEO.

  While Pandit’s prediction should be concerning to anyone who works in the financial industry, humanity as a whole would have much more to worry about if another CEO’s dire predictions about AI are eventually realized.
  In one of several memorable tweetstorms on the topic, Tesla CEO Elon Musk urged governments to start considering regulation to govern the development and application of AI technology, arguing that the machines pose a greater danger to the US than North Korea.

   

  If you're not concerned about AI safety, you should be. Vastly more risk than North Korea. pic.twitter.com/2z0tiid0lc

  — Elon Musk (@elonmusk) August 12, 2017

   

  However, other banking CEOs, including JP Morgan Chase & Co.’s Jamie Dimon, have played down the potential impact of technology in the financial industry, as Bloomberg reminds us. Conversely, automation could create “more opportunities” for employment as the firm hires a bevy of “technology workers.”

  “JPMorgan Chase & Co. CEO Jamie Dimon cautioned in June against overreacting to the impact of technology on jobs. While the bank is using technology to reduce costs, that helps create other opportunities, Dimon said in an interview published on LinkedIn. He predicted that employee numbers at his firm will continue to rise — as it hires more technology workers.”

  …Of course, Dimon has every reason to expect this: After all, that’s exactly what happened when the adoption of automation by manufacturers began to accelerate. Right?
   

  

  

• Keynes: A Master Of Confused And Confusing Prose

  Authored by Hunter Lewis via The Mises Institute,

  [This article is a selection from Where Keynes Went Wrong]

  Paul Samuelson, professor of economics at MIT after World War II and author of a best-selling economics textbook, was one of Keynes’s most ardent American disciples. Here is what he has to say about the latter's General Theory:

  It is a badly written book, poorly organized. . . . It is ar­rogant, bad-tempered, polemical, and not overly gener­ous in its acknowledgements. It abounds in mare’s nests and confusion…. 

  In reading this, one recalls Keynes’s infatuation with paradox. Samuelson, the ardent disciple, is telling us that the master’s book is good because it is bad.

  

  We do not, however, have to take Samuelson’s word about the bad writing, poor organization, and general confusion of The General Theory. Following publication in 1936, many lead­ing economists pointed to the same problems, although some of them hesitated to criticize or quarrel with Keynes and thus chose their words carefully.

  Frank H. Knight, a leading American econ­omist, complained that it was “inordinately difficult to tell what the author means. . . . The direct contention of the work [also] seems to me quite unsubstantiated.”

   

  Joseph Schumpeter noted Keynes’s “technique of skirting problems by artificial definitions which, tied up with highly specialized assumptions, produce paradoxical-looking tau­tologies. . . .”

   

   British economist Hubert Henderson privately stated that: “I have allowed myself to be inhibited for many years . . . by a desire not to quarrel in public with Maynard . . . . But. . . I regard Maynard’s books as a farrago of confused sophis­tication.”

   

  French economist Etienne Mantoux added that the whole thing simply appeared to be “rationalization of a policy … long known to be . . . dear to him."

  In The General Theory itself, Keynes has a good word to say about clarity, consistency, and logic.He is quick to pounce on what he considers the errors of others. But he then leads us down a rabbit hole of convolution, needless and misleading jar­gon, mis-statement, confusion, contradiction, unfactuality, and general illogic.

  It is not that Keynes is entirely opaque. It is quite feasible to make out what he seems to be saying, but it is worth taking a moment to focus on the particular rhetorical devices and obfuscations that Keynes employed.

  Device One: Obscurity

  A typical sentence from The General Theory:

  We have full employment when output has risen to a level at which the marginal return from a representa­tive unit of the factors of production has fallen to the minimum figure at which a quantity of the factors suf­ficient to produce this output is available.

  This means, in essence, that we have not reached full employ­ment until all factors of production are fully employed. We will recall that, per Keynes, only at this point do we have to worry about inflation.

  Keynes took exception when other economists wrote in this convoluted way. For example, in a 1931 letter to the editor of The New Statesman and Nation, he charged Lionel Robbins with the same sin, even though Robbins was, on the whole, a very clear writer:

  Professor Robbins wants “increased elasticity of local wage costs” . . . which means in plain English, I sup­pose, a reduction of average wages.

  Given this stab at Robbins, can we at least assume that Keynes will avoid the term “elasticity” in The General Theory? No, not at all, he uses (and misuses) it repeatedly.

  Device Two: Misuse of Technical Language

  In the example above, Lionel Robbins was at least using standard economist’s jargon. Keynes liked to make up his own jargon, or worse, use standard jargon in a non standard way. This led to a scolding by economist Frank H. Knight in the review of The Gen­eral Theory that we have already cited: “Familiar terms and modes of expression seem to be shunned on principle.”

  The only legitimate reason to use technical language is to make a sentence clearer, if not to the average reader, at least to the pro­fessional reader. Keynes habitually uses technical language to confuse, and as we shall shortly see, this may have been a deliber­ate strategy.

  Device Three: Shifting Definitions

  Keynes tells us in The General Theory that economists have not clearly defined the jargonish term “marginal efficiency of capi­tal” (which roughly means return on capital). He then proceeds throughout the book to use the term in many different ways, at least seven by Henry Hazlitt’s count. Another slippery word in The General Theory is wages, which can mean an hourly rate or total employee pay or something else. Keynes does not seem to notice the difference, which leads him into serious logical errors.

  Once again, Keynes criticized the same lapse in others. In a book review early in his career, he took an author to task for

  us[ing] the [same] expression some thirty times in some apparently eight different senses.

  Device Four: Misuse of Common Terms

  In some cases, Keynes stretches the meaning of a commonly used word beyond recognition without explicitly redefining it. For example, he tells us that for every commodity there is an implicit rate of interest, a wheat rate of interest, a copper rate of interest, a steel plant rate of interest, and so on. This confuses commodity options and futures pricing with interest rates, a clear case of mix­ing apples and bananas. We have already seen that Keynes uses the word equilibrium to describe what is actually disequilibrium.

  Device Five: Reversing Cause and Effect

  Keynes says that entrepreneurs calculate how much revenue they will earn from x employees. But they do not. They calculate how many employees they can afford from x revenue. Keynes says that prices are low if production is low. In actuality, it is the reverse: production is low if prices are low. Keynes seems to like these reversals, perhaps because they dress up the ordinary with a gloss of novelty, even of profundity. But it is really no more than a parlor trick, and just piles error on error.

  Device Six: False Determinism

  Keynesian economist Alvin H. Hansen, whose book A Guide to Keynes attempted to de-mystify the master, tells us that “Keynes’s most notable contribution was his consumption function.” The so-called marginal propen­sity to consume (consumption function) tells us that people tend to save more as their income rises. Stated as such, it is a common­place, certainly nothing new. But Keynes calls it a “fundamen­tal psychological law,” which it certainly is not. We can nei­ther predict with certainty that people will always save more as their income rises, nor can we work out a forecastable schedule of increased saving, as Keynes assumed.

  In the Keynesian model, the marginal propensity to consume is also treated as an independent variable. (It is supposed to deter­mine other variables, not be determined by them.) This is clearly false. As Benjamin Anderson, economist and early Keynes critic, pointed out, “The so-called independent Keynesian variables (1. The marginal propensity to consume, 2. The schedule of the mar­ginal efficiency of capital, and, 3. The rate of interest) are all influ­enced by each other. They are interdependent, not independent. Keynes even forgets himself and admits at one point that #2 is influenced by #1.” 

  Device Seven: Slipping Back and Forth between Mutually Inconsistent Categories

  Keynes uses the word “wages” to mean either a wage rate or total wages. He is also prone to move back and forth between physical commodities and services and money prices for commodities and services, another case of mixing up apples and bananas.

  Device Eight: Unsupported Assertion

  In the entirety of The General Theory, there are only two refer­ences to statistical studies, one of which Keynes partly dismisses as improbable:

  Mr. Kuznet’s method must surely lead to too low an estimate.

  Even when he discusses a subject that especially lends itself to statistical analysis, such as a suggested relationship between agri­cultural harvests and the business cycle, he simply takes a posi­tion without bothering to search for relevant data.

  Device Nine: Misstatement

  Keynes mischaracterizes the purpose of corporate sinking funds. How could he make such an elementary error? Probably because he had said the same thing many times when speaking on his feet, and, being busy, did not take sufficient time to check his written work.

  Sometimes Keynes seems too busy even to think. He says that if a lender lends money to a business owner, this doubles the risk of a business owner using his own money, which doubled risk is reflected in the interest rate. This makes no sense, as Henry Hazlitt noted. Risk is not doubled when a lender enters the pic­ture. The lender and the business owner share what is still the same risk of failure.

  Device Ten: Macro or Aggregative Economics

  Keynes is usually credited with “inventing” macroeconomics, which looks at economy-wide flows rather than the micro-eco­nomics of specific firms or industries. This is not entirely accu­rate. Other economists adopted an economy-wide perspective, although they often extrapolated from the firm or industry to the economy as a whole, which Keynes wrongly criticized. Ironi­cally, Keynes attacked Say’s Law which is, itself, an example of macroeconomics. It is certainly fair to say that Keynes developed his own type of macroeconomics, which his followers developed into the macroeconomics of today. It is also true that a macroeconomic viewpoint makes it easier for a skilled casuist to mislead and confuse, and that Keynes fully exploited this opening.

  Device Eleven: Misuse of Math

  Keynes refers to sales in one of his equations, but it is expected sales, not actual sales. Expectations by definition are not verifiable and thus do not belong in an equation.

  As Henry Hazlitt has pointed out,

  A mathematical statement, to be scientifically useful, must, like a verbal statement, at least be verifiable, even when it is not verified. If I say, for example (and am not merely joking), that John’s love of Alice varies in an exact and determinable relationship with Mary’s love of John, I ought to be able to prove that this is so. I do not prove my statement—in fact, I do not make it a whit more plausible or “scientific”—if I write, solemnly,

  • let X equal Mary’s love of John,
  • and Y equal John’s love of Alice,
  • then Y = f (X)

  —and go on triumphantly from there. Yet this is the kind of assertion constantly being made by mathemat­ical economists, and especially by Keynes.

  Given the Alice in Wonderland quality of The General Theory, it should not surprise us that Keynes interrupts his own misuse of math to tell us that he (apparently) agrees with Hazlitt:

  To say that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth [is] a propo­sition not without meaning and not without interest, but unsuitable as material for the differential calculus. Our precision will be a mock precision if we try to use such partly vague and nonquantitative concepts as the basis of a quantitative analysis.28

  He also warns of

  symbolic pseudo-mathematical methods . . . of eco­nomic analysis.

  After some of his own algebra he adds that:

  I do not myself attach much value to manipulations of this kind.

  It is quite typical of Keynes now to attack, now to disarm, now to shout, now to whisper, now to qualify his mathematical claims, now to ignore, even blatantly ignore, the same qualifications. On occasion, Keynes was even capable of a crude bluff. Writing a pri­vate letter to Montagu Norman, Governor of the Bank of Eng­land, he said that his theories (the same theories that would later appear in The General Theory) were a

  mathematical certainty, [not] open to dispute.

  Keynes certainly knew better. Some of his disciples did not. Economist Wilhelm Röpke noted in 1952 that

  The [Keynesian] revolutionaries [take a stance of] . . . vehement self-assertion and barely veiled contempt, such as are habitual to the “enlightened” in dealing with those who remain in the dark. They seem to re­gard themselves as all the more superior in that they can point with obvious pride to the difficulty of their literature and to the use of mathematics, which lifts the “new economics” almost to the lofty heights of physics.

  One could go on, almost indefinitely, citing Keynes’s obscuri­ties, convolutions, inconsistencies, factual or logical lapses,and so on, but it is time to ask the obvious question: why did he write The General Theory this way? Keynes could be orderly, orga­nized, consistent, relevant, clear, complete, and factual, in addi­tion to being playful and witty, when he wanted to be. This is apparent from the earlier books and many of the shorter pieces. There are some snippets from The General Theory that also reflect these characteristics. So why is most of The General Theory so different?

  There are many possible answers. Historian Paul Johnson has said, unrelated to Keynes, that “In financial matters, the object of complexity is all too often to conceal the truth, to deceive.” The French economist Étienne Mantoux, reviewing The General Theory shortly after publication, quoted an earlier English econo­mist, Samuel Bailey, from 1825: “An author’s reputation for the profundity of his ideas often gains by a small admixture of the unintelligible.”

  This may be part of the explanation, that Keynes intended to deceive or impress. But we must bear in mind that Keynes was a salesman. He was trying to sell a particular type of economic policy, and he was prepared to utilize any rhetorical device, from crystal clarity and wit all the way to complete unintelligibility, in order to make the sale.

  Why would unintelligibility help to make the sale? Not just because it can be used to impress. Equally important, it can be used to intimidate. Keynes liked to make people feel, as his very intelligent friend Bob Brand said, like “the bottom boy in the class.”

  Keynes probably developed obscurity as one of his speaking styles. He obscured, confused, and scrambled the mental “chessboard,” because he felt confident that he could always keep the position of the “chess pieces” in mind, and combine them as he saw fit for an attack in any direction, whereas his opponents could not. This is a very impressive skill indeed, especially when one is speaking extemporaneously. No wonder that Sir Josiah Stamp, a very respected economist who often partnered with Keynes on BBC broadcasts, said on the air that “I can never answer you when you are [verbally] theorizing.”

  Whether this was a deliberate style on Keynes’s part, or just a habit, we cannot know. But it was natural for him to fall into the same scrambling, intimidating style when writing The Gen­eral Theory. The problem is that it does not work as well in print as in conversation or debate. When confined to print, it can be examined, and all the myriad flaws, the errors of fact or reasoning, the rhetorical tricks, the pseudo originality, may be revealed.

  A few prominent economists, notably Ludwig von Mises, Friedrich Hayek, Wilhelm Röpke, Jacques Rueff, and Henry Hazlitt, among others, saw through it completely. Others per­ceived that something was wrong, but hesitated to say so out of fear of Keynes’s position and powers of retaliation. Regrettably, no major economist published an immediate book-length ref­utation, so that the influence of The General Theory spread and spread, notwithstanding its all too apparent flaws.

  Today many people – economists, financiers, investors, busi­ness owners, and managers – say that Keynes is their intellectual hero. Have they actually read The General Theory? Have they read more than the few clear and witty passages so widely quoted?

   

  

  

• Crypto Crash Charts: Where to Now?

  Bitcoin (Daily) ~ Gaps and Support Levels

  

   

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  Bitcoin (240-minute) ~ RSI, MACD and Stochastics

  

   

  Check out www.Fibozachi.com to learn about modern technical analysis and trading indicators that actually work. 

  

  

• Hurricane Irma Released "250 Million Gallons Of Untreated Sewage" Into The Streets Of Florida

  One could be forgiven for believing that, with all this talk of the coming “climate catastrophe,” Americans would be scrambling to flee Hurricane-prone states like Texas and Florida. The reality is just the opposite: Thanks to their low cost of living, and minimal taxes, Florida and Texas are among the states in the US where populations are rising via interstate migration. Contrast that with Connecticut, which is far less vulnerable to hurricanes, and where the population drain has accelerated dramatically in recent years.

  Both Harvey and Irma impacted some of the fastest-growing counties in the US, exposing a problem that’s probably frustrated city and county officials for years. How to upgrade decades-old sewage and water-treatment systems.

  When the storms struck, the ancient systems quickly failed, releasing millions of gallons of raw sewage into city streets and canals, complicating the cleanup effort, according to Bloomberg:

  “Millions of gallons of poorly treated wastewater and raw sewage flowed into the bays, canals and city streets of Florida from facilities serving some of the nation’s fastest-growing counties. In fact, 4 of the 10 fastest-growing coastal counties in the eastern U.S. are in Florida. More than 9 million gallons of releases tied to Irma have been reported as of late Tuesday as inundated plants were submerged, forced to bypass treatment or lost power.”

  Of course, this problem requires a monumentally expensive fix: The Environmental Protection Agency estimated last year that $271 billion is needed to maintain and improve the nation’s wastewater pipes, treatment plants and associated infrastructure. In fact, many parts of Florida and Texas face infrastructure challenges even when they aren’t deluged by rain because of rapid population growth.

  

  Otherwise, populations risk the spread of pathogens with every overflow.

  Estimates for scale of the untreated and poorly treated wastewater that leaked because of both Irma and Harvey are expected to keep climbing. Even Hurricanes Hermine and Matthew, which were modest compared with this year’s storms, released some 250 million gallons of wastewater that hadn’t been fully treated between Aug. 31 and Oct. 15, 2016, according to the Florida Department of Environmental Protection.

  A treatment facility in Clearwater, Fla. Leaked 1.6 million gallons of wastewater into a creek, according to filings with the state’s Department of Environmental Protection. And that incident paled in comparison to a 30-million-gallon discharge of raw sewage after Hurricane Hermine caused pumps to fail, according to David Porter, the city’s public utilities director.

  Electrical outages throughout the state caused lift station pumps to stop running in St. Petersburg and Orlando, prompting at least 500,000 gallons of spillage. A pipeline broke in Miramar, Florida, sending sewage spilling across a parkway – creating a nasty scene for the contractors who had to hunt for the rupture. And operators of a Miami-area wastewater treatment plant blamed a power outage for 6 million gallons of sewage released into Biscayne Bay.

  Of course, this isn’t limited to a regional issue: Hurricane Sandy also unleashed a flood of sewage when it struck New York and New Jersey in 2012:

  “After Hurricane Sandy ravaged the northeast US in 2012, damaged treatment plants and pumping stations caused untreated sewage to flow into local waterways for weeks. All told, facilities in the eight states hardest hit by the super storm released 11 billion gallons of untreated and partially treated sewage, according to one assessment.”

  And as Bloomberg explains, loose sewage poses lingering public-health and economic risks to a community…

  “Sewage discharges carry both health and economic risks, as officials may order the closing of affected beaches and rivers for swimming and boating long after storm clouds have passed. When untreated water or raw sewage is spilled, it can deliver toxic chemicals from roads, E. coli from human waste and other pathogens that have the potential to cause viruses, parasitic infections, rashes and other health conditions.”

  …Because the pollution can often be difficult to detect.

  "We focus on the water and the flooding and the impacts to homes and everything else, which is super important," said Danielle Droitsch, a program director with the Natural Resources Defense Council. "But understanding environmental contamination issues is more complicated. We don’t necessarily see the pollution, sometimes you can’t smell it and yet it’s there."

  And while there’s no such thing as a perfect sewer system…

  "There’s no sewer system in the world that can be built that’s completely leak proof," said Nathan Gardner-Andrews, chief advocacy officer for the National Association of Clean Water Agencies. Plants generally are designed to handle twice their normal capacity, but "when you get some of these rain events and you’re talking four to six to eight inches of rain in an hour, the engineering is such that you cannot build a system to hold that capacity."

  …Some sewage systems in rapidly growing southern counties, including the Florida counties affected by Irma, are more than 50 years old, and they demand immediate attention.

  “Aging infrastructure may not be able to keep up with the demands of a surging southern population. In many cases, such as in south Florida, elements of the sewer system range from 60 to 70 years old, with pipelines that are even older, said Kelly Cox, a staff attorney and program director for the environmental group Miami Waterkeeper.”

   

  “You throw a hurricane on top of that, and you are starting to see a lot more problems," she said.

  Talk about a sh—storm…
   

  

  

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• Paul Craig Roberts: "Behold, A Pale Horse, And Its Rider Is Washington"

  Authored by Paul Craig Roberts,

  Two of America’s most populous states, Texas and Florida, are in hurricane ruins, and Washington is fomenting more wars.

  The US national debt is now over $20 trillion, and Washington is fomenting more wars.

  The entire world is helping Washington foment wars – including two targeted countries themselves – Russia and China – both of which are helping Washington foment more wars. Believe it or not, both Russia and China voted with Washington on the UN Security Council to impose more and harsher sanctions on North Korea, a country guilty of nothing but a desire to have the means to protect itself from the US and not become yet another Washington victim like Afghanistan, Iraq, Libya, Somalia, Yemen, Syria, Serbia, and Ukraine overthrown in a US coup and now poverty-stricken.

  I once thought that Russia and China were checks on Washington’s unilateralism, but apparently not.

  Both governments have been knuckled under by Washington and both voted to punish North Korea for striving to be sufficiently armed to protect its sovereignty from Washington.

  Why are Russia and China repeating their same mistake that they made when they supported Washington’s no-fly UN resolution for Libya, a resolution that Washington and NATO stood on its head when they launched air attacks that helped the CIA organized “jihadists” overthrow Libya’s progressive government and murder Gaddafi?

  Russia knows that it is surrounded by US nuclear and military bases. So does China. The question is: have Russia and China capitulated out of fear? Or is their cooperation with Washington a ruse while they prepare their own strike on Washington, or are the two misguided governments trying to cooperate with Washington a la sanctions so as to avoid having to confront a US military attack on North Korea?

  It requires much competence to confront evil, and there is probably more evil in Washington than there is competence in Russia and China, two countries interested in being rich to an extent that it might cost them their sovereignty and existence.

  When you see such potentially powerful countries as Russia and China collapse under Washington’s pressure in the UN Security Council, it makes you wonder if the various analyses of Washington’s many weaknesses are real, and if they are real, if Russia and China are aware of them.

  How does one go about explaining why two countries, whose sovereignty is in the way of Washington’s world hegemony, help their known enemy bully yet another small country, especially one in their orbit of influence? How can Russia complain of sanctions against Russia based on nothing but Washington’s propaganda when Russia supports sanctions against North Korea based on Washington’s propaganda?

  Russia and China have nothing to fear from North Korean nuclear weapons. Indeed, no one does except a country that attacks North Korea. What is the explanation for Russia and China lining up with Washington’s foreign policy against North Korea when Russia and China know that Washington’s foreign policy is hostile to Russia and China?

  Just the other day Washington announced that it was increasing its navy warships in the South China Sea to make sure China doesn’t think the South China Sea is Chinese, instead of American, territorial waters.

  Just the other day more election interfering charges were leveled against Russia.

  This time Facebook was the mechanism by which Russia stole the US presidential election.

  These positions taken by Washington are absurd.

  Yet, they are becoming the reality. The frightening development is that the entire world, the entirely of the UN and Security Council are now captured by Washington in The Matrix. It seems that not even Russia and China can any longer see their own national interest.

  Russia and China are working hand-in-hand with Washington toward their own demise.

  It is becoming biblical.

  

  

• College Students Rejoice! Bernie Sanders Introduces Long-Awaited "Medicare For All" Bill

  After successfully leveraging promises for far-left policy reforms into a competitive challenge against frontrunner Hillary Clinton during the 2016 Democratic primary (forcing Debbie Wasserman Schultz to intervene on her longtime friend's behalf), Senator Bernie Sanders has finally introduced a long-anticipated piece of legislation: His bill to create a single-payer health-care system, or, as his supporters know it best, “Medicare for all.”

  As expected, the proposal would offer the same suite of medical benefits required for some insurance plans under the Affordable Care Act and eliminate most out-of-pocket costs. Mr. Sanders argues that although taxes would likely rise to support the new system, families would save money by no longer needing to purchase health coverage, according to the Wall Street Journal.

  

  Unsurprisingly given Sanders’s well-known views on government spending, the 96-page bill offers no mechanisms to pay for the plan, which is expected to cost the federal government hundreds of billions of dollars a year. A Bernie spokesman said his office plans to release a separate white paper focusing on payment strategies, but as of now, no such plan exists.

  While the bill’s chances of passing are infinitesimal (Republicans remain vehemently opposed), as the WSJ explains, the symbolism surrounding its introduction is actually quite potent.

  As the Democratic party shifts further to the left, socialized medicine (Like they have in Canada!) is becoming a rallying cry for the party. Already, four of the top-polling contenders for the 2020 presidential nod have signed on to the plan.

  “A health-care system as Mr. Sanders envisions it remains unlikely with Republicans in control of the White House and both chambers of Congress. But the idea has caught on with many Democrats since Mr. Sanders touted it on the 2016 presidential campaign trail; when he debuted a similar plan in 2013, none of his Democratic colleagues signed on.

   

  Single-payer health care is becoming a rallying cry for many Democrats much as the seven-year promise to “repeal and replace” the ACA brought together Republicans.

   

  At least four potential 2020 Democratic presidential contenders, Elizabeth Warren of Massachusetts, Kirsten Gillibrand of New York, Kamala Harris of California and Cory Booker of New Jersey, have all signed onto the plan.”

  In a timeline chronicling the Democratic Party’s flirtations with single payer, the International Business Times explains how the idea of universal health-care coverage was first proposed by former President Harry Truman in 1945. After Democrats successfully created the Medicare and Medicaid programs during the 1960s, some progressive hoped to follow by extending coverage to all citizens. The idea slowly lost favor during the 1970s and 1980s, as Ronald Reagan criticized what he saw as “socialized medicine.”

  But it was revived in 1992 when California’s once-and-future governor Jerry Brown campaigned on it during the Democratic primary. He was defeated by Bill Clinton who decided to institute reforms that preserved the existing private-insurance system after failing to muster support for “Hillarycare” – the Clintonian plan for a single-payer system.

  Moving ahead to the Obama era, the former president famously flip-flopped on the issue, saying he “never supported single payer” even though there were records of him speaking favorably about the policy dating back to 2003, when he was a state senator in Illinois.

  During the formulation of what would become Obamacare, some Democrats pushed to include a so-called “public option” in the bill – a measure for which the president's support wavered. It was eventually killed by then-Democratic Sen. (and former vice presidential candidate) Joe Lieberman.

  Which brings us back to today.  

  If enacted, Sanders’s bill would begin extending Medicare-like coverage to people over a four-year transition period, with the eligibility age for the program—currently 65 and older—slowly lowered over time until it covers the entire population, according to WSJ. And while private insurers wouldn’t be permitted to compete with the government’s plan for basic coverage, consumers could purchase supplemental health policies.

  The plan would also authorize the universal government health system to negotiate the cost of prescription drugs, an idea that conservative have said is tantamount to price fixing. The Sanders plan would also require abortion to be covered – an idea that will outrage evangelicals. Federal funds are presently prohibited from paying for abortions.

  While hundreds of thousands of college students would probably rejoice at its passage (having free health-care coverage for life would certainly ease the psychic burden of not working), as author and former trader Nassim Taleb notes, “America is not Canada.”

  As of Wednesday, 15 Democratic senators have signed on to support the bill. They are:

  Tammy Baldwin (WI)

  Richard Blumenthal (CT)

  Cory Booker (NJ)

  Al Franken (WI)

  Kamala Harris (CA)

  Mazie Hirono (HI)

  Martin Heinrich (NM)

  Kirsten Gillibrand (NY)

  Ed Markey (MA)

  Jeff Merkley (OR)

  Brian Schatz (HI)

  Tom Udall (NM)

  Elizabeth Warren (MA)

  Sheldon Whitehouse (RI)

  Speculation about how Sanders will propose payment for the bill, which will likely be used as a template by Democrats in legislative battles for years to come, is already mounting. Here are a few ideas, courtesy of Axios.

  • A 7.5% income-based premium paid by employers, which his paper claims will raise $3.9 trillion over 10 years. This would exempt certain small businesses.
  • 4% income-based premium paid by households, which his paper claims will raise $4.2 trillion over 10 years. This would not affect low-income families.
  • Savings from health tax expenditures, which his paper claims will raise $4.2 trillion over 10 years.
  • Make the personal income tax and the estate tax more progressive, including limiting deductions for the wealthy. His paper claims this will raise $1.8 trillion and $249 billion over 10 years, respectively.
  • "Establish a Wealth Tax on the Top 0.1 percent," which his paper claims will raise $1.3 trillion over 10 years.
  • Add a fee on large financial institutions, which his paper claims will raise $117 billion over 10 years.

  Of course, not all Democrats are so fond of Sanders’s plan. Shockingly, it’s least popular among the party’s leadership. Nancy Pelosi has said she wouldn’t endorse the bill because she’s focused on protecting Obamacare. Schultz’s successor, DNC Chairman Tom Perez, said something similar. In summary, single-payer has gained enough political momentum within the party to force its opponents to at least couch their position in an excuse.

  Because if the 2016 election cycle taught the Democrats anything, it’s that they oppose populist movements at their own peril. 

  

  

• Amid 2017's Fascist Disinformation Mania, Brandon Smith Fears "Something Larger Afoot"

  Authored by Brandon Smith via Alt-Market.com,

  Years ago in 2012, I published a thorough examination of disinformation tactics used by globalist institutions as well as government and political outfits to manipulate the public and undermine legitimate analysts working to expose particular truths of our social and economic conditions.

  

  If you have not read this article, titled Disinformation: How It Works, I highly recommend you do so now. It will act as a solid foundation for what I am about to discuss in this article. Without a basic understanding of how lies are utilized, you will be in no position to grasp the complexities of disinformation trends being implemented today.

  Much of what I am about to discuss will probably not become apparent for much of the mainstream and portions of the liberty movement for many years to come. Sadly, the biggest lies are often the hardest to see until time and distance are achieved.

  If you want to be able to predict geopolitical and economic trends with any accuracy, you must first accept a couple of hard realities. First and foremost, the majority of cultural shifts and fiscal developments within our system are a product of social engineering by an organized collective of power elites. Second, you must understand that this collective is driven by the ideology of globalism — the pursuit of total centralization of financial and political control into the hands of a select few deemed as "superior" concertmasters or "maestros."

  As globalist insider, CFR member and mentor to Bill Clinton, Carroll Quigley, openly admitted in his book Tragedy And Hope:

  "The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank … sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

  The philosophical basis for the globalist ideology is most clearly summarized in the principles of something called "Fabian Socialism," a system founded in 1884 which promotes the subversive and deliberate manipulation of the masses towards total centralization, collectivism and population control through eugenics. Fabian Socialists prefer to carry out their strategies over a span of decades, turning a population against itself slowly, rather than trying to force changes to a system immediately and outright.  Their symbol is a coat of arms depicting a wolf in sheep's clothing, or in some cases a turtle (slow and steady wins the race?) with the words "When I strike I strike hard."

  Again, it is important to acknowledge that these people are NOT unified by loyalty to any one nation, culture, political party, mainstream religion or ethnic background.

  In fact, they will happily sacrifice any country or any group of people if it will get them closer to their goal.

  They are not defenders of the free market as the idiots on the extreme left like to claim. In fact, they abhor any business model that is not dominated by a government and a bureaucracy designed to give them an unfair advantage through legislation. Anyone who thinks free markets are the cause of our economic ailments in the past decade has lost sight of the fact that we have not had anything even remotely resembling free markets for more than a century. The corporations leftists and common socialists constantly wail about could not exist without government charter and the legal loopholes surrounding limited liability. So please, socialist warriors, shut up about free markets. You have no idea what you are talking about.

  The globalists are also not loyal acolytes of any particular theological tradition (at least not any that are clearly identified). Meaning, they are NOT organized around Judaism or even loyalty to Israel as is the common claim of the clowns that make up what some are now calling the "Alt-Right." Globalists do not care about Jewish people or Jewish beliefs even though some of them are genetically Jewish.

  While a minority of globalists are associated with the political extremist faction known as "Zionism," Zionists are just another exploitable group to them, and their greater objective has nothing to do with the elevation of Israel. They will gladly fund Islamic extremist groups, for example, that desire and will willingly carry out the obliteration of Israel or the murder of Jewish people. They also exploit elements of the Israeli government to trigger chaos on the other side of the chess board.

  Those who argue that all our ills are engineered by "the jeeeewwws!" or "the tribe" are poorly informed and have chosen an overly simplistic broad-brush explanation for a much more complex enemy they have no ability to fathom. They tend to cite "evidence" that is highly unverified and poorly sourced.  They think the Rothschilds are the root of all globalism when the Rothschilds are just one element of a greater cabal.  Ask them which globalist institutions actually argue for Jewish or Zionist supremacy and they won't be able to produce evidence of any, unlike the numerous globalist institutions and champions that OPENLY argue for GLOBALISM even at the expense of Jews and the nation of Israel (i.e. Barack Obama's consistent support of Islamic extremist groups and the Arab Spring).  In fact, ask them for evidence that Jews or Zionists are the core of the globalist agenda and they will copy and paste the same list of perhaps two dozen Council on Foreign Relations members that are Jewish while ignoring the thousands of other members that are not.

  They also tend to argue that the fascist movements of the past century were actually "doing battle with the globalist agenda" — i.e. they were the "good guys."  Sorry to break it to the "Alt-Right" crowd, but almost everything they believe is wrong.

  I have noticed a disturbing trend within liberty movement and conservative circles; a kind of invasion, if you will. A minority of disinformation agents and useful idiots are operating within liberty outlets to push an ideological revolution oddly similar in tactics to those used by Soros funded groups overtaking the political left. It is my belief that while some globalist created movements are meant to provoke the left to zealotry and cultural Marxism, other globalist created movements are meant to provoke the right to zealotry and a misplaced adoration for fascism.  Divide and conquer is the game here.

  As I noted in my last article 'Globalists Will Throw Antifa To The Wolves To Further Their Agenda', the left is essentially a lost cause. Any semblance of the so called "classical liberal" that is so commonly linked back to certain American revolutionaries and founding fathers was snuffed out long ago. They don't exist anymore. Conservatives (not necessarily Republicans) have taken up the mantle of individual liberty and small government. The labels may have changed, but the principles remain the same. Conservatives are the natural enemy of globalists. The ideals of conservative thought and the globalist agenda are mutually exclusive — both cannot exist within the same space at the same time. One of them has to go for the other to function.

  So, what are elitists with aspirations of becoming god-kings to do? Well, they could try to attack conservatives directly, but this does not mean our ideals will disappear. The ideals might even spread and flourish in reaction to a crackdown, which is the opposite effect that social engineers desire. Instead, 4th generation warfare is in order. That is to say, conservatives must be bamboozled into embracing actions contrary to their principles.

  They must be conned into applauding big government instead of fighting against it. They must be tricked into rationalizing violations of the Constitution instead of exposing said violations as a spreading cancer. They must be cajoled into cheering for even more expensive and ill conceived war efforts that do not serve the interests of Americans. They must be fooled into praising the relationship between corporations and government instead of working to dismantle the government framework that coddles corporations and protects them from free markets.

  While globalists cannot destroy conservatism from without, they might be able to use 4th Gen tactics to destroy conservatism from within. Conservatives have to be convinced that conservative values are weaknesses that must be abandoned for the "greater good." At this point, conservatives would no longer be conservative; they become something else entirely.

  While the liberty movement in particular has been hyper-focused on the dangers of cultural Marxism and communism, the real danger is the psyop being played within the political right. Both communism and fascism serve globalist interests. It is to their advantage to promote both and to even pit one against the other. The key is to use the left to drive conservatives to desperate measures and then link conservatives to ideals that are counter to their natures until the original ideals are forgotten.

  There are some core weakness to the propaganda campaign that gut the narrative completely. The fact that the establishment is grasping at such methods to me seems desperate, but then again, I make a rule never to underestimate people's laziness or their ignorance. So, lets look at the primary argument popping up in every liberty comment thread and chat board: "Globalists are purely communists, and fascism is a misunderstood and necessary counterpunch."

  This assertion falls apart fantastically when historical fact is applied and one realizes that BOTH communism and fascism were movements funded and supported by the very same financial elites. Yes, that's right, fascism cannot be opposed to globalism, because globalists created fascism to serve their purposes.

  To find the most comprehensive evidence compiled on the relationship between the financial elites and the rise of fascism and communism, one of the best sources is the work of Professor Antony Sutton. Here Sutton answers questions on some of these ties, including the elitist funding and technological development of the Nazis as well as the Soviet Union:

  Let's not forget about the Bush family legacy of financial support for the Third Reich – yet some people are attempting to feed a growing argument that the globalists were opposed to Hitler or vice versa…?

  Globalist conglomerates like the Rockefeller's Standard Oil were even exposed during the Nuremberg trials as having funded and aided Nazi technological advancements throughout the war using close relationships to IG Farben. This is made clear in the 'Von Knieriem Documents' within the Nuremberg and WWII congressional investigative record, which can be read in full in Elimination Of German Resources For War, starting on page 1302.

  This means that the disinfo-argument that "perhaps the elites funded fascism in the beginning but turned against it later" is a no-go. Of course, these revelations were ultimately buried and no one of import was ever prosecuted.

  So, to be absolutely clear – Fascist movements are NOT a counterweight to communism, they are controlled opposition to communism.  If you want to join a real opposing movement to cultural marxists and communists, then the only answer is a movement that supports individual liberty and the reduction of government power.  Fascism does not support either.

  Beyond general cash flow and technological backing for fascist governments, the globalist ideology is almost identical to fascist models. Mainstream assumptions aside, fascists are not true nationalists, rather, they are ideologues seeking to spread globally — their propaganda base just happens to begin with national pride. As mentioned earlier, globalism is best understood through the lens of Fabian Socialism, and Fabian Socialism is essentially fascism; though fascism tends to add a frontman dictator as a figurehead rather than an open cabal of oligarchs.

  Fabian Socialists (globalists) are so fond of fascism that they have in the past presented unabashed defense of the Third Reich. George Bernard Shaw, a celebrity member of the Fabians, is notorious for praising the methods of both the Nazis and Stalin, including the mass murder of undesirables.

  The difference between the communist model and the Nazi model? Nazis believed in population control based on genetic origin, while communists believed in population control based on labor potential. Both standards appeal to globalists.

  Bottom line – fascists are slaves for globalists, just as communists are slaves for globalists. Both support big government power, both undermine personal freedoms. There is little more than cosmetic differences between them when one knows the true history behind each movement.

  The disinformation brigade drumming up the pro-fascist/pro-Hitler dialogue on conservative forums may be part of a funded agenda to demonize liberty movements by false association. Or, it may be an attempt to lure conservatives into thinking the only way to counteract the insanity of the extreme left is to become more like their classic enemy, the fascist. And, perhaps it is simply a gaggle of morons with zero historical reference parroting what they have been hearing in their online echo chambers for years, but now they see an opportunity generated by the fear surrounding the mania of cultural Marxists.

  They will seethe in the comments of this article, that is certain. I will be accused of being a "Zionist agent," with zero proof of course. They will froth at the mouth about how "something must be done" about the cultural marxists as if our only other choice is to adopt even more egregious methods.  They will gather a dozen of their friends from their favorite online haunts and "mob up" to flood forums with angry discord to make it appear that there are more of them out there than really exist (much like social justice warriors do), but it is unlikely they will produce any hard evidence countering anything I have presented here. Their opinions might be loud, but they are also irrelevant.

  My concern is that there is something larger afoot.

  That maybe, just maybe, the conservative right is being tenderized in preparation for radicalization, just as much as the left has been radicalized. For the more extreme the social divide, the more likely chaos and crisis will erupt, and the globalists never let a good crisis go to waste. Zealots, regardless of their claimed moral authority, are almost always wrong in history. Conservatives cannot afford to be wrong in this era. We cannot afford zealotry.  We cannot afford biases and mistakes; the future of individual liberty depends on our ability to remain objective, vigilant and steadfast. Without self examination, we will lose everything.

  

  

• Facebook Promises To Censor All Material That Makes Zuckerberg Sad

  Earlier this morning, Facebook Vice President of Media Partnerships shared a new blog post on the company’s website detailing precisely how they intend to censor content with which they happen to disagree.  Apparently all content providers who share “clickbait or sensationalism, or post misinformation and false news” will be deemed ineligible to monetize their efforts over Facebook.

  To use any of our monetization features, you must comply with Facebook’s policies and terms, including our Community Standards, Payment Terms, and Page Terms. Our goal is support creators and publishers who are enriching our community. Those creators and publishers who are violating our policies regarding intellectual property, authenticity, and user safety, or are engaging in fraudulent business practices, may be ineligible to monetize using our features.

   

  Creators and publishers must have an authentic, established presence on Facebook — they are who they represent themselves to be, and have had a profile or Page on Facebook for at least one month. Additionally, some of our features like Ad Breaks require a sufficient follower base, something that could extend to other features over time.

   

  Those who share content that repeatedly violates our Content Guidelines for Monetization, share clickbait or sensationalism, or post misinformation and false news may be ineligible or may lose their eligibility to monetize.

  Ironically, the biggest peddlers of “clickbait or sensationalism, or misinformation and false news” these days seems to be the largest, and ‘most respected’ mainstream media outlets…presumably there is a carve out for the likes of CNN, NYT and Wapo?

  

  Of course, we first noted the efforts of Facebook to combat the spread of “fake news” over social media back in December 2016 when they first introduced a filter intended to flag ‘fake’ content so that users wouldn’t have to go through the hassle of critically analyzing information on their own.  As we noted at the time, it was a genius plan, except for one small issue:  who determines what is considered “fake news” and how exactly do they draw those conclusions?  From our prior post (see “Facebook Launches Campaign To Combat “Fake News”“):

  The first problem, however, immediately emerges because as NBC notes, “legitimate news outlets won’t be able to be flagged”, which then begs the question who or what is considered “legitimate news outlets”, does it include the likes of NYTs and the WaPos, which during the runup to the election declared on a daily basis, that Trump has no chance of winning, which have since posted defamatory stories about so-called “Russian propaganda news sites”, admitting subsequently that their source data was incorrect, and which many consider to be the source of “fake news”.

   

  Also, just who makes the determination what is considered “legitimate news outlets.”

  Luckily, Zuckerberg cleared up all the confusion in a subsequent post in which he basically admitted that all ‘fact-checking’ would be outsourced to disaffected Hillary voters and the completely impartial, ‘myth-busting’ website Snopes.com.

  Historically, we have relied on our community to help us understand what is fake and what is not. Anyone on Facebook can report any link as false, and we use signals from those reports along with a number of others — like people sharing links to myth-busting sites such as Snopes — to understand which stories we can confidently classify as misinformation. Similar to clickbait, spam and scams, we penalize this content in News Feed so it’s much less likely to spread.

  Keep in mind folks, this entire Facebook witch hunt has been prompted by $50,000 worth of ads that ‘MAY‘ have been purchased by Russian-linked accounts to run ‘potentially politically related’ ads. 

  

  

• De-Dollarization Spikes – Venezuela Stops Accepting Dollars For Oil Payments

  Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?

  

  Source: The Burning Platform

  Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

  

  As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters,

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

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

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

  *  *  *

  And today, as The Wall Street Journal reports, in an effort to circumvent U.S. sanctions, Venezuela is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy said.

  Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

   

  The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

   

  The new payment policy hasn’t been publicly announced, but Vice President Tareck El Aissami, who has been blacklisted by the U.S., said Friday, "To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar."

  There is no major market reaction for now – a modest bid to Bitcoin and some weakness in EUR and Gold (seems someone wants this to look like nothing).

  

  However, as Nomura debt analyst Siobhan Morden warns:

  “You can say whatever you want for your domestic propaganda and make it look like you’re retaliating against the U.S…. This political posturing will only be to their detriment.”

  So what happens if Europe also sanctions Venezuela? Will Rubles or Yuan… or Gold be the only way to buy Venezuela's oil?

  *  *  *

  This decision by the nation with the world's largest proven oil reserves comes just days after China and Russia unveiled the latest Oil/Yuan/Gold triad at the latest BRICS conference.

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

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

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

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

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

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

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

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

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

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

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

  *  *  *

  Having threatened China today with exclusion from SWIFT, we suspect Washington is rapidly running out of any great ally to sustain the petrodollar-driven hegemony (and implicitly its war machine). Cue the calls for a Venezuelan invasion in 3…2..1…!

  

  

• What Could Go Wrong? New 'Robotic Smart Crib' Will Stop Your Baby Crying

  Authored by Jake Anderson via TheAntiMedia.org,

  Would you trust a robot to rock your baby to sleep?

  

  The question likely elicits the chilling vision of a Terminator cradling your child. However, a new product – the Snoo – is, in fact, an automated crib, a high-tech bassinet perfectly calibrated to ‘swaddle’ infants and lull them into slumber. It’s an early entry of automated child care in an age that promises to integrate robotics into the daily fabric of human life.

  So, back to the question at hand:

  Would you trust a robot to swaddle your child while she sleeps?

  The Snoo was developed by renowned pediatrician Dr. Harvey Karp, MIT-trained engineers, and Yves Behar, who runs a tech-savvy industrial design firm. The team’s goal was to recreate the sensations of being in the womb by swaddling the infant — restricting their limb movement, a practice some have criticized — and inundating them with white noise. This is accomplished with a sleeper outfit that one mother, Samantha Murphy Kelly, referred to as a “straight jacket” that safely secures the child as the bassinet rocks her to sleep.

  Samantha, who wrote about the experience of entrusting the Snoo to care for her baby, describes her trepidation disappearing as she watched her child fall asleep within minutes. However, she admits that a creeping anxiety never fully went away.

  “As I became comfortable with the product — even relied on it — I found new things to worry about,” she writes. 

   

  “When the city experienced a storm in the middle of the night, I sprinted out of bed to unplug it.”

  The Snoo senses when a child is stirring and modulates its speed accordingly. In this way, it is part of a new tech trend of automated devices designed to coddle children. In 2009, a Japanese company released Suima, the first fully automatic baby crib. Earlier this year, Ford, in advertising its new Max line of cars, developed a crib that simulates the ‘soothing’ vibrations of a car ride. One can imagine there will be many more products and services like these as automation in the household becomes more ubiquitous — and profitable.

  But will this cottage industry be challenged by the uncanny valley? This is an aesthetics theory supposing that humans feel a kind of revulsion when faced with a human replica. It is most commonly applied to androids, robots, and dolls, humanoid manifestations that come close to approximating our form, expression, or sound — but that remain eerily incongruent.

  In entrusting robotic consumer products with caring for our infants, we must overcome a feeling that something is slightly off. Even if a product has a perfect safety record, a queasy doubt will still linger. While robotics, artificial intelligence, and automation make many aspects of our lives vastly more efficient, there remains a sense that the simulacrum is untrustworthy.

  Will we overcome this sense in the coming decades? Will we merge seamlessly with our new robotics creations, as Elon Musk believes? Will the 2020s bring us smart cribs and infant monitoring microchips? Or will the feeling of unease cause a Luddite rift? Only time — and money — will tell.

  

  

• Schumer, Pelosi Announce Deal With Trump: DACA For Border Security But No Wall; White House Denies

  Update: there appears to be some post-dinner confusion, because while the top Democrats issued a statement saying there was a deal on DACA, White House press sec. Sarah Sanders said that “While DACA and border security were both discussed, excluding the wall was certainly not agreed to.“

  While DACA and border security were both discussed, excluding the wall was certainly not agreed to.

  — Sarah Sanders (@PressSec) September 14, 2017

  //platform.twitter.com/widgets.js

  And then this:

  WH leg affairs director Marc Short calls Dems’ DACA statement “misleading,” says no deal on DACA or border wall $$ was reached tonight.

  — Rebecca Ballhaus (@rebeccaballhaus) September 14, 2017

  //platform.twitter.com/widgets.js

  yet at the same time this:

  The President made clear he would continue pushing the wall, just not as part of this agreement. https://t.co/KD1SdLAnIF

  — Matt House (@mattwhouse) September 14, 2017

  //platform.twitter.com/widgets.js

  Or, in other words, deal but no deal at the same time. Hopefully by tomorrow morning someone will know what really happened.

  * * *

  Shortly after concluding their dinner with president Trump at the White House, top Democrats Chuck Schumer and Nancy Pelosi announced they have reached a deal with Donald Trump which will preserve DACA and shield about 800,000 young “Dreamers” from deportation, while agreeing to border security but  without the president’s proposed border wall as a condition.

  

  Schumer and Pelosi issued the following joint statement following a dinner with President Trump in the White House:

  “We had a very productive meeting at the White House with the President. The discussion focused on DACA. We agreed to enshrine the protections of DACA into law quickly, and to work out a package of border security, excluding the wall, that’s acceptable to both sides.

   

  “We also urged the President to make permanent the cost-sharing reduction payments, and those discussions will continue.”

  Among the other items discussed were tax reform, border security, infrastructure, trade and the DACA program, which Trump rescinded last week, but now appears to have been reincarnated.

  Earlier on Wednesday evening, Paul Ryan told House Democrats Wednesday that there’s no chance Republicans will pass a replacement for DACA without including border security provisions. President Trump and Ryan have both said Congress should act on DACA, the Obama-era program that allows some illegal immigrants who arrived in the U.S. as children to remain and apply for work permits, leading to some speculation that leadership would support a “clean” bill restoring those protections. Ryan made clear that’s not going to happen. According to Axios, none of the Democrats pushed back against the border security proposal.

  Still, there may be complications. Here are some hot takes on the “deal” from Politico’s Jake Sherman:

  keep in mind that Pelosi and Schumer are both in the minority and need cooperation from ryan/McConnell.

   

  House leaves tomorrow and doesn’t return till last week of the month so we’ll have to see how this progresses.

   

  This will pose challenges for ryan and McConnell. Ryan has said he would not pursue immigration legislation without majority of Rs.

   

  There will be internal pressure for ryan and McConnell to resist turning over majority to a president who has decided to work w minority.

   

  You have a speaker who has been under fire from the right who will now be pressured to take up a deal cut between trump and Dems.

   

  Not passing judgement on whether this will happen. Just noting the obvious crosscurrents on the hill right now.

   

  Big question for ryan: will 121 republicans support a deal to reinstate DACA protections w border security and no wall.

   

  One other dynamic to keep in mind: regular order. Conservatives are obsessed w it. They’ll want hearings, to feel involved. Buy in.
  

  Assuming the answer is year, and now that Trump has fully conceded on DACA in the spirit of the “deal”, the question is whether the Democrats will also do the same, and support Trump’s tax reform, potentially overriding opposition from within the Republican party.

  

  

• Chinese Economic Data Misses Across The Board As Credit Impulse Slump Kicks In

  The brief encounter with a 'recovery' that China's economic data enjoyed in the first half of 2017 has evaporated as the reality of a collapsing credit impulse strikes across the board. Retail Sales, Fixed Asset Investment, and Industrial Production all missed expectations  and slowed dramatically.

  Tonight's big China data dump to ignore includes:

  • Retail Sales +10.1% YoY (+10.5% exp), well below July's 10.4% gain
  • Fixed Asset Investment +7.8% YoY (+8.2% exp), well below July's 8.3% rise
  • Industrial Production +6.0% YoY (+6.6% exp), drastically weaker than July's 6.4% gain

  The first half bounce is officially dead…

  

   

  China's macro data disappointments are just beginning…

  

   

  In fact China's credit impulse is the worst in the world…

  

  Yuan continues to tumble (3rd day in a row of weaker fix)…

  

  Is China back in the currency war game now that credit is no longer holding up the economy?

  

  

• Is Amazon To Blame The Fed Can't Hit Its Inflation Target

  It’s been a bad year for inflation forecasters: every month this year, economist consensus has expected core CPI to rise by 0.2% and every month since March, that figure has proven to be too high, resulting in 5 consecutive inflation misses and the weakest stretch of core inflation growth since 2010.

  

  Tomorrow’s CPI print, however, should finally break the spell: following a stabilization in cell phone plan costs, a rebound in hotel prices, and the ongoing weakness in dollar, should make tomorrow’s 0.2% core CPI forecast easier to achieve. And while year-over-year core growth is expected to slow to just 1.6% , the weakest since January 2015, Fed officials – having telegraphed a December rate hike – have indicated they’re looking more closely at the month-to-month trends for hints on what inflation will do next.

  “Inflation matters for the December decision, which is still very much up in the air,’’ Jonathan Wright, an economics professor at Johns Hopkins University and former Fed economist told Bloomberg. If core price gains remain low through the end of the year, “it would be too hard to insist that inflation is still on track.’’

  Headline inflation is also expected to come in a tad stronger: 0.3% M/M the highest since January, and 1.8% year-over-year due largely to a jump in gasoline prices following hurricane Harvey. “The core inflation numbers are going to be some of the lesser-affected of the key data between now and December,” said Stephen Stanley of Amherst Pierpont.

  And yet, while countless algos will react within nanoseconds of tomorrow’s CPI print, with a laser focus on whether tomorrow’s US core CPI will come out at 0.1%, 0.2% or 0.3%, it is easy to lose sight of the bigger inflation story. Simply put, inflation has been trending down across the major economies for decades. Take the US, each decade has seen inflation average as follows:

  • 1970s: 7.1%
  • 1980s: 5.6%
  • 1990s: 3.0%
  • 2000s: 2.6%
  • 2010s: 1.7%

  A similar pattern can be seen in Europe and Japan, though the latter seems to have settled around zero for the past two decades. Returning to the US, a big contributor has been a strong decline in goods inflation to around zero since the early 2000s. Meanwhile, services inflation has fallen but at a much slower pace and seems to be settling around 2%

  

  As Nomura’s Bilal Hafeez writes, it comes as no surprise that the early 2000s saw a major expansion in US (and world) trade with China. Indeed, President Clinton with the help of Republicans in Congress passed legislation to normalise trade relations with China in 2000. Soon after that, trade with China increased substantially, which helped put downward pressure on goods inflation. While there has been rhetoric from the current administration about reversing some of these measures, nothing has passed. Moreover, US trade is also increasing with other low-cost Asian producers, such as Vietnam, which is now the fifth largest net goods exporter to the US. Vietnam has not so far featured in any anti-trade rhetoric.

  Still, tomrrow’s numbers matter particularly for what the Fed will do next: with core inflation stubbronly below the Fed’s 2.0% core traget, FOMC members have been scrambling to justify they ongoing rate hike in light of persistent price weakness. “Fed policy makers seem to believe that inflation weakness is temporary, and they are probably right on that,” said Roberto Perli of Cornerstone Macro LLC in Washington. “But the more weak data we get, the more uncertain they will be about that interpretation and therefore the higher the likelihood of a postponement.”

  One key factor, however, which may spoil the party and keep inflation prints depressed is the deflationary impact of technology in general, something even the Fed has admitted in recent months, and the role of tech giants like Amazon in particular.

  Discussing this issue, Nomura writes that while globalisation was the meme of the 2000s, this decade’s has to be the “Amazonisation” of commerce. Hafeez takes the argument further, and while ascribing  to Amazon much of the good disinflation in recent years, suggests that one solution would be to weaken the dollar, i.e., go back to square 1 and either cuts rates or engage in QE…. just to offset the effect of Amazon!
  

   Given the bulk of the cost of goods is distribution costs, Amazon’s unique distribution model and widening range of products could impart a new disinflationary impulse on goods prices. There may already be signs of that if we compare the expected growth at Amazon with that of more conventional retail outlets as expressed through their relative share prices (Figure 3).

   

  So what can policymakers do to generate inflation? Services inflation is already around 2% – with the bulk of services accounted for by housing, medical and education costs, further increases may not be politically viable. That leaves raising goods inflation. But the forces of global trade and Amazonisation are unlikely to turn soon, barring some kind of breakthrough for President Trump in accomplishing political goals.

   

  The most obvious step, then, could be to weaken the nation’s currency. It worked for Japan when Abenomics was first launched with a weak yen in 2012 (inflation rose as high as 1.7% by 2014), and recently the weak pound has helped propel UK inflation to close to 3%. For the US, it’s noteworthy that goods inflation appears fairly tied to the dollar cycle – so a weak dollar in the 2000s saw inflation rise, while dollar strength since 2012 has seen goods inflation fall (Figure 4).

   

  

  But is it really Amazon’s fault the Fed can’t hit its inflation target? 

  Conveniently, that is just the question posed recently by Capital Economy in a recent research report. What it found is that, contrary to FOMC members seeking an easy scapegoat, it’s not Jeff Bezos’ fault why the Fed has failed at one of its two key mandates for nearly a decade. As Capital Eco’s Paul Ashworth writes:

  The drop back in core inflation to well below the Fed’s 2% target this year has prompted claims that prices are being held down by structural changes linked to the growing importance of online sales. With Amazon also regularly in the news recently thanks to its surging revenues and stratospheric stock price, it is understandable that people have put two and two together. Unfortunately, the data simply don’t support the theory that competition between online sellers and traditional bricks and mortar stores explains the low level of inflation.

  A breakdown of his argument:

  • The shift to online sales is having a transformative effect on the retail industry, but does not explain the weakness in core inflation, either this year specifically or the Fed’s more general failure to hit the 2% target in recent years.
  • Online retailing should be boosting productivity, since it eliminates the cost of running expensive stores in prime locations and reduces staffing needs. Those productivity gains should be reflected in lower prices. But goods prices have been falling since the early 2000s, when production was first outsourced to low-cost developing countries and behemoths like Walmart unleashed their own efficiency revolution in the retail sector.
  • Thanks to the rapid growth in non-store retail sales, the proportion of total retail sales accounted for by e-commerce has doubled since 2010. But it still accounts for a relatively minor 8.4%. Looking at Amazon specifically, its recent performance has been undoubtedly impressive. Nevertheless, Amazon’s importance within the overall US retail market still pales in significance to more traditional retailers. Even after years of strong growth, Amazon’s revenues are still only one-fifth of Walmart’s.
  • The biggest categories for online sales are clothing, furniture & home furnishings and electronics. Looking at price inflation for those top three categories, a mixed picture emerges. There is little evidence that clothing prices are falling more rapidly now. In contrast, there is perhaps some evidence that prices for household furnishings and sporting goods have been falling at a slightly faster pace over the past five years. Before we conclude that is due to structural shifts in online versus bricks and mortar stores, however, it is worth bearing in mind that the dollar’s strength has also probably played a role.
  • In the services sector, e-commerce now accounts for almost a third of revenues in air transportation and travel agencies. But airline fares are still being driven almost entirely by fuel prices. Despite the explosion in private short-term rentals through sites like Airbnb, hotel room rates continue to rise.

  In short, CapEco finds that “the drop off in core inflation this year is mainly due to transitory factors”, not Amazon, and as a result, “it will rebound next year as those factors fade and the dollar’s weakness begins to feed through.”

  Or at least it should.

  Meanwhile, if tomorrow’s CPI is the 6th consecutive miss, the Fed would be better advised to look at its own erroneous decision-making, its faulty models, and the flawed CPI basket construction, the before trying to once again pin the blame on some external force.

  

  

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• Swedish Police "Cannot Cope" With Huge Numbers Of Rapes Since Migrants Arrived

  Authored by Paul Joseph Watson via InfoWars.com,

  A journalist investigating the rape of a 12-year-old girl in Sweden was told that police have not even interviewed the prime suspect two months later because authorities “cannot cope” with the sheer volume of cases since Sweden opened its borders to mass immigration two years ago.

  

  Back in July, the 12-year-old girl was dragged into a restroom by an older man in the center of Stenungsund before being beaten, raped and threatened with death.

  Knowing the identity of the culprit, the girl’s mother immediately reported him to police, but authorities have yet to even interrogate the suspect two months later despite knowing his name and address.

  According to journalist Joakim Lamotte, the girl is still being confronted and taunted by the rapist on the streets of Stenungsund.

  When Lamotte contacted authorities, he was told that the case hasn’t been acted on because police “cannot cope with the workload” of having so many rape cases to investigate.

  “Do you know how many rapes we have?” Lamotte was told by the police officer in a conversation he recorded and uploaded to YouTube.

   

  “No, I don’t. But I’ve talked to the mother and her daughter feels very bad because of this, and I know who this man is, I have his name, address, social security number and everything, and, I mean, you haven’t even interrogated him yet, isn’t that remarkable?” asked Lamotte.

   

  “Well, you might think so, but we have so many similar issues and so few people available we cannot cope with the workload,” responded the police officer.

   

  “That sounds unbelievable. A 12-year-old girl who is raped, it’s just a child,” said Lamotte.

   

  “We have 3-year-old children that get raped,” responded the police officer, sounding clearly exasperated.

  When asked if they were not able to prosecute rapists who molest 3-year-old children, the female officer responded, “Yes….these are the realities and it’s terribly regrettable. That’s all I can say about it.”

  Rapes have skyrocketed in Sweden over recent years. Authorities have claimed that this is due to the definition of rape being changed, but the spike occurred long after the change was made. Sex crimes in the country have doubled since 2012. The most recently available statistics showed that immigrants were 5.5 times more likely to carry out sexual assaults.

  Sex attacks as music festivals throughout Sweden are also soaring, with over 150 cases of assaults and 20 rapes being reported this summer.

  Earlier this year, Peter Springare, veteran police investigator and former deputy head of the division for serious crimes at the police in Örebro, made headlines after he wrote a Facebook post in which he detailed how the country was in “chaos” due to a never ending epidemic of serious crimes being committed by Muslim migrants.

  We previously highlighted Joakim Lamotte’s work back in February when he investigated the brutal gang rape of a Swedish woman who was racially abused by a group of men in Gothenburg who live streamed the assault to Facebook.

  When Lamotte attempted to get an update on the case from police in Gothenburg, he was told it was being treated as “aggravated rape” but that “no one even has begun working with the case yet”.

  According to a concerned mother who first brought the video to the attention of police in Gothenburg, she was shocked to see that they were disinterested and “sat and ate cheetos” while being seemingly more bothered by her for reporting the incident.

  

  

• Bitcoin Tumbles Below $4000 – Down 21% From Record High

  For the first time since August 22nd, the USD price of Bitcoin has dropped below $4000 – down over 20% from its record highs on September 1st.

  

   

  Crackdowns by China (on ICOs and more recently confusion over Bitcoin exchanges) combined with JPMorgan's Jamie Dimon's comments today saw selling pressure extend as China opened…

  All but one of the top 15 cryptocurrencies are under pressure…

  

   

  As we noted earlier, what is ironic is that this is not the first time Jamie Dimon has lashed out at bitcoin: the last time Dimon slammed bitcoin was November 2015, at the Fortune Global Forum in San Francisco. Here’s what he had to say when asked directly about it by an audience member:

  “You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

   

  “Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

  Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.” And yet, despite said "killing" Bitcoin remained well above $4,000.

  That said, Dimon conceded that he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses, saying that it "could hit $100,000 before it drops." The best argument Dimon has heard about owning bitcoin, is that it can be useful to people in places with no other options: “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” he said. “So there may be a market for that, but it’d be a limited market.”

  What is also ironic is Dimon's admission that his daughter purchased some bitcoin, saying "it went up and she thinks she is a genius."

  And to think the Fed didn't even have to inject $4 trillion in liquidity to make her feel that way, unlike so many stock "investors."

  Shortly after Dimon's comment, the chairman and CEO of the CBOE, Ed Tilly – which plans to offer bitcoin futures soon – defended the cryptocurrency after Dimon’s remarks.

  “Like it or not, people want exposure to bitcoin,” Tilly said. Believers can bet on its rise, and Dimon is welcome to take the other side, he said. “We’re happy to be the ones in the middle.”

  * * *

  Incidentally, for those who "wasted their time" since Dimon's 2015 threat, Bitcoin is up 1,018%.

  *  *  *

  Perhaps most ironically, while US elites are talking their book in desparation at this 'new-fangled' virtual currency, Russia is working on legitimizing cryptocurrencies and is developing a legal framework that will govern transactions using digital currencies like Bitcoin.

  Russia’s First Deputy Prime Minister Igor Shuvalov previously said that the regulation would be delayed that was originally set for October.

  “In April, we announced that the draft law would be ready in October. However, the situation on the market made us, in addition to the main bill, consider several more options. And now all these projects are postponed, we are watching the situation to understand,” Sidorenko said.

  Speaking at the II Moscow Financial Forum, Russian Finance Minister Anton Siluanov reassured Russian users of Bitcoin and other cryptocurrencies that the government has no intention of outlawing or penalizing cryptocurrencies and is working on regulation.

  “The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” Siluanov said.

  Putin himself has embraced cryptocurrency and met with Ethereum Founder Vitalik Buterin, who instilled the advantages of Russia’s usage of the Blockchain Technology under Bitcoin.

  

  

• Is North Korea Using Bitcoin To Get Around UN Sanctions?

  The latest round of United Nations sanctions against North Korea are designed specifically to prevent Kim Jong Un from obtaining hard currency. Luckily for the Kim regime, there’s always bitcoin.

  According to Bloomberg, the isolated country, facing further restrictions on exports that would bring in desperately needed Chinese yuan, has increasingly been turning to bitcoin to circumvent the sanctions.

  And to try and keep the illicit digital money flowing, the country has reportedly stepped up attacks against South Korean digital currency exchanges, causing disruptions in one of the largest markets for digital currencies like Ethereum and bitcoin, according to a new report from security researcher FireEye. In addition, the North has managed to breach an English-language bitcoin news website and collect bitcoin ransom payments from global victims of the malware WannaCry attack (although we thought that one had been linked to China?).

  

  “So far this year, FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, local media reported that Seoul-based exchange Yapizon lost more than 3,800 bitcoins (worth about $15 million at current rates) due to theft, although FireEye said there are not clear indications of North Korean involvement.”

  According to Naeem Aslam, a contributor at Forbes, the North cultivated an “army of hackers” to go after digital-currency exchanges after the digital currency’s world-beating gains piqued Kim Jong Un’s interest.

  “North Korea has an army of hackers who are constantly targeting South Korea, the hectic trading hub for cryptocurrency. The strategy would aid the country in bypassing many trade restrictions which also include the new sanctions. Moreover, the massive popularity of the cryptocurrency gained Kim’s attention and for crypto traders, this represents an opportunity. A higher demand for cryptocurrency would only boost its price,” said Forbes contributor Naeem Aslam.”

  North Korea’s Reconnaissance General Bureau, which directly reports to Kim Jong Un, handles peacetime cyber operations from espionage to network disruptions and employs an estimated 6,000 officers, according to a 2016 report from the International Cyber Policy Centre at the Australian Strategic Policy Institute.

  

  A group within the RGB known as TEMP.Hermit is believed to be responsible for the attacks on the South Korean bitcoin exchanges. FireEye said it has been linked to a 2015 attack on South Korea’s nuclear industry. The hackers have also been tied by other security firms to last year’s attack on Samsung Electronics Co.’s corporate messenger app and the breach of Sony Corp.’s film studio, which the FBI blamed on North Korea.

  "They’re pretty capable actors in comparison to other North Korean activity we see,” said Luke McNamara, a researcher at FireEye and author of the new report. "They’ve been creative in how they use their cyber-espionage capability."

  And with the US likely to continue to push for still tighter sanctions as the North continues its provocative missile and nuclear tests – that is, until Russia and China finally say “enough” – the isolated country will likely deepen its reliance on the digital currency.

  “We definitely see sanctions being a big lever driving this sort of activity,” McNamara said. “They probably see it as a very low-cost solution to bring in hard cash.”

   

  "As more money goes into cryptocurrency exchanges and more people buy bitcoin and ethereum, exchanges become larger targets for this group,” said McNamara. He said so far he did not have evidence that Kim Jong Un’s regime has targeted cryptocurrency exchanges outside of South Korea, but did not rule out the possibility in the future.”

  And with so many shadowy digital currency exchanges operating throughout Asia, cashing out the country’s digital currency positions would be easy.

  “They could compromise an exchange and transfer those bitcoins to other exchanges elsewhere in Asia or exchange them for a more anonymous cryptocurrency,” said McNamara. “There are variety of things they could do to cash out.”

  As Aslam points out, increasing demand for digital currencies from North Korea could ultimately lift prices on a global scale as the country is increasingly forced to transact at in bitcoin, Ethereum and their peers. North Korea isn’t the only country that’s turning to bitcoin out of a sense of desperation. As the Atlantic pointed out earlier this month, thousands of Venezuelans have taken to minería bitcoin – or mining bitcoin – to try and get their hands on precious US dollars.

  Because, in some cases, it’s either that, or starvation.
   

  

  

• This Fascinating City Within Hong Kong Was Lawless For Decades

  There are very few places on Earth that remain ungoverned, and even the tiniest islands and city-states tend to have rules in place for things like taxation and citizenship.

  Government control is an established reality for most of the world, but what would happen if a neighborhood in your city suddenly became a lawless free-for-all? What type of industries would emerge, and how would people cooperate within that environment to ensure basic services continued to operate?

  As Visual Capitalist's Nick Routley details below, one example from recent history sheds light on just how such a situation could work: Kowloon Walled City.

  

  Courtesy of: Visual Capitalist

   

  Kowloon Walled City

  Today’s infographic is a fantastic editorial illustration from South China Morning Post from 2013 that takes a detailed look at the inner workings of Kowloon Walled City (KWC).

  Often described as one of the most remarkable social anomalies in recent history, this bizarre enclave was more dense than any other urban area on the face of the planet.

  

  The story of the KWC site begins in the Song Dynasty (960-1297) when a small fort was constructed to house soldiers who helped safeguard the salt trade. In the latter half of the 19th century, the small fort was expanded into a full garrison town as the threat of a British invasion hung over China.

  In 1898, the 99-year lease of Kowloon and the New Territories was established with one exception: the 2.7 hectare walled fortress. Because China never dropped its claim on the site and the British took a hands-off approach, the site became a sort of lawless enclave.

  After WWII, squatters began to fill the site and more permanent structures followed. By 1950, the population had grown to 17,000, and by 1990 over 50,000 people lived within a property the size of two rugby fields.

  

  From Squatter Camps to Functioning Neighborhood

  There was a tendency to view KWC is an isolated bubble of vice within the city, but the sheer volume of business activity within the informal settlement shows that outside customers were more than happy to benefit from lower priced goods and services. This symbiosis has few parallels in modern history, and it makes KWC a fascinating situation to look back on.

  KWC is best known as an enclave of criminal activity and illicit businesses such as brothels and gambling dens, but that only tells one side of the story. Despite the lack of space and formal links to utilities, the neighborhood was remarkably productive. In fact, KWC was often been described as Hong Kong’s shadow economy because the hundreds of tiny workshops and factories scattered throughout the site provided products for businesses across Hong Kong.

  

  People moved to KWC for many reasons, including bankruptcy, poverty, or to avoid deportation. Others went there to take advantage of the lack of law enforcement and regulations.

  One prominent example of skirting regulation was the high concentration of dental and medical practitioners operating within KWC. In addition to lower rents, doctors who immigrated to Hong Kong from China could avoid expensive licensing and retraining required by the colonial government. Industrial businesses were free to ignore fire, labor, and safety codes to produce goods at a lower cost, or to sell items that were considered taboo in the formal economy (e.g. restaurants serving dog meat).

  Law and Order

  Triads acted as a de facto city council by resolving civil conflicts, creating a volunteer fire brigade, and organizing garbage disposal. The tight-knit community within the settlement would also coordinate among themselves to conserve electricity and make repairs to shared infrastructure.

  Despite the lack of formally recognized land ownership, people still bought and sold property within KWC. In one example, a construction company struck an exchange deal with the owner of a four-story building. The owner would retain a ground floor flat in a newly constructed thirteen-story building on the site.

  The Bitter End

  In 1993, after intense rounds of buy-out offers and forced relocations, Kowloon Walled City was demolished and converted into a park. Many of the businesses were forced to close forever as rents in the rest of Hong Kong were not affordable for most of the owners.

  All this intensity of random human effort and activity, vice and sloth and industry, exempted from all the controls we take for granted, resulted in an environment as richly varied and as sensual as anything in the heart of the tropical rainforest. The only drawback is that it was obviously toxic.

  – Greg Girard, author of City of Darknes

  

  

• US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions

  In an unexpectedly strong diplomatic escalation, one day after China agreed to vote alongside the US (and Russia) during Monday’s United National Security Council vote in passing the watered down North Korea sanctions, the US warned that if China were to violate or fail to comply with the newly imposed sanctions against Kim’s regime, it could cut off Beijing’s access to both the US financial system as well as the “international dollar system.”

  Speaking at CNBC’s Delivering Alpha conference on Tuesday, Steven Mnuchin said that China had agreed to “historic” North Korean sanctions during Monday’s United Nations vote. “We worked very closely with the U.N.  I’m very pleased with the resolution that was just passed.  This is some of the strongest items.  We now have more tools in our toolbox, and we will continue to use them and put additional sanctions on North Korea until they stop this behavior.”

  In response, Andrew Ross Sorkin countered that “we haven’t been able to move the needle on China, which seems to be the real mover on this, in terms of being able to apply the real pressure. What do you think the issue is?  What is the problem?”

  The stunner was revealed in Mnuchin’s answer: “I think we have absolutely moved the needle on China.  I think what they agreed to yesterday was historic.  I’d also say I put sanctions on a major Chinese bank.  That’s the first time that’s ever been done.  And if China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system.  And that’s quite meaningful.”

  And to underscore his point, the Treasury Secretary also said that “in North Korea, economic warfare works. I made it clear that the President was strongly considering and we sent a message that anybody that wanted to trade with North Korea, we would consider them not trading with us.  We can put on economic sanctions to stop people trading.“

  In other words, to force compliance with the North Korean sanctions, Mnuchin threatened Beijing with not only trade war, but also a lock out from the dollar system, i.e. SWIFT, something the US did back in 2014 and 2015 when it blocked off several Russian banks as relations between the US and Russia imploded.

  Of course, whether the US would be willing to go so far as to use the nuclear option, and pull the dollar plug on its biggest trade partner, in the process immediately unleashing an economic depression domestically and globally is a different matter.  So far Washington has been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing and the potentially catastrophic consequences for the global economy. Washington runs a $350 billion annual trade deficit with Beijing, while the PBOC also holds over $1 trillion in US debt.

  Ironically, the biggest hurdle to the implementation of the just passed sanctions may be the president himself.  “We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a meeting with Malaysian Prime Minister Najib Razak. “I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” said Trump who has vowed not to allow North Korea to develop a nuclear ballistic missile capable of hitting the United States.

  Separately, at a hearing of the House Foreign Affairs Committee on Tuesday, Republican Chairman Ed Royce said the U.S. should target major Chinese banks, including Agricultural Bank of China Ltd. and China Merchants Bank Co., for aiding Kim’s regime. Russia also came in for criticism. Assistant Treasury Secretary Marshall Billingslea said in prepared remarks to the committee that North Korean bank representatives “operate in Russia in flagrant disregard of the very resolutions adopted by Russia at the UN.”

  While China and Russia supported the latest UN sanctions, officials made clear they were troubled by Haley’s comments in the Security Council that the U.S. would act alone if Kim’s regime didn’t stop testing missiles and bombs. They emphasized the world body’s resolution also emphasized the importance of resolving the crisis through negotiations. “The Chinese side will never allow conflict or war on the peninsula,” Foreign Ministry spokesman Geng Shuang said in a statement on Tuesday.

  In a soundbite late on Tuesday, Japan’s Nikkei quoted prime minister Shinzo Abe who said that “in the end, [the North Korean] problems should be solved through diplomatic dialogue,” adding that Japan will “work together with the international community to apply maximum pressure, so that North Korea commits to perfect, verifiable and irreversible denuclearization.” For Japan to engage with the regime, he stressed it would have to be “on the condition that North Korea commits to” this complete denuclearization.”

  Which, of course, won’t happen: “sanctions of any kind are useless and ineffective,” Russian President Vladimir Putin told reporters earlier this month at a summit in Xiamen, China. “They’ll eat grass, but they won’t abandon their [nuclear] program unless they feel secure.”

  Predictably, North Korea’s Foreign Ministry slammed the sanctions saying it “condemns in the strongest terms and categorically rejects” the United Nations adding more sanctions, North Korea’s state-run KCNA reported on Wednesday morning. Instead, North Korea warned it “will redouble efforts to increase its strength” as it seeks to establish “practical equilibrium” with U.S.

  And so, not only is the entire geopolitical circle jerk back at square one, but the ball is again back in North Korea’s court, while the decision on whether or not to launch another ICBM really depends on whether China will give it the quiet go ahead; a China which responds notoriously poorly to being threatened in the global financial arena, like for example when the US threatens to kick it out of the global dollar system…

  

  

• Calls To Imprison "Climate Change Deniers" Grow In The Wake Of Hurricane Irma

  When retired Georgia Tech professor Judith Curry penned a blog post on her “Climate Etc.” website suggesting that it was scientifically irresponsible to tie the intensity of Hurricanes Harvey and Irma directly to climate change, she probably didn’t expect that she might trigger 1,000’s of progressives to call for her immediate imprisonment.  Unfortunately, for both Curry and society at large, that is exactly what happened. 

  Here is part of Curry’s post that potentially resulted in this latest ‘mass-triggering’ event:

  It is premature to conclude that human activities–and particularly greenhouse gas emissions that cause global warming–have already had a detectable impact on Atlantic hurricane or global tropical cyclone activity. That said, human activities may have already caused changes that are not yet detectable due to the small magnitude of the changes or observational limitations, or are not yet confidently modeled (e.g., aerosol effects on regional climate).

  As the Washington Times notes, Curry’s comments only served to further enrage Al Gore’s climate change crusaders who promptly ramped up their calls to imprison anyone with the audacity to present any data and/or question, in any way, climate models which should be accepted as proven fact…even though they’re subjective and highly sensitive any number of input variables.

  That is the kind of talk that could get policymakers who heed her research hauled before the justice system, if some of those in the climate change movement have their way.

   

  “Climate change denial should be a crime,” declared the Sept. 1 headline in the Outline. Mark Hertsgaard argued in a Sept. 7 article in the Nation, titled “Climate Denialism Is Literally Killing Us,” that “murder is murder” and “we should punish it as such.”

   

  The suggestion that those who run afoul of the climate change consensus, in particular government officials, should face charges comes with temperatures flaring over the link between hurricanes and greenhouse gas emissions.

   

  “In the wake of Harvey, it’s time to treat science denial as gross negligence — and hold those who do the denying accountable,” said the subhead in the Outline article, written by Brian Merchant.

   

  Brad Johnson, executive director of Climate Hawks Vote, posted last week on Twitter a set of “climate disaster response rules,” the third of which was to “put officials who reject science in jail.”

  

   

  And while we’re not sure if imprisonment is the right punishment, it does seem a bit outrageous for a Georgia Tech climate scientist to challenge the opinions of both the Pope and Sir Richard Branson on climate change...who does she think she is? 

  Meanwhile, Pope Francis said the two Category 4 storms offer proof of catastrophic climate change, even though they are the first two major hurricanes to make landfall on the U.S. mainland in 12 years.

   

  “You can see the effects of climate change with your own eyes, and scientists tell us clearly the way forward,” said the pontiff, adding that leaders have a “moral responsibility” to take action.

   

  “Man-made climate change is contributing to increasingly strong hurricanes causing unprecedented damage,” Mr. Branson said in a Friday statement. “The whole world should be scrambling to get on top of the climate change issue before it is too late for this generation, let alone the generations to come.”

  Of course, while we would never question the opinions of the Pope and/or a Knight, we do find the following chart on U.S. hurricane strikes by decade to be somewhat perplexing.  Why, for example, were U.S. hurricane strikes above average for almost every decade between 1870 and 1950 before declining in the 1950s through 2000?  If hurricane frequency can suddenly be linked directly to climate change in 2017, shouldn’t it have produced similarly alarming hurricanes in the 80’s, 90’s and 2000’s?  If we’re not mistaken, CO2 output has pretty much consistently risen since man first started building fires…

  

  Of course, maybe the extreme weather events have simply shifted away from the U.S. and global hurricane strikes are the more relevant metric…except not…

  

  Oh well, we probably just don’t understand the math…

  

  

• Bitcoin Tumbles After Jamie Dimon Calls It A Fraud: "Would Fire Anyone Trading It"

  Surprised by the sudden air pocket below bitcoin? Curious if this was caused by some new, unconfirmed Chinese crackdown on bitcoin traders, exchanges, and other money launderers?

  No, the answer is Jamie Dimon, who in an angry outburst during the same conference in which he preannounced JPM’s 20% trading revenue drop, lashed out at the cryptocurrency, calling it a “fraud” which is “worse than tulip bulbs. It won’t end well”, will “blow up” and “someone is going to get killed.” Oh, and in conclusion, “any trader trading bitcoin” will be “fired for being stupid.“

  • DIMON: BITCOIN IS A “FRAUD”; “WORSE THAN TULIP BULBS”
  • DIMON: BITCOIN WILL EVENTUALLY BLOW UP
  • DIMON: BITCOIN WON’T END WELL
  • DIMON: WOULD FIRE ANY TRADER TRADING BITCOIN FOR BEING STUPID

  So how does Jamie really feel? 

  Of course, if “a trader” bought $100,000 of Bitcoin in 2010, they’d be roughly 3x richer than billionaire Jamie, but that’s another story.

  What is more surprising, is that bitcoin actually reacted to this angry outburst by the JPM CEO, sliding sharply, and dragging the entire cryptocurrency space with it.

  Or perhaps not surprising at all as hundreds of JPM traders quietly liquidated their accounts moments after hearing Dimon’s threat…

  

  Curiously, as Bitcoin sold off, gold finally saw a modest bid:

  

  As for Dimon’s personal vendetta with the digital currency, one twitter commentator said it best:

  BTC bulls: proof that “we” are a threat to the establishment + Gandhi quote
  BTC bears: see? https://t.co/e2ZCmjKi3C

  — Barbarian Capital (@BarbarianCap) September 12, 2017

  //platform.twitter.com/widgets.js

  What is ironic is that this is not the first time Jamie Dimon has lashed out at bitcoin: the last time Dimon slammed bitcoin was November 2015, at the Fortune Global Forum in San Francisco. Here’s what he had to say when asked directly about it by an audience member:

  “You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

   

  “Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

  Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.” And yet, despite said “killing” Bitcoin remained well above $4,000.

  That said, Dimon conceded that he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses, saying that it “could hit $100,000 before it drops.” The best argument Dimon has heard about owning bitcoin, is that it can be useful to people in places with no other options: “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” he said. “So there may be a market for that, but it’d be a limited market.”

  What is also ironic is Dimon’s admission that his daughter purchased some bitcoin, saying “it went up and she thinks she is a genius.”

  And to think the Fed didn’t even have to inject $4 trillion in liquidity to make her feel that way, unlike so many stock “investors.”

  Shortly after Dimon’s comment, the chairman and CEO of the CBOE, Ed Tilly – which plans to offer bitcoin futures soon – defended the cryptocurrency after Dimon’s remarks.

  “Like it or not, people want exposure to bitcoin,” Tilly said. Believers can bet on its rise, and Dimon is welcome to take the other side, he said. “We’re happy to be the ones in the middle.”

  * * *

  Incidentally, for those who “wasted their time” since Dimon’s 2015 threat, Bitcoin is up 1,018%.

  

  

• "It's Not Worth Fighting" – Hedge Funds Are Dumping Their China Shorts

  Pretty soon, China bears will be as rare as the Giant Panda.

  At least that’s what Bloomberg suggested in a story about how Chinese markets have continued to defy proclamations that country’s economy would soon collapse in an avalanche of bad debt, exposing rampant corporate fraud. Or that a rash of outflows and the pressure of short sellers would force a massive yuan devaluation. Or that the exposure of rampant fraud and abuse in its corporate sector would tank local markets, which rely heavily on shady investment products.

  We’ve repeatedly noted when fund managers who once loudly touted their China-related positions either moderated, or changed their minds completely. Just last week, Corriente Advisors’ Mark Hart announced the end of a seven-year options position that would’ve seen a massive payoff if the yuan dropped 50%. As we noted, he’d spent $240 million rolling over the options.

  Before that, Kyle Bass, during an appearance on Adventures in Finance, said that while he was 100% certain his thesis will ultimately prove correct, calling the timing has obviously proven difficult.

  Bass, in his interview, cited shady retail investment products that have been used to backstop $40 trillion in debt with only $2 trillion in equity as a looming sign of a collapse. (We’ve also noted other questionable financing deals like the use of collateralized commodity transactions, which we discuss in greater detail in “Did China's Bronze Swan Just Arrive? Copper Inventories Crash Most In History”).

  

  Kyle Bass

  Bloomberg has a more complete accounting of how hedge fund managers’ views on China have “evolved” this year, as the promise of the Shanghai Composite’s massive correction, and subsequent yuan devaluation in 2015 proved to be teasers for deeper declines that never materialized. 

  Crispin Odey (Odey Asset Management): Said the yuan would slide 30% against the dollar after its 1.8% devaluation in August 2015.

  Here’s Bloomberg:

  “Odey has moderated his views – somewhat. He’s shorting metal stocks on expectations that China’s economy will slow in the second half. But he says betting against the yuan is no longer worth the trouble. ‘They can control their currency very easily,’ he said in an Aug. 8 interview, citing China’s massive current-account surplus. ‘It’s not really worth fighting very much.’”

  Kevin Smith (Crescat Capital): Smith said the yuan was “massively overvalued” before the August 2015 devaluation. Now, he is one example of a bear who’s standing by his position despite absorbing stomach-churning losses.

  “Smith is sticking to his bearish bets via currency options and short positions in Chinese stocks, even after his macro fund lost about 12 percent so far this year. He said last month that his “mid-target” for the yuan is a 70 percent plunge over the next year.”

  John Burbank (Passport Capital): He said in late 2015 that a hard landing in China could trigger a global recession. In May 2016, he called for a major yuan devaluation. Though he hasn’t publicly commented on China in a while, Bloomberg says a July 31 investor letter suggests his “views have moderated.”

  While he predicted China’s restrictions on housing and credit this year would be “detrimental” for commodity demand in the second half, he noted that the Communist Party continues to support the economy.

  “Recent economic data has in fact been supportive of a continuation of strong growth near-term, with a slowdown possibly pushed to 2018,” Burbank said.

  Douglas Greenig (Florin Court Capital): He said in June 2016 that China might devalue its currency because of Brexit.

  Now his “quantitative modeling” has changed his mind; he’s now a China bull.

  “Locals could sell more currency, but foreign inflows may offset that,” he said in a phone interview.

  In summary, Chinese markets have performed strongly this year. Despite calls for further weakness, the yuan has rallied more than 6 percent from its eight-year low against the dollar in December. Chinese credit markets have quieted down after a period of turbulence triggered by a PBOC crackdown on rampant lending, and the Shanghai Composite Index has rallied to its highest level in nearly two years.

  

  Still, at least for yuan bears, there may be a silver lining. The PBOC recently struck down a policy that required sales desks to hold 20% of revenues from sales of FX derivatives in reserve – effectively opening the door to short-sellers as the bank ironically now seeks to stem the currency’s advance against the dollar.
   

  

  

• Let's Make America Free Again: 230 Years After The Constitution, We're Walking A Dangerous Road

  Authored by John Whitehead via The Rutherford Institute,

  “I tell you, freedom and human rights in America are doomed. The U.S. government will lead the American people in — and the West in general — into an unbearable hell and a choking life.”—Osama bin Laden (October 2001)

  Ironically, we mark the 16th anniversary of the 9/11 attacks in the same week we celebrate the 230th anniversary of the U.S. Constitution.

  While there has been much to mourn since 9/11, there has been very little to celebrate.

  Here is what it means to live under the Constitution today.

  The First Amendment is supposed to protect the freedom to speak your mind (the media, as well), worship, assemble, and protest nonviolently without being bridled by the government. Despite the clear protections found in the First Amendment, Americans continue to be censored, silenced and prosecuted for challenging government misconduct and corruption.

  The Second Amendment was intended to guarantee “the right of the people to keep and bear arms.” Essentially, this amendment was intended to give the citizenry the means to resist tyrannical government. Yet while gun ownership has been recognized by the U.S. Supreme Court as an individual citizen right, Americans remain powerless to defend themselves against SWAT team raids and militarized government agents armed to the teeth.

  The Third Amendment prohibits the military from entering any citizen’s home without “the consent of the owner.” Yet with the police increasingly training like, acting like, and arming themselves like military forces, we now have what the founders feared most—a standing army on American soil.

  The Fourth Amendment prohibits the government from conducting surveillance on you or touching you or invading you, unless they have some evidence that you are guilty of a crime. Unfortunately, the Fourth Amendment has been all but eviscerated by an unwarranted expansion of police powers that include strip searches, surveillance and home invasions.

  The Fifth Amendment and the Sixth Amendment work in tandem. These amendments supposedly ensure that you are innocent until proven guilty, and government authorities cannot deprive you of your life, your liberty or your property without the right to an attorney and a fair trial before a civilian judge. However, in our suspect/surveillance society, these fundamental principles have been upended.

  The Seventh Amendment guarantees citizens the right to a jury trial. Yet when the populace has no idea of what’s in the Constitution, that inevitably translates to an ignorant jury incapable of distinguishing justice and the law from their own preconceived notions and fears.

  The Eighth Amendment is supposed to protect the rights of the accused and forbid the use of cruel and unusual punishment. However, the Supreme Court’s determination that what constitutes “cruel and unusual” depends on the “evolving standards of decency that mark the progress of a maturing society” leaves us with little protection in the face of a society lacking in morals altogether.

  The Ninth Amendment provides that other rights not enumerated in the Constitution are nonetheless retained by the people. Popular sovereignty—the belief that the power to govern flows upward from the people rather than downward from the rulers—has been turned on its head by a centralized federal government that sees itself as supreme.

  As for the Tenth Amendment’s reminder that the people and the states retain every authority that is not otherwise mentioned in the Constitution, that assurance of a system of government in which power is divided among local, state and national entities has long since been rendered moot by the centralized Washington, DC, power elite—the president, Congress and the courts. Through its many agencies and regulations, the federal government has stripped states of the right to regulate countless issues that were originally governed at the local level.

  If there is any sense to be made from this recitation of freedoms lost, it is simply this: our individual freedoms have been eviscerated so that the government’s powers could be expanded.

  Yet those who gave us the Constitution and the Bill of Rights believed that the government exists at the behest of “We the People.” We have the power to make and break the government.

  Still, it’s hard to be a good citizen if you don’t know anything about your rights or how the government is supposed to operate.

  Americans are constitutionally illiterate.

  Most citizens have little, if any, knowledge about their basic rights. And our educational system does a poor job of teaching the basic freedoms guaranteed in the Constitution and the Bill of Rights.

  Thirty-five percent of Americans cannot name a single branch of the government. Only a quarter of Americans know it takes a two-thirds vote of the House and Senate to override a presidential veto. One in five Americans incorrectly thinks that a 5-4 Supreme Court decision is sent back to Congress for reconsideration. And more than half of Americans do not know which party controls the House and Senate.

  Only one out of a thousand adults could identify the five rights protected by the First Amendment. Teachers and school administrators do not fare much better. One study found that one out of every five educators was unable to name any of the freedoms in the First Amendment. In fact, while some educators want students to learn about freedom, they do not necessarily want them to exercise their freedoms in school.

  Government leaders and politicians are also ill-informed.

  So what’s the solution?

  Thomas Jefferson recognized that a citizenry educated on “their rights, interests, and duties”  is the only real assurance that freedom will survive. As Jefferson concluded in 1820: “This is the true corrective of abuses of constitutional power.”

  From the President on down, anyone taking public office should have a working knowledge of the Constitution and the Bill of Rights and should be held accountable for upholding their precepts. I’d go so far as to require students to pass a citizenship exam before graduating from grade school.

  Here’s an idea to get educated and take a stand for freedom: anyone who signs up to become a member of The Rutherford Institute gets a wallet-sized Bill of Rights card and a Know Your Rights card.

  If this constitutional illiteracy is not remedied and soon, freedom in America will be doomed.

  As I make clear in my book Battlefield America: The War on the American People, we have managed to keep the wolf at bay so far. Barely.

  Our national priorities need to be re-prioritized.

  For instance, Donald Trump wants to make America great again.

  I, for one, would prefer to make America free again.

  

  

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