Today’s News 11th September 2017

  • Israeli Jets Rattle Lebanon And Raise Tensions With Syria

    In what Lebanese media reported as a deeply provocative act, an Israeli jet did a high speed and low altitude flyover of the city of Saida in the country's South on Sunday. Lebanese citizens and security sources also reported sonic booms which broke windows and shook buildings. Lebanese social media mentioned possible injuries due to falling glass and regional outlets showed images of damaged buildings and momentary panic in the area under the fly-by. The region has been the site of major military incursions by Israel over the past years, especially during the last major Israeli bombing of the country in 2006.

    An Associated Press reporter witnessed multiple Israeli jets while locals captured photographs of planes at higher altitudes just prior to the low fly-by. The AP's account is as follows:

    An Associated Press reporter in Sidon heard two sonic booms and saw four jets flying overhead at various altitudes on Sunday. Lebanon's state-run National News Agency reported one sonic boom caused by a low-flying Israeli jet. 

     

    …Lebanon's Foreign Ministry said Saturday it was filing a complaint against Israel at the U.N. Security Council for violating its national airspace to strike targets inside Syria. 

    Video footage purporting to show the flyover circulated widely, and was even picked up by some international media outlets, but was later proven to be fake


    Social media image purporting to show Israeli jets not long before the low flyby occurs. Image source: Wael Al Hussaini/Twitter

    Last week Israel attacked a Syrian military base just across Lebanon's border, which was carried out by jets flying over Lebanese airspace. As we previously reported the flagrant act of aggression was likely designed to provoke a response as Israeli leadership is concerned that Assad has not only survived but appears to be winning the war in Syria. Lebanon barely has an air force and further lacks adequate or high tech missile defense systems. 

    According to regional media, "Lebanese security officials told a Hezbollah-affiliated radio station the Israeli sorties were part of a large-scale training exercise the IDF is currently holding in northern Israel meant to prepare for a future war with the Shiite terror organization." Middle East historian As'ad AbuKhalil noted after the incident that the Lebanese government recorded over 7000 Israeli violations of Lebanese Airspace in the first decade of the 2000's alone.

    It is likely that Sunday's stunt was also meant to send a direct message to Syria: Israel has this summer consistently declared a "red line" warning of repercussions should Iranian and Hezbollah troops not leave Syria.

  • Myanmar's Rohingya Crisis: George Soros, Oil, & Lessons For India

    Authored by Shelley Kasli via GGINews.com,

    "When George Soros comes to this or that country… he looks for religious, ethnic or social contradictions, chooses the model of action for one of these options or their combination and tries to 'warm them up'," Egorchenkov explained…

     The ongoing crisis in Myanmar including tensions between Buddhist and Muslim communities and the military crackdown by Myanmar Army and police seems to be a multidimensional crisis with major geopolitical players involved according to a report by Sputnik International.

    As per the report Dmitry Mosyakov, director of the Centre for Southeast Asia, Australia and Oceania at the Institute of Oriental Studies of the Russian Academy of Sciences, told RT that the conflict “was apparently fanned by external global players” and “has at least three dimensions”.

    First, this is a game against China, as China has very large investments in Arakan [Rakhine],” Mosyakov told RT.

     

    “Second, it is aimed at fuelling Muslim extremism in Southeast Asia….

     

    Third, it’s the attempt to sow discord within ASEAN [between Myanmar and Muslim-dominated Indonesia and Malaysia].”

    The conflict is mostly concentrated in the country’s northwestern region in the Rakhine State which consists of vast reserves of hydrocarbons located offshore. This vast reserve of hydrocarbon is the major reason why external players are using the conflict to undermine Southeast Asian stability, according to Mosyakov.

    “There’s a huge gas field named Than Shwe after the general who had long ruled Burma,” Mosyakov said.

    In 2004 this massive Rakhine energy reserves were discovered and by 2013 China had connected Myanmar’s port of Kyaukphyu with the Chinese city of Kunming in Yunnan province with oil and natural gas pipelines. Through this oil pipeline China can bypass the world’s most congested shipping choke points – the Malacca Straits, while through the gas pipeline hydrocarbons from Myanmar’s offshore fields are transported to China.

    The development of the Sino-Myanmar energy project coincided with the intensification of the Rohingya conflict in 2011-2012 when 120,000 asylum seekers left the country escaping the bloodshed.

    Dmitry Egorchenkov, deputy director of the Institute for Strategic Studies and Prognosis at the Peoples’ Friendship University of Russia doesn’t believe that this is a coincidence. Although there are certain internal causes behind the Rohingya crisis, Dmitry believes that the crisis might be fueled by external players, most notably, George Soros.

    By destabilizing Myanmar they could directly target China’s energy projects.

    George Soros funded Burma Task Force has been actively operating in Myanmar since 2013 although Soros interference in Myanmar’s domestic affairs goes deeper than that.

    In 2003, George Soros joined a US Task Force group aimed at increasing “US cooperation with other countries to bring about a long overdue political, economic and social transformation in Burma [Myanmar].”

    A document published by the Council of Foreign Relation’s (CFR) in 2003 entitled “Burma: Time For Change,” states that “democracy… cannot survive in Burma without the help of the United States and the international community” and calls for an establishment of a group to implement the project.

    “When George Soros comes to this or that country… he looks for religious, ethnic or social contradictions, chooses the model of action for one of these options or their combination and tries to ‘warm them up,'” Egorchenkov explained, speaking with RT.

    According to Mosyakov, it is a globalist management policy to sow discord in nations by fuelling regional conflicts which allows them to exert pressure on those nations and ultimately gain control over their sovereignty. A recent example is the Ukrainian Crisis and the Greek Crisis before that. When the flames are out and the country ravaged with the crisis, it is time for the vultures to descend.

    “BUY WHEN THERE IS BLOOD ON THE STREETS, EVEN IF THE BLOOD IS YOUR OWN”

     

    – THESE ARE THE WORDS OF NATHAN MAYER ROTHSCHILD OF THE HOUSE OF ROTHSCHILD, ONE OF THE FAMILY BLOODLINES THAT CONTROLLED THE EAST INDIA COMPANIES.

    What one should understand is that a crisis just doesn’t take a toll on the infrastructure and human lives but it also ruptures the economy and puts the country in huge debt. And it is through this debt that the global players dictate their terms to sovereign nations for decades or even centuries if there is no course correction. That is the reason why both Ukraine and Greece appointed Rothschild as their debt adviser to assist with their growing debt crisis.

    Lesson for India

     

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    Even India is hunting for a solution to its Bad-Debt Crisis (read the corporate loans that state-owned banks wrote off, which were taken by arousing nationalistic sentiments in the media) which is a Rs 1.14 lakh crore (this is a conservative figure) scam as we explained in our special Demonetization issue War on Cash. However, a solution has already been prescribed by the deputy governor of Reserve Bank of India, Viral Acharya. His solution is to simple sell-off state owned units to foreign players bankrupted in the 2008 crisis. You can read all about it here – PARA – A New Central Bank For Strategic Sale Of India.

    These Money Masters doesn’t lose anything in case the situation escalates and war erupts between China and Myanmar, infact they have everything to gain from it; just like they had everything to gain from the Russian-Ukrainian conflict. Educated folks call it Balance of Power. It is through this same strategy of Balance of Power that even the India-China conflict is being orchestrated. But we don’t have to rely on war to be in debt, our policy makers are already doing a good job at it. We are already in the midst of a major crisis, be it agriculture, economy, civil society and press or defense and security. This is the direction our policy makers have set for us, and it leads directly to destruction, unless we do a major course correction.

    Could such a crisis be orchestrated in India?

    This is the hypothetical question we raised after Liquor baron Vijay Mallya was allowed to flee India to take refuge in London. This was not the first time a person fleeing local law in foreign countries had taken shelter in London. Since decades, high-profile foreign offenders with considerable wealth have found refuge and a safe place to park their assets and enjoy a peaceful life in Britain.

    Similar is the case of Russia. Immediately after the collapse of the Soviet Union large-scale privatization of state-owned assets was implemented. From Glasnost and Perestroika (liberalization and privatization or globalization) – the tools created by the East India Company for enslavement of their colonies (known at the time as Free Trade) emerged the Oligarchs – who amassed vast wealth by acquiring state assets very cheaply (or for free) during the privatization process.

    After coming to power Vladimir Putin set about on a massive purging of these oligarchs from Russia, the power struggle that continues to this day. The most famous case is that of Mikhail Khodorkovsky. In 2003, Khodorkovsky was believed to be the wealthiest man in Russia (with a fortune estimated to be worth $15 billion) who accumulated considerable wealth through obtaining control of a series of Siberian oil fields unified under the name Yukos, one of the major companies to emerge from the privatization of state assets during the 1990s. Khodorkovsky was later backed up by Henry Kissinger, George Soros and Rothschilds as a candidate to run for a Presidential election against Putin as well as for an attempted revolution.

    UK has been traditionally the largest sanctuary to not just money launderers and fraudsters but foreign terrorists and extremists as well. Everybody, who is somebody in the world of terrorism, has found a rear base in the UK.

    There are as many as 131 pending pleas for extradition of wanted criminals from Britain by India alone.

    Below are just some of the cases of individuals wanted in India and living in Britain:

    1. Vijay Mallya (financial offences)
    2. Lalit Modi (financial offences)
    3. Ravi Shankaran (accused in the Indian Navy war room leak case)
    4. Tiger Hanif (wanted in connection with two bomb attacks in Gujarat in 1993)
    5. Nadeem Saifi (music director accused and acquitted in the Gulshan Kumar murder)
    6. Raymond Varley (accused in child abuse cases in Goa)
    7. Lord Sudhir Choudhrie (one of India’s most notorious arms-dealers and Italian consortium’s middleman in Finmeccanica helicopter scandal)
    8. Several individuals related to the Khalistan movement
    9. Several individuals related to the LTTE
    10. Several individuals related to ISIS

    Even MQM leader Altaf Hussein resides in London, under the protection of the British government, which has refused Pakistani government requests for his extradition to face trial for murder.

    Last year, Khodorkovsky said Open Russia (a George Soros funded organisation) would provide logistical backing to 230 candidates running from various opposition parties or on independent tickets in September from the headquarters of his Open Russia foundation in London. With rise of Indian Oligarchs increasingly finding asylum in Britain, is it a far-fetched scenario for India as well when these Indian Oligarchs would be used for inciting revolution in India or even orchestrating elections – that is in case India goes for course correction?

    Even so, there is a way to avert such a scenario as well as the impending crisis.

    After Putin kicked them out of Russia the same Oligarchs setup shop in India under the same tried and tested ideology of enslavement – Glasnost and Perestroika (called in India as Liberalization and Privatization) during the 90s.

    It is this group of Oligarchs or Robber Barons (as they are known in the United States of America) that is still operational in India.

    What our intelligence agencies should be doing instead of spying on opposition political parties and depending on foreign agencies for information and direction is to track this shadow network and dismantle its grip on India as was done in America (the process that still continues to this day).

     

  • North Korean Defector Claims Kim Jong-Un's Days Are Numbered

    Authored by Mac Slavo via SHTFplan.com,

    CNN allegedly found a North Korean defector through University researchers working in conjunction with the South Korean government.

    The news outlet interviewed the alleged defector, who claims Kim Jong-Un’s days as “supreme leader” are numbered.

    CNN says that the defector had worked among the elites in Pyongyang. In order to protect the man’s anonymity, the descriptions and his name were omitted from the interview.

    He is said to fear being hunted down by North Korea and his family harmed should his identity be known. He is by far, however, the most recent defector CNN has ever interviewed; he’s only been free from North Korea for one year. But, he had a few predictions about the North’s borderline psychopathic dictator…

    In 2011, Kim Jong Un’s father, Kim Jong Il, died. Kim Jong Un took over and “tried his best,” says the defector. He gave gifts, and in a public appearance, allowed his voice to be broadcast on North Korean state run television. The perception among the people was that life was about to improve inside North Korea. “It was a false image,” he says.

     

    In December 2013, the regime announced the second most powerful man in North Korea, Jang Song Thaek, was being expelled from the ruling Workers’ Party of Korea. Jang was accused of a litany of crimes, from obstructing the nation’s economic affairs to anti-party acts. The allegations stunned for several reasons, primarily for who the regime fingered — Jang is Kim’s uncle.

     

    “Kim Jong Un revealed his true side,” says the defector. Jang’s arrest was broadcast on state television, followed by a statement calling him “despicable human scum, worse than a dog.” State media then announced he was executed.

    The defector that CNN interviewed expressed confidence in his opinion that the elites’ loyalty to Kim Jong-Un has deteriorated and will continue to do so. He says that conviction is how he was able to leave his family behind because he believes he will reunite with them one day.

    I can tell you for sure, the North Korean regime will collapse within 10 years,” he says without hesitation.

     

    “Kim Jong Un is mistaken that he can control his people and maintain his regime by executing his enemies. There’s fear among high officials that at any time, they can be targets. The general public will continue to lose their trust in him as a leader by witnessing him being willing to kill his own uncle.”

    Yet Kim Jong-Un has all the power in North Korea.  

    Meaning those who lose trust in the “supreme leader” may face their ultimate and untimely demise. It’s no secret why this defector is keeping his identity well hidden.

  • Visualizing The Future Of Food

    The urban population is exploding around the globe, and, as Visual Capitalist's Jeff Desjardins explains below, yesterday’s food systems will soon be sub-optimal for many of the megacities swelling with tens of millions of people.

    Further, issues like wasted food, poor working conditions, polluted ecosystems, mistreated animals, and greenhouse gases are just some of the concerns that people have about our current supply chains.

    Today’s infographic from Futurism shows how food systems are evolving – and that the future of food depends on technologies that enable us to get more food out of fewer resources.

    Courtesy of: Visual Capitalist

    THE NEXT GEN OF FOOD SYSTEMS

    Here are four technologies that may have a profound effect on how we eat in the future:

    1. Automated Vertical Farms

    It’s already clear that vertical farming is incredibly effective. By stacking farms on top of another and using automation, vertical farms can produce 100x more effectively per acre than conventional agricultural techniques.

    They grow crops at twice the speed as usual, while using 40% less power, having 80% less food waste, and using 99% less water than outdoor fields. However, the problem for vertical farms is still cost – and it is not clear when they will be viable on a commercial basis.

    2. Aquaponics

    Another technology that has promise for the future of food is a unique combination of fish farming (aquaculture) with hydroponics.

    In short, fish convert their food into nutrients that plants can absorb, while the plants clean the water for the fish. Compared to conventional farming, this technology uses about half of the water, while increasing the yield of the crops grown. As a bonus, it also can raise a significant amount of fish.

    3. In Vitro Meats

    Meat is costly and extremely resource intensive to produce. As just one example, to produce one pound of beef, it takes 1,847 gallons of water.

    In vitro meats are one way to solve this. These self-replicating muscle tissue cultures are grown and fed nutrients in a broth, and bypass the need for having living animals altogether. Interestingly enough, market demand seems to be there: one recent study found that 70.6% of consumers are interested in trying lab grown beef.

    4. Artificial Animal Products

    One other route to get artificial meat is to use machine learning to grasp the complex chemistry and textures behind these products, and to find ways to replicate them. This has already been done for mayonnaise – and it’s in the works for eggs, milk, and cheese as well.

    TASTING THE FUTURE OF FOOD

    As these new technologies scale and hit markets, the future of food could change drastically. Many products will flop, but others will take a firm hold in our supply chains and become culturally acceptable and commercially viable. Certainly, food will be grown locally in massive skyscrapers, and there will be decent alternatives to be found for both meat or animal products in the market.

    With the global population rising by more than a million people each week, finding and testing new solutions around food will be essential to make the most out of limited resources.

  • "Dear President Trump: America Is In For A Rude Awakening In January"

    Authored by James Rickards via DailyReckoning.com,

    Dear President Trump,

    Over the last couple of years I’ve been all over TV… from Fox News to CNBC, CNN and Bloomberg. I’ve been telling our fellow Americans that the financial global elite was planning to issue their own globalist currency called special drawing rights, or SDRs.

    And that those elites would use this new currency to replace the U.S. dollar as the global reserve currency.

    I’ve even written about this extensively in my best-selling booksThe Road to Ruin and The New Case for Gold.

    I’m sure some people in the mainstream media thought I was out of line — but the United Nations and the International Monetary Fund (IMF) have both confirmed this plan to replace the U.S. dollar is real. I’ve made this warning many times, but it seems to be falling on deaf ears. That’s why I’m writing directly to you.

    Here’s the proof that the U.S. dollar is under attack, right in front of our eyes:

    The UN said we need “a new global reserve system… that no longer relies on the United States dollar as the single major reserve currency.”

     

    And the IMF admitted they want to make “the special drawing right (SDR) the principal reserve asset in the [International Monetary System].”

    More recently, the IMF advanced their plan by helping private institutions, such as the UK’s Standard Chartered Bank, issue bonds in SDRs.

    Although our mainstream media ignored this major event, the UK media reported:

    SDR Special Drawing Rights

    This is all happening. And on January 1st, 2018, this trend to replace the U.S. dollar will accelerate. That’s when the global elite will implement a major change to the plumbing of our financial system.

    It’s a brand-new worldwide banking system called Distributed Ledger Technology. And it will have a huge impact on seniors who are now preparing for retirement.

    When this system goes live, many nations will be able to dump the U.S. dollar for SDRs.

    For now, the U.S. dollar is still the world’s reserve currency. Other nations have to hold and use the U.S. dollar for international trade, instead of their own currencies.

    This creates a virtually unlimited demand for U.S. dollars, which allows us to print trillions of dollars each year to pay for wars, debt and anything we want. It keeps our country operating.

    Now, we can see that the global elites are working to unseat the U.S. dollar as the global reserve currency.

    Here are the three key pieces of information that prove this will happen.

    Fact #1 — The IMF issues a globalist currency called special drawing rights, or SDRs.

    Fact #2 — The IMF has confirmed they want to replace the U.S. dollar with SDRs.

    Fact #3 — The IMF has confirmed Distributed Ledgers can be used for “currency substitution”… and they’ve even set up a special task force to speed up implementation.

    The IMF is using this technology to create an SDR payment system, because that’s the currency they issue.

    IMF Lagarde Special Drawing Rights

    As you know, Christine Lagarde, head of the IMF, is the woman in the middle.

    When asked about the task force, she said:

    As I see it, all this amounts to a brave new world for the financial sector.”

    Yes, a brave new world where the dollar is no longer the world reserve currency.

    Barbara C. Matthews, a former US Treasury Department attaché to the European Union, has reached the same conclusion.

    She said the link between the globalists’ currency and Distributed Ledgers “is impossible to avoid.”

    And that “the IMF seems to be exploring the possibility of permitting a broader use of [their globalist currency] beyond internal transactions among member central banks.”

    Make no mistake, if the IMF is planning to use Distributed Ledgers to replace the U.S. dollar with SDRs. And just to be clear, when SDRs take over, the American people will be left with devalued dollars.

    Once other nations start accumulating the globalist currency through Distributed Ledgers, they will no longer need to hold dollars. Once Distributed Ledgers go live, other nations will no longer need to buy Treasury bonds.

    And that means our government — your government — will no longer be able to finance its normal operations, including welfare programs like Social Security. For those who have their retirement account parked in stocks, they could watch it evaporate in a matter of days. The weakest companies in the stock market could collapse once this plan goes live.

    Just look what happened the last time we had a big change in our global financial system. In 1971, Nixon announced the U.S. would no longer officially trade dollars for gold. That created a lot of uncertainties, turning that decade into a nightmare for stock investors.

    Take a look… the Dow Jones, an index of “stable” blue chip stocks (the kind most retirees like to hold), was cut in half. Stock investors bailed out of the market and, for the most part, didn’t come back for a decade.

    Dow Jones Historical Chart

    I expect something similar once Distributed Ledgers go live.

    The transition from a U.S. dollar system to a new system dominated by SDRs will be messy. Stocks will collapse… and will stay down. There will be no recovery this time, because the U.S. government won’t be able to come to the rescue like they did in 2008.

    You won’t even have funding for normal operations, let alone enough funds to save stock investors.

    I know that governments have been patiently watching Distributed Ledger (often referred to as blockchain) technology develop and grow outside their control for the past eight years. Libertarian supporters of Distributed Ledgers celebrate this lack of government control.

    Yet, their celebration is premature, and their belief in the sustainability of powerful systems outside government control is naïve. Governments don’t like competition especially when it comes to money.

    You probably know that you, or any government, cannot stop Distributed Ledger technology — in fact you probably don’t want to. Governments and monetary elites want to control it using powers of regulation, taxation, and investigation.

    An elite U.S. legal institution called the Uniform Law Commission, which proposes model laws intended for adoption in all fifty states, has released its latest proposal called the “Uniform Regulation of Virtual Currency Businesses Act.”

    This new law will not only provide a regulatory scheme for state regulators, but will also be a platform for litigation by private plaintiffs and class action lawyers seeking recourse against real or imagined abuses by digital coin exchanges and facilities.

    We know the U.S. government will want to use this technology for its benefit. One step toward government control just occurred a few weeks ago.

    On August 1, 2017, the SEC announced “Guidance on Regulation of Initial Coin Offerings,” the first step toward requiring fundraising through Distributed Ledger, or blockchain-based tokens to register with the government.

    But consider the following additional developments:

    • On August 1, 2017, the World Economic Forum, host body to the Davos conference of global super-elites, published a paper entitled “Four reasons to question the hype around blockchain.”
    • On August 7, 2017, China announced they will begin using Distributed Ledger technology to collect taxes and issue “electronic invoices” to citizens there.

    Perhaps most portentously, the International Monetary Fund (IMF) has weighed in.

    In a special report dated June 2017, the IMF had this to say about Distributed Ledgers: The IMF favors control by a “pre-selected group of participants” or “one organization,” rather than allowing “anyone” to participate.

    This paper should be viewed as the first step in the IMF’s plan to migrate its existing form of world money, the SDR, onto a DLT platform controlled by the IMF.

    They’re telling you exactly what their plan is. It would be foolish to ignore them, or assume the U.S. dollar will remain the global reserve currency much longer once this plan is implemented, as early as January 1, 2018.

    You know the global elites’ aren’t your biggest fan. You know the U.S. dollar has been under attack.

    This is the global financial elites’ plan to remove the U.S. dollar from its position of power and to attack your administration all at once.

    Who do you think American’s will blame when the stock market crashes, or Social Security runs out? We can hear the talking heads already.

    Best,

    Rickards Signature

     

     

     

     

     

  • These Are America's Fattest States

    According to a new report, one third of U.S. adults are obese along with one in six children.

    The research was conducted by the Trust for America's Health and the Robert Wood Johnson Foundation and, as Statista's Nial McCarthy explains, it found that the adult obesity rate exceeded 35 percent in five states, 30 percent in 25 states and 25 percent in 46 states.

    In 2016, West Virginia had the highest rate of obesity at 37.7 percent, followed closely by Mississippi with 37.3 percent. Alabama and Arkansas jointly round off the top three with 35.7 percent each.

    Infographic: America's Fattest States | Statista

    You will find more statistics at Statista

    Back in 2000, no U.S. state had an obesity rate higher than 25 percent.

    As bad as the obesity epidemic is, the report also found that rates are starting to stabilize and actually decline in some places. Colorado, Minnesota, Washington and West Virginia all saw their obesity rates climb while Kansas saw a decrease.

    The situation remained stable everywhere else.

    Progress in halting the spread of expanding waistlines can be attributed to state policies improving access to healthy food and increasing physical activity.

    The report notes that early childhood education has proven particularly effective at preventing obesity in early life, instead of having to reverse the problem in later years.

     

  • Welcome To 1984: Big Brother Google Now Watching Your Every Political Move

    Authored by Robert Bridge via RT.com,

    Google has taken the unprecedented step of burying material, mostly from websites on the political right, that it has deemed to be inappropriate. The problem, however, is that the world's largest search engine is a left-leaning company with an ax to grind.

    Let's face it, deep down in our heart of hearts we knew the honeymoon wouldn't last forever. Our willingness to place eternal faith in an earth-straddling company that oversees the largest collection of information ever assembled was doomed to end in a bitter divorce from the start. After all, each corporation, just like humans, has their own political proclivities, and Google is certainly no exception. But we aren't talking about your average car company here.

    The first sign Google would eventually become more of a political liability than a public utility was revealed in 2005 when CEO Eric Schmidt (who is now executive chairman of Alphabet, Inc, Google's parent company) sat down with interviewer Charlie Rose, who asked Schmidt to explain "where the future of search is going."

    Schmidt's response should have triggered alarm bells across the free world.

    "Well, when you use Google, do you get more than one answer," Schmidt asked rhetorically, before answering deceptively.

     

    "Of course you do. Well, that's a bug. We have more bugs per second in the world. We should be able to give you the right answer just once… and we should never be wrong."

    Really?

    Think about that for a moment. Schmidt believes, counter-intuitively, that getting multiple possible choices for any one Google query is not the desirable prospect it should be (aren't consumers always in search of more variety?), but rather a "bug" that should be duly squashed underfoot. Silly mortal, you should not expect more than one answer for every question because the almighty Google, our modern-day Oz, "should never be wrong!" This is the epitome of corporate hubris. And it doesn't require much imagination to see that such a master plan will only lead to a colossal whitewashing of the historic record.

    For example, if a Google user performs a search request for – oh, I don't know – 'what caused the Iraq War 2003,' he or she would be given, according to Schmidt's algorithmic wet dream, exactly one canned answer. Any guesses on what that answer would be? I think it's safe to say the only acceptable answer would be the state-sanctioned conspiracy theory that Saddam Hussein was harboring weapons of mass destruction, an oft-repeated claim we now know to be patently false. The list of other such complicated events that also demand more than one answer – from the Kennedy assassination to the Gulf of Tonkin incident – could be continued for many pages.

    Schmidt's grandiose vision, where there is just "one answer to every question," sounds like a chapter borrowed from Orwell's dystopian novel, Nineteen Eighty-Four, where omnipresent Big Brother had an ironclad grip on history, news, information, everything. In such a intensely controlled, nightmarish world, individuals – as well as entire historical events – can be 'disappeared' down the memory hole without a trace. Though we've not quite reached that bad land yet, we're plodding along in that direction.

    That much became disturbingly clear ever since Donald Trump routed Hillary Clinton for the presidency. This surprise event became the bugle call for Google to wage war on 'fake news' outlets, predominantly on the political right.

    'Like being gay in the 1950s'

    Just before Americans headed to the polls in last year's presidential election, WikiLeaks delivered a well-timed steaming dump, revealing that Eric Schmidt had been working with the Democratic National Committee (DNC) as early as April 2014. This news came courtesy of a leaked email from John Podesta, former chairman of the Hillary Clinton presidential campaign, who wrote:

    "I met with Eric Schmidt tonight. As David reported, he's ready to fund, advise recruit talent, etc. He was more deferential on structure than I expected. Wasn't pushing to run through one of his existing firms. Clearly wants to be head outside advisor, but didn't seem like he wanted to push others out. Clearly wants to get going…"

    via GIPHY

    The implications of the CEO of the world's most powerful company playing favorites in a presidential race are obvious, and make the Watergate scandal of the early 1970s resemble a rigged game of bingo at the local senior citizens center by comparison. Yet the dumbed-down world of American politics, which only seems to get excited when Republicans goof up, continued to turn on its wobbly axis as if nothing untold had occurred.

    Before continuing our trip down memory lane, let's fast forward a moment for a reality check. Google's romance with the US political left is not a matter of conjecture. In fact, it has just become the subject of a released internal memo penned by one James Damore, a former Google engineer. In the 10-point memo, Damore discussed at length the extreme liberal atmosphere that pervades Google, saying that being a conservative in the Silicon Valley sweat shop was like "being gay in the 1950s."

    "We have… this monolithic culture where anyone with a dissenting view can’t even express themselves. Really, it’s like being gay in the 1950s. These conservatives have to stay in the closet and have to mask who they really are. And that’s a huge problem because there’s open discrimination against anyone who comes out of the closet as a conservative."

    Beyond the quirky, laid back image of a Google campus, where 'Googlers' enjoy free food and foot massages, lies a "monolithic culture where anyone with a dissenting view can’t even express themselves," says Damore, who was very cynically fired from Google for daring to express a personal opinion. That is strange.

    Although Google loudly trumpets its multicultural diversity in terms of its hiring policy, it clearly has a problem dealing with a diversity of opinion. That attitude does not seem to bode well for a search engine company that must remain impartial on all matters – political or otherwise.

    Back to the 2016 campaign. Even CNN at the time was admitting that Google was Donald Trump's "biggest enemy."

    Indeed, not only was Schmidt apparently moonlighting for the DNC, his leftist company was actively shutting down information on the Republican front runner. At one point when Google users typed in a query for 'presidential candidates,' they got thousands of results for Hillary Clinton, Bernie Sanders, and Green Party candidate Jill Stein. Missing in action from the search results, however, was, yes, Donald Trump.

    When NBC4 reached out to Google about the issue, a spokesperson said a "technical bug" was what caused Trump to disappear into the internet ether. Now, where have we heard the word "bug" before? It is worth wondering if this is what Eric Schmidt had in mind when he expressed his vision of a "one answer" Google search future?

    In any case, this brings to the surface another disturbing question that is directly linked to the 'fake news' accusations, which in turn is fueling Google's crackdown on the free flow of news from the political right today.

    In the run up to the 2016 presidential election, poll after poll predicted a Clinton landslide victory. Of course, nothing of the sort materialized, as even traditional Democratic strongholds, like Wisconsin, Pennsylvania, and Michigan pulled the lever for Trump. As the Economist reported: "On the eve of America’s presidential election, national surveys gave Hillary Clinton a lead of around four percentage points, which betting markets and statistical models translated into a probability of victory ranging from 70 percent to 99 percent."

    The fact that Trump – in direct contradiction to what the polls had been long predicting – ended up winning by such a huge margin, there is a temptation to say the polls themselves were 'fake news,' designed to convince the US voter that a Clinton landslide victory was forthcoming. This could have been a ploy by the pollsters, many of whom are affiliated with left-leaning news corporations, by the way, for keeping opposition voters at home in the belief their vote wouldn't matter. In fact, statisticians were warning of a "systemic mainstream misinformation" in poll data favoring Clinton in the days and weeks before Election day. Yet the Leftist brigade, in cahoots with the Googlers, were busy nurturing their own fervent conspiracy theory that 'fake news' – with some help from the Russians, of course – was the reason for Hillary Clinton's devastating defeat.

    Who will guard us against the Google guardians?

    Just one month after Donald Trump became the 45th President of the United States, purportedly on the back of 'fake news,' Google quietly launched Project Owl, the goal of which was to devise a method to "demote misleading, false and offensive articles online," according to a Bloomberg report. The majority of the crackdown will be carried out by machines. Now here is where we enter the rat's nest. After all, what one news organization, or alternative news site, might consider legitimate news and information, another news group, possibly from the mainstream media, would dismiss as a conspiracy theory. And vice versa.

    In other words, what we have here is a battle for the misty mountain top of information, and Google appears to be paving the way for its preferred candidate, which is naturally the mainstream media. In other words, Google has a dog in this fight, but it shouldn't. Here is how they have succeeded in pushing for their crackdown on news and information.

     

    The mainstream media almost immediately began peddling the fake news story as to why Hillary Clinton lost to Donald Trump. In fact, it even started before Clinton lost the election after Trump jokingly told a rally: “I will tell you this, Russia: If you’re listening, I hope you’re able to find the 30,000 emails that are missing… I think you will probably be rewarded mightily by our press.” The Democrats, of course, found no humor in the remark. Indeed, they began pushing the fake news story, with help from the likes of Amazon-owned Washington Post, that it was Russians who hacked the DNC email system and passed along the information to WikiLeaks, who then dumped it at the most inopportune time for the Democrats.

    With this masterly sleight of hand, did you notice what happened? We are no longer talking about the whereabouts of Clinton's estimated 33,000 deleted emails, nor are we discussing how the DNC worked behind the scenes to derail Bernie Sanders' chances at being a presidential candidate. Far worse, we are not considering the tragic fate of a young man named Seth Rich, the now-deceased DNC staffer who was gunned down in Washington, DC on July 10, 2016. Some news sites say Rich was preparing to testify against the DNC for "voter fraud," while others say that was contrived nonsense.

    According to the mainstream media, in this case, Newsweek, only batshit crazy far-right conspiracy sites could ever believe Seth Rich leaked the Clinton emails.

    "In the months since his murder, Rich has become an obsession of the far right, an unwilling martyr to a discredited cause," Newsweek commented. "On social media sites like Reddit and news outlets like World Net Daily, it is all but an article of faith that Rich, who worked for the Democratic National Committee, was the source who gave DNC emails to WikiLeaks, for which he was slain, presumably, by Clinton operatives. If that were to be true—and it very clearly isn’t—the faithful believe it would invalidate any accusations that Donald J. Trump’s campaign colluded with Russia in tilting the election toward him."

    Blame Russia

    The reality is, we'll probably never know what happened to Mr. Rich, but what we do know is that Russia has become the convenient fall guy for Clinton's emails getting hacked and dumped in the public arena. We also know Google is taking advantage of this conspiracy theory (to this day not a thread of proof has been offered to prove Russia had anything to do with the release of the emails) to severely hinder the work of news sites – most of which sit on the right of the political spectrum.

    Last November, just two weeks after Trump's victory, Sundar Pichai, the chief executive of Google, addressed the question of 'fake news' in a BBC interview, and whether it could have swayed the vote in Trump's favor.

    "You know, I think fake news as a whole could be an issue [in elections]. From our perspective, there should just be no situation where fake news gets distributed, so we are all for doing better here. So, I don't think we should debate it as much as work hard to make sure we drive news to its more trusted sources, have more fact checking and make our algorithms work better, absolutely," he said.

    Did you catch that? Following the tiresome rigmarole, the Google CEO said he doesn't think "we should debate it as much as we work hard to make sure we drive news to its more trusted sources…"

    That is a truly incredible comment, buried at the sea floor of the BBC article. How can the head of the largest search engine believe a democracy needn't debate how Google determines what information, and by whom, is allowed into the public realm, thus literally shaping our entire worldview? To ask the question is to answer it…

    "Just in the last two days we announced we will remove advertising from anything we identify as fake news," Pichai said.

    And how will Google decide who the Internet baddies are? It will rely on "more than 15 additional expert NGOs and institutions through our Trusted Flagger program, including the Anti-Defamation League, the No Hate Speech Movement, and the Institute for Strategic Dialogue," to determine what should be flagged and what should not.

    Feeling better yet? This brings to mind the quaint Latin phrase, Quis custodiet ipsos custodes? Who will guard the guards themselves? especially since these groups also have their own heavy political axes to grind.

    Unsurprisingly, Mr. Pichai and his increasingly Orwellian company already stand accused of censorship, following the outrageous decision to bar former Congressman Ron Paul and his online news program, Liberty Report, from receiving advertising revenue for a number of videos which Paul recently posted.

    Dr. Ron Paul would never be confused as a dangerous, far-right loony. Paul is a 12-term ex-congressman and three-time presidential candidate. However, he is popular among his supporters for views that often contradict those of Washington’s political establishment, especially on issues of war and peace. Now if squeaky clean Ron Paul can't get a fair hearing before the Google/YouTube tribunal, what are chances for average commentators?

    “We have no violence, no foul language, no political extremism, no hate or intolerance,” Daniel McAdams, co-producer of the Ron Paul Liberty Report, told RT America. “Our program is simply a news analysis discussion from a libertarian and antiwar perspective.”

     

    McAdams added that the YouTube demonetization “creates enormous financial burdens for the program.”

    Many other commentators have also been affected by the advert ban, including left-wing online blogger Tim Black and right-wing commentator Paul Joseph Watson. Their videos have registered millions of views.

    “Demonetization is a deliberate effort to stamp out independent political commentary – from the left or the right,” Black told the Boston Globe’s Hiawatha Bray.

     

    “It’s not about specific videos… It’s about pushing out the diversity of thought and uplifting major news networks such as CNN, Fox News, and MSNBC.”

    In light of this inquisition against free speech and free thought, it is no surprise that more voices are calling for Google, and other massive online media, like Facebook and Amazon, to become nationalized for the public good.

    "If we don’t take over today’s platform monopolies, we risk letting them own and control the basic infrastructure of 21st-century society,"  wrote Nick Srnicek, a lecturer in the digital economy at King’s College London.

    It's time for Google to take a stroll beyond its isolated Silicon Valley campus and realize there is a whole world of varying political opinion out there that demands a voice. Otherwise, it may find itself on the wrong side of history and time, a notoriously uninviting place known as 1984.

  • Bill Maher: Federal Aid For Climate-Change-Denying, Republican-Voting Texas And Florida "Seems Unfair"

    In the opening monologue of his talk show, Real Time Host Bill Maher suggested that disaster victims in Florida and Texas somehow don’t deserve the $15 billion in federal aid money being allocated for the cleanup efforts after Hurricane Harvey – and now Hurricane Irma – devastated their states and forced millions from their homes.

    Maher’s remarks are the latest in a wave of shockingly callous comments from liberals, including a Florida professor who was fired for suggesting that residents of southwest Texas deserved to suffer Hurricane Harvey's devastation. Even some media organizations published controversial comics characterizing storm victims as immoral foolish racists who deserve whatever horrible occurances befall them.

    Maher suggested – incorrectly – that red states somehow pay less in federal income taxes, and therefore shouldn’t be “bailed out” by the feds when natural disasters occur. Of course, this ignores the billions of dollars in federal income taxes that Texans pay to the Federal government every year.

    He also added that, because the state’s political leaders don’t believe in man-made climate change, their residents should be forced to confront what Maher judged to be a symptom of rising global temperatures. We didn’t realize Maher was so well-versed in meteorology.

    “These places that got flooded, like Texas, okay, they have a low tax base,’ Maher said on his show "Real Time" on Friday. "So, the federal government bails them out. Their governors, their legislators they don’t believe in climate science.”

    Of course, it’s only fair that liberal states continue to receive federal disaster aid. After all, residents of wealthy liberal states – “responsible people” in Maher’s words – pay more in taxes and virtuously recognize the dangers of man-made climate change.

    He griped that “it’s unfair” that conservatives, who try to cut government spending at every turn, would come running to the Feds for help when they’re in trouble.

    "It seems like the responsible folks in this country, the people who pay a little more taxes and the people who believe in climate change are bailing out the people who hate government, except when they need government when they’re in trouble," he continued. "That seems a little unfair.”

     

    “Suddenly, socialism is not such a bad idea when you’re standing in toxic floodwater.”

    Maher’s divisive – not to mention shockingly cruel – jokes are yet another symptom of the bitter divisiveness that casts a pall over modern America. As we reported yesterday, a recent poll by the Wall Street Journal/NBC News confirmed what many Americans have suspected for a long time: The US was a country rife with political, economic and cultural divisions long before President Trump rode down that escalator at Trump Tower in June 2015.

    Though judging by what passes for humor on liberal-leaning talk shows, these divisions are only growing wider.
     

  • "Bannon Declares War On The GOP": Key Highlights From His 60 Minutes Interview

    Steve Bannon appeared on 60 Minutes Sunday night in his first-ever TV interview. The full interview, which Charlie Rose defined as the one in which “Bannon declared war on the GOP“, can be watched, with a full transcript, below (link):

    Here is Charlie Rose’s introduction:

    Former White House chief strategist Steve Bannon, during his brief tenure in the West Wing and his few months as CEO of President Trump’s campaign, earned many nicknames among his admirers and his ever-expanding list of enemies. He was the “great manipulator,” “Trump’s Svengali,” “the Grim Reaper,” “Propagandist-in-chief.”

     

    He describes himself as a “streetfighter.” And he proved it in this, his first-ever television interview.  Bannon is back running Breitbart News — the website where the alt-right and conspiracy theories meet conventional conservatives. The streetfighter, shiv-in-hand came ready to brawl, and not with liberals or Democrats.

    … but with the “Republican establishment.” For those pressed on time, courtesy of Axios, here are Bannon’s most notable quotes, starting with his war with the GOP: “The Republican establishment is trying to nullify the 2016 election. That’s a brutal fact we have to face.”

    • On ‘the establishment’: “In the 48 hours after we won, there’s a fundamental decision that was made. You might call it the original sin of the administration. We embraced the establishment. I mean, we totally embraced the establishment … Because ya had to staff a government.”
    • On his relationship with the president: “I think I’m a street fighter. And by the way, I think that’s why Donald Trump and I get along so well. Donald Trump’s a fighter. Great counter puncher. Great counter puncher. He’s a fighter. I’m going to be his wing man outside for the entire time, to protect [Trump]” and “to make sure his enemies know that there’s no free shot on goal.”
    • On Trump’s Charlottesville remarks: “I was the only guy that came out and tried to defend him.”
    • On the “Swamp”: “The Republican establishment is trying to nullify the 2016 election. That’s a brutal fact we have to face.” 
    • On Gary Cohn’s critical interview with the Financial Times: “If you don’t like what [Trump’s] doing and you don’t agree with it, you have an obligation to resign.”
    • On Republican criticism of Trump’s national security strategy: “That’s the geniuses of the Bush administration. I hold these people in contempt, total and complete contempt … They’re idiots, and they’ve gotten us in this situation, and they question a good man like Donald Trump,” Bannon said, naming Condoleezza Rice, Brent Scowcroft and Colin Powell.
    • On Economic Nationalism: “”Economic nationalism is what this country was built on. The American system. Right? We go back to that. We look after our own.”” 
    • On the Russia investigation: “It’s a total and complete farce. Russian collusion is a farce.”
    • On Trump’s tweets: “He knows he’s speaking directly to the people who put him in office when he uses Twitter … [General Kelly’s] not going to be able to control it either because it’s Donald Trump.”
    • On campaign discussions following the Access Hollywood tape’s release: “Trump went around the room and asked people the percentages he thought of still winning and what the recommendation. And Reince started off and Reince said, ‘You have two choices. You either drop out right now, or you lose by the biggest landslide in American political history.’ … And I told him as he went around, I was the last guy to speak, and I said, ‘It’s 100%. You have 100% probability of winning.'”
    • On the Catholic Church: “Because unable to really to come to grips with the problems in the church, they need illegal aliens, they need illegal aliens to fill the churches.”

    The full interview can be found here.

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Today’s News 10th September 2017

  • Irma Begins To Lash Florida With Hurricane-Force Winds, Tornadoes Reported

    With just hours left until landfall, sometime on Sunday morning, Hurricane Irma is edging ever closer to Florida and has started to batter the state with Hurricane force winds as millions brace for the impact of the most powerful Atlantic storm in a decade.

    According to ABC and AP, the National Weather Service measured a 74-mph gust in the Florida Keys on Saturday night, marking the beginning of hurricane-force winds that forecasters say will steadily intensify in the coming hours.

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    A tornado watch is in effect across the area, and at least two such twisters have already been reported.

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    As of about 10 p.m. Saturday, Irma was 100 miles southeast of Key West with sustained winds of 125 mph. It was moving west, and is expected to turn north and head up the western coast of Florida, making landfall on Sunday.

    Hurricane Irma approached Florida, Sept. 9, 2017.

    A live feed tracking the hurricane is shown below, courtesy of ABC:

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    According to Hurricane Tracker, the peak forecast wind gust city-by-city is as follows:

    • Miami: 74 mph (Sun. Morning)
    • Key West: 144 mph (Sun. Morning)
    • Naples: 141 mph (Sun. Morning)#Irma
    • Tampa: 139 mph (Sun. Night)
    • Orlando: 74 mph (Sun. Night)
    • Fort Myers: 134 mph (Sun. Afternoon)

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    The NHC is expecting a storm surge anywhere between 6 and 12 feet.

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    The storm, which was downgraded to Category 3 after making landfall as a rare Category 5 hurricane in Cuba overnight but is expected to strengthen once more before again making landfall in Florida, has sent 75,000 people into shelters in Florida. More than six million people, or nearly a third of Florida’s population, have been warned to evacuate its path.

    The National Hurricane Center on Friday cautioned that Irma’s winds would likely be strong enough to uproot trees, bring down power poles and rip off the roofs and some exterior walls of well-built frame homes. “Obviously Hurricane Irma continues to be a threat that is going to devastate the United States,” Brock Long, administrator of the Federal Emergency Management Agency (FEMA), said at a press conference Friday morning. “We’re going to have a couple rough days.”

    Several counties and cities in south Florida have issued a curfew as the storm draws near. Broward County set a curfew for 4 p.m. Saturday and said no unauthorized vehicles will be allowed on the roads. Charlotte County and the City of Miami Beach will enter one later tonight. Palm Beach County has issued a curfew to prevent looting and other criminal activity as the storm approaches, according to a press release. The curfew goes into effect Saturday at 3 p.m. It is unclear when it will be lifted.

    Some 10,000 flights have been cancelled in anticipation of Irma, about 7,000 of them in Florida alone.

    Florida Gov. Rick Scott called the storm unprecedented. “This is a life-threatening situation,” Florida Gov. Rick Scott said Saturday. “Our state has never seen anything like it.” The governor stressed the dangers of what he called a “deadly, deadly, deadly storm surge.”

    President Trump tweeted a video from a Cabinet meeting Saturday, telling people to “get out of” Irma’s way. “Property is replaceable but lives are not. and safety has to come first. Don’t worry about it, get out of its way,” Trump said.

    Meteorologists from ABC News are forecasting storm surges of 10 feet in Tampa and Sarasota, and 10 to 15 feet from Fort Myers to Naples. Somewhat lower storm surges of 3 to 6 feet may occur from Miami to Key Largo. Winds were already picking up in Florida early Saturday, with gusts between 40 and 60 mph, as the following clip shows:

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    Hurricane-force winds with gusts over 115 mph are possible in the Keys by daybreak Sunday. More tornadoes are also likely and a tornado watch was issued Saturday for southern Florida.

    According to ABC, Florida state residents should anticipate days-long power outages, FEMA said. Ahead of Irma’s arrival in the Sunshine State, the last flights departed Friday night from Miami International Airport and Fort Lauderdale-Hollywood International Airport. Miami’s airport officially remains open, while Fort Lauderdale’s airport is closed for Saturday and Sunday. Meanwhile, many ATM machines across southwest Florida were out of cash by late Friday night after people stocked up in case Hurricane Irma causes power outages that make debit and credit card transactions impossible, the Associated Press reported.

    Meanwhile, as millions evacuate, Germain Arena, a large shelter between Naples and Fort Myers along Florida’s west coast, is already at capacity Saturday as hundreds of people were in line waiting to get in. Miami-Dade County Mayor Carlos A. Giménez said Saturday morning about 25,000 residents are sheltered in Miami-Dade alone, a number he called “unprecedented in our history.” 


    Traffic streaming out of Florida creeps along northbound Interstate 75 after a
    vehicle accident in Lake Park, Ga., Sept. 6, 2017.

    “We must remain vigilant,” Giménez said. “The storm will still strengthen … and we will be impacted.”

  • China Warns Trump: "We Will Back North Korea If The US Strikes First"

    All day Saturday, South Korea braced for a possible new missile test by North Korea as the provocative northern neighbor marked its founding anniversary, just days after its sixth and largest nuclear test rattled global financial markets and further escalated tensions in the region. Throughout the week, South Korean officials warned the North could launch another intercontinental ballistic missile, in defiance of U.N. sanctions and to further provoke the US. As Reuters reports, Pyongyang marks its founding anniversary each year with a big display of pageantry and military hardware. Last year, North Korea conducted its fifth nuclear test on the Sept. 9 anniversary.

    Ultimately, September 9 came and went, and North Korea did nothing, perhaps signalling its eagerness to de-escalate. Or perhaps not, and Kim is simply looking to surprise his adversaries with the ICBM launch date. Experts have said the rogue, isolated regime is close to its goal of developing a powerful nuclear weapon capable of reaching the United States, something Trump has vowed to prevent.

    Celebrating its founding anniversary, a front-page editorial of the Saturday edition of North Korea’s official Rodong Sinmun said the country should make “more high-tech Juche weapons to continuously bring about big historical events such as a miraculous victory of July 28.”. The July date refers to the intercontinental ballistic missile test (Juche is North Korea’s homegrown ideology of self-reliance that is a mix of Marxism and extreme nationalism preached by state founder Kim Il Sung, the current leader’s grandfather).

    * * *

    Meanwhile, South Korean nuclear experts, checking for contamination, said on Friday they had found minute traces of radioactive xenon gas but that it was too early to link it to Sunday’s explosion. The Nuclear Safety and Security Commission (NSSC) said it had been conducting tests on land, air and water samples since shortly after the North Korean nuclear test on Sunday. There was no chance the xenon “will have an impact on South Korea’s territory or population”, the agency said.

    What is more concerning, however, is a Friday report on NBC, according to which Trump is readying a package of diplomatic and military moves against North Korea, including cyberattacks and increased surveillance and intelligence operations, after the nation’s sixth and largest nuclear test.

    Trump’s top national security advisers walked him through a range of options over lunch in the White House on Sunday, just hours after North Korea’s latest test, officials said.

    According to NBC, Trump is also seriously considering adopting diplomatically risky sanctions on Chinese banks doing business with Pyongyang and upgrading missile defense systems in the region, administration officials said. In addition, the administration is not ruling out moving tactical nuclear weapons to South Korea should Seoul request them, a White House official said, though many consider such a move a nonstarter. It would break with nearly three decades of U.S. policy of denuclearizing the Korean Peninsula.

    U.S. officials have also made the case to China that if Beijing doesn’t take stronger steps against North Korea, such as cutting off oil exports, South Korea and Japan are likely to pursue their own nuclear weapons programs and the U.S. won’t stop them, the official said. “It’s more a message for China than North Korea,” the official said.

    The U.S. has adopted sanctions aimed at Chinese entities that conduct business with North Korea, but has so far held back on broadly targeting China’s banking system. China has told U.S. officials it would protest such a move diplomatically and retaliate, according to the senior administration official.

    So what happened on Sunday? According to NBC, Trump’s national security advisers presented him with U.S. military options, including pre-emptive strikes, and nuclear capabilities should America be called on to abide by its treaty obligations in the region, White House and defense officials said.

    The president’s advisers have made the case, however, that military strikes on North Korea could have serious repercussions, senior defense officials said, and the most glaring among these is that China has told administration officials that if the U.S. strikes North Korea first, Beijing would back Pyongyang, a senior military official told NBC.

     

    This is not the first time China has warned the US not to escalate: on August 11, Beijing, through the state-owned media, cautioned the US president on Friday that it would intervene (militarily) on North Korea’s behalf if the US and South Korea launch a preemptive strike to “overthrow the North Korean regime,” according to a statement in the influential state-run newspaper Global Times.

    “If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so,” it said.

    At the same time, the Chinese regime made it clear that its preferred outcome would be a continuation of the status quo, warning Kim Jong Un, or perhaps Trump, that it would “remain neutral if North Korea were to strike first.”

    As we said almost one month ago:

    “not surprisingly, analysts have compared the standoff between the two nuclear powers (the North is a recent, if untested, member of this club) to a modern day Cuban Missile crisis.  “This situation is beginning to develop into this generation’s Cuban Missile crisis moment,” ING’s chief Asia economist Robert Carnell said in a research note. “While the U.S. president insists on ramping up the war of words, there is a decreasing chance of any diplomatic solution.

    Since then, the potential risks, mutual threats and near-hostilities have grown exponentially. China – which is by far North Korea’s biggest trading partner, accounting for 92% of two-way trade last year, and also provides hundreds of thousands of tonnes of oil and fuel to the impoverished regime – has only dug in deeper, explaining repeatedly that it wants a peaceful de-escalation and that it would not side with the US in case of a military conflict.

    * * *

    What happens next? Well, on one hand, after today’s lack of launch, there is hope that things will indeed de-escalate. A headline that just hit from Yonhap may accelerate this:

    • SOUTH KOREA SEES NO SIGNS OF IMMINENT ADDITIONAL PROVOCATIONS BY NORTH KOREA THAT COULD LEAD TO ANOTHER MISSILE OR NUCLEAR TEST: YONHAP

    On the other hand, what the US does next may be a sufficient provocation to force Kim to lob another ICBM. Earlier today, Reuters reported that the USS Ronald Reagan aircraft carrier left its home port in Japan for a routine autumn patrol of the Western Pacific, a Navy spokeswoman said. That area included “waters between Japan and the Korean peninsula.” North Korea vehemently objects to military exercises on or near the peninsula, and China and Russia have suggested the United States and South Korea halt their exercises to lower tension.

    Another imminent escalation is due on Monday.

    That’s when the United States told the U.N. Security Council that it intends to call a meeting to vote on a draft resolution establishing additional sanctions.  U.S. ambassador to the United Nations Nikki Haley said last Monday that she intended to call for a vote on Sept. 11 and then the United States circulated a draft resolution to the 15-member council on Wednesday.

    The United States wants the Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers abroad, and to subject Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday.

    It was not immediately clear how North Korean allies China and Russia would vote, but a senior U.S. official on Friday night expressed scepticism that either nation would accept anything more stringent than a ban on imports of North Korean textiles. Chinese officials have privately expressed fears that imposing an oil embargo could risk triggering massive instability in its neighbor. 

    Meanwhile, tensions are also growing between China and South Korea. The two countries have been at loggerheads over South Korea’s decision to deploy the U.S. THAAD anti-missile system, which has a powerful radar that can probe deep into China. Shares in South Korean automaker Hyundai Motor and key suppliers slid on Friday on worries over its position in China after highly critical Chinese state newspaper comments. Recently Hyundai auto sales in China have crashed as local suppliers and potential customers have shied away from the company due to nationalistic prerogatives. The military section of China’s Global Times newspaper on Thursday referred to THAAD as “a malignant tumor”.

    The good news, for markets, is that this Saturday’s widely anticipated ICBM launch from North Korea did not take place; the bad news is that said launch was at best delayed, and if and when it comes, the US will have to choose: do nothing again, and appears increasingly weak on the global diplomatic arena, or retaliate, and risk dragging China into the conflict, potentially precipitating the appearance of mushroom clouds around the globe.

  • Paul Craig Roberts Rages At Americans "Laughing All The Way To Armageddon"

    Authored by Paul Craig Roberts,

    The United States shows the world such a ridiculous face that the world laughs at us.

    The latest spin on “Russia stole the election” is that Russia used Facebook to influence the election. The NPR women yesterday were breathless about it.

    We have been subjected to ten months of propaganda about Trump/Putin election interference and still not a scrap of evidence. It is past time to ask an unasked question:

    If there were evidence, what is the big deal? All sorts of interest groups try to influence election outcomes including foreign governments.

     

    Why is it OK for Israel to influence US elections but not for Russia to do so?

     

    Why do you think the armament industry, the energy industry, agribusiness, Wall Street and the banks, pharmaceutical companies, etc., etc., supply the huge sum of money to finance election campaigns if their intent is not to influence the election?

     

    Why do editorial boards write editorials endorsing one candidate and damning another if they are not influencing the election?

    What is the difference between influencing the election and influencing the government?

    Washington is full of lobbyists of all descriptions, including lobbyists for foreign governments, working round the clock to influence the US government. It is safe to say that the least represented in the government are the citizens themselves who don’t have any lobbyists working for them.

    The orchestrated hysteria over “Russian influence” is even more absurd considering the reason Russia allegedly interfered in the election. Russia favored Trump because he was the peace candidate who promised to reduce the high tensions with Russia created by the Obama regime and its neocon nazis—Hillary Clinton, Victoria Nuland, Susan Rice, and Samantha Power. What’s wrong with Russia preferring a peace candidate over a war candidate? The American people themselves preferred the peace candidate. So Russia agreed with the electorate.

    Those who don’t agree with the electorate are the warmongers—the military/security complex and the neocon nazis. These are democracy’s enemies who are trying to overturn the choice of the American people. It is not Russia that disrespects the choice of the American people; it is the utterly corrupt Democratic National Committee and its divisive Identity Politics, the military/security complex, and the presstitute media who are undermining democracy.

    I believe it is time to change the subject. The important question is who is it that is trying so hard to convince Americans that Russian influence prevails over us?

    Do the idiots pushing this line realize how impotent this makes an alleged “superpower” look. How can we be the hegemonic power that the Zionist neocons say we are when Russia can decide who is the president of the United States?

    The US has a massive spy state that even intercepts the private cell phone conversations of the Chancellor of Germany, but his massive spy organization is unable to produce one scrap of evidence that the Russians conspired with Trump to steal the presidential election from Hillary. When will the imbeciles realize that when they make charges for which no evidence can be produced they make the United States look silly, foolish, incompetent, stupid beyond all belief?

    Countries are supposed to be scared of America’s threat that “we will bomb you into the stone age,” but the President of Russia laughs at us. Putin recently described the complete absence of any competence in Washington:

    “It is difficult to talk to people who confuse Austria and Australia. But there is nothing we can do about this; this is the level of political culture among the American establishment.

     

    As for the American people, America is truly a great nation if the Americans can put up with so many politically uncivilized people in their government.”

    These words from Putin were devastating, because the world understands that they are accurate.

    Consider the idiot Nikki Haley, appointed by Trump in a fit of mindlessness as US Ambassador to the United Nations.

    This stupid person is forever shaking her fist at the Russians while mouthing yet another improbable accusation. She might want to read Mario Puzo’s book, The Godfather. Everyone knows the movie, but if memory serves somewhere in the book Puzo reflects on the practice of the irate American motorist who shakes a fist and gives the bird to other drivers. What if the driver receiving the insult is a Mafia capo? Does the idiot shaking his fist know who he is accosting? No. Does the moron know that the result might be a brutal beating or death? No.

    Does the imbecile Nikki Haley understand what can be the result of her inability to control herself? No. Every knowledgeable person I know wonders if Trump appointed the imbecile Nikki Haley US ambassador to the world for the purpose of infuriating the Russians.

    Ask Napoleon and the German Wehrmacht the consequence of infuriating the Russians.

    After 16 years the US “superpower” has been unable to defeat a few thousand lightly armed Taliban, who have no air force, no Panzer divisions, no worldwide intelligence service, and the crazed US government in Washington is courting war with Russia and China and North Korea and Iran.

    The American people are clearly out to lunch in their insouciance. Americans are fighting among themselves over “civil war” statues, while “their’ government invites nuclear armageddon.

    The United States has an ambassador to the world who shows no signs of intelligence, who behaves as if she is Mike Tyson or Bruce Lee to the 5th power, and who is the total antithesis of a diplomat. What does this tell about the United States?

    It reveals that the US is in the Roman collapse stage when the emperor appoints horses to the Senate.

    The United States has a horse, an uncivilized horse, as its diplomat to the world. The Congress and executive branch are also full of horses and horse excrement. The US government is completely devoid of intelligence. There is no sign of intelligence anywhere in the U.S. government. Of or morality. As Hugo Chavez said: Satan is there; you can smell the sulphur.

    America is a joke with nuclear weapons, the prime danger to life on earth.

    How can this danger be corralled?

    The American people would have to realize that they are being led to their deaths by the Zionist neocon nazis who, together with the military/security complex and Wall Street, control US foreign policy, by the complicity of Europe and Great Britain desperate to retain their CIA subsidies, and by the harlots that comprise the Western media.

    Are Americans capable of comprehending this? Only a few have escaped The Matrix.

    The consequence is that America is being locked into conflict with Russia and China. There is no possibility whatsoever of Washington invading either country, much less both, so war would be nuclear.

    Do the American people want Washington to bring us this result? If not, why are the American people sitting there sucking their thumbs, doing nothing? Why are Europe and Great Britain sitting there permitting the unfolding of nuclear armageddon? Who murdered the peace movement?

    The World and the American people need desperately to rein in the warmonger United States, or the world will cease to exist.

    An International Court To Preserve Life On Earth needs to be assembled. The US government and the war interests it serves need to be indicted and prosecuted and disarmed before their evil destroys life on earth.

  • "Like Moths To The Flame": ISIS Fighters Cut Down While Approaching Stranded Convoy

    A convoy of buses containing hundreds of lightly armed ISIS terrorists and their family members remains stuck in the Syrian desert and pinned down as US and coalition planes continue to pick off militants who stray too far from the group. External ISIS vehicles have also tried to access and aid the group, but as US coalition spokesman Army Col. Ryan S. Dillon statedcoalition aircraft are picking them off as they come close "like moths to the flame."

    Dillon estimated that over 40 ISIS vehicles were destroyed, including nearly 100 terrorists killed, while heading toward the convoy as the coalition has been "able to continue to just observe and pick them off one at a time.” But on Friday afternoon the US alliance announced the sudden withdrawal of its surveillance aircraft over the site at Russia's request, publishing the following statement:

    At approximately 7am GMT Sept. 8, Syrian pro-regime forces advanced past the 11-bus convoy of ISIS terrorists and non-combatants in the eastern Syrian desert. To ensure safe de-confliction of efforts to defeat ISIS, coalition surveillance aircraft departed the adjacent airspace at the request of Russian officials during their assault on Dawyr Az Zawyr.


    The Syrian Army and Hezbollah in the Qara area in Syria's Qalamoun mountains when the ISIS bus convoy deal was initiated on August 28, 2017. Photo source: AFP/Louai Beshara


    ISIS convoy in Syria. Photo source: Louai Beshara/Agence France-Presse

    The convoy has been stranded in no-man's land on the Syrian battlefield since at least last Wednesday (9/30) after its progress was halted by US coalition airstrikes along the evacuation route, including a key bridge. The Lebanese government and Hezbollah arranged a deal with Syria to allow the convoy to pass as ISIS fighters and their families were transferred from northeast Lebanon after loosing a decisive battle there. In exchange, ISIS handed over the bodies of previously kidnapped Lebanese soldiers as well as a the body of an Iranian Revolutionary Guards officer to Hezbollah.

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    The deal, which President Assad acknowledged as "an embarrassment" has been mired in controversy as it would result in experienced ISIS fighters being dropped in eastern Syria along the Iraq border. Both Iraq and the US have vociferously protested the arrangement, essentially labeling the deal an intentional terror transfer that will hinder Iraq's ongoing anti-ISIS fight. 

    But US officials have failed to acknowledged that the deal was first and foremost brokered by the Lebanese government, specifically Prime Minister Saad Hariri and President Michel Aoun. A reluctant Assad agreed to let the convoy pass after the personal intervention of Nasrallah, who argued the deal would result in fewer Lebanese lives lost as the army sought to root out the final few hundred ISIS fighters in the border region of Arsal after their recent overall defeat (in what was set to be a "fight to the death" scenario). The United States has given over $1 billion in military aid to Lebanon over the past years, and itself contributed US special forces support for the successful Arsal anti-ISIS campaign. While the US coalition has highlighted Hezbollah's role in the deal, it has conveniently side-stepped the lead role of its own allies in the Lebanese government.  

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    For the past week and a half a catch-22 standoff has developed: Syria made a difficult and embarrassing deal – in Hezbollah leader's Hassan Nasrallah's words "for the sake of Lebanon" – yet it's a deal which is going unfulfilled as the US coalition intervened to stop the evacuation. At the same time Hezbollah fighters are escorting the convoy as part of upholding its end of the bargain. Friday's Operation Inherent Resolve statement confirms that though Russia waived off American surveillance in the area, the coalition's stance has not changed, nor does it appear that the remaining ISIS buses have moved:

    “From the start of this situation on Aug. 29, we have placed responsibility for the buses and passengers on the Syrian regime, who in conjunction with Lebanese Hezbollah brokered a deal with ISIS to move its terrorists into Iraq,” said Brig. Gen. Jon Braga, director of operations for the Coalition. “The regime’s advance past the convoy underlines continued Syrian responsibility for the buses and terrorists. As always, we will do our utmost to ensure that the ISIS terrorists do not move toward the border of our Iraqi partners,” said Braga.

    The ISIS fighters and their families have continued to be provided food and water through Syrian government lines. The group exited Lebanon with 17 chartered buses along with an unknown number of individual vehicles – all attempting to make it to ISIS held Abu Kamal in Deir Ezzor Province close to the Iraq border, but that number was reduced to 11 this week as 6 buses returned to an unknown fate in Syrian government territory. In a speech announcing specifics at the beginning of the evacuation, Nasrallah put the original numbers at 308 ISIS fighters and 331 civilian family members in the convoy.  Wounded ISIS members travelling in ambulances reportedly made it to Islamic State territory ahead of the convoy last week. 

    The US coalition has stated its desire to separate the militants from their families in order to destroy the ISIS terrorists. Apparently there are even pregnant women in the group – this according to Hezbollah's Al Manar news network. The US issued a statement Tuesday, saying, “Coalition leaders have communicated a course of action to the Russians, providing the Syrian regime an opportunity to remove the women and children from this situation.”

    Though the whole arrangement is one of the more bizarre deals to come out of the Syrian war, it's been widely seen as a blow to ISIS propaganda and recruiting efforts. Last week Middle East correspondent Robert Fisk reported, "some ISIS leaders in Syria did not want members of the group who had surrendered territory to be welcomed back into the so-called caliphate, and the militants should have fought to the death instead." Other observers of Islamic State social media accounts have noted that ISIS members initially reacted in disbelief, claiming the entire brokered deal and ISIS retreat to be a fiction of Hezbollah media.

    With the Syrian Army's assault on Deir Ezzor city successfully underway, it is likely that Assad's calculation was to allow the pressure to be let off Lebanon (and perhaps repaying a favor to Hezbollah, which has sacrificed much to defend Syria) with the thinking that the ISIS stronghold of Deir Ezzor Province would be the next to be pummeled anyway. In meantime, this stranded ISIS convoy episode continues to be among the more bizarre waiting games of the entire war.

  • "It's A Killer" – Florida Orders A Third Of The Population To Evacuate As Irma Hurtles Toward Tampa

    Florida’s highways and backroads are clogged with motorists after Gov. Rick Scott has ordered an unprecedented 6.2 million residents of central and southern Florida to evacuate. Meanwhile, Miami, along with many towns and cities along the state’s southeastern coast, resembles a ghost town, according to the New York Post.

    To recap: The category 4 storm has already carved a path of destruction through the Caribbean, leaving 90% or Barbuda uninhabitable and nearly a million people without power in Puerto Rico. And now, with the storm’s outer bands already battering the southern part of the state, meteorologists are saying Irma has suddenly shifted westward and is now heading toward Florida’s Gulf Coast – specifically, the Tampa Bay area.

    Here’s the Associated Press:

    Forecasters expect Irma’s core to come ashore Sunday and strike the Keys, southwestern Florida and the Tampa Bay region, which hasn’t felt a major hurricane since 1921. The eye is expected to miss heavily-populated Miami, which may have dodged a bubble in the last minute, but that area will still get life-threatening hurricane conditions even without a direct hit, Hurricane Center spokesman Dennis Feltgen said.

    Irma weakened slightly to Category 3 with maximum sustained winds of 125 mph on Saturday morning, but it was expected to pick up strength again as it closes in on Florida.

    Damaging winds bombarded Key Biscayne and Coral Gables on Saturday morning with gusts of up to 56 mph (90 kph) recorded at Virginia Key, near Miami, according to the National Weather Service.

    It's not just the wind that is deadly, the storm surge could well be life-threatening too…

    In one of the country’s largest evacuations, a record 6.2 million people in Florida, or 30% of the state’s population, have been ordered to leave, and another 540,000 were ordered out on the Georgia coast. Authorities opened hundreds of shelters for people who did not leave. Meanwhile, South Carolina Gov. Henry McMaster issued evacuation orders for Hilton Head Island and six of the state's other barrier islands, according to the Associated Press. Hotels as far away as Atlanta were filling up with evacuees.

     

     

    Scott warned that those who choose to stay will be on their own, before urging everybody in the Keys to get out as fast as possible.

    “If you are planning to leave and do not leave tonight, you will have to ride out this extremely dangerous storm at your own risk,” Florida Gov. Rick Scott said Friday.

     

    "It's getting late … if you're not on the road on the west coast by noon you need to get to a shelter…get off the road,"

    Ray Scarborough and girlfriend Leah Etmanczyk left their home in Big Pine Key and fled north with her parents and three big dogs to stay with relatives in Orlando. Scarborough was 12 when Hurricane Andrew hit in 1992 and remembers lying on the floor in a hallway as the storm nearly ripped the roof off his house.

    “‘They said this one is going to be bigger than Andrew. When they told me that, that’s all I needed to hear,’ said Scarborough, now a 37-year-old boat captain. “That one tore everything apart.”

    Their house in the Keys, up on 6-foot (1.8-meter) stilts, has flooded before.

    “This isn’t our first rodeo. Andrew was a wicked storm. Wilma was a wicked storm. This one is going to be worse. Then we’ll go home and rebuild, like we always do,” said Etmanczyk, a 29-year-old teacher.”

    While it might take some residents along the state’s gulf coast by surprise, the storm’s westward shift means “a less costly, a less deadly storm,” according to University of Miami. Still, forecasters warned that Irma’s winds could reach from coast to coast, testing the rapid development of more stringent hurricane-proof building codes in the last decade or so.

    As residents flee, streets were nearly deserted early Saturday in Palm Beach County as the first squalls hit the state’s Atlantic coast. Gas stations ran out of fuel, grocery stores were closed and only a few fast-food restaurants were open.

    Meanwhile, Gov. Scott took to CBS This Morning to warn residents that the storm was going to have "a big impact" on the state, calling it a "killer." for large swaths of southern and central Florida. He has ordered all schools in the state shut, and was scrambling to set up emergency shelters for residents, according to an interview with CBS This Morning.

    "People are going to shelters, but I just want to make sure everybody understands this is an unbelievable, massive, destructive storm, and it's a killer," he said.

    Meanwhile, some of the worst-case projections will likely leave the southernmost parts of the state uninhabitable for months. According to one forecaster, a reasonable worst case scenario has over half of Key West underwater due to storm surge.

     

    The storm, which is presently battering parts of Cuba, is expected to make landfall early Sunday, bringing winds well over 100 miles per hour and dangerous water levels…

    …meanwhile, Hurricane Jose – a Category 4 storm – is following closely behind.
     

  • The Real Estate Market, Explained In One Graph

    The U.S. housing market has now surpassed its pre-recession peak by 4.3%. This is great news for the economy, although there’s still an ongoing debate about the possibility of another housing crash.

    Whatever you believe about real estate, there’s no doubt that prices depend on where you live. HowMuch.net created a new visualization to demonstrate what this looks like…

    According to Zillow,  the median price for a house is $200,400, up 7.4% over last year.

    So, naturally, how big of a house can you afford with a mortgage of $200,400? Our visualization answers this question on a sliding color-coded scale. We broke each state into a grid with 25 boxes, representing 2,500 square feet—that’s a large home with at least 3 bedrooms and 3 bathrooms. Green boxes indicate affordability and orange and red boxes mean it’s expensive. We then graphed how much house you can purchase with exactly $200,400.

    The results highlight the enormous differences between housing values in the U.S. It is all about location, location, location.

    In the Hoosier State, your $200k mortgage can purchase 2,330-sq. ft., but in Washington D.C. only 497 sq. ft. That’s the difference between a large home and a cramped studio apartment.

    The fact that Washington D.C. boasts the most expensive housing market in the coutry should come as no surprise to observers of the economy in the aftermath of the recession. While real estate market crashed in other metro areas, it kept rising in Washington D.C. The nation’s capital has actually started to come back down to Earth, but the area is still an outlier. If you can get a high-paying job in the government, chances are that you’ll need to find a roommate to make ends meet.

    Except for Ohio, rural states without large cities dominate the list of affordability. The five most affordable states to purchase a home for a mortgage of $200,400:

    1. Indiana – 2,330 sq. ft.

    2. Arkansas – 2,227 sq. ft.

    3. Mississippi  – 2,277 sq. ft.

    4. West Virginia – 2,252 sq. ft.

    5. Ohio – 2,252 sq. ft. 

    The five most unaffordable states highlight pockets of high economic growth in the U.S. (like Colorado) or a restriction in housing availability (like Hawaii, which is in the middle of the Pacific Ocean!).

    1. Washington D.C. – 403 sq. ft.

    2. Hawaii – 418 sq. ft.

    3. California – 713 sq. ft.

    4. Massachusetts – 887 sq. ft.

    5. Colorado – 982 sq. ft.

    Think about the inequality here: The fourth most unaffordable state in the country (Massachusetts) is still more than twice as affordable as Washington D.C. and Hawaii.

    Whether you are buying a home or just renting, chances are you know that the price you pay can vary from neighborhood to neighborhood. If you ever think you are paying too much, just know that someone else in Washington D.C. is paying a heck of lot more for a smaller home.

    Data: Table 1.1 

  • Mind The Chemtrails: US Air Force Dispatches Sprayer Aircraft In Response To Harvey

    Via StockBoardAsset.com,

    The Pentagon has just dispatched C-130H Sprayers from the Air Force Reserve’s 910th Airlift Wing residing in Youngstown, Ohio to Texas in response to Hurricane Harvey.

    The aircraft are outfitted with spraying equipment tasked with ‘minimizing the impact of the brutal storm’s aftermath’.

    According to the article, the specially outfitted C-130Hs can spray wide areas with various chemicals for ‘multiple applications, including dispersing oil spills, destroying invasive vegetation, and controlling insect populations’. 

    Per The Drive,

    Because there is so much standing and heavily polluted water around Houston and other areas affected by the storm, insects populations are bound to explode, which poses a major health risk to the population of southeastern Texas and the first responders working to get the area back on its feet.

     

    Mosquitoes that can carry and transmit malaria, west nile virus, zika, and multiple types of encephalitis will be the target of the operation.

     

    Supposedly the C-130s will treat over six million acres of land while dispatched to the region, far more territory than in previous post-hurricane operations. 

    Houstonians and other surrounding areas are about to get their daily dose of chemtrails in large amounts. Each aircraft can spray 190,000 acres per day emitting chemicals into the atmosphere and ultimately ending up in living organisms.

    Back in the Vietnam War, the Pentagon launched its herbicidal warfare coined Operation Ranch Hand, which sprayed Agent Orange for deforestation purposes.

    According to the American Cancer Society, “there is now quite a bit of evidence about the health effects of Agent Orange” on the human body.

    Some returning veterans from Vietnam began reporting skin rashes, cancer, psychological symptoms, birth defects in their children, and other health problems in the 1970’s. In 1979, a class action lawsuit was filed against major herbicide manufacturers and was settled in 1984 out of court forming Agent Orange Settlement Fund.

    Watch the 910th Aerial Spray C-130H in action spraying insecticides into the atmosphere over Charleston..

    The article ends by telling Texans don’t be alarmed if you see or hear a C-130H Sprayer flying at low altitude dumping chemicals behind it.

    The lesson above dating back to Vietnam is heed the warning that the Pentagon is still willing to spray chemicals into the atmosphere with disregard to human life.

  • Here Are The California Counties Where Annual Opioid Scripts Outnumber People

    The California Department of Public Health just dropped some staggering statistics about the level of opioid abuse in America’s progressive paradise of the left coast.  As the Sacramento Bee points out, there are a remarkable number of counties in California where annual prescriptions for pain killers actually exceed the population.  

    Trinity County is the state’s fourth-smallest, and ended last year with an estimated population of 13,628 people.

     

    Its residents also filled prescriptions for oxycodone, hydrocodone and other opioids 18,439 times, the highest per capita rate in California.

     

    Besides Trinity, other counties with more prescriptions than people include Lake, Shasta, Tuolumne and Del Norte counties. In the Sacramento region, El Dorado, Placer and Sacramento counties had prescription rates above the statewide average, with Yolo County slightly below the state average.

     

    A county’s prescription total represents all opioids dispensed via prescriptions filled at a pharmacy and tracked by the state. Statewide, 15 percent of Californians were prescribed opioids in 2016, ranging from 7.3 percent of residents in tiny Alpine County to almost 27 percent in Lake County.

    As might be expected, the scripts per capita are highest in California’s more rural northern counties.

     

    So who is participating most in this deadly epidemic?  Well, according the Centers for Disease Control and Prevention, the biggest abusers of opioids are high-school educated, unemployed, white people living in small towns…

    “The following characteristics were associated with higher amounts of opioids prescribed: a larger percentage of non-Hispanic whites; higher rates of uninsured and Medicaid enrollment; lower educational attainment; higher rates of unemployment; (small-town) status; more dentists and physicians per capita; a higher prevalence of diagnosed diabetes, arthritis, and disability; and higher suicide rates,” concluded the authors of a Centers for Disease Control and Prevention study released in July.

     

    “What you’re seeing in California is what you’re seeing in many parts of the country, including Oregon,” Korthuis said. “There are still a lot of rural counties around the U.S. that are awash in prescription opioids.”

    …oh, and grandma and grandpa are getting high on the reg as well.

    In California, residents aged 15 to 29 got 1.7 million prescriptions in 2016, representing 7.2 percent of the state total. That’s down from the 1.9 million prescriptions in 2015, which represented about 7.8 percent of the state total. The age range that featured the largest prescription rate increase were 70- to74-year-olds, whose prescriptions grew from almost 1,354 per 1,000 people in 2015 to 1,394 per 1,000 people in 2016.

     

    Of course, growth in opioid addiction is hardly just a California phenomenon.  According to the CDC’s Annual Surveillance Report of Drug-Related Risks and Outcomes, addiction-related deaths are far more prevalent in the rural ‘rust-belt’ states of the Midwest.

     

    Meanwhile, the epidemic is growing far more severe every year with overdose deaths up 167% across the country since 1999.

    The rate of drug overdose deaths increased from 6.1 per 100,000 population in 1999 to 16.3 in 2015; for unintenttional drug overdose deaths, the rate increased from 4.0 per 100,000 in 1999 to 13.8 in 2015; for drug overdose deaths involving any opioid, the rate increased from 2.9 per 100,000 in 1999 to 10.4 in 2015 (p<0.05); for unintenttional drug overdose deaths involving any opioid, the rate increased from 2.1 per 100,000 in 1999 to 9.3 per 100,000 in 2015 (p<0.05). For all four categories of drug overdose deaths, increases in rates were largest from 2013 to 2015, with the rate increasing on average by 9% per year for overall drug overdose deaths (p<0.05), 11% per year for unintenttional drug overdose deaths (p<0.05), 15% per year for drug overdose deaths involving any opioid (p<0.05), and 16% for unintenttional drug overdose deaths involving any opioid (p<0.05).

     

    But don’t worry too much because, as Princeton Economist Alan Krueger told us yesterday, there is a simple solution to the opioid epidemic in the U.S…apparently it can all be solved with just a little more Obamacare.

  • Babies On Drugs In America? 1984 Predicted It!

    Authored by Chris Campbell via LFB.org,

    Over a million kids in America six years old and under are on psychiatric drugs – mostly to treat anxiety.

    Let that sink in.

    I have to ask. Is the U.S. really becoming this out of touch? And I mean that literally.

    Author Ray Williams, a contributor to Psychology Today, offered an important question back in 2010: “In our desire to have a politically correct and safe social environment, or an environment of instant communication, have we lost sight of the most important aspect of human development and culture  — physical touch?”

    The science is in: After food, water and shelter, there’s little more important to kids, especially babies, than human contact. Without simple human contact, in fact, babies can die.

    This is the case, actually, to varying degrees, for all mammals.

    In many litters of puppies and kittens, for example, there are sometimes one or two animals that come out enfeebled — as the “runts.”

    The weakness of the runts, felt by the mother during nursing, is a sign to the mother it likely won’t survive. To make sure her genes have the best chance for survival, she must use her limited resources wisely.

    As a result, the mother doesn’t lick or nurture the runt. The mother still allows the runt to feed (other species don’t even go that far), but it refuses to show the runt affection.

    It’s hard to understate how catastrophic this is for the runt. A certain amount of maternal licking and nuzzling is necessary. The affection, we now know, turns on the production of a certain growth hormone in the brain. Without it, food cannot be metabolized properly and healthy growth and development is impossible. If the runt continues to be ignored, even if it still gets plenty to eat, it will eventually shrivel up and die.

    It’s the same for humans. Without human contact at the earliest of age, the immune system is essentially shot. The affected becomes vulnerable to all sorts of ailments and diseases.

    But it’s not just babies…

    Human contact, in kids and adults, has been shown to ease pain, lift depression and may even, oddly enough, increase the odds that a team will win a game.

    And it’s the simplest thing. (Plus, it’s free!)

    K.I.S.S.: When the Synthetic Gets in the Way

    Indeed. In our headlong rush for “progress” in all forms, this is one aspect of our existence in which we need to “make great again,” rather than mindlessly perverting or opting for more synthetic versions. (Food and most medicine can also be added to this list, among other things.)

    Progress, technological and otherwise, hold incredible potential to lift humanity to new heights — yet, if not done mindfully (which is the ideal role of conservatism, preserving that which is worthy of preservation), it can, without question, push us down to new lows.

    The latter is precisely what both George Orwell and Aldous Huxley were warning us about.

    Dystopia would come first with a smile and promises of a vast utopia. And, so enamored we would be, we wouldn’t even notice the glimmering of its fangs until, of course, it was too late.

    Today, we invite Joe Jarvis of the Daily Bell to ask one unnerving question: Have we already reached dystopia?

    Read on.

    As Babies are Prescribed Pharmaceuticals, Have We Reached Dystopia?

    By Joe Jarvis

    Would you let a five-year-old smoke a joint? I certainly hope not. Yet that would probably be less harmful than loading kids up on pharmaceuticals.

    Currently, over a million American children UNDER SIX YEARS OLD are taking psychiatric drugs. Babies are literally being doped up by the pharmaceutical industry. Over 274,000 babies UNDER ONE-YEAR-OLD are given drugs, mostly for anxiety.

    Anxiety drugs for babies. Have they tried motherly love? Or is that just an old fashioned, outdated concept?

    You know, I like to mention society’s similarity to Orwell’s 1984. And surely the growing police state, war on drugs, and endless military campaigns – where the enemy seems to change daily – are reminiscent of the fictional dictatorship of Big Brother.

    But it seems the powers that be are working tirelessly to blend together the dystopia of 1984, with that of Aldous Huxley’s Brave New World.

    Brave New World

    In that dystopia, there is no police state or war. Society has been perfectly designed by scientists, inspired by Ford’s assembly line. Babies are grown in the lab, cloned to all look alike, depending on their class. Parents are an embarrassing relic of the past. How silly to think a child needs family when they have the state!

    The lower castes are deprived of oxygen as embryos to stunt their mental development. In America, they use fluoride in the drinking water instead.

    In Brave New World, children listen to 24-hour propaganda in their cribs.

    Betas hear:

    Alpha children wear grey. They work much harder than we do, because they’re so frightfully clever. I’m really awfully glad I’m a Beta, because I don’t work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don’t want to play with Delta children. And Epsilons are still worse.

    White pride, black pride, gay pride, national pride. Pride is not meant for accidents of birth. You should be proud of accomplishments and achievements, not genetics and geography.

    Perhaps someone has been whispering in these radicalized children’s ears.

    And how jealous the Department of Education must be of the incubators of Brave New World! They have to sometimes wait years to indoctrinate children. But at least the government gets to drug them up at a young age! And if the TV is left on, most of the programming is done for them.

    Of course, the adults are drugged up in Brave New World as well, just like in America. If anyone feels the least bit anxious, nervous, sad–or any other troublesome emotion–they get “soma.” It’s the perfect mix of drugs with only pleasant feelings and no ill side effects.

    The 1 in 6 Americans on antidepressants, antipsychotics, and anti-anxiety medication still have to put up with side effects.

    The 50 million plus Americans on psychiatric medication sometimes kill themselves, or go mad and kill others. I guess the government is still working out the kinks. Or it’s just another creative blending of 1984 and Brave New World. In the former, the proles must be properly terrified.

    1984

    And there is one more thing I can remember from Brave New World that strikes eerily similar to modern America.

    At what age does the public education system start teaching sex ed? Kindergarteners in some states receive “age appropriate” – according to the government – sexual education. Some studies suggest teen pregnancies rise in areas where sex ed is taught at younger ages.

    How young is too young for a sex change? Kids can now choose between 43 genders, or make up a new one! It’s like Mr. Potato head, but with their own bodies. And they will be given corresponding drugs to enhance the “natural” changes.

    In the classrooms of Brave New World:

    “We had Elementary Sex for the first forty minutes,” she answered. “But now it’s switched over to Elementary Class Consciousness.”

    The Director walked slowly down the long line of cots. Rosy and relaxed with sleep, eighty little boys and girls lay softly breathing…

    He let out the amazing truth. For a very long period before the time of Our Ford, and even for some generations afterwards, erotic play between children had been regarded as abnormal (there was a roar of laughter); and not only abnormal, actually immoral (no!): and had therefore been rigorously suppressed.

    Drugging the population, programming citizens with propaganda, sexualizing children, creating class divisions.

    These dystopian novels were meant to be warnings, not instruction manuals.

    Aldous Huxley explores how his fictional predictions progressed in his nonfiction work, Brave New World Revisited.

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Today’s News 9th September 2017

  • A Nuclear North Korea Is Here To Stay

    Authored by Doug Bandow via The National Interest,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Everyone knows that guns are great for protecting yourself.

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

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

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

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

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

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

    BulletBlocker NIJ IIIA Bulletproof Gabriel BBL Ballistic Base Layer Compression Vest

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

    Police magazine notes:

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

    ***

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

    ***

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

    2-piece suits:

    BulletBlocker NIJ IIIA Bulletproof Classic Two Piece Suit

    Top coats:

    BulletBlocker NIJ IIIA Bulletproof TopcoatBulletBlocker NIJ IIIA Bulletproof Long Topcoat

    Vests:

    BulletBlocker NIJ IIIA Bulletproof Dress Vest

    Sports coats:

    BulletBlocker NIJ IIIA Bulletproof Sportscoat

    Leather jackets:

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

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

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

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

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

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

    BulletBlocker NIJ IIIA Bulletproof Medical Lab Coat

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

    Bespoke and bulletproof!

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

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

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

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

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

     

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

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

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

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

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

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

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

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

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

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

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

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

    Watch the webcast of the hearing below

  • The Era Of Complacency Is Ending

    Authored by James Rickards via DailyReckoning.com,

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

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

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

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

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

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

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

    Nothing could be further from the truth.

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

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

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

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

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

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

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

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

    The Trap of Complacency

    Here are the key volatility drivers we have considered:

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

    This is a major development.

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

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

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

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

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

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

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

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

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

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

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

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

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

    Other wild cards include domestic terror and cyber attacks.

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

    Don’t rule it out.

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

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

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

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

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

    It looks like a volatile and bumpy fall ahead.

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

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

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

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

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

    Here's the post in question:

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

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

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

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

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

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

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

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

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

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

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

    Authored by Darius Shahtahmasebi via TheAntiMedia.org,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    *  *  *

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

    Meet the oil/yuan/gold triad

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

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

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

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

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

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

    And then, Putin delivers the clincher;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     

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

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

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

     

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

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

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

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

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

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

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

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

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

    Authored by Patrick Buchanan via Buchanan.org,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    * * *

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

     

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

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

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

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

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

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

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

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

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

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Today’s News 8th September 2017

  • Private-Plane Taxes: Another Way The Poor Subsidize The Rich

    Wealthy CEOs and athletes have found a loophole that allows them to minimize their tax bills while traveling in style – all at the expense of the everyday traveler who flies commercial and must bear an outsize percentage of aviation taxes in the US.

    According to a Bloomberg analysis of government data, operators of private jets pay far less in taxes than airline passengers and other commercial flyers. On a per flight basis, a private jet could generate as little as two percent of the taxes and fees paid by airline passengers on an identical route. Private planes make up about 10 percent of US flights under air-traffic control, yet pay less than 1 percent into a trust fund that finances air-traffic control and other Federal Aviation Administration operations.

    Sports teams like the New England Patriots are increasingly investing in private jets to take advantage of these cost-savings, Bloomberg reported.

    Of course, after years of declining prices, buyers of private jets can easily get a good deal if they’re willing to buy used. Sales prices for used jets have fallen as much as 35% over the past three years, with the average price falling from $13.7 million in April 2014 to $8.9 million today.

    Bloomberg’s analysis prompted some aviation experts to complain that private-jet owners aren’t paying their fair share of taxes.

    "By and large, a private aircraft costs the same for the FAA to process as a large aircraft," said Michael Ball, senior associate dean at the University of Maryland’s Robert H. Smith School of business and co-director of an aviation research consortium. "If you look at it from that standpoint, they clearly aren’t paying their due.”

    Private-jet owners, unsurprisingly, must have an army of powerful lobbyists in their employ, because, as Bloomberg explains, the US system where private owners are exempt from the bulk of taxes that commercial airlines pay is different from the system used by most of the rest of the world.

    “Unlike most of the rest of the world, which charges fees based on aircraft weight and distance flown, the taxes private jets in the U.S. pay are different from the ones imposed on airlines.

     

    Private aircraft operators pay 21.8 cents per gallon of jet fuel. By contrast, airlines and charter operators have three separate taxes: an excise tax of 7.5 percent on tickets or charter charges, a fee of $4.10 per passenger and 4.3 cents per gallon of jet fuel.”

    This means that airline passengers are effectively subsidizing some of the world’s largest corporations and wealthiest people under the current system, said Matthew Gardner, a senior fellow at the nonprofit Institute on Taxation and Economic Policy.

    "Pretty clearly, we all feel the pain every time we buy an airline ticket and see how big a share of the costs those fees are," Gardner said.

    Indeed, the disparity in taxes for comparable private and commercial flights can be staggering:

    “A transcontinental flight from New York to Los Angeles on a Virgin America Inc. Airbus SE A320, would be charged about $3,900 in taxes, assuming the plane was 85 percent full and passengers paid the average fare calculated by the Transportation Department’s Bureau of Transportation Statistics.

     

    The tax bill for a flight between the same cities on a privately owned Bombardier Inc. Global 6000, one of the world’s longest range corporate jets, would be about $525. That’s about 87 percent less than the airline flight.”

    And the differences can be even larger if the private plane is a smaller model that burns less fuel.

    “A trip from Nashville, Tennessee, to Philadelphia by Southwest Airlines Co., which typically uses a Boeing Co. 737-700 on that route, would typically be charged more than $2,000 in taxes. An Embraer SA Phenom 100E, a smaller and more fuel efficient corporate jet, on the same leg would be assessed about $50, or roughly 2 percent of the Southwest plane.”

    Putting their total tax contribution in context, private business plane owners contributed just $104 million to the FAA’s trust fund in 2016 – that amounts to just 0.7 percent of the overall aviation taxes paid that year.

    “The FAA estimated that these business planes contributed $104 million to the trust fund in 2016. That amounts to just 0.7 percent of the overall aviation taxes. That compares to 92 percent of the tax payments, or more than $13 billion, that came from U.S. carriers, foreign airlines and charter carriers — most of which were paid directly by passengers.”

    And thanks to their army of lobbyists, private jet owners have virtually guaranteed that the tax disparity will persist.

    “Any potential changes in the taxes on private aviation were effectively taken off the table this year by the powerful chairman of the House Transportation and Infrastructure Committee, Pennsylvania Republican Bill Shuster.

     

    In order to mute opposition to his plan to create a nonprofit company to operate the air-traffic system, Shuster’s bill would keep the current tax levels for private planes. Shuster’s attempt to mollify private plane owners has had little effect as they continue to oppose his proposal. The bill has passed the committee and is awaiting a vote before the full House.”

    As one expert pointed out, if the purpose of the FAA’s tax system was to evenly distribute costs for maintaining the US’s aviation infrastructure among its users, than the current system is an abject failure.

    “If the purpose of aviation taxes is to create an equitable way to pay for the air-traffic centers, computers and radars, the existing system is a failure, said Robert Frank, a professor at Cornell University’s Johnson Graduate School of Management.

     

    “It doesn’t sound like this fee structure comes even close to imposing fees on the costs respective users impose on the system,” Frank said."

    But hey…like they say, life isn’t fair.

  • Jim Rickards: The North Korean Endgame is Playing Out Now

    Via Daily Reckoning,

    As mounting tensions rise from the latest round of nuclear testing out of North Korea, Jim Rickards believes a considerable window is closing by the United States. The threat of a nuclear armed and capable North Korea is a line that the currency wars expert and macro analyst believes the United States will now allow to be crossed. Speaking on CNBC’s Capital Connection Rickards offered his latest critique of the restrictions and response by the international community on North Korea.

    The interview began with a question what an oil embargo would mean for North Korea and how it would impact that country. Rickards blasts,

    “North Korea has already beaten the world to the punch. They’ve been building up their strategic oil reserves. What that means is they have an estimated year’s worth of held in reserve and China has played a role in these things in the past.”

    Jim Rickards is the editor of Strategic Intelligence and a best-selling author featured in the New York Times for his latest work, The Road to Ruin. Rickards’ worked on Wall Street for over three decades and has advised the U.S intelligence community on international finance, trade and financial warfare tactics.

    “The area that would be effective for a reactionary measure would be for the United States to exclude the People’s Bank of China, the Industrial and Commercial Bank of China and some of the other major Chinese banks from within the U.S dollar payment systems. The U.S could completely shut down the U.S operations.”

    On the keys to a successful response, Rickards notes that China plays a pivotal role. The macro analyst relays, “Ultimately, the Chinese are facilitating the North Korean finance. The move would be a kind of sanction with bite behind it. My expectation would be that China wouldn’t necessarily put pressure on North Korea. In reaction we could see escalation of further sanctions from the Chinese against the United States leaving for a trade and financial war without solving the North Korean situation.”

    Speaking on the impact of nuclear development in the country the intelligence community advisor warns, “Currently, North Korea is in what is classified as a ‘break out.’ Under typical nuclear development phases, we’ve normally seen countries that are cheating on nuclear development programs complete their operations in baby steps.  In the process they proceed gradually and when they do draw attention will stall programs until beginning again at a later date. North Korea has put that pattern aside and is in complete breakout.”

    “To give a U.S football comparison, they’re in the red zone and the quarterback is simply about to throw a pass into the end zone. The leader of North Korea is going for it and not hiding anything.

     

     The leadership in North Korea is hoping that the United States is bluffing and that they will be able to get a serviceable intercontinental ballistic missile (ICBM) with a hydrogen bomb that could threaten or destroy Los Angeles before the U.S could do anything. The United States is facing a six month window to act and I believe they will.

    When asked about the preemptive strike threat by the United States and what it means for China the currency wars expert narrowed in, “China will be looking out for its own interest. They will have great concern over a U.S ground invasion in North Korea and as was the case in 1951 they would be highly concerned over any proximity of forces to the border. There would also be concerns that the U.S is attempting to reunify the Korean Peninsula under U.S strategic interests.”

    “The way I expect that the U.S government will approach the situation is to approach China in outlining that it will be functioning toward strategical means. What that would signal is that they are not going to get anywhere near the Yalu River and that special operations and cyber warfare will be a key role.”

     

    “My expectation is that the first steps will see the country going dark by shutting down the power grid and cutting off the command and control operations. From there they will use psychological warfare tactics. The objective will be to disrupt all North Korean operations before the heavy bombers move in. North Korea will be limited and reduced in its artillery response.”

     

    “All of that will be relatively close to the demilitarized zone (DMZ) region. By indicating to China that when the U.S military operation is over, they will be looking to open up communications and negotiations to reunify stability on mutually acceptable terms.

    As Rickards noted previously, North Korea detonated a nuclear weapon early on Sunday, Sept. 3. This was the sixth time they had done so, but the first time since their ICBM missile tests and the first time under President Trump’s administration.

    This test was different in another important way. It is estimated to be a hydrogen bomb instead of an atomic bomb. The difference is significant.

    Both types of nuclear weapons work by releasing neutrons in critical-state radioactive material, either highly enriched uranium or plutonium. The difference is that the atomic bomb works by fission, literally “splitting” an atom, so that a neutron is emitted, collides with other atoms and causes a chain reaction with an enormous release of energy.

    The hydrogen bomb works by fusion. Atomic particles are “fused,” or pushed together, in a way that destabilizes the atom and also releases a neutron.

    Both methods start a chain reaction. But the fusion method in a hydrogen bomb is orders of magnitude more powerful. The destructive force can be 100 or even 1,000 times greater than that of an atomic bomb.

    This gives North Korea many more options in their attack scenarios.

    They can put more destructive force in a smaller space, thereby achieving the warhead miniaturization needed to fit on an ICBM.

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

    Finally, a hydrogen bomb gives North Korea the ability to unleash an electromagnetic pulse (EMP). In this scenario, the hydrogen bomb does not even strike the Earth; it is detonated near the edge of space. The resulting electromagnetic wave from the release of energy could knock out the entire U.S. power grid. Good luck with your bitcoins in that scenario.

    Got gold?

    These threats are existential from a U.S. perspective. Deterrence does not work when the opponent has so little to lose.

  • Expats Don't Want To Live In The US & UK Anymore

    Few anticipated that the UK would vote to leave the UK. Even fewer expected that President Donald Trump would defeat Hillary Clinton in November’s US presidential election.

    So unsurprisingly, members of the internationalist class of workers who populate urban centers like New York City and London – and who have the most to lose from nationalist economic and immigration policies – now perceive the US and Britain as less friendly to foreigners, not to mention less politically stable, according to a survey of 13,000 expatriates of 166 nationalities that was cited by Bloomberg.

    The respondents said that quality of life in both countries is declining by other measures, including the affordability of child care and health care. However, we don’t think one can easily blame that on the election.

    The UK ranks 54, down 21 places from last year’s survey, after its June 2016 vote to leave the European Union. Before the referendum, 77 percent of expats had a favorable opinion of the nation’s political stability. That’s down to 47 percent this year.  The survey was conducted in February and March, before the most recent British election. Just half of expats say the UK has a good attitude toward foreign residents, compared to 67 percent worldwide.

    Expats in Britain have also soured on its economy. The weak pound and higher inflation put the UK 59th for personal finance. Almost two-thirds of its expats have an unfavorable opinion of its cost of living, with 69 percent unhappy with the affordability of housing. Three out of five expats also don’t appreciate the weather in the UK.

    The US has seen a commensurate decline in public opinion. Just 36 percent of expats have a positive view of America’s political stability, down from 68 percent in last year’s survey. Overall, it ranks 43 of 65, down 17 places from last year.

    Overall, the U.S. is ranked 43rd of 65 contenders, 17 places lower than last year. But its reputation was already falling before the election results came in. As recently as 2014’s survey, the US was No. 5. One bright spot is that 69 percent of expats have a favorable view of the American economy.

    Some 72 percent of expats in the US say health care is unaffordable; the world’s largest economy ranks 50 by measures of health and well-being. Its transportation infrastructure was rated “very good” by just 15 percent of the expats, less than half of the global average. Meanwhile, the US ranks last for affordability of child care and 39 out of 45 countries ranked for education affordability.

    Despite all the talk about President Donald Trump stoking resentment against immigrants, expats still view the US as a welcoming country. Though that perception is beginning to shift…

    “Three years ago, 84 percent of expats rated the U.S. positively on “friendly attitude to foreign residents,” and just 5 percent negatively. By 2017, the negative ratings had tripled, and the positive ratings had dropped 16 points.”

    Many smaller economies outranked larger developed countries. Ironically, the top-ranked country in 2017 was Bahrain. We wonder: Would Bahrain’s sizable population of Asian “foreign workers” feel the same?

    “The top-ranked country in 2017 is Bahrain, given high marks by its expats as a place to work and raise a family and for making foreigners feel welcome. It vastly outranks Persian Gulf neighbors such as Kuwait, Saudi Arabia and Qatar, which ranked in the bottom 10 of the 65 countries in the survey.”

    While the US and UK have both experienced a reputational hit, surprisingly it was Australia that saw the largest drop of any national present in the rankings, sliding from tenth most expat-friendly country to 34th. Meanwhile, Greece ranked dead last, despite its warm climate and beautiful beaches.

    “Greece was at the very bottom of the list, weighed down by the country’s economic problems. Australia, which ranked in the top 10 last year, dropped more than any other country, to 34th place. Expats’ ratings of jobs, career prospects, work hours and work-life balance all dropped.”

    In another twist, China ranked as one of the expats’ favorite places, despite the severe pollution and the quality and cost of health care and education. Two-thirds of respondents said they were happy with their careers, though the country ranked 55 out of 65 for overall quality of life. Elsewhere in Asia, Taiwan, which topped last year's list, slipped to fourth place, while Singapore climbed into the top 10. Hong Kong languished at 39, up from 44 last year.

    The survey was conducted by InterNations, a Munich-based network of 2.8 million expats. The survey includes interviews with executives, skilled workers, students and retirees who live outside the country where they grew up. There are about 50 million expats worldwide, according to market research by Finaccord, and the number is expected to hit 60 million over the next five years.

     

  • Dollar Bloodbath Continues Across Asia, Gold Tops Election-Night Spike Highs

    Having plunged by the most in 6 months during the US day session, the dollar is continuing to get pounded across AsiaPac with Hong Kong Dollar and Yuan surging. Gold is extending gains, breaking above the spike highs from election night…

    The Dollar Index is in free fall…This is the 7th straight down day for the USD Index…

     

    There is not much support below here…

     

    Driven by widespread selling across Asia… The last 3 days have seen the biggest collapse in the dollar since the start of January.

     

    With the Hong Kong Dollar exploding higher (and 12mo forwards signaling expectations of a major collapse in the US dollar, breaking the Hong Kong peg)…

     

    Offshore Yuan is spiking higher against the dollar…

     

    But all Asian currencies are surging against the dollar tonight…

     

    And gold is spiking back above the election night highs…

     

    Did President Trump's "we don't need no stinking debt ceiling" decision finally break the back of dollar hegemony?

    Or is this the market calling The Fed's bluff and forcing them to hike rates to defend the dollar – and by doing so losing all data-dependent credibility (whatever is left)?

  • Globalists Will Throw Antifa To The Wolves To Further Their Agenda

    Authored by Brandon Smith via Alt-Market.com,

    In numerous interviews and articles, including my essay 'Globalist Strategy: Use Crazy Leftists And Provocateurs To Enrage/Demonize Conservatives', I have warned leftists that they are being exploited by globalists as a means to drive conservatives towards greater centralization under Trump and the federal government and that if they continue on the path they have embraced, a totalitarian response may be imminent.

    I have also made it clear to conservatives that cultural Marxist groups like Antifa and Black Lives Matter as they exist today are paper tigers; they are not physically or strategically capable of backing up the viciousness of their ideologies. Meaning, a totalitarian response is not warranted (a totalitarian response is NEVER warranted) and would in fact only help the globalists in their long term efforts to destroy our Constitutional principles.

    To summarize, the goal of the establishment is to use extreme leftist groups like a short stick to prod the real tiger – conservative movements. The goal, I believe, is to enrage liberty champions to the point that they are willing to "bend the rules" and rationalize the abandonment of their morals in order to defeat what they think is a great evil. Like all morally relativistic shifts in society, there is always the claim that it is for "the greater good of the greater number", or, "the other side is much worse, therefore we are justified in our tyranny…".

    In the end, groups like Antifa will be thrown to the wolves, because the globalists do not intend for them to "win" any engagement with conservatives. This was never the plan.

    If you want to measure the speed at which our nation is destabilizing under this agenda, it is helpful to watch how quickly government institutions and politicians abandon or turn on the leftists. The faster they do so, the more likely it is that a major crisis event is in the making.

    In the past week alone, the entire narrative surrounding the mainstream relationship to Antifa has turned sour. For example:

    According to documents obtained by Politico, the FBI and DHS have now officially classified Antifa as a terrorist group. The DHS has stated that these documents were not meant to be made public.

     

    The mainstream media, the largest backers of cultural Marxist groups, must have received a memo, because their tune has quickly morphed to the negative when dealing with Antifa. The Washington Post chastised them for attacking "peaceful right-wing demonstrators" (did you EVER think you would see the words "peaceful right-wing protestors" in an establishment rag like The Washington Post?).

     

    The Los Angeles Times also admonished far-left violence, while The Atlantic warned of the "rise of the violent left."

     

    Even crazed leftist zealot Nancy Pelosi has publicly turned against Antifa, stating that violent members should be "locked up."

    This is a rather fascinating 180-degree turn from a couple of weeks ago when all eyes were on "white nationalist" groups as the primary threat to America. But does this mean that the establishment did some soul searching and realized who the real purveyors of violence and conflict are? No, it does not.

    As I have been predicting since before the 2016 elections, the left's usefulness has a shelf life. If the establishment was interested in following through with the concept that Trump must be "unseated," then they would retain full public support behind groups like Antifa. Instead, the establishment is playing the game of the hidden hand.

    Right now,it would seem that Antifa groups are to take on the role of the underdog — the battered but still active insurgency against an "increasingly fascist regime." A few events need to take place in order for this narrative to hold any weight in the national consciousness, however. For example, while globalists may back away from support of extreme leftists in public, they will most likely continue with private support and funding as men like George Soros have always done. Leftists will also have to be inspired to even greater violence than they have already committed.

    As I discussed in my article 'Militant Leftists Are More An Annoyance Than A Real Threat To Liberty', published in May, regular Antifa protest organizations are not a true threat. That said, eventually there will be Antifa groups that are directly trained by government agencies to commit terrorist acts, much like The Weather Underground in the U.S. in the 1970s, or the controlled and well armed terror groups in Europe during Operation Gladio from the 1950s to the 1990s. In the end, all leftists will be associated with the actions of these false-flag groups.

    In the meantime, the Trump administration is playing its part by preparing the ground for a future martial law-style crackdown. Trump's latest executive measure? Bringing back Department of Defense program 1033, which funnels considerable amounts of surplus military hardware to police departments across America.

    What happens next?  Well, in my view the next most logical step for the globalists would be to initiate an attack of some kind on a civilian or government target and ensure that leftists are involved or blamed.  With the fanaticism of the left today almost on par with the fanaticism of Islamic fundamentalists, I imagine it will not be very hard to find some useful idiots to carry out such an action.

    Most likely attack scenarios in my view? Leftist terror groups supported covertly by governments have often gravitated towards bombings as their preferred method. On a larger scale, I would not rule out assassinations of politicians or even a FAILED assassination attempt on Donald Trump. These would be perfect triggers for a wider federal crackdown on leftists, fueling even greater animosity for Trump by progressives and providing a rationale for martial law for conservatives.

    For some people uneducated on the finer points of false flag terrorism, this will sound like "conspiracy theory." Some of it is indeed speculation on my part, but all of it is based on exposed programs of past high profile operations by various establishment entities to engineer civil unrest or to manipulate one part of a society to support more centralization and less freedom.

    Again, as I have said all along, the real target has always been conservatives. Conservative principles are the primary threat to globalism. In order to eliminate these principles, it is not enough to attempt to eliminate the people that hold them dear. This will only inspire the spread of such ideals; the globalists would achieve the opposite effect they desire. Therefore, they need to manipulate conservatives into voluntarily abandoning those principles of constitutional liberty and limited government. Conservatives must be made into tyrants. Only then will conservative principles truly die out.

    Leftist groups like Antifa are meant as a catalyst for this transition, much like their communist forebears were a catalyst for the rise of fascism in Italy in the early 1920's. They will not be the only mechanism, but they will be an important mechanism. As we witness the mainstream turning on the extreme left, the temptation will be to assume victory — that we have won and that the fighting will soon be over. Nothing could be further from reality. Antifa is not going away, it is merely changing into something worse; something more useful to globalists like Soros. If we find ourselves distracted from Constitutionalism and our pursuit of the globalists by this new and more violent incarnation, it will be conservatives, not leftists, that will end up becoming the pinnacle threat to our own ideals.

  • China Capitulation: Corriente Advisors' Mark Hart Ends 7-Year Bet On A "Massive Yuan Devaluation"

    China bears like Kyle Bass claimed victory last year after bets that the Chinese yuan would weaken paid off handsomely – particularly if they were supercharged by leverage. Hopefully, for their sake, yuan decided to lock in those gains early this year. Because since January, China’s currency has whipsawed higher, reversing most of its 2016 depreciation as the US dollar has endured a period of broad weakness, and Chinese policy makers have turned their attention to managing the currency’s valuation against a basket of currencies.

    But Mark Hart, who, like Bass is a Texas-based fund manager, and who built his bear case against China on the theory that the PBOC would opt for a series of one-off devaluations in the yuan, instead of allowing it to gradually depreciate, which would be tantamount to a policy error.

    Here’s more from a post on Hart’s outlook that we published last year:

    “Hart believes that the Chinese crawling devaluation is an error as it carries with its the latent threat of much more devaluation in the future, thus encouraging even more outflows, which in turn forces China to sell even more reserves, which destabilizes the economy even further, forcing even more devaluation and so on.

     

    Instead, a one-off devaluation would allow policy makers to “draw a line in the sand” at a more appropriate level for the yuan, easing pressure on China’s foreign-exchange reserves and removing an incentive for capital outflows, according to Hart, who’s been betting against the currency since at least 2011. He adds that China should devalue before its $3.3 trillion hoard of reserves shrinks much further, he said, because the country can still convince markets it’s acting from a position of strength.”

    According to Hart, while a devaluation this year would be “jarring” and may initially accelerate capital outflows, it would ultimately put China in a stronger position. He said the country could explain the move by saying it would put the yuan at a level more reflective of market forces and allow the currency to catch up with declines in international peers.

    However, the 50% devaluation that Hart had been anticipating never materialized. So, after seven years, Bloomberg is reporting that Hart has (pun intended ) had a change of heart after spending $240 million on his losing bet against the currency, which nearly cost him his sanity.

    Hart is now taking the other side of the trade, joining the ranks of Bridgewater Capital’s Ray Dalio and other yuan bulls:

    “Mark Hart spent seven years and $240 million waiting on a crash in China’s currency.

     

    He lost sleep. He lost clients. He damn near lost his sanity.

     

    And now he’s lost his conviction: Hart, who called for a more than 50 percent yuan devaluation last year, has turned bullish on China and its currency.”

    According to Bloomberg, Hart’s dedication to his short-yuan position left employees demoralized at his Fort Worth, Texas fund. Hart claims that his investing thesis was sound. His biggest mistake? Hart says he was “too early” in putting on the trade.

    “His reversal hasn’t come easily. From his base in Fort Worth, Texas, the hedge fund manager spent countless nights on the line to Hong Kong, parsing market news and exchange rates. At times, the stress took a toll on Hart personally and left his employees demoralized.

    ‘I always thought we had a good risk-reward trade on, but we made a number of mistakes, including being way too early,’ Hart, who started the yuan bet after predicting both the U.S. subprime mortgage bust and the European debt crisis, said in a telephone interview. ‘And now the world has changed.’”

    Hart now believes that G-20 leaders tacitly conspired to a “Plaza Accord”-type agreement to stanch the dollar’s appreciation while putting a floor under the yuan last February during a G-20 summit in Shanghai.

    “In cool hindsight, the 45-year-old founder of Corriente Advisors sees last year’s Group of 20 summit in Shanghai as a key turning point. Like many investors, Hart suspects the meeting resulted in a tacit agreement among world leaders to prevent the yuan from tumbling. He calls it China’s “whatever it takes” moment – when policy makers resolved to prop up the currency at any cost.”

    The agreement has tremendously benefited China, Hart says.

    “‘China now has the breathing room it needs to either temporarily stave off a slowdown with fiscal and monetary stimulus, or reform, grow and upgrade itself into the world’s largest developed economy,’ Hart said.”

    Regardless of whether Hart’s “conspiracy theory” is accurate, China has clearly succeeded in stabilizing the exchange rate. The yuan ended a three-year slide in late December and has rallied almost 7 percent in 2017. China’s central bank strengthens its daily reference rate for onshore yuan for a ninth day on Thursday, the longest run of increases since January 2011. The PBOC raised the yuan reference rate by 0.06% to 6.5269 per dollar, extending the strengthening streak since Aug. 28 to 2%. Meanwhile, the offshore yuan surged, sending the USDCNH below 6.50 for the first time since May 3, 2016.

    Even at its weakest point, the yuan never weakened enough for the options that Hart originally purchased in 2009 to pay off. His dedicated China funds, which had fixed lifespans, bought options that were designed to deliver one of two outcomes. According to Bloomberg, a massive payoff in the event of a currency crash, or a near total wipeout if a major devaluation failed to occur.

  • Florida Sheriff Will Check For Warrants At Hurricane Shelters

    Authored by Mac Slavo via SHTFplan.com,

    If you have a warrant out for your arrest and manage to safely make it to a Florida hurricane shelter while Hurricane Irma barrels down on the state, a Florida sheriff will make sure you’re escorted right to jail.

    As Hurricane Irma approaches his state, a county sheriff in Florida said that law enforcement authorities would check the identities of people who turn up at shelters and take to jail anyone found to have an active arrest warrant. On Wednesday, Grady Judd, the sheriff in Polk County, announced the maneuver in a series of messages on Twitter.

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    We cannot and we will not have innocent children in a shelter with sexual offenders & predators,” the sheriff said, adding law enforcement officers would be posted at shelters to check IDs.If you have a warrant, turn yourself into the jail — it’s a secure shelter.”

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    A spokeswoman for the sheriff, Carrie E. Horstman, said that the authorities hoped the effort would encourage turnout at shelters if county residents know they are safe. Horstman said, “We hope it actually leads to more people turning themselves in.” In a telephone interview on Wednesday, Ms. Horstman said that officers are obligated to take a person into custody if there is a warrant for their arrest and that in some misdemeanor cases a person can be released on bond immediately before they even go to a shelter.

    “Our hope even before they reach a shelter is that they will turn themselves into law enforcement prior to that,” she said. “It is normal protocol to have an accountability log and to know the names of each person going in,” she said. “We need to know who is in there.”

    But not everyone was thrilled with the Sheriff’s announcement, however.

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    The Polk County sheriff’s announcement that the authorities would use the hurricane as an opportunity for arrests drew widespread criticism online, leading some to question just how far the checks would go, such as whether Sheriff Judd would jail those wanted on traffic or drug charges, The Orlando Sentinel reported.

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    The backlash over this announcement was swift and more appear to be against the arrests at the shelters than for them. These announcements also come as word of police turning away volunteers bringing supplies to Hurricane Harvey victims in Texas, and yelled at for trying to help others.

    The sheriff’s office made these announcements as residents of the state of Florida stocked up on supplies or made preparations to evacuate ahead of Hurricane Irma. Making arrests a top priority over human lives appears callous to Florida residents, especially in the wake of the damage currently being inflicted by Irma on the Caribbean.

    The massive hurricane, which battered the northeast Caribbean on Wednesday is now moving on to the Virgin Islands and Puerto Rico. According to a majority of the latest projections, the Category 5 hurricane could make landfall in Florida by Sunday, although it was unclear where exactly that might happen. But the state is already bracing for impact. On Wednesday, Governor Rick Scott activated the state National Guard and declared a state of emergency across the state.

    Polk County boasts a population of over 600,000 people, and none of the hurricane shelters have begun accepting evacuees just yet.

  • Hillary Fundraiser Offers Thoughts On Her Upcoming Book Tour: "Shut The F**k Up And Go Away!"

    After days of the media reporting on leaked excerpts from Hillary’s upcoming book entitled “What Happened,” it now seems that some Democrats are growing just as weary of Hillary’s perpetual excuses and endless clamoring for the spotlight as their colleagues on the right side of the aisle.  According to The Hill, one rather blunt former Hillary fundraiser said that he wished “she’d just shut the f**k up and go away.”

    Not everyone was so charitable. Even some of Clinton’s allies have grown weary of her insistence on re-litigating the 2016 campaign at a time when the Democratic Party is looking to forge a new identity in the age of Trump.

     

    “The best thing she could do is disappear,” said one former Clinton fundraiser and surrogate who played an active role at the convention. “She’s doing harm to all of us because of her own selfishness. Honestly, I wish she’d just shut the f— up and go away.”

    Hillary

     

    Meanwhile, others sent the same basic messaging, if in a slightly more diplomatic tone…

    Clinton’s latest election musings have also reopened old wounds from the bitter primary fight with Sanders right as Democrats say their focus should be on finding an economic message that appeals to the Rust Belt voters who abandoned the party for Trump.

     

    There is an urgency to unite the progressive and mainstream wings of the party ahead of the 2018 midterm elections, when Democrats will face a brutal slate of Senate reelection campaigns in states that Trump carried over Clinton.

     

    Those daunting challenges have some Democrats fuming at what they view as Clinton’s petty post-election score settling.

     

    “None of this is good for the party,” said one former Obama aide. “It’s the Hillary Show, 100 percent. A lot of us are scratching our heads and wondering what she’s trying to do. It’s certainly not helpful.”

    Of course, sfter days of book excerpts blaming everything and everyone including, but certainly not limited to, racists, misogynists, Russian hackers, Bernie Sanders, James Comey, “content farms in Macedonia” and, our personal favorite, a movie scene from “There’s Something About Mary”…it’s easy to see why former Hillary allies may be getting a little annoyed by her most recent self-enrichment scam.

  • "Greatest Evacuation In History" – 650,000 Ordered To Leave Florida

    In what spokesman Michael Hernandez describes as "the biggest evacuation in history," Miami-Dade has expanded its mandatory evacuations orders to Zone C, forcing over 650,000 to leave Florida in a "traffic nightmare" as Cat-5 Hurricane Irma bears down.

    An earlier order included just Miami Beach, other low-lying and barrier island areas and all mobile-home residents, but as the storm grew in intensity and the cone of uncertainty narrowed, County Mayor Carlos Gimenez issued the order this afternoon expanded to Zone C.

    The expansion now covers Zone B, which encompasses Brickell, Miami’s downtown area and South-Dade, including parts of Cutler Bay, Florida City and Homestead. Evacuation orders also touch Zone C, which includes parts of Coral Gables, South Miami, Miami Shores and North Miami Beach.

    More than 650,000 residents are reportedly subject to the mandatory evacuation order – that’s up from the 200,000 who were asked to leave to areas outside of evacuation Zones A and B, Wednesday.

    Downtown Miami is described as "a ghost town"...

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    As the mass exodus begins…

    Lines at gas stations were evident everywhere…

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    As AP reports on resident exclaiming:

    "There was no gas and it's gridlock. People are stranded on the sides of the highway," she said.

     

    "It's 92 degrees out and little kids are out on the grass on the side of the road. No one can help them."

    Irma's eventual path and Florida's fate depends on when and how sharp the powerful hurricane takes a right turn, National Weather Service Director Louis Uccellini said.

    "It has become more likely that Irma will make landfall in southern Florida as a dangerous major hurricane," the Hurricane Center said in a forecast discussion Thursday afternoon.

    The last Category 5 storm to hit Florida was Andrew in 1992. Its winds topped 165 mph (265 kph), killing 65 people and inflicting $26 billion in damage. It was at the time the most expensive natural disaster in U.S. history.

    U.S. Air Force Reserve weather officer Maj. Jeremy DeHart flew through the eye of Irma at 10,000 feet Wednesday and through Hurricane Harvey just before it hit Texas last month.

    He said Irma's intensity set it apart from other storms.

    "Spectacular is the word that keeps coming to mind. Pictures don't do it justice. Satellite images can't do it justice," DeHart said.

    Still unsure…Miami-Dade made it simple…

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Today’s News 7th September 2017

  • Did Benjamin Netanyahu Just Panic?

    Authored by Alistair Crooke via ConsortiumNews.com,

    Is Israeli Prime Minister Netanyahu pushing the panic button over the collapse of the Saudi-Israeli jihadist proxies in Syria and now threatening to launch a major air war…

    A very senior Israeli intelligence delegation, a week ago, visited Washington. Then, Israeli Prime Minister Benjamin Netanyahu broke into President Putin’s summer holiday to meet him in Sochi, where, according to a senior Israeli government official (as cited in the Jerusalem Post), Netanyahu threatened to bomb the Presidential Palace in Damascus, and to disrupt and nullify the Astana cease-fire process, should Iran continue to “extend its reach in Syria.”

    Israeli Prime Minister Benjamin Netanyahu speaking to a joint session of the U.S. Congress on March 3, 2015, in opposition to President Barack Obama’s nuclear agreement with Iran. (Screen shot from CNN broadcast)

    Russia’s Pravda wrote, “according to eyewitnesses of the open part of the talks, the Israeli prime minister was too emotional and at times even close to panic. He described a picture of the apocalypse to the Russian president that the world may see, if no efforts are taken to contain Iran, which, as Netanyahu believes, is determined to destroy Israel.

    So, what is going on here? Whether or not Pravda’s quote is fully accurate (though the description was confirmed by senior Israeli commentators), what is absolutely clear (from Israeli sources) is that both in Washington and at Sochi, the Israeli officials were heard out, but got nothing. Israel stands alone. Indeed, it is reported that Netanyahu was seeking “guarantees” about the future Iranian role in Syria, rather than “asking for the moon” of an Iranian exit. But how could Washington or Moscow realistically give Israel such guarantees?

    Belatedly, Israel has understood that it backed the wrong side in Syria – and it has lost. It is not really in a position to demand anything. It will not get an American enforced buffer zone beyond the Golan armistice line, nor will the Iraqi-Syrian border be closed, or somehow “supervised” on Israel’s behalf.

    Of course, the Syrian aspect is important, but to focus only on that, would be to “miss the forest for the trees.” The 2006 war by Israel to destroy Hizbullah (egged on by the U.S., Saudi Arabia – and even a few Lebanese) was a failure. Symbolically, for the first time in the Middle East, a technologically sophisticated, and lavishly armed, Western nation-state simply failed. What made the failure all the more striking (and painful) was that a Western state was not just bested militarily, it had lost also the electronic and human intelligence war, too — both spheres in which the West thought their primacy unassailable.

    The Fallout from Failure

    Israel’s unexpected failure was deeply feared in the West, and in the Gulf too. A small, armed (revolutionary) movement had stood up to Israel – against overwhelming odds – and prevailed: it had stood its ground. This precedent was widely perceived to be a potential regional “game changer.” The feudal Gulf autocracies sensed in Hizbullah’s achievement the latent danger to their own rule from such armed resistance.

    Syrian President Bashar al-Assad.

    The reaction was immediate. Hizbullah was quarantined — as best the full sanctioning powers of America could manage. And the war in Syria started to be mooted as the “corrective strategy” to the 2006 failure (as early as 2007) — though it was only with the events following 2011 that the “corrective strategy” came to implemented, à outrance.

    Against Hizbullah, Israel had thrown its full military force (though Israelis always say, now, that they could have done more). And against Syria, the U.S., Europe, the Gulf States (and Israel in the background) have thrown the kitchen sink: jihadists, al-Qaeda, ISIS (yes), weapons, bribes, sanctions and the most overwhelming information war yet witnessed. Yet Syria – with indisputable help from its allies – seems about to prevail: it has stood its ground, against almost unbelievable odds.

    Just to be clear: if 2006 marked a key point of inflection, Syria’s “standing its ground” represents a historic turning of much greater magnitude. It should be understood that Saudi Arabia’s (and Britain’s and America’s) tool of fired-up, radical Sunnism has been routed. And with it, the Gulf States, but particularly Saudi Arabia are damaged. The latter has relied on the force of Wahabbism since the first foundation of the kingdom: but Wahabbism in Lebanon, Syria and Iraq has been roundly defeated and discredited (even for most Sunni Muslims). It may well be defeated in Yemen too. This defeat will change the face of Sunni Islam.

    Already, we see the Gulf Cooperation Council, which originally was founded in 1981 by six Gulf tribal leaders for the sole purpose of preserving their hereditary tribal rule in the Peninsula, now warring with each other, in what is likely to be a protracted and bitter internal fight. The “Arab system,” the prolongation of the old Ottoman structures by the complaisant post-World War I victors, Britain and France, seems to be out of its 2013 “remission” (bolstered by the coup in Egypt), and to have resumed its long-term decline.

    The Losing Side

    Netayahu’s “near panic” (if that is indeed what occurred) may well be a reflection of this seismic shift taking place in the region. Israel has long backed the losing side – and now finds itself “alone” and fearing for its near proxies (the Jordanians and the Kurds). The “new” corrective strategy from Tel Aviv, it appears, is to focus on winning Iraq away from Iran, and embedding it into the Israel-U.S.-Saudi alliance.

    President Donald Trump touches lighted globe with Egyptian President Abdel Fattah al-Sisi and Saudi King Salman and Donald Trump at the opening of Saudi Arabia’s Global Center for Combating Extremist Ideology on May 21, 2017. (Photo from Saudi TV)

    If so, Israel and Saudi Arabia are probably too late into the game, and are likely underestimating the visceral hatred engendered among so many Iraqis of all segments of society for the murderous actions of ISIS. Not many believe the improbable (Western) narrative that ISIS suddenly emerged armed, and fully financed, as a result of former Iraqi Prime Minister Nouri al-Maliki’s alleged “sectarianism”: No, as rule-of-thumb, behind each such well-breached movement – stands a state.

    Daniel Levy has written a compelling piece to argue that Israelis generally would not subscribe to what I have written above, but rather: “Netanyahu’s lengthy term in office, multiple electoral successes, and ability to hold together a governing coalition … [is based on] him having a message that resonates with a broader public. It is a sales pitch that Netanyahu … [has] ‘brought the state of Israel to the best situation in its history, a rising global force … the state of Israel is diplomatically flourishing.’ Netanyahu had beaten back what he had called the ‘fake-news claim’ that without a deal with the Palestinians ‘Israel will be isolated, weakened and abandoned’ facing a ‘diplomatic tsunami.’

    “Difficult though it is for his political detractors to acknowledge, Netanyahu’s claim resonates with the public because it reflects something that is real, and that has shifted the center of gravity of Israeli politics further and further to the right. It is a claim that, if correct and replicable over time, will leave a legacy that lasts well beyond Netanyahu’s premiership and any indictment he might face.

    “Netanyahu’s assertion is that he is not merely buying time in Israel’s conflict with the Palestinians to improve the terms of an eventual and inevitable compromise. Netanyahu is laying claim to something different — the possibility of ultimate victory, the permanent and definitive defeat of the Palestinians, their national and collective goals.

    “In over a decade as prime minister, Netanyahu has consistently and unequivocally rejected any plans or practical steps that even begin to address Palestinian aspirations. Netanyahu is all about perpetuating and exacerbating the conflict, not about managing it, let alone resolving it…[The] message is clear: there will be no Palestinian state because the West Bank and East Jerusalem are simply Greater Israel.”

    No Palestinian State

    Levy continues: “The approach overturns assumptions that have guided peace efforts and American policy for over a quarter of a century: that Israel has no alternative to an eventual territorial withdrawal and acceptance of something sufficiently resembling an independent sovereign Palestinian state broadly along the 1967 lines. It challenges the presumption that the permanent denial of such an outcome is incompatible with how Israel and Israelis perceive themselves as being a democracy. Additionally, it challenges the peace-effort supposition that this denial would in any way be unacceptable to the key allies on which Israel depends…

    The Palestinian flag is waved as relief ships arrive in Gaza in August 2008.

    “In more traditional bastions of support for Israel, Netanyahu took a calculated gamble — would enough American Jewish support continue to stand with an increasingly illiberal and ethno-nationalist Israel, thereby facilitating the perpetuation of the lopsided U.S.-Israel relationship? Netanyahu bet yes, and he was right.”

    And here is another interesting point that Levy makes:

    “And then events took a further turn in Netanyahu’s favor with the rise to power in the United States and parts of Central Eastern Europe (and to enhanced prominence elsewhere in Europe and the West) of the very ethno-nationalist trend to which Netanyahu is so committed, working to replace liberal with illiberal democracy. One should not underestimate Israel and Netanyahu’s importance as an ideological and practical avant-garde for this trend.”

    Former U.S. Ambassador and respected political analyst Chas Freeman wrote recently very bluntly: “the central objective of U.S. policy in the Middle East has long been to achieve regional acceptance for the Jewish-settler state in Palestine.” Or, in other words, for Washington, its Middle East policy – and all its actions – have been determined by “to be, or not to be”: “To be” (that is) – with Israel, or not “to be” (with Israel).

    Israel’s Lost Ground

    The key point now is that the region has just made a seismic shift into the “not to be” camp. Is there much that America can do about that? Israel very much is alone with only a weakened Saudi Arabia at its side, and there are clear limits to what Saudi Arabia can do.

    Iraqi Prime Minister Haidar al-Abadi.

    The U.S. calling on Arab states to engage more with Iraqi Prime Minister Haider al-Abadi seems somehow inadequate. Iran is not looking for war with Israel (as a number of Israeli analysts have acknowledged); but, too, the Syrian President has made clear that his government intends to recover “all Syria” – and all Syria includes the occupied Golan Heights. And this week, Hassan Nasrallah called on the Lebanese government “to devise a plan and take a sovereign decision to liberate the Shebaa Farms and the Kfarshouba Hills” from Israel.

    A number Israeli commentators already are saying that the “writing is on the wall” – and that it would be better for Israel to cede territory unilaterally, rather than risk the loss of hundreds of lives of Israeli servicemen in a futile attempt to retain it. That, though, seems hardly congruent with the Israeli Prime Minister’s “not an inch, will we yield” character and recent statements.

    Will ethno-nationalism provide Israel with a new support base? Well, firstly, I do not see Israel’s doctrine as “illiberal democracy,” but rather an apartheid system intended to subordinate Palestinian political rights. And as the political schism in the West widens, with one “wing” seeking to delegitimize the other by tarnishing them as racists, bigots and Nazis, it is clear that the real America First-ers will try, at any price, to distance themselves from the extremists.

    Daniel Levy points out that the Alt-Right leader, Richard Spencer, depicts his movement as White Zionism. Is this really likely to build support for Israel? How long before the “globalists” use precisely Netanyahu’s “illiberal democracy” meme to taunt the U.S. Right that this is precisely the kind of society for which they too aim: with Mexicans and black Americans treated like Palestinians?

    ‘Ethnic Nationalism’

    The increasingly “not to be” constituency of the Middle East has a simpler word for Netanyahu’s “ethnic nationalism.” They call it simply Western colonialism.

    Round one of Chas Freeman’s making the Middle East “be with Israel” consisted of the shock-and-awe assault on Iraq. Iraq is now allied with Iran, and the Hashad militia (PMU) are becoming a widely mobilized fighting force.

    The second stage was 2006. Today, Hizbullah is a regional force, and not a just Lebanese one.

    Far-right militia members demonstrating outside Ukrainian parliament in Kiev. (Screen shot from RT video via YouTube video)

    The third strike was at Syria. Today, Syria is allied with Russia, Iran, Hizbullah and Iraq. What will comprise the next round in the “to be, or not to be” war?

    For all Netanyahu’s bluster about Israel standing stronger, and having beaten back “what he had called the ‘fake-news claim’ that without a deal with the Palestinians ‘Israel will be isolated, weakened and abandoned’ facing a ‘diplomatic tsunami,’” Netanyahu may have just discovered, in these last two weeks, that he confused facing down the weakened Palestinians with “victory” — only at the very moment of his apparent triumph, to find himself alone in a new, “New Middle East.”

    Perhaps Pravda was right, and Netanyahu did appear close to panic, during his hurriedly arranged, and urgently called, Sochi summit.

  • What Country Is This? Forced Blood Draws, Cavity Searches, And Colonoscopies

    Authored by John Whitehead via The Rutherford Institute,

    “The Fourth Amendment was designed to stand between us and arbitrary governmental authority. For all practical purposes, that shield has been shattered, leaving our liberty and personal integrity subject to the whim of every cop on the beat, trooper on the highway and jail official.”

    – Herman Schwartz, The Nation

    Our freedoms – especially the Fourth Amendment – are being choked out by a prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, shoot, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.

    Such is life in America today that Americans are being made to relinquish the most intimate details of who we are – our biological makeup, our genetic blueprints, and our biometrics (facial characteristics and structure, fingerprints, iris scans, etc.) – in order to clear the nearly insurmountable hurdle that increasingly defines life in the United States: we are now guilty until proven innocent.

    Forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, forced inclusion in biometric databases: these are just a few ways in which Americans are being forced to accept that we have no control over our bodies, our lives and our property, especially when it comes to interactions with the government.

    Consider, for example, what happened to Utah nurse Alex Wubbels after a police detective demanded to take blood from a badly injured, unconscious patient without a warrant.

    Wubbels refused, citing hospital policy that requires police to either have a warrant or permission from the patient in order to draw blood. The detective had neither. Irate, the detective threatened to have Wubbels arrested if she didn’t comply. Backed up by her supervisors, Wubbels respectfully stood her ground only to be roughly grabbed, shoved out of the hospital, handcuffed and forced into an unmarked car while hospital police looked on and failed to intervene (take a look at the police body camera footage, which has gone viral, and see for yourself).

    Michael Chorosky didn’t have an advocate like Wubbels to stand guard over his Fourth Amendment rights. Chorosky was surrounded by police, strapped to a gurney and then had his blood forcibly drawn after refusing to submit to a breathalyzer test. “What country is this? What country is this?” cried Chorosky during the forced blood draw.

    What country is this indeed?

    Unfortunately, forced blood draws are just the tip of the iceberg when it comes to the indignities and abuses being heaped on Americans in the so-called name of “national security.”

    Forced cavity searches, forced colonoscopies and forced roadside strip searches are also becoming par for the course in an age in which police are taught to have no respect for the citizenry’s bodily integrity whether or not a person has done anything wrong.

    For example, 21-year-old Charnesia Corley was allegedly being pulled over by Texas police in 2015 for “rolling” through a stop sign. Claiming they smelled marijuana, police handcuffed Corley, forced her to strip off her pants, threw her to the ground, forced her legs apart and then probed her vagina. The cavity search lasted 11 minutes. This practice is referred to as “rape by cop.”

    David Eckert was forced to undergo an anal cavity search, three enemas, and a colonoscopy after allegedly failing to yield to a stop sign at a Wal-Mart parking lot. Cops justified the searches on the grounds that they suspected Eckert was carrying drugs because his “posture [was] erect” and “he kept his legs together.” No drugs were found.

    During a routine traffic stop, Leila Tarantino was subjected to two roadside strip searches in plain view of passing traffic, while her two children—ages 1 and 4—waited inside her car. During the second strip search, presumably in an effort to ferret out drugs, a female officer “forcibly removed” a tampon from Tarantino. No contraband or anything illegal was found.

    Thirty-eight-year-old Angel Dobbs and her 24-year-old niece, Ashley, were pulled over by a Texas state trooper on July 13, 2012, allegedly for flicking cigarette butts out of the car window. Insisting that he smelled marijuana, the trooper proceeded to interrogate them and search the car. Despite the fact that both women denied smoking or possessing any marijuana, the police officer then called in a female trooper, who carried out a roadside cavity search, sticking her fingers into the older woman’s anus and vagina, then performing the same procedure on the younger woman, wearing the same pair of gloves. No marijuana was found.

    Meanwhile, four Milwaukee police officers were charged with carrying out rectal searches of suspects on the street and in police district stations over the course of several years. One of the officers was accused of conducting searches of men’s anal and scrotal areas, often inserting his fingers into their rectums and leaving some of his victims with bleeding rectums.

    It’s gotten so bad that you don’t even have to be suspected of possessing drugs to be subjected to a strip search.

    Thanks to the U.S. Supreme Court’s ruling in Florence v. Burlison, any person who is arrested and processed at a jail house, regardless of the severity of his or her offense (i.e., they can be guilty of nothing more than a minor traffic offense), can be subjected to a strip search by police or jail officials without reasonable suspicion that the arrestee is carrying a weapon or contraband.

    As technology advances, police searches are becoming more invasive on a cellular level, as well, with passive alcohol sensors, DNA collection roadblocks, iris scans and facial recognition software—to name just a few methods—used to assault our bodily integrity.

    America’s founders could scarcely have imagined a world in which we needed protection against widespread government breaches of our privacy, including on a cellular level.

    Yet that’s exactly what we so desperately need.

    Unfortunately, as I make clear in my book Battlefield America: The War on the American People, the indignities being heaped upon us by the architects and agents of the American police state—whether or not we’ve done anything wrong—are just a foretaste of what is to come.

  • NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers

    So what do you do when the bubbly market for your exorbitantly priced New York City commercial real estate collapses by over 50% in two years?  Well, you lever up, of course. 

    As Bloomberg notes this morning, the ‘smart money’ at U.S. banking institutions are tripping over themselves to throw money at commercial real estate projects all while ‘dumb money’ buyers have completely dried up.

    A growing chasm between what buyers are willing to pay and what sellers think their properties are worth has put the brakes on deals. In New York City, the largest U.S. market for offices, apartments and other commercial buildings, transactions in the first half of the year tumbled about 50 percent from the same period in 2016, to $15.4 billion, the slowest start since 2012, according to research firm Real Capital Analytics Inc.

     

    At the same time, the market for debt on commercial properties is booming. Investors of all stripes — from banks and insurance companies to hedge funds and private equity firms — are plowing into real estate loans as an alternative to lower-yielding bonds. That’s giving building owners another option to cash in if their plans to sell don’t work out.

     

    “Sellers have a number in mind, and the market is not there right now,” said Aaron Appel, a managing director at brokerage Jones Lang LaSalle Inc. who arranges commercial real estate debt. “Owners are pulling out capital” by refinancing loans instead of finding buyers, he said.

     

    But don’t concern yourself with talk of bubbles because Scott Rechler of RXR would like for you to rest assured that the lack of buyers is not at all concerning…they’ve just “hit the pause button” while they wander out in search of the ever elusive “price discovery.”  

    At 237 Park Ave., Walton Street Capital hired a broker in March to sell its stake in the midtown Manhattan tower, acquired in a partnership with RXR Realty for $810 million in 2013. After several months of marketing, the Chicago-based firm opted instead for $850 million in loans that value the 21-story building at more than $1.3 billion, according to financing documents. The owners kept about $23.4 million.

     

    “The basic trend is you have a really strong debt market and a sales market that has hit the pause button while it seeks to find price discovery,” said Scott Rechler, chief executive officer of RXR.

     

    The debt market has become so appealing that landlords are looking at mortgage options while simultaneously putting out feelers for buyers, said Rechler, whose company owns $15 billion of real estate throughout New York, New Jersey and Connecticut. That’s a departure for Manhattan’s property owners, who in prior years would pursue one track at a time, he said.

    Of course, this isn’t just a NYC phenomenon as sales of office towers, apartment buildings, hotels and shopping centers across the U.S. have been plunging since reaching $262 billion nationally in 2015, just behind the record $311 billion of real estate that changed hands in 2007, according to Real Capital. Property investors are on the sidelines amid concern that rising interest rates will hurt values that have jumped as much as 85 percent in big cities like New York, compounded by overbuilding and a pullback of the foreign capital that helped power the recent property boom.

    The tough sales market has put some property owners in a bind — most notably Kushner Cos., which has struggled to find partners for 666 Fifth Ave., the Midtown tower it bought for a record price in 2007. The mortgage on the building will need to be refinanced in 18 months.

    Thankfully, at least someone interviewed by Bloomberg seemed to be grounded in reality with Jeff Nicholson of CreditFi saying that it just might be a “red flag” that buyers have completely abandoned the commercial real estate market at the same time that owners are massively levering up to take cash out of projects.

    Some lenders view seeking a loan to take money off the table as a red flag, according to Jeff Nicholson, a senior analyst at CrediFi, a firm that collects and analyzes data on real estate loans. It may signal the borrower is less committed to the project, and makes it easier to walk away from the mortgage if something goes wrong, he said.

    But, it’s probably nothing…

  • Escobar Exposes Real BRICS Bombshell: Putin's "Fair Multipolar World" Where Oil Trade Bypasses The Dollar

    Authored by Pepe Escobar via The Asia Times,

    Putin reveals 'fair multipolar world' concept in which oil contracts could bypass the US dollar and be traded with oil, yuan and gold…

    The annual BRICS summit in Xiamen – where President Xi Jinping was once mayor – could not intervene in a more incandescent geopolitical context.

    Once again, it’s essential to keep in mind that the current core of BRICS is “RC”; the Russia-China strategic partnership. So in the Korean peninsula chessboard, RC context – with both nations sharing borders with the DPRK – is primordial.

    Beijing has imposed a definitive veto on war – of which the Pentagon is very much aware.

    Pyongyang’s sixth nuclear test, although planned way in advance, happened only three days after two nuclear-capable US B-1B strategic bombers conducted their own “test” alongside four F-35Bs and a few Japanese F-15s.

    Everyone familiar with the Korean peninsula chessboard knew there would be a DPRK response to these barely disguised “decapitation” tests.

    So it’s back to the only sound proposition on the table: the RC “double freeze”. Freeze on US/Japan/South Korea military drills; freeze on North Korea’s nuclear program; diplomacy takes over.

    The White House, instead, has evoked ominous “nuclear capabilities” as a conflict resolution mechanism.

    Gold mining in the Amazon, anyone?

    On the Doklam plateau front, at least New Delhi and Beijing decided, after two tense months, on “expeditious disengagement” of their border troops. This decision was directly linked to the approaching BRICS summit – where both India and China were set to lose face big time.

    Indian Prime Minister Narendra Modi had already tried a similar disruption gambit prior to the BRICS Goa summit last year. Then, he was adamant that Pakistan should be declared a “terrorist state”. The RC duly vetoed it.

    Modi also ostensively boycotted the Belt and Road Initiative (BRI) summit in Hangzhou last May, essentially because of the China-Pakistan Economic Corridor (CPEC).

    India and Japan are dreaming of countering BRI with a semblance of connectivity project; the Asia-Africa Growth Corridor (AAGC). To believe that the AAGC – with a fraction of the reach, breath, scope and funds available to BRI – may steal its thunder, is to enter prime wishful-thinking territory.

    Still, Modi emitted some positive signs in Xiamen; “We are in mission-mode to eradicate poverty; to ensure health, sanitation, skills, food security, gender equality, energy, education.” Without this mammoth effort, India’s lofty geopolitical dreams are D.O.A.

    Brazil, for its part, is immersed in a larger-than-life socio-political tragedy, “led” by a Dracula-esque, corrupt non-entity; Temer The Usurper. Brazil’s President, Michel Temer, hit Xiamen eager to peddle “his” 57 major, ongoing privatizations to Chinese investors – complete with corporate gold mining in an Amazon nature reserve the size of Denmark. Add to it massive social spending austerity and hardcore anti-labor legislation, and one’s got the picture of Brazil currently being run by Wall Street. The name of the game is to profit from the loot, fast.

    The BRICS’ New Development Bank (NDB) – a counterpart to the World Bank – is predictably derided all across the Beltway. Xiamen showed how the NDB is only starting to finance BRICS projects. It’s misguided to compare it with the Asian Infrastructure Investment Bank (AIIB). They will be investing in different types of projects – with the AIIB more focused on BRI. Their aim is complementary.

    ‘BRICS Plus’ or bust

    On the global stage, the BRICS are already a major nuisance to the unipolar order. Xi politely put it in Xiamen as “we five countries [should] play a more active part in global governance”.

    And right on cue Xiamen introduced “dialogues” with Mexico, Egypt, Thailand, Guinea and Tajikistan; that’s part of the road map for  “BRICS Plus” – Beijing’s conceptualization, proposed last March by Foreign Minister Wang Yi, for expanding partnership/cooperation.

    A further instance of “BRICS Plus” can be detected in the possible launch, before the end of 2017, of the Regional Comprehensive Economic Partnership (RCEP) – in the wake of the death of TPP.

    Contrary to a torrent of Western spin, RCEP is not “led” by China.

    Japan is part of it – and so is India and Australia alongside the 10 ASEAN members. The burning question is what kind of games New Delhi may be playing to stall RCEP in parallel to boycotting BRI.

    Patrick Bond in Johannesburg has developed an important critique, arguing that “centrifugal economic forces” are breaking up the BRICS, thanks to over-production, excessive debt and de-globalization. He interprets the process as “the failure of Xi’s desired centripetal capitalism.”

    It doesn’t have to be this way. Never underestimate the power of Chinese centripetal capitalism – especially when BRI hits a higher gear.

    Meet the oil/yuan/gold triad

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

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

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

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

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

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

    And then, Putin delivers the clincher;

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

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

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

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

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

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

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

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

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

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

  • Australia Mortgage Market Is Now A $1.7 Trillion "House Of Cards"

    Over a decade ago, the U.S. residential housing market was revealed to be perhaps the biggest ponzi scheme ever created as easy financing enabled people to buy/build countless investment properties, that they were in no way adequately capitalized to own, with no money down all based on the premise that the house could be ‘flipped’ before the first mortgage payment even came due.  It was a classic ponzi that worked great for a while but inevitably turned south when home prices suddenly soured and their was no cash equity backing the trillions of dollars in outstanding mortgage debt.

    But, if a new report from LF Economics is even directionally accurate, then the bubble currently percolating in Australia could take the residential housing ponzi game to a whole new level courtesy of a ‘creative’ little product called “cross-collateralized residential mortgages.”

    The Australian mortgage market has “ballooned” due to banks issuing new loans against unrealised capital gains of existing investment properties, creating a $1.7 trillion “house of cards”, a new report warns.

     

    The report, “The Big Rort”, by LF Economics founder Lindsay David, argues Australian banks’ use of “combined loan to value ratio” — less common in other countries — makes it easy for investors to accumulate “multiple properties in a relatively short period of time despite high house prices relative to income”.

     

    “The use of unrealised capital gain (equity) of one property to secure financing to purchase another property in Australia is extreme,” the report says.

     

    “This approach allows lenders to report the cross-collateral security of one property which is then used as collateral against the total loan size to purchase another property. This approach substitutes as a cash deposit.

     

    “This has exacerbated risks in the housing market as little to no cash deposits are used.”

    Yes, you read that correctly…Australian housing speculators can literally use unrealized gains in investment properties as a ‘cash substitute’ for down payments on other investment properties.  Of course, we’re not experts at ‘the mathematics,’ but if you constantly take every dollar worth of equity you accrue and pledge it as collateral toward a new purchase then doesn’t that mean the entire system is built on debt and no actual equity at all?

    As LF Economics points out, just like the American mortgage bubble, the current ponzi scheme in Australia is also completely dependent on constantly rising prices.

    The report describes the system as a “classic mortgage Ponzi finance model”, with newly purchased properties often generating net rental income losses, adversely impacting upon cash flows.

     

    “Profitability is therefore predicated upon ever-rising housing prices,” the report says. “When house prices have fallen in a local market, many borrowers were unable to service the principal on their mortgages when the interest only period expires or are unable to roll over the interest-only period.”

    Australia

     

    And, just like the American bubble, much of the madness is being funded by unsuspecting foreign investors.

    LF Economics argues that while international money markets have until now provided “remarkably affordable funding” enabling Australian banks to issue “large and risky loans”, there is a growing risk the wholesale lending community will walk away from the Australian banking system.

     

    “[Many] international wholesale lenders … may find out the hard way that they have invested into nothing more than a $1.7 trillion ‘piss in a fancy bottle scam’,” the report says.

    Meanwhile, there is no shortage of ‘success stories’ from people who make next to no money doing their ‘day jobs’ but have been able to acquire dozens of investment properties with nothing but debt.

    Last month, a young Sydney couple revealed how they had racked up $1.2 million in debt on a portfolio of five properties in just two years.

     

    Roy Palleson and Rowena Ebona, appearing on the ABC’s Four Corners, said they had no concerns about their debt — nearly 10 times their combined income of $135,000 — and were hoping to expand their portfolio to 20 investment properties “initially”.

     

    Prominent Sydney property investor Nathan Birch, who accumulated more than 200 properties worth an estimated $55 million by channelling the equity from capital gains into deposits for new purchases, earlier this year announced he was selling off some of his portfolio.

     

    Mr Birch blamed the move on tougher loan serviceability restrictions by the banks. “Anytime you withdraw equity, you need to show income to service that new loan,” he said. “Sadly, the banks don’t value rental income as highly as they once did.”

     

    Eddie Dilleen, a young investor with 10 properties worth about $2 million, last month said he was not fazed by tightening lending environment or talks of a housing bubble.

     

    Mr Dilleen said the majority of his portfolio was positively geared, largely because he avoided borrowing against existing properties, instead saving up for each new deposit by working several jobs.

    Conclusion: “Short everything that guy has touched.”

  • ECB Preview: A Trapped Mario Draghi Makes A Decision

    After a barrage of media trial balloons (as recently as today) meant to temper the enthusiasm of Euro bulls now that the EURUSD is back to 1.20 and threatening European corporate profitability, Mario Draghi’s Sintra hawkishness is a distant memory.

    And so, with the ECB’s policy decision less than 12 hours from now, a “trapped” Mario Draghi finds himself in a quandary: with less than 4 month left until the formal expiration of the ECB’s €2.3 trillion QE program, he will likely start laying the groundwork for the central bank’s stimulus reduction – after all the ECB is rapidly running out of bonds to purchase – but without revealing too much as that will send the EUR surging, and he will also hold off on any major commitment, as an explicit backing off his recent hawkishness could collapse the EUR and send Bunds right back into NIRPatory.

    Which path will he take?

    With that in mind, courtesy of RanSquawk, here is a full preview of what to expect (or not) from the ECB president tomorrow.

    Rate Decision due at 1245BST/0645CDT and Press Conference at 1330BST/0730CDT

    • All rates and the current pace of asset purchases are expected to be left unchanged
    • Staff will update macroeconomic projections; impact of EUR likely to weigh on inflation outlook
    • Key focus for press conference will be on recent EUR strength and possible QE exit
    • Click here for a link to an overview of ECB rhetoric since the last meeting

    RATE/ASSET PURCHASE EXPECTATIONS

    • DEPOSIT RATE: Forecast to remain unchanged at -0.40%. The rate was last adjusted in March 2016, when it was cut by 10bps.
    • REFI RATE: Forecast to remain unchanged at 0.00%. The rate was last adjusted in March 2016, when it was cut by 5bps.
    • MARGINAL RATE: Forecast to remain unchanged at 0.25%. The rate was last adjusted in March 2016, when it was cut by 5bps.
    • ASSET PURCHASES: Forecast to maintain the pace of asset purchases at EUR 60bln per month until December 2017. Last December, the ECB reduced the size of purchases by EUR 20bln per month, and extended the purchase horizon by nine months.

    PRESS CONFERENCE

    CURRENT ECB FORWARD GUIDANCE

    • RATES: “The Governing Council continues to expect the key ECB interest rates to remain at present levels for an extended period of time, and well past the horizon of the net asset purchases.” (ECB statement, 20/Jul)
    • ASSET PURCHASES: “Net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.” (ECB statement, 20/Jul)
    • GROWTH: “The risks to the growth outlook are broadly balanced.” (ECB statement, 20/Jul)
    • INFLATION: “While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with our inflation aim, it has yet to translate into stronger inflation dynamics. Headline inflation is dampened by the weakness in energy prices. Moreover, measures of underlying inflation remain overall at subdued levels. Therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to gradually build up and support headline inflation developments in the medium term.” (ECB statement, 20/Jul)
      POTENTIAL ADJUSTMENTS TO FORWARD GUIDANCE/ROADMAP TO EXITING LOOSE POLICY
    • RATES: No adjustments expected
    • ASSET PURCHASES: Consensus is for no change expected to exact phrasing above. Commerzbank suggest ECB could add ‘or at a lower pace’ into the above statement.
    • GROWTH: No adjustments expected (although impact of firmer EUR could be reflected in latest economic projections).
    • INFLATION: No adjustments expected (although impact of firmer EUR is expected to be reflected in latest economic projections).

    EUR APPRECIATION

    Given the EUR’s 13% advancement against the USD this year, a key focus of the market’s view on ECB monetary policy has been on the appreciating currency. Despite this ultimately reflecting a resurgence in the Eurozone economy, the ECB will be wary of the potential impact on the Eurozone’s inflation path. As such, markets will be looking to see if Draghi talks down the currency with recent source reports (Aug 31st) highlighting EUR is worrying a growing number of ECB policymakers, adding that EUR concerns increase chance of delay in QE decision, or a more gradual exit from asset purchases. Furthermore, the minutes from the previous meeting also highlighted concerns about overshooting and as such given Draghi’s decision to not comment on the currency at Jackson Hole, markets will be highly sensitive to any potential verbal intervention by the President. **Note that existing rhetoric states ‘the ECB does not target the exchange rate’.* *

    That said, ECB’s Nowotny (Sep 1st) has warned markets not to over-dramatize EUR gains vs. USD and ECB’s Hansson (Aug 23rd) also came out and downplayed the issue last month. Despite Hansson and Nowotny being two of the more hawkish policymakers at the Bank and thus in-fitting with their stances, it highlights a lack of unanimity at the ECB.

    FUTURE PATH OF QE PROGRAMME

    Aside from the firmer EUR, another key source of focus for the market will be on any clues as to when the ECB could begin tapering its QE programme given recent economic developments and concerns over bond scarcity. Ultimately, consensus amongst analysts suggest that this meeting will be too early for the bank to outline its plans for tapering at this stage with October seen as a more likely platform for the ECB to provide concrete policy actions; a view back by last month’s (Aug 16th) ECB source reports that suggested the council will hold off on debating the issue until Autumn. Furthermore, the minutes from the July meeting revealed the aim to ‘gain more policy space and flexibility to adjust policy and the degree of monetary policy accommodation, if and when needed, in either direction’; thus suggesting that the central bank will continue to hold off; as highlighted by Lloyds. Commerzbank also highlight the issue of bond scarcity given the current pace of monthly purchases which could cause a headache for the bank. However, Commerzbank suggest that it is unlikely the ECB would be willing to raise the limits on purchases from individual issuers and as such scarcity will have to be addressed as part of a larger policy move.

    Although no explicit announcements are expected this time round, Nordea expect the ECB to comment on the preparatory work on September 7th, subsequently hinting at a decision on October 26th. However, Pictet suggest that markets may have to wait potentially longer than October with the ECB looking to avoid a disorderly exit from policy by proceeding in a cautious manner. This would be achieved by eventually scaling down purchases (avoid explicit mentioning of tapering), no mentioning of ending asset purchases initially or referring to actions as outright monetary tightening. Although it is likely that few details will be revealed during this meeting regarding how the ECB will manage their exit from current policy, the above is worth noting if Draghi et al elude to potential announcements next month.

    ECB STAFF MACROECONOMIC PROJECTIONS

    INFLATION: Likely to be downgraded given the appreciation of the EUR with June projections made under an assumed rate of 1.09 in 2018-2019. Nordea expect the new assumed rate to climb to 1.18 in 2018-2019 and as such, would imply lower annual inflation in 2017-19 by 0.1-0.3% points. However, Nordea also highlight that improving employment prospects in the Eurozone (which could imply higher wages) and the future oil profile could limit the extent of inflation downgrades.

    REAL GDP: There is potential for 2017 growth to be upgraded given recent firm PMI data and consumer confidence, according to Nordea. However, Pictet suggest that longer-term forecasts are likely to be little changed given the possible headwinds of the firmer EUR with ING’s base case for downward revisions for 2018/19 amid FX effects.

    MARKET REACTION

    In terms of a potential market reaction, given the focus on EUR appreciation, FX markets will be mostly centred around any potential verbal intervention by Draghi on the currency. If Draghi is overtly cautious on recent EUR strength this will likely lead to pressure on EUR, whereas, if Draghi downplays the bank’s focus on targeting the FX rate this could provide further fuel to the EUR rally. Elsewhere, the other main source of traction will be hints on when the ECB will curtail bond purchases. It is likely that Draghi won’t offer too much on this front. However, if details are provided or Draghi is forceful about a potential unveiling of details next month, this could lead to selling pressure in fixed income markets, equities and upside in EUR. Furthermore for fixed income markets, traders will also be looking out for any potential reference to the bank’s view on bond scarcity and any possible measures which could be used to counter this issue. However, such actions are unlikely to be made this time round.

  • Ohio Reporter Shot Without Warning For Photographing Routine Traffic Stop

    In one of the more bizarre stories to hit national news this week, an Ohio sheriff's deputy is under investigation for shooting a local reporter who innocently set up a camera and tripod on a public sidewalk to document a routine traffic stop. What's more is the shooting took place in a small town where "everyone knows everybody" and the police officer and victim were actually friends.

    Ohio based New Carlisle News reports that its own photographer was shot in the incident which occurred Monday night:

    Andy Grimm was shot by a Clark County deputy Monday evening. Andy had left the office around 10:00 p.m. to take pictures of lightning. There was a traffic stop on Main Street near Studebaker’s Restaurant, but Andy was not the subject of the stop. He had his camera and tripod in his hands and Deputy Jake Shaw apparently mistook it for a weapon and fired, striking Andy in the side. He was rushed to Miami Valley Hospital for surgery. He is expected to recover from his wounds.


    Image source: New Carlisle News

    Body camera video released by the Clark County Sheriff's Office shows Deputy Jake Shaw shoot Grimm. The shooting sequence begins at 3:20 in as the officer is checking info inside the police car on speeder he pulls over.

    In an unexpected twist, the wounded cameraman is now pleading for the officer to keep his job. Grimm told local reporters, "I know Jake. I like Jake. I don't want him to lose his job over this," in reference to the sheriff's deputy that shot him.

    The victim's father, Dale Grimm, told The Washington Post that his son "got out, parked under a light in plain view of the deputy, with a press pass around his neck. He was setting up his camera, and he heard pops." Sheriff's deputy Jake Shaw reportedly gave no warning before firing.

    The case has been turned over to the the Ohio state attorney general’s Bureau of Criminal Division. While it's entirely possible that there's much more here than what's being reported – for example, there could have been some kind of personal dispute between the friends – the strange incident is part of a growing list of "shoot first, ask questions later" incidents which display an increasingly militarized and trigger-happy mentality by local and state police.

    As we reported last week in The Alarming Militarization of American Police, it is deeply disturbing that the federal government currently seeks to pass on military hardware to local and state authorities which continue to display lack of judgement as well as over the top tactics while dealing with routine local civilian matters. Local police forces should never operate like the Pentagon, but it appears we're headed down precisely that path:

    President Donald Trump has signed an executive order clearing the way for local police in America to receive military gear such as grenade launchers, high-calibre weapons, and armored vehicles. Trump and the DOJ have just reversed former President Barack Obama’s restrictions that allows local police departments to receive surplus military equipment.

     

    …Let’s not kid ourselves, America by the day is turning into a police state where power through police force is the objective. The citizens of the police state may experience restrictions on social or financial mobility, or even on their freedom to express or communicate alternative political views.

    No, the sheriff's deputy who possibly mistook a simple camera and tripod on a small-town street for a mounted assault rifle should not keep his job – he is an absolute danger to society. But could we imagine if such police made regular use of mounted 50-caliber machine guns and grenade launchers?

  • Physical Gold In Vault Is "True Hedge of Last Resort" – Goldman Sachs

    – Physical gold is “the true currency of the last resort” – Goldman Sachs
    – “Gold is a good hedge against geopolitical risks when the event leads to a debasement of the dollar” 
    – Trump and Washington risk bigger driver of gold than risks such as North Korea
    – Recent events such as N. Korea only explain fraction of 2017 gold price rally
    – Do not buy gold futures or ETFs rather “physical gold in a vault” [is] the “true hedge”

    Editor: Mark O’Byrne

    What’s increasing the demand for gold? Is it Kim Jon-Un’s calls for nuclear war? Trump’s tough tweets on government and trade and unleashing “fire and fury” on North Korea? The threat of World War III? Possibly not, according to Jeff Currie of Goldman Sachs. This is more to do with the market mechanics underlying such events.

    Currie released a note arguing that gold’s strong performance of late is less to do with the current perceived risk in the geopolitical sphere and instead from the currency debasement that arises from central banks printing money.

    In light of this, investors should be buying up gold. Goldman’s Currie refers to gold as the ‘geopolitical hedge of the last resort’. This is the case ‘if the geopolitical event is extreme enough that it leads to some sort of currency debasement’ and especially so ‘ if the gold price move is much sharper than the move in real rates or the dollar.’

    Read on to see in exactly what form Currie believes you should be investing in gold.

    It has become too easy to pin gains on geopolitics

    As we have repeatedly pointed out, the gold price jumps following events such as North Korea testing missiles or Hurricane Harvey or a declaration from Trump. However these jumps are not frequently sustainable.

    What is going on in the U.S. and global markets and economy which really provides long-term support for the every-strengthening gold price.

    Currie writes:

    “It is tempting to blame the rally in gold prices on recent events in North Korea. While these events have helped to create a bid in gold, they only explain [roughly] $15 of the more than $100 [per ounce] rally since mid-July.”

    It is too easy to pin gold’s rise on geopolitical events. Instead, argues Currie, these events are only really impacting gold if they lead to ‘actual currency debasement.’

    Instead, the recent rally has been down to the decline in the U.S. dollar and lower real interest rates.

    Gold is the currency of the last resort

    All about that (de)base 

    This dynamic is captured by a negative correlation between gold prices and real interest rates. As the central bank prints more currency, the price of the currency as measured by the real interest rate declines. The lower real interest rate, in turn, reduces the opportunity cost of holding a real asset like gold, leading the market to bid up gold prices. So at the core, gold is a hedge against debasement, which is why we have termed it the “currency of last resort.” 

    Bigger things to worry about than Korea

    Interestingly gold’s move this year has had far more to do with President Trump than it has to do with North Korea.

    Currie argues that Kim Jong-Un might only be responsible for 15% of the yellow metals’ move. 85% of the price rise can be accounted for by the fact that  the Trump risk premium is reflected in both real interest rates and a weaker US dollar.

    This does not mean that gold will no longer be classed as a hedge against geopolitical risk (as well as currency debasement). But, in the current climate gold is reacting more to Trump risk and the ongoing devaluation of monetary assets.

    We find that gold can effectively hedge against geopolitical risk if the geopolitical event is extreme enough that it leads to some sort of currency debasement, and especially if the gold price move is much sharper than the move in real rates or the dollar. For these events, gold essentially serves as a call option and can therefore be thought of as a “geopolitical hedge of last resort.” For example, gold served as an effective hedge after the events of September 11, 2001 when the US Federal Reserve substantially increased dollar liquidity, debasing the US dollar. Gold also proved an effective hedge during the Gulf Wars as governments printed money.

    Learn from Lehman

    In conclusion, gold is still very much as we have argued – a hedge against geopolitical risk and currency debasement.

    Investors must consider gold-market liquidity when using gold to protect themselves. Goldman Sachs argue that liquidity in the gold market is

    crucial when deciding to hedge via physical gold in a vault versus COMEX gold futures.

    Investors should not assume that during a geopolitical event liquidity will not be a problem:

    Using a gold futures contract as the basis of the hedge makes the implicit assumption that market liquidity will not be a problem in the realization of a geopolitical event.

    Goldman Sachs strongly advise that investors buy physical gold as opposed to ETFs or Comex Futures. Their logic for this? The liquidity event that was the collapse of Lehman Brothers.

    The importance of liquidity was tested during the collapse of Lehman Brothers in September 2008. Gold prices declined sharply as both traded volumes and open interest on the exchange plunged. After this liquidity event, investors became more conscious of the physical vs. futures market distinction and began to demand more physical gold or physically-backed ETFs as a hedge against black-swan events.

    Therefore owning physical gold bullion coins and bars in the safest vaults in the world will again be the primary way to protect yourself and your wealth in the event of a geopolitical crisis and liquidity crunch.

    “The lesson learned was that if gold liquidity dries up along with the broader market’s, so does your hedge—unless it is physical gold in a vault, the true “hedge of last resort.”

    Gold and Silver Bullion – News and Commentary

    Gold up for fifth straight day as geopolitical concerns persist (Reuters)

    Asian Stocks Fall as North Korea Worries Persist (Bloomberg)

    Gold Outshines Bitcoin After N. Korea Bomb Test & China ICO Ban (Barrons)

    U.S. stocks pummeled by policy uncertainty, North Korea tensions (Marketwatch )

    Fed governor urges central bank to pretend there’s no inflation (Reuters)

    Source: BofA Via Zerohedge.com

    Gold is a currency debasement hedge of last resort – Goldman (Yahoo Finance)

    Goldman Issues Two Different Price Targets On Gold In The Same Day (Zerohedge)

    Commentary: I’m not buying gold until this happens (CNBC)

    Paris Hilton, the China crypto crackdown… and the worst way to buy bitcoin (Stansberry C.H.)

    BofA: Even The Bubbles Are Becoming More “Bubbly” Thanks To Central Banks (Zerohedge )

    Gold Prices (LBMA AM)

    06 Sep: USD 1,340.15, GBP 1,028.03 & EUR 1,122.11 per ounce
    05 Sep: USD 1,331.15, GBP 1,029.51 & EUR 1,120.43 per ounce
    04 Sep: USD 1,334.60, GBP 1,030.98 & EUR 1,120.53 per ounce
    01 Sep: USD 1,318.40, GBP 1,020.18 & EUR 1,107.98 per ounce
    31 Aug: USD 1,305.80, GBP 1,013.17 & EUR 1,098.31 per ounce
    30 Aug: USD 1,310.60, GBP 1,014.93 & EUR 1,096.71 per ounce
    29 Aug: USD 1,323.40, GBP 1,020.34 & EUR 1,097.36 per ounce

    Silver Prices (LBMA)

    06 Sep: USD 17.77, GBP 13.62 & EUR 14.90 per ounce
    05 Sep: USD 17.88, GBP 13.80 & EUR 15.03 per ounce
    04 Sep: USD 17.80, GBP 13.75 & EUR 14.95 per ounce
    01 Sep: USD 17.50, GBP 13.53 & EUR 14.69 per ounce
    31 Aug: USD 17.34, GBP 13.47 & EUR 14.62 per ounce
    30 Aug: USD 17.44, GBP 13.49 & EUR 14.60 per ounce
    29 Aug: USD 17.60, GBP 13.59 & EUR 14.62 per ounce


    Recent Market Updates

    – Bitcoin Falls 20% as Mobius and Chinese Regulators Warn
    – Gold Surges To $1338 as U.S. Warns of ‘Massive’ Military Response
    – 4 Reasons Why “Gold Has Entered A New Bull Market” – Schroders
    – Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards
    – Gold Surges 2.6% After Jackson Hole and N. Korean Missile
    – Diversify Into Gold On U.S. “Political Instability” Advise Blackrock
    – Trump Presidency Is Over – Bannon Is Right
    – The Truth About Bundesbank Repatriation of Gold From U.S.
    – Cyberwar Risk – Was U.S. Navy Victim Of Hacking?
    – Global Financial Crisis 10 Years On: Gold Rises 100% from $650 to $1,300
    – Mnuchin: I Assume Fort Knox Gold Is Still There
    – Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
    – Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High

    Important Guides

    For your perusal, below are our most popular guides in 2017:

    Essential Guide To Storing Gold In Switzerland

    Essential Guide To Storing Gold In Singapore

    Essential Guide to Tax Free Gold Sovereigns (UK)

    Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

  • 6 Reasons Why Hurricane Irma Could Be "The Natural Disaster Of Our Time"

    Authored by Sarah Burris via RawStory.com,

    Hurricane Harvey was a tragic nightmare that hit the Texas shores with force and then lingered for days, dumping truck-loads of rain on a city ill-equipped to handle it. Florida is next, and if predictions are accurate, Hurricane Irma is going to be far worse than Houston was, and worse than anyone has prepared for.

    Already, Irma is setting records and being named the strongest storm the Atlantic Ocean has seen on record. Here is a short list of things meteorologists and experts at the Hurricane Center have already seen from Irma that should give everyone pause.

    1. The wind speeds broke the measuring tool.

    The wind was so strong when Irma passed over Barbuda that the monitoring equipment used to measure the wind was damaged and couldn’t report an accurate account of the wind speed. It tapped out at 151 mph.

    2. The prospect of 185mph wind should strike fear into our hearts.

    The gusts for the Category 5 storm have reached 185 mph. That’s the equivalent of an EF4 tornado sitting on an area, nonstop for hours. To put that into perspective, the photo below is of the damage sustained by residents of Garland/Rowlett, Texas after an EF4 tornado blew through in 2015.

    Damage in a residential area as a result of the EF4 Garland/Rowlett, Texas tornado. (Photo: Wikipedia)

    To make matters worse, NOAA’s tools dropped into the hurricane to measure the storm and recorded 226mph gusts from its northeast eyewall.

    //platform.twitter.com/widgets.js

     

    3. No one has heard from the tiny island it hit in hours.

    Barbuda is a tiny island with barely over 1,000 residents. The top elevation on the island is 125 feet above sea level. Storm surges, however, predict waves will reach seven to 11 feet in the Northern Leeward Islands. That was worse for Turks and Caicos, which is expected to see 15- to 20-foot storm surges. As long as the surges are under 10 feet, Barbuda will be fine, but storm surges like those expected for Turks and Caicos would destroy the island.

    Already, what scientists have seen from Barbuda is leaving them speechless. Tide sensors in Barbuda recently reported 7.89 feet above what the average height of the top tide is each day.

    “I am at a complete and utter loss for words looking at Irma’s appearance on satellite imagery,” tweeted Taylor Trogdon, of the National Hurricane Center‏.

    //platform.twitter.com/widgets.js

     

    4. Irma ripped grass from its roots.

    CNN meteorologist Chad Myers reported that there were parts of Bermuda that saw vegetation ripped from the soil, the winds were so strong. The claim hasn’t been reported by other outlets and there are no photos or video yet that show the full extent of the damage.

    5. Miami isn’t prepared — no one is.

    Florida is as good as it gets at handling hurricanes, similar to states that are accustomed to navigating tornadoes or weathering earthquakes. Florida citizens know how to prepare for a storm. However, the strength of Irma seems to dwarf more recent hurricanes.

    Already, the city of Miami is being forced to raise its roads to accommodate rising waters creeping into the city. A report from The Atlantic notes that the last major hurricane to hit Miami was in 1926 and 400 people were killed. Back then, the city boasted 100,000 residents, but today the population is more like 6 million.

    Disaster planners have long been concerned about a natural event of this magnitude hitting a major U.S. city. If Irma turns toward Florida, this could be the horrific event they’ve feared. 

    “It won’t survive,” said former top emergency manager Craig Fugate in 2014.

    6. President Donald Trump only barely understands the crisis.

    During a meeting with Democratic and Republican leaders, Trump acted as if he had special insider information on the severity of Hurricane Irma. All he could manage to tell them was it is “not good.”

    //platform.twitter.com/widgets.js

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Today’s News 6th September 2017

  • Undercover In North Korea: "All Paths Lead To Catastrophe"

    Authored by Jon Schwartz via The Intercept,

    The most alarming aspect of North Korea’s latest nuclear test, and the larger standoff with the U.S., is how little is known about how North Korea truly functions. For 70 years it’s been sealed off from the rest of the world to a degree hard to comprehend, especially at a time when people in Buenos Aires need just one click to share cat videos shot in Kuala Lumpur. Few outsiders have had intimate contact with North Korean society, and even fewer are in a position to talk about it.

    One of the extremely rare exceptions is novelist and journalist Suki Kim. Kim, who was born in South Korea and moved to the U.S. at age 13, spent much of 2011 teaching English to children of North Korea’s elite at the Pyongyang University of Science and Technology.

    Kim had visited North Korea several times before and had written about her experiences for Harper’s Magazine and the New York Review of Books. Incredibly, however, neither Kim’s North Korean minders nor the Christian missionaries who founded and run PUST realized that she was there undercover to engage in some of history’s riskiest investigative journalism.

    Although all of PUST’s staff was kept under constant surveillance, Kim kept notes and documents on hidden USB sticks and her camera’s SIM card. If her notes had been discovered, she almost certainly would have been accused of espionage and faced imprisonment in the country’s terrifying labor camps. In fact, of the three Americans currently detained in North Korea, two were teachers at PUST. Moreover, the Pentagon has in fact used a Christian NGO as a front for genuine spying on North Korea.

    But Kim was never caught, and she returned to the U.S. to write her extraordinary 2014 book, “Without You, There Is No Us.” The title comes from the lyrics of an old North Korean song; the “you” is Kim Jong-il, Kim Jong-un’s father.

    Kim’s book is particularly important for anyone who wants to understand what happens next with North Korea. Her experience made her extremely pessimistic about every aspect of the country, including the regime’s willingness to renounce its nuclear weapons program. North Korea functions, she believes, as a true cult, with all of the country’s pre-cult existence now passed out of human memory.

    Most ominously, her students, all young men in their late teens or early 20s, were firmly embedded in the cult. With the Kim family autocracy now on its third generation, you’d expect the people who actually run North Korea to have abandoned whatever ideology they started with and degenerated into standard human corruption. But PUST’s enrollees, their children, did not go skiing in Gstaad on school breaks; they didn’t even appear to be able to travel anywhere within North Korea. Instead they studied the North Korea ideology of “juche,” or worked on collective farms.

    Unsurprisingly, then, Kim’s students were shockingly ignorant of the outside world. They didn’t recognize pictures of the Taj Mahal or Egyptian pyramids. One had heard that everyone on earth spoke Korean because it was recognized as the world’s most superior language. Another believed that the Korean dish naengmyeon was seen as the best food on earth. And all of Kim’s pupils were soaked in a culture of lying, telling her preposterous falsehoods so often that she writes, “I could not help but think that they – my beloved students – were insane.” Nonetheless, they were still recognizably human and charmingly innocent and for their part, came to adore their teachers.

    Overall, “Without You, There Is No Us” is simply excruciatingly sad. All of Korea has been the plaything of Japan, the U.S., the Soviet Union, and China, and like most Korean families, Kim has close relatives who ended up in North Korea when the country was separated and have never been seen again.

    Korea is now, Kim says, irrevocably ruptured:

    It occurred to me that it was all futile, the fantasy of Korean unity, the five thousand years of Korean identity, because the unified nation was broken, irreparably, in 1945 when a group of politicians drew a random line across the map, separating families who would die without ever meeting again, with all their sorrow and anger and regret unrequited, their bodies turning to earth, becoming part of this land … behind the children of the elite who were now my children for a brief time, these lovely, lying children, I saw very clearly that there was no redemption here.

    The Intercept spoke recently to Kim about her time in North Korea and the insight it gives her on the current crisis.

    Suki Kim’s North Korean visa.

    Photo: Suki Kim

    JON SCHWARZ: I found your book just overwhelmingly sorrowful. As an American, I can’t imagine being somewhere that’s been brutalized by not just one powerful country, but two or three or four. Then the government of North Korea and, to a lesser degree, the government of South Korea used that suffering to consolidate their own power. And then maybe saddest of all was to see these young men, your students, who were clearly still people, but inside a terrible system and on a path to doing terrible things to everybody else in North Korea.

    SUKI KIM: Right, because there’s no other way of being in that country. We don’t have any other country like that. People so easily compare North Korea to Cuba or East Germany or even China. But none of them have been like North Korea – this amount of isolation, this amount of control. It encompasses every aspect of dictatorship-slash-cult.

    What I was thinking about when I was living there is it’s almost too late to undo this. The young men I was living with had never known any other way.

    The whole thing begins with the division of Korea in 1945. People think it began with the Korean War, but the Korean War only happened because of the 1945 division [of Korea by the U.S. and Soviet Union at the end of World War II]. What we’re seeing is Korea stuck in between.

    JS: Essentially no Americans know what happened between 1945 and the start of the Korean War. And few Americans know what happened during the war. [Syngman Rhee, the U.S.-installed ultra right-wing South Korean dictator, massacred tens of thousands of South Koreans before North Korea invaded in 1950. Rhee’s government executed another 100,000 South Koreans in the war’s early months. Then the barbaric U.S. air war against North Korea killed perhaps one-fifth of its population.]

    SK: This “mystery of North Korea” that people talk about all the time – people should be asking why Korea is divided and why there are American soldiers in South Korea. These questions are not being asked at all. Once you look at how this whole thing began, it makes some sense why North Korea uses this hatred of the United States as a tool to justify and uphold the Great Leader myth. Great Leader has always been the savior and the rescuer who was protecting them from the imperialist American attack. That story is why North Korea has built their whole foundation not only on the juche philosophy but hatred of the United States.

    North Korean girls outside Kumsusan Palace where Kim il-sung is embalmed.

    Photo: Suki Kim

    JS: Based on your experience, how do you perceive the nuclear issue with North Korea?

    SK: Nothing will change because it’s an unworkable problem. It’s very dishonest to think this can be solved. North Korea will never give up its nuclear weapons. Never.

    The only way North Korea can be dealt with is if this regime is not the way it is. No agreements are ever honored because North Korea just doesn’t do that. It’s a land of lies. So why keep making agreements with someone who’s never going to honor those agreements?

    And ultimately what all the countries surrounding North Korea want is a regime change. What they’re doing is pretending to have an agreement saying they do not want a regime change, but pursuing regime change anyway.

    Despite it all you have to constantly do engagement efforts, throwing information in there. That’s the only option. There’s no other way North Korea will change. Nothing will ever change without the outside pouring some resources in there.

    JS: What is the motivation of the people who actually call the shots in North Korea to hold onto the nuclear weapons?

    SK: They don’t have anything else. There’s literally nothing else they can rely on. The fact they’re a nuclear power is the only reason anyone would be negotiating with them at this point. It’s their survival.

    Regime change is what they fear. That’s what the whole country is built on.

    JS: Even with a different kind of regime, it’s hard to argue that it would be rational for them to give up their nuclear weapons, after seeing what happened to Saddam Hussein and Moammar Gadhafi.

    SK: This is a very simple equation. There is no reason for them to give up nuclear weapons. Nothing will make them give them up.

    JS: I’ve always believed that North Korea would never engage in a nuclear first strike just out of self-preservation. But your description of your students did honestly give me pause. It made me think the risk of miscalculation on their part is higher than I realized.

    SK: It was paradoxical. They could be very smart, yet could be completely deluded about everything. I don’t see why that would be different in the people who run the country. The ones that foreigners get to meet, like diplomats, are sophisticated and can talk to you on your level. But at the same time they also have this other side where they have really been raised to think differently, their reality is skewed. North Korea is the center of the universe, the rest of the world kind of doesn’t exist. They’ve been living this way for 70 years, in a complete cult.

    My students did not know what the internet was, in 2011. Computer majors, from the best schools in Pyongyang. The system really is that brutal, for everyone.

    JS: Even their powerful parents seemed to have very little ability to make any decisions involving their children. They couldn’t have their children come home, they couldn’t come out and visit.

    SK: You would expect that exceptions were always being made [for children of elites], but that just wasn’t true. They couldn’t call home. There was no way of communicating with their parents at all. There are literally no exceptions made. There is no power or agency.

    I also found it shocking that they had not been anywhere within their own country. You would think that of all these elite kids, at least some would have seen the famous mountains [of North Korea]. None of them had.

    That absoluteness is why North Korea is the way it is.

    JS: What would you recommend if you could create the North Korea policy for the U.S. and other countries?

    SK: It’s a problem that no one has been able to solve.

    It’s not a system that they can moderate. The Great Leader can’t be moderated. You can’t be a little bit less god. The Great Leader system has to break.

    But it’s impossible to imagine. I find it to be a completely bleak problem. People have been deprived of any tools that they need, education, information, intellectual volition to think for themselves.

    [Military] intervention is not going to work because it’s a nuclear power. I guess it has to happen in pouring information into North Korea in whatever capacity.

    But then the population are abused victims of a cult ideology. Even if the Great Leader is gone, another form of dictatorship will take its place.

    Every path is a catastrophe. This is why even defectors, when they flee, usually turn into devout fundamentalist Christians. I’d love to offer up solutions, but everything leads to a dead end.

    One thing that gave me a small bit of hope is the fact that Kim Jong-un is more reckless than the previous leader [his father Kim Jong-il]. To get your uncle and brother killed within a few years of rising to power, that doesn’t really bode well for a guy who’s only there because of his family name. His own bloodline is the only thing keeping him in that position. You shouldn’t be killing your own family members, that’s self-sabotage.

    JS: Looking at history, it seems to me that normally what you’d expect is that eventually the royal family will get too nuts, the grandson will be too crazy, and the military and whatever economic powers there are going to decide, well, we don’t need this guy anymore. So we’re going to get rid of this guy and then the military will run things. But that’s seems impossible in North Korea: You must have this family in charge, the military couldn’t say, oh by the way, the country’s now being run by some general.

    SK: They already built the brand, Great Leader is the most powerful brand. That’s why the assassination of [Kim Jong-un’s older half-brother and the original heir to the Kim dynasty] Kim Jong-nam was really a stupid thing to do. Basically that assassination proved that this royal bloodline can be murdered. And that leaves room open for that possibility. Because there are other bloodline figures for them to put in his place. He’s not the only one. So to kill [Jong-nam] set the precedent that this can happen.

    A North Korean woman holds a sign that reads “The Sun of the 21st Century” in honor of Kim Jong-il’s 60th birthday at Pyongyang’s Sunan International Airport.

    Photo: Suki Kim

    JS: One small thing I found particularly appalling was the buddy system with your students, where everyone had a buddy and spent all their time with their buddy and seemed like the closest of friends – and then your buddy was switched and you never spent time with your old buddy again.

    SK: The buddy system is just to keep up the system of surveillance. It doesn’t matter that these are 19-year-old boys making friends. That’s how much humanity is not acknowledged or valued. There’s a North Korean song which compares each citizen to a bullet in this great weapon for the Great Leader. And that’s the way they live.

    JS: I was also struck by your description of the degeneration of language in North Korea. [Kim writes that “Each time I visited the DPRK, I was shocked anew by their bastardization of the Korean language. Curses had taken root not only in their conversation and speeches but in their written language. They were everywhere – in poems, newspapers, in official Workers’ Party speeches, even in the lyrics of songs. … It was like finding the words fuck and shit in a presidential speech or on the front page of the New York Times.”]

    SK: Yes, I think the language does reflect the society. Of course, the whole system is built around the risk of an impending war. So that violence has changed the Korean language. Plus these guys are thugs, Kim Jong-un and all the rest of them, that’s their taste and it’s become the taste of the country.

    JS: Authoritarians universally seem to have terrible taste.

    SK: It’s interesting to be analyzing North Korea in this period of time in America because there are a lot of similarities. Look at Trump’s nonstop tweeting about “fake news” and how great he is. That’s very familiar, that’s what North Korea does. It’s just endless propaganda. All these buildings with all these slogans shouting at you all the time, constantly talking about how the enemies are lying all the time.

    Those catchy one-liners, how many words are there in a tweet? It’s very similar to those [North Korean] slogans.

    This country right now, where you’re no longer able to tell what’s true or what’s a lie, starting from the top, that’s North Korea’s biggest problem. America should really look at that, there’s a lesson.

    JS: Well, I felt bad after I read your book and I feel even worse now.

    SK: To be honest, I wonder if tragedies have a time limit – not to fix them, but to make them less horrifying. And I feel like it’s just too late. If you wipe out humanity to this level, and have three generations of it … when you see the humanity of North Koreans is when the horror becomes that much greater. You see how humanity can be so distorted and manipulated and violated. You face the devastation of what’s truly at stake.

  • Bitcoin: Now Accepted As Down Payment For UK Houses

    A UK co-living company has announced that it will begin accepting down payments made in bitcoin, according to CoinTelegraph, making it that much easier for traders hooked on effortless, outstanding returns to speculate in another bubble-prone market: UK housing.

    Co-living pioneer The Collective announced the decision on Tuesday, saying it’s the first developer that will accept payments in cryptocurrency. The company added that it’s exploring how to accept rental payments in bitcoin, which it hopes to implement later in the year. It said that its decision to accept bitcoin was related to demand from international clients.

    The company has pledged to perform a “spot conversion” of users’ deposits – a fancy way of saying it intends to hedge its position – so that it bears any financial risk while holding the deposit.

    “The Collective's online booking form for its Old Oak living scheme, an ambitious co-living development with 550 rooms, will be accepting Bitcoin as a deposit on the flats.

     

    The standard deposit is £500, which equates to about 0.148 at time of publishing. Additionally, with the volatile nature of Bitcoin seemingly holding back its ability to be utilized as a currency, The Collective has pledged “spot conversion,” which means it will bear any financial risk while holding the deposit, returning it at the original value when the tenancy finishes.”

    The Collective’s chief executive and founder Reza Merchant said the decision was a bold move for the UK property market.

    “The rise and adoption of cryptocurrency globally, particularly Bitcoin, is a fascinating development in how people store value and transact for goods and services worldwide.

     

    With many savers and investors now choosing and becoming more comfortable with cryptocurrency, people will expect to be able to use it to pay for life’s essentials, including housing deposits and rent.”

    It’s a major step indeed. Housing prices in London have risen 65% since 2011, compared with bitcoin’s more-than 300% climb since the beginning of the year. But we imagine some less risk-averse bitcoin investors might be attracted to the deal, reasoning that it’s a smart way to lock in their investment returns.

    But London property values might not be as invincible as the world thinks.

    UK’s Land Registry data for three London boroughs shows transaction volumes in London are at all-time lows. Back in December asking prices in London dropped 4.3%, with inner London down 6%. More exclusive areas dropped by as much as 10%.

    Between 2006 and 2016, average home prices in the capital grew from £257,000 to £474,000 or by a very substantial 84.4%. These large gains were 'built' on the back of the very large appreciation in prices between 1996 and 2006.

    Despite this, the Collective’s head of technology, Jon Taylor, told CoinTelegraph that their company is proudly breaking down barriers to bitcoin’s legitimacy.

    “One of the biggest barriers to the popularity of Bitcoin is making it more consumer-friendly, and we believe this will become established as an easy and convenient way to pay deposits.”

    According to CoinTelegraph, private property owners in the US have occasionally priced their property in bitcoin in the hopes of attracting buyers, as well as accumulating the valuable digital currency. A well-regarded Miami trader recently placed his house for sale in Bitcoin after first trying to entice the seller to pay him in bitcoin back in 2014.

    With the economic threat of Brexit looming in the not-too-distant future, some say the UK housing market is headed for a leveling off if not an outright drop. But who knows, maybe we will see one last leg higher as the crypto traders look to cash in their winnings before the next Mt Gox kills the market.
     

  • Australia's Dystopian Future: A Nation Of High-Rise Renters

    Authored by James Fernyhough via TheNewDaily.com,

    Young Australians are increasingly likely to live most of their lives in high-density rented accommodation – and that’s not necessarily such a bad thing.

    That was one of the more controversial findings of a major study into the housing market released in recent days.

    The Committee for Economic Development of Australia (CEDA) concluded that capital city home ownership would continue to be unaffordable for at least the next four decades.

    It was grim news for many young Australians, particularly those who have bought into the Aussie dream of owning their own house and backyard in a spacious suburb.

    But the study argued that a lower level of home ownership, and/or a greater level of high-density living, need not be a bad thing.

    In fact, examples from overseas – and even some in Australia – suggest it could be a positive. But this would require a massive shift in policy and, more importantly, attitude.

    What clearly emerged from the report is that there is no one culprit behind the property price explosion; rather, the picture is of a tangled mess of convergent causes, most of which will not go away.

    CEDA blamed all the usual suspects, including foreign investment, negative gearing, capital gains tax rules, interest rates, increasing urban population, limited land supply, restrictive planning rules, and the tendency of stamp duty to discourage retirees from downsizing.

    Professor Rodney Maddock, CEDA’s research and policy committee chairman, said the research showed that “barring any major economic jolts, demand pressures are likely to continue over the next 40 years and supply constraints will continue”.

    In other words, if you’re holding out for the “bubble” to burst before you make your move, you may be waiting a long time.

    Many of the partial solutions were equally as predictable: replace stamp duty with a land tax; raise capital gains tax on investment properties; loosen planning restrictions; and improve infrastructure to more remote suburbs.

    While all of these would help the situation, none would comprehensively reverse the astonishing increase in property prices over recent decades.

    The result of all this is that more and more people will be forced to rent – which, indeed, has already been happening.

    In 1982, the report showed, just over 40 per cent of 25- to 34-year-olds were renters. Now it’s closer to 65 per cent. The proportion of renters has increased in every age group over that time period, excluding the over-65s.

    Predicting this trend will continue, CEDA recommended improving tenancy laws to “provide adequate protection and certainty to long-term renters”.

    It pointed to countries such as Germany, the Netherlands and Sweden, where “long-term contracts exist within the private rental market, and termination is only possible in limited circumstances”.

    The case of Germany is an interesting one. Only ­52 per cent of Germans own their own home, compared with 67 per cent of Australians. Given Germany is a developed country with a high standard of living, this shows home ownership is not a prerequisite for wellbeing.

    At the end of the report, CEDA presents a utopian, and occasionally dystopian, vision of high-density living. It takes the example of an existing high-density development in Sydney’s northern beaches, called ‘The Village’.

    A particularly irksome passage talks about a “hierarchy of spaces to create an intuitive sense of public and private space, without excluding non-residents from the residential parts of the site”.

    While this vision may be off-putting, the fact is this sort of development is the most logical answer to the problems raised by the report. It makes economical and sustainable use of space, and in so doing solves many of the problems we are currently facing.

    However, embracing such an ‘un-Australian’ style of accommodation would clearly require a fundamental shift in attitude.

    But if we don’t make this shift, many younger Australians may find their quality of life greatly diminished, as more and more of their pay goes towards servicing massive mortgages, paying inflated rents, and simply getting to and from work.

  • Hawaii Considers A "Universal Basic Income" As Robots Seen Stealing Jobs, There's Just One Catch…

    Forget social security, medicaid and WIC, today’s progressives have moved well beyond discussing such entitlement relics of the past and nowadays dedicate their efforts to the concept of a “Universal Basic Income” for all…call it the New ‘New Deal’.  You know, because having to work for that “car in every garage and chicken in every pot” is just considered cruel and unusual punishment by today’s standards.

    Of course, it should come as little surprise that the progressive state of Hawaii, which depends on easily automatable jobs tied to the tourism industry, is among the first to pursue a Universal Basic Income for its residents.  And while the idea of passing out free money to everyone seems like a genius plan, if we understand it correctly, as CBS points out, there is just one catch…figuring out who will pay for it.

    Driverless trucks. Factory robots. Delivery drones. Virtual personal assistants.

     

    As technological innovations increasingly edge into the workplace, many people fear that robots and machines are destined to take jobs that human beings have held for decades–a trend that is already happening in stores and factories around the country. For many affected workers, retraining might be out of reach —unavailable, unaffordable or inadequate.

     

    Over the past two decades, automation has reduced the need for workers, especially in such blue-collar sectors as manufacturing, warehousing and mining. Many of the jobs that remain demand higher education or advanced technological skills. It helps explain why just 55 percent of Americans with no more than a high school diploma are employed, down from 60 percent just before the Great Recession.

     

    Hawaii state lawmakers have voted to explore the idea of a universal basic income in light of research suggesting that a majority of waiter, cook and building cleaning jobs — vital to Hawaii’s tourism-dependent economy — will eventually be replaced by machines. The crucial question of who would pay for the program has yet to be determined. But support for the idea has taken root.

     

    “Our economy is changing far more rapidly than anybody’s expected,” said state Rep. Chris Lee, who introduced legislation to consider a guaranteed universal income.

     

    Lee said he felt it’s important “to be sure that everybody will benefit from the technological revolution that we’re seeing to make sure no one’s left behind.”

    But taking billions from hard working Americans to “spread the wealth around” has never been all that difficult before so presumably this too should prove to be a relatively minor issue.

    UBI

     

    In all seriousness, where does Representative Lee and CBS figure Hawaii will get the funding for their guaranteed income plan?  Well, as it turns out, Facebook co-founder Chris Hughes made a very generous $10mm donation to support programs just like thisthe only problem, of course, is that Hawaii would need about 1,000 times that amount to fund Chris Lee’s plan for just one year.

    For now, philanthropic organizations founded by technology entrepreneurs have begun putting money into pilot programs to provide basic income. The Economic Security Project, co-led by Facebook co-founder Chris Hughes and others, committed $10 million over two years to basic income projects.

     

    Tom Yamachika, president of the Tax Foundation of Hawaii, a nonprofit dedicated to limited taxes and fairness, has estimated that if all Hawaii residents were given $10,000 annually, it would cost about $10 billion a year, which he says Hawaii can’t afford given its $20 billion in unfunded pension liabilities.

    That said, it’s difficult to argue with Karl Widerquist’s argument that Hawaiians deserve a “beach dividend” for their heroic efforts in being born and continuing the difficult task of breathing day in and day out.

    Karl Widerquist, co-founder of the U.S. Basic Income Guarantee Network, an informal group that promotes the idea of a basic income, suggests that Hawaii could collect a property tax from hotels, businesses and residents that could be redistributed to residents.

     

    “If people in Alaska deserve an oil dividend, why don’t the people of Hawaii deserve a beach dividend?” he asked.

    And while we have little doubt that Widerquist has fully thought through his suggestion that Hawaii just raise an incremental $10 billion every year via a tax on hotel stays…we thought we’d run the math just to make sure his plan holds water.  As it turns out, roughly 3 million families visit Hawaii for a little R&R every year which means each family would only have to pony up an extra $3,400 per hotel stay to cover Hawaii’s Universal Basic Income plan.  Seem more than reasonable, right?

  • Green Beret Warns: "Skepticism Will Vanish When The Power Suddenly Fails Across The US"

    Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces ) via SHTFplan.com,

    It should be obvious, now, even to the most vocal and acetic naysayers that no matter how much they try to declare that nothing will happen regarding North Korea, they’re wrong. 

    It is happening, as we speak, and the buildup reached a high octave with North Korea’s sixth nuclear detonation, one that experts are saying was between 100 to 120 kilotons.  This detonation occurred in North Korea’s test facility on Sunday, and North Korean news stated that it was a hydrogen bomb.  Here’s a Wall Street Journal article excerpt:

    “In a televised statement, North Korea described the underground explosion, which triggered a large earthquake, as a “perfect success in the test of a hydrogen bomb for an ICBM.”

     

    Pyongyang said, “the creditability of the operation of the nuclear warhead is fully guaranteed.”  The test came just hours after leader Kim Jong Un showed off what he described as a hydrogen bomb capable of being mounted on an intercontinental ballistic missile.” 

    Now, the Western Consumer Marketing/Euro Arrogance-Confidence News Networks and Politicos all decried North Korea’s capabilities for years. 

    The news-twisters and politicos still only begrudgingly admit what recognized experts have been jumping up and down to warn the public about for years, namely this:

    1. That North Korea does indeed possess nuclear weapons
    2. North Korea does have ICBM’s capable of delivering a nuclear warhead
    3. North Korea possesses the technology and the ability to deploy an EMP (Electromagnetic Pulse) weapon
    4. Submarine-Launched Ballistic Missiles (SLBM’s) are in North Korea’s arsenal
    5. Two satellites (Kwangmyongsang-3 and Kwangmyongsang-4) are currently orbiting the earth, and each satellite passes over the United States several times per day
    6. The possibility exists that the satellites are carrying/have been fitted with an EMP weapon
    7. The central focus of North Korea’s strategic doctrine regarding nuclear war is geared toward an EMP strike

    This is part of that article that shows how science and stupidity go together, as follows:

    In July, it test-fired two ICBMs that experts say they believe are capable of reaching many parts of the U.S. mainland

     

    “The Kim regime made the strategic decision to develop a nuclear armed ICBM that can strike the United States,” said Leif-Eric Easley, a professor of international studies at Ewha Woman’s University in Seoul.

     

    “It is in a sprint to deploy that capability, because it wants the world to recognize it before returning to diplomatic talks, and before sanctions become unbearable.” However, analysts have been divided on whether North Korea could shrink a nuclear warhead to fit on the tip of a missile. Many also remain skeptical about whether a North Korean warhead can survive the strain of re-entry into the Earth’s atmosphere.

    Skepticism will vanish when the power suddenly fails across the United States.  The North Koreans can reach the U.S. mainland with a missile, and it will survive reentry. 

    They can do this, and they will…only it will not come in the form of air-raid sirens blaring and people scurrying to the basements of buildings (as Fallout Shelters don’t exist anymore).  Here is the form that it will take. This is the real “kicker” that was just released Sunday by North Korea’s state-run news agency, reported on Daily Mail and if falls in line with the items just mentioned:

    “North Korea’s state news agency warned that the weapon ‘is a multifunctional thermonuclear nuke with great destructive power which can be detonated even at high altitudes for super-powerful EMP attack.”

    This falls in line with the warnings of Dr. Peter Pry, the head of the Committee to brief Congress on EMP threats against the U.S., the warnings of former Congressman Roscoe Bartlett (R, MD), and a slew of other with access to detailed information on North Korea’s nuclear capabilities.  When asked if the military option is on the table on Sunday, September 3rd, President Trump responded with, “We’ll see.”

    No, ‘We the People’ will see it, but he will not, except on television.  He will be in a bunker a mile underground, or in an area far removed from what happens in the moment of decisive action or the aftermath.  There’s a good chance that nobody will ever see it coming.  Remember: The North Koreans launched a missile that flew directly over Japan!  This excerpt is from AP News on September 1st and summarizes “Japanese readiness” in a nutshell:

    “Japan has a two-step missile defense system, including interceptors on destroyers in the Sea of Japan that would shoot down projectiles mid-flight and if that fails, surface-to-air PAC-3s on land.”

    So, with that “protection,” why didn’t they shoot down the North Korean missile fired right over them last Monday?  Maybe they were waiting for “Mothra” to stop it.

    In any event, it appears the President is going to pursue a military option, as can be implied within his words.  This also comes from the Wall Street Journal article:

    “North Korea is a rogue nation which has become a great threat and embarrassment to China, which is trying to help but with little success.”

     

    He also added: “South Korea is finding, as I have told them, that their talk of appeasement with North Korea will not work, they only understand one thing!”

    What might that “one thing” be?  Whatever happens, you can be certain that if we initiate an attack, North Korea will have allies, as China has already informed the world.  The bottom line is that if you personally have not prepared and formulated a plan if things kick off, then you’re long in the tooth.  Don’t remain in denial that the worst can happen, and take the initiative.  It’s better to be prepared and be “wrong” every day than to be unprepared just once and have the worst come to pass on that day.

    The next world war will be initiated with an EMP weapon detonated over the U.S., followed by a nuclear exchange and conventional warfare.

  • ISIS Urges Supporters To Poison Food At US Grocery Stores

    After urging its supporters in the west to turn cars into weapons, guidance that inspired terror attacks in the UK, Spain and France, ISIS is now calling for sympathizers to poison the food in US supermarkets with cyanide, according to SITE.  

    In recent days, channels associated with the terrorist army have posted calls for attacks on Europe, Russia and the United States to mark the occasion of the Islamic "Sacrifice Feast" Eid al Adha. In the third part of an English-language series on jihad, IS advised would-be attackers to inject food for sale in markets with cyanide poison. According to Spiesa, the organization has tested these methods on prisons, causing horrifically painful deaths.

    “The Islamic State group used prisoners as “human guinea pigs,” carrying out chemical weapons experiments in order to plan for attacks against the West, documents found in Mosul have revealed. The papers detailing the tests, which led to the agonizing deaths of prisoners, were discovered at Mosul University in January when it was recaptured by Iraqi special forces. The documents verified by United States and British forces were detailed by The Times in a report published Saturday.

     

    Prisoners had their food and water contaminated by the sprinkling of chemicals found in easily accessible pesticides. The US and Britain now fear that the same methods could be used on a larger scale to contaminate food supplies in the West.”

    Aside from the obvious death toll, we imagine that a terror attack in an American grocery store would annihilate billions in grocery stock market cap, adding to the industry’s Whole Foods Market-inspired woes. Investors who once saw grocers as an oasis in the troubled retail sector are increasingly balking now that Amazon has promised to use sensors and automation to save on staffing costs and undercut rivals on pricing. And the terror threats won’t help.

    In other Islamic State news, a convoy of 17 buses carrying Islamic State terrorists and their families has been stranded in the Syrian desert since Thursday as the US, Russia, and Syria debate its fate: attack the convoy or allow it to pass?

    In an unusual deal, the convoy of Islamic State fighters and their families was allowed to exit their contested stronghold along the Syrian-Lebanese border under the watch of the Lebanese and Syrian armies and Hezbollah after being defeated. As first announced by Hezbollah's Secretary General Hassan Nasrallah in a speech Monday night, the deal involved the transportation of 26 wounded and 308 ISIS fighters, along with 331 civilian family members via buses and ambulances to Syria's eastern province.

    The images of the convey of terrorists helplessly stranded in the desert is perhaps the biggest blow to their propaganda.

    At the same time, the group is struggling for relevance with a resurgent Al Qaeda, which is encouraging supporters to sabotage trains and other public infrastructure in the US – specifically the New York City subway.
     

  • Period Of Uncertainty Under Donald Trump Appears To Never End

    Authored by Alex Gorka via The Strategic Culture Foundation,

    Has anybody recently seen President Trump in the flesh instead of photos circulated on internet or daily tweets?  Has a quite putsch taken place in Washington? Some people say they’ve  heard it on the grapevine. As rumors have it, the president is isolated and actually destitute of power by the «old guard». Is it possible? You never know.

    John Bolton, former U.S. ambassador to the U.N., once enjoyed regular access to President Donald Trump. He was among candidates for the positions of national security adviser and state secretary. The president told him he was welcome anytime. He wanted to share his views on the Iran deal with Trump but couldn’t get in. Bolton says he requested a meeting with the president and was turned down. He believes the snubbing is the result of the ongoing struggle between different fractions vying for Trump's ear. Secretary of State Rex Tillerson and Defense Secretary James Mattis advocate a more moderate approach to foreign policy than Bolton who is known as a hawk.

    «Trump is on house arrest» says Mike, journalist Cernovich cited by Breitbart. «I kept digging into it and I kept hearing the same thing over and over again», he said.

    One may not believe Mike Cerovich, who is known as a right wing muckraker, but the rumors about Trump being isolated in the White House have been going around for some time, at least among the alt right. According to the Prissy Holy’s report for Freedom Daily, «Ever since Trump got elected as president, there’s been no shortage of Republican traitors working behind the scenes to bring him down. Our suspicions about House Speaker Paul Ryan were confirmed several days ago, after Wikileaks exposed how he was one of 6 Republicans that Hillary bought off in order to form an alliance against Trump».

    There are more reports about the role of Paul Ryan. True or not, the gist of the matter is that the Trump's voters are greatly frustrated over the president. With the sensational victory scored, the winner has got nothing. None of the pre-election promises have been carried out.

    Immigrants of all races and faiths keep on coming, the wall with Mexico appears to be a pipe dream, no tax reforms have been implemented, Obamacare is still alive, the Iran deal is effective as it was before the Trump’s inauguration, and the relations with Russia are far from being improved. In substance, nothing has changed since the Obama’s days. Under Trump, the United States is getting militarily involved in more foreign conflicts that have no relation to the America’s national security. It‘s only natural to ask whether there is any difference between Donald Trump and Hillary Clinton.

    The voters feel deceived. They have started to look for ways to escape from reality. It makes them invent the stories about the good king undermined by his courtiers. And they are looking for fall guys. In this regard, the name of National Security Adviser, Herbert McMaster, is often cited. They believe he keeps in touch with Ben Rhodes, former Deputy National Security Advisor for Strategic Communications under Obama. The people close to Ben Rhodes are believed to be responsible for the leaks. Some think the president suffers from dementia.

    Their feelings are hurt by the president’s giving the cold shoulder to his electoral base. The members of the alt-right feel they played a large part in making Donald Trump president. True, it was important to look like the president of all Americans after the inauguration but time went by and the president never expressed his gratitude.

    Pro-Trump media feel offended. They fought hard for him but the president has not even condescended to give any of them an exclusive interview. But he did give an interview to Maggie Haberman of the New York Times – the newspaper that strongly attacked him during the election campaign. In that interview Trump distanced himself from the supporters. He also distanced himself from Steve Bannon, the informal leader of alt-right and his former adviser who has recently resigned. Looks like the president is getting sucked into the very same swamp he promised to drain.

    Rush Limbaugh, an American radio talk show host and conservative political commentator, believes that the Washington establishment – both Democrats and Republicans – are involved in a «silent coup» against President Trump. »These people are trying to take this president out,» he told his national radio audience after the failure of the Senate to pass a bill to replace ObamaCare.

    Alt right feel hurt and abandoned. Using Breitbart to express their feelings, they are looking for a new idol. Richard Spencer, one of the founding fathers of the alt-right, has decided to run for office.

    Some people of the presidential retinue tapped him on the shoulder and told him to go on with the diplomatic war against Russia and close its three outposts in the United States.  Instead of fighting terrorists – something the president promised to do – he keeps on spoiling the relationship with Russia in contrast with what he promised to do during the presidential race. There are things which are hard to explain. Something’s happening behind the certain and it’s impossible to know exactly what it is.

    There is no foreign policy and nothing is clear with one thing said and something different done. Many key positions in State Department and other agencies to shape foreign policy are vacant. People come and go to make the administration look like a revolving door. Sabastian Gorka, who served as President’s Deputy Assistant, is a good example.

    These are the days of turmoil and strife in Washington. This instability affects the policy on Russia. Under the circumstances, no tangible improvement of Russia-US ties is possible. Wait and see is the only thing to do. The United States appears to be unpredictable and unnegotiable – it’s the only thing that’s certain.

  • Thanks, Mnuchin: Lego Slashes 1,400 Jobs As Sales Of "Batman" Toy Sets Falter

    Lego cemented its status as a vaunted turnaround story with the success of the “Lego” movies which – fun fact – were produced by Treasury Secretary Steve Mnuchin.

    But after nearly a decade of expansion, the company announced Tuesday that it will be cutting 1,400 jobs as it struggles with weak demand for a new line of “Batman” play sets that’s contributing to its worst downturn in more than a decade. The cuts, the company's first in 10 years, would be tantamount to letting 8% of its workforce go. The move came after Europe’s largest toymaker said Tuesday that sales in the first half fell 5 percent to 14.9 billion kroner.

    “We’re losing momentum and we’re losing productivity,” Chairman Jorgen Vig Knudstorp said on a conference call. “We have built an increasingly complex organization. This could ultimately lead to stagnation or decline.”

    According to Bloomberg, Lego is suffering its biggest crisis since 2003 and 2004, when the maker of colorful plastic bricks reported record losses. After a turnaround led by Knudstorp that transformed the struggling brand into the world’s most-profitable toymaker, sales have slumped anew as children spend more time on digital devices. Predictably, the shift has created tumult in the C-suite amid rapid executive turnover.

    The company, which is controlled by the family of Danish billionaire Kirk Kristiansen, promoted Chief Operations Officer Bali Padda to succeed Knudstorp as CEO as of Jan. 1, but said last month that he’ll be replaced Oct. 1 with Niels B. Christiansen, the former boss of Danish engineering giant Danfoss A/S.

    Knudstorp has said he’s taking responsibility for creating an organization with “too many layers and overlapping functions,” a move that prevented the company from realizing its “growth potential.”

    Retailers have started to complain about the weak Lego sales, which are suffering from “significant weakness in demand.” “The Lego Batman Movie,” an animated film featuring the superhero and the company’s bricks, hasn’t generated the toy sales that Toys R Us or Lego expected, he said.

    According to Bloomberg, Knudstorp declined to comment on the performance of the Lego Batman products, though he said they made “a positive contribution” to first-half results. Lego’s Star Wars product line “remains one of our top categories globally, but it has slightly declined for us this year,” he said. Knudstorp said brands that Lego invented, including Lego City, Lego Friends, Lego Duplo and Lego Technic, were the best performers in the period. Still, the company’s net income in the first half declined by 3 percent to 3.4 billion kroner.

  • US Bitcoin Exchange Coinbase Hits 10 Million Users

    After two (and soon three) “generational” market crashes, Joe Sixpack may have lost interest in the stock market (or at least in single names, the transfer of bagholder rights from institutions to retail investors via ETFs is doing just fine), but when it comes to chasing torrid, upward price momentum, US retail investors are doing their best frenzied Chinese housewife impression now that they have discovered the next big bubble thing, and it’s called bitcoin. And nowhere is America’s sudden infatuation with cryptocurrencies such as bitcoin, ethereum, litecoin and all other “coins” which can make (or break) a hedge fund’s annual return in days if not hours, more obvious than on Coinbase, the US bitcoin exchange, which has just hit a remarkable 10 million registered users, all of whom are there for just one thing: to trade, but mostly buy, crypto currencies.

    The San Francisco startup has seen tremendous growth in 2017, adding thousands of users per day and handling increasing levels of trading volume. Last month, CEO Brian Armstrong announced that the company had raised $100 million during its latest funding round, giving the company a valuation of $1 billion, making it first “bitcoin unicorn” according to Cryptocoinsnews. A few weeks later, following the latest burst higher in bitcoin, Coinbase has surpassed 10 million registered users. In the last three weeks of August, the bitcoin exchange added an astonishing 800,000 users as the bitcoin price briefly rose above $5,000. According to data from the Coinbase website, the exchange and wallet service has also recently surpassed $20 billion in total volume.

    While many bitcoin veterans have panned Coinbase for its simplistic approach to trading (no limit orders, no shorting, etc) and exorbitant fees, some actually enjoy the minimialist, if expensive, experience: one user on reddit, btcltc77, referred to the exchanges as the “McDonald’s of Bitcoin banking.”

    Coinbase is still the most mainstream way of buying Bitcoin. It’s the McDonald’s of Bitcoin banking.

    That, and the implied safety net from its increasingly bigger venture backing, appears to be working and has made Coinbase the go-to site for millions of armchair cryptocurrency investors.

    To be sure, Coinbase has not been without its challenges as it marched toward this impressive goal. Throughout the year, it has been embroiled in an ongoing legal dispute with the IRS over whether it should have to release personal client information to the agency.

    It has also struggled to scale its business operations as fast as it has gained users, resulting in multiple outages throughout the year during periods of extreme market volatility, with many clients noting that one can determine if bitcoin is crashing without knowing the price, simply because the exchange is offline.

    Moreover, the Consumer Financial Protection Bureau (CFPB) has been flooded with 4,700% more complaints about Coinbase so far in 2017 than it did in all of 2016 (which is understandable in light of the surge in users). More than a third of the grievances have come from users who said they were unable to access their money when promised. Many also complained about other transaction or service problems. Accusations of fraud represented less than 15% of the complaints.

    Coinbase, which was founded in 2012, said in June that it’s working to improve customer support. The exchange has grappled with a slew of performance issues, including outages, slow load times and a flash crash in ether, the second most valuable virtual coin.

    “Over the past few months, we’ve seen an unprecedented increase in the number of customers signing up to use Coinbase,” wrote the company’s co-founder and CEO, Brian Armstrong, in a June 6 blog post. “As a result, our systems have been pushed to the limit. This has caused many customers to have a negative experience.”

    The company has pledged to devote Q3 (not to mention spending some of that brand new $100 million) to focusing on operational excellence, scaling, and an improved customer experience. It probably won’t rush though: since it has a near monopoly on the retail crypto market in the US, as long as bitcoin keeps rising new clients will keep pouring in, no matter how much they complain about the underlying infrastructure.

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Today’s News 5th September 2017

  • Merkel, Schulz Agree: "It's Clear, Turkey Should Not Become An EU Member"

    Having blasted Germany for "abetting terrorists," Turkish president Edrogan was on the receiving end of some ire this weekend as the refugee crisis and the EU deal with Turkey dominated the TV debate between Chancellor Angela Merkel and her coalition ally SPD challenger Martin Schulz on Sunday.

    The rivals agreed, however, that Turkey can’t be part of the EU.

    "If I become German chancellor, if the people of this country give me a mandate, then I will propose to the European Council that we end the membership talks with Turkey. Now all red lines are crossed, so this country can no longer become a member of the EU,”said Schulz during the debate, forcing the CDU leader to clarify her position on the issue.

     

    “The fact is clear that Turkey should not become a member of the EU,”said Merkel, agreeing with Schulz.

    “I’ll speak to my [EU] colleagues to see if we can reach a joint position on this so that we can end these accession talks,” added Merkel, who is hoping to get re-elected for a fourth term.

    As RT notes, the government in Ankara is moving away from democratic principles at a “breathtaking” speed, Merkel said, adding that at the moment “the accession negotiations are non-existent.”

    However, she refused to completely freeze the relationship with Turkey.

    Additionally, Reuters reports that the actions of the Turkish authorities are making it “impossible” for the country to join the European Union, an EU executive said on Monday after German Chancellor Angela Merkel called for ending accession talks.

    Quoting European Commission President Jean-Claude Juncker from last week, before Merkel’s election campaign comment, the Commission’s chief spokesman told a regular news briefing:

    “Turkey is taking giant strides away from Europe and that is making it impossible for Turkey to join the European Union.”

    He stressed, however, that any decision on whether to formally halt the long-stalled membership process would be up to the 28 member states of the bloc, not the Brussels executive.

    Turkey has been receiving funding from the EU, which will reach €6 billion by 2018, as part of the deal to halt the migrant flow into Europe, signed in March 2016. Turkey was also promised visa free travel and expedited talks on joining the EU, but the discussion of those issues remains stalled due to Ankara’s refusal to relax its harsh anti-terrorism laws. As EU-Turkish ties hang in the balance, President Recep Tayyip Erdogan has been actively reiterating his threats to withdraw from the deal and again allow migrants to pour into the EU.

     

  • Endless Regional Chaos: American Presence In Afghanistan Explained

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    The geographic location of Afghanistan has always occupied a central role in many geopolitical studies. Donald Trump’s reasons for reinforcing US troops in the region are driven by the continuing US need to prevent a complete Eurasian integration among regional powers.

    The April peace talks between Afghanistan, India, Pakistan, Russia and China seemed to have put an end to the persistent and dominant American presence in the country. In Washington, following fifteen years of war and a series of failures, many had come to the conclusion that the time had come for the United States to return home.

    Trump had throughout his electoral campaign criticized the foreign policy of his predecessors, giving the indication that he would be looking to leave Afghanistan once he assumed the presidency.

    The road plan for Afghanistan laid out by the April peace talks seemed to offer the prospect of national reconciliation between the Taliban and the central authority in Kabul, assisted by parties with great interest in the country like India and Pakistan, given their geographic proximity, as well as Russia, China and Turkey.

    The first talks in April 2017 capitalized on America's absence at the conference as well as on the will of the protagonists to reach an agreement after fifteen years of war and terror. Afghanistan is a key crossroad in the eastward expansion strategy that illustrates the special partnership between Russia and China, as seen with the steady progress of the Silk Road 2.0 initiative and the Eurasian Economic Union. Given Afghanistan’s geographic position, sharing boundaries with Pakistan, Turkmenistan, Iran, Tajikistan, Uzbekistan, it is useful to emphasize the role the country could play as a commercial and energy hub in the not too distant future.

    Due to incompetence or perhaps due to facing insurmountable pressures, Donald Trump is undergoing a gradual and inexorable diminution with the elimination of all the most representative members of his administration. At the same time, the appointment of military personnel to civilian roles has pushed the administration into unexplored directions not foreshadowed in the electoral campaign. Trump spoke of less US military presence in the internal affairs of other nations. But as we shall see, nothing could be further from the truth.

    The appointment of Generals McMaster, Kelly and Mattis (Mattis perhaps being the most powerful US defense secretary since the end of World War II) is Trump's attempt to withstand and bargain with the most significant elements of America’s deep state. A strong military component in the White House helps ensure continuity in US foreign policy. Contrary to what was professed during the elections, Donald Trump immediately traded American foreign policy in exchange for explicit GOP backing for key legislation that will help secure a 2020 re-election. Without bills on health, tax and immigration reform being passed, there will be no arguments in favor of the GOP and Trump during the midterm and presidential elections in 2018 and 2020 respectively.

    The deep state in Washington has slowly but inexorably taken over Trump's presidency, a task made all the simpler by Trump’s character, which dismisses his lack of experience with an overweening self-confidence. The military component of the deep state, in concert with GOP leaders, took less than six months to quash Trump's electoral promises and turn the president’s foreign policy into a dangerous reprise of the Obama and Bush years.

    More and more frequently, American intervention in foreign lands lead to situations of uncontrollable chaos, with no real central authority able to govern and obey Washington’s orders. The current state of the Middle East is reflective of this. In Afghanistan, Washington, especially Mattis, is cognizant of the country's rebirth under Sino-Russian leadership after fifteen years of America’s presence. This is a scenario that the US deep state is not willing to tolerate.

    Leaving aside Afghanistan’s huge amounts of natural resources (about one trillion in precious metals), as well as its strategic location linking east and west, a peaceful Afghanistan led by a single central authority would hardly cohere with US objectives in the country. The US loves to consider itself the indispensable nation for peace in Afghanistan, when actually it is the main obstacle to peace.

    For American foreign policy continuity, Afghanistan needs to remain in a chaotic situation. Above all, the US military industrial complex is not willing to surrender its political and military power in the country, only to be substituted by Moscow or Beijing. With these unofficial motives, General Mattis announced a surge of several thousand American troops to the country. It is immediately clear that numerically and tactically, four or five thousand soldiers will make no difference. The intent is purely demonstrative, as seen in Syria with a few missiles lobbed at an empty airbase. The purpose is to send a clear and unambiguous message to Russia, China, Pakistan and even India, to the effect that without American consensus, no strategic reorganization is permissible in Afghanistan.

    General Mattis and all those who for decades have been constantly thinking of MacKinder's geopolitical theory (Heartland Theory) are aware of the strategic importance of keeping Afghanistan hostile towards regional powers like China and Russia. The USSR's war in defense of the country, and the socialist superpower’s subsequent collapse, offers a historical warning.

    In April, Moscow and Beijing, with the tacit approval of New Delhi and Islamabad, launched a peace process in Kabul that should have facilitated talks between the central authority and the Taliban to bring about a truce that would bring to an end the violence and destruction that had over fifteen years left the country bleeding in endless poverty and suffering.

    The American surge will not advance American interests in the country. It will not change the delicate balance negotiated between the parties back in April. It will not affect the efforts of Moscow and Beijing to stabilize the country. It will only buy Washington more time by bombing and killing civilians, always viewed by American generals as an acceptable and privileged option available to them.

    Like in other parts of the world, the presence of American troops does not fully explain the long-term goals of military planners. Afghanistan in some respects resembles a similar situation to Southeast Asia. In South Korea, the American presence has persisted since 1950, and with it the destabilization of the Korean peninsula. As in Asia, the central purpose of the American presence in Afghanistan is to occupy geo-strategic zones in order to prevent Eurasian integration between powers like India, China and Russia. Secondly, it is the constant presence of troops and military bases in locations close to or around the two major powers of China and Russia that aims to overburden and thereby diminish the defensive capabilities of these two strategic threats. In 1962, when the USSR did something similar in response to the US deployment of patriot missiles in Turkey, it started building up its offensive capability in the Western Hemisphere using Cuba as a military base. The US was willing to go to war to halt this domestic threat and for weeks the world was on the verge of a nuclear conflict. Only dialogue between American and Soviet leaders averted this threat to human existence.

    Conclusions

    Washington cares for nothing other than its own interests. But twenty-five years after the end of the Cold War, the world is changing, and more and more fruitful efforts to replace the chaos wrought by US policies can be seen with peaceful, mutually beneficial cooperation increasingly being the order of the day. The road to economic prosperity and a re-established unity among the Afghan people is still a work in progress, but once the country manages to establish its independence, Washington will have a hard time dictating conditions. Countries like Russia, China and India have every intention of using diplomacy and peacekeeping to prevent a dangerous escalation in Afghanistan.

    India and China have some divergence over the future of the region, but by the start of the 2017 BRICS conference, they had already resolved a border dispute that lasted over two months. The ability to create diverse organizations like BRICS, AIIB and SCO provides the opportunity to begin any kind of negotiation with a legal and economic foundation. This represents a commendable example of overcoming differences through diplomacy and economic benefits.

    While the United States exhales the last breaths as a declining global power, no longer able to impose its will, it lashes out in pointless acts like lobbing 60 cruise missiles at Syria or sending 4000 troops to Afghanistan. Such acts do not change anything on the ground or modify the balance of forces in Washington’s favor. They do, however, have a strong impact on further reducing whatever confidence remains in the US, closing the door to opportunities for dialogue and cooperation that may otherwise have offered themselves.

    Trump promised isolationism. His generals, behind the scenes, have managed to make this electoral promise come true, leaving Washington alone in the international arena in the near term.

  • Putting North Korea's "Bomb Test" In Context

    On Sunday, North Korea tested its most powerful nuclear bomb yet, detonating a device that caused a 6.3 magnitude tremor.

    The weapon's sheer power has caused alarm but the fact that Pyongyang is claiming it can be fitted inside an intercontinental ballistic missile is sending shockwaves through Asia and beyond.

    Using data from the Center for Strategic and International Studies, Statista's Niall McCarthy presents the following infographic provides an overview of the strength of all North Korean nuclear tests since 2006.

    Infographic: North Korea Tests Its Most Powerful Bomb Yet  | Statista

    You will find more statistics at Statista

    Sunday's detonation was estimated to have been 100 kilotons or more, far more powerful than previous tests and the atomic bombs dropped on Hiroshima and Nagasaki. How does it compare with the warheads inside current U.S. and Russian intercontinental ballistic missiles?

    According to the Economist, the U.S. Trident and Russian SS ballistic missiles have a yield of 455 and 800 kilotons respectively.

  • So Deep, It's Sunk?

    Authored by Robert Gore via StraightLineLogic.com,

    If you strike the king but do not kill him, by definition your position is weak.

    There has never have been a deeper deep state than the Soviet Union’s. It controlled everything: the military, intelligence, the judicial system, the rest of the government, the press, and the economy. It operated in shadows and darkness; there was no loyal opposition or media to shine the occasional light. Yet at 7:32 p.m., December 26, 1991, the Soviet flag was lowered from the Kremlin and replaced with the Russian flag. The Soviet of the Republics of the Supreme Soviet of the Soviet Union’s declaration number 142-H recognized the independence of the Soviet republics. Mikhail Gorbachev had resigned, handing power to Boris Yeltsin. The Soviet Union and its deep state were no more.

    There are still lessons to be generally recognized from the fall of the Soviet Union.

    First and foremost: command and control doesn’t work. That’s a lesson US commanders and controllers and their media and academic fellow travelers ignore at their peril. They cling to their cherished vision of American life directed from above, with the infamous Deep State at the apex of the power pyramid, the ultimate string pullers. Recent maneuvers, however, suggest a Deep State so tangled in its own strings that any attempt to free itself will only make the situation worse.

    A deep state operates submerged from public view. The US deep state had to emerge in its effort to topple Trump, an emergence that screams weakness (see “Plot Holes”). The ineptitude of the effort made the weakness that much more apparent. A claim that Russia had hacked the Democratic Nation Committee (DNC) last summer and then used Wikileaks to disseminate what it had hacked, all in collusion with Donald Trump’s campaign, was the cornerstone of this maladroit coup. It should have raised more eyebrows than it did that the DNC refused to turn over its servers to the FBI for analysis, and that the only confirmation of the hacking claim came from a contractor, Crowdstrike, which had numerous conflicts of interest, including that it was paid by the DNC.

    No objective, scientific analysis of the evidence was performed until that of the Veterans Intelligence Professionals for Sanity (VIPS). That group forensically analyzed the metadata associated with the alleged hack. The speed with which the material was downloaded precluded an Internet based hack. The only way it could have been downloaded so quickly was onto an external storage device. That’s a leak, not a remote hack. It had to have been done by someone with direct access to the DNC’s computer system, which suggests a DNC insider, perhaps Seth Rich.

    Alternative news site consortiumnews.com published the VIPS’ analysis and conclusions . Mainstream “confirmation” followed at the left-leaning thenation.com. With its cornerstone gone, the Russian collusion story collapsed. For form’s sake Special Prosecutor Mueller will fan the embers for the next few months, perhaps uncovering a technical violation or two of this or that inconsequential law, perhaps releasing some sort of face saving report, but even the most rabid anti-Trumpers appear to recognize that the Russian hack dog won’t hunt.

    If this is the best the supposed all-powerful deep state could come up with, then the deep state isn’t nearly as powerful as supposed. The way this affair was handled buttresses that conclusion, because it opens deep staters to serious legal liability.

    Before the election they thought they would be shielded by a Clinton administration, but now they’re wide open to prosecution for a number of possible crimes. There is the FBI’s dereliction of duty, not performing its own analysis of DNC servers and accepting Crowdstrike’s conclusions without further scrutiny. (It was apparently in bed with the Clinton camp from the get-go.) There are the multiple leaks to friendly news outlets of classified information. There are the intelligence reports with their damning and much-reported, but evidence free, best assessments and probable conclusions. Potentially the most legally troublesome: a cabal of deep state insiders concocted their story to unseat a duly elected United States president. That makes out a prima facie case of treason.

    If you strike the king but do not kill him, by definition your position is weak. He can exact ultimate retribution and your head is in a basket, or he can let you twist in the wind. The best guess is that Trump will do both, depending on the specifics of each conspirator’s situation and which course will be most useful to him.

    When California Senator Diane Feinstein says conciliatory things about Trump, infuriating her base, you know things have changed. As ranking Democrat on the Senate Judiciary Committee, she has also joined chairman Charles Grassley requesting interviews with two high-ranking FBI officials concerning the discredited Trump dossier. She’s one of the shrewdest power players in Washington, a deep state stalwart. Her effort with Grassley and her conciliation aren’t magnanimous gestures from the bottom of her black heart. Rather she’s bending the knee; Trump has won the game of thrones.

    When the major mainstream media outlets in unison condemn Antifa’s violent tactics, you know things have changed. George Soros, meet Donald Trump and the new order. The condemnations toss the latest kerfuffle about what Trump said after Charlottesville down the memory hole, and give Trump cover to do something about fringe violence in the future. The extremists are by no means finished; that wouldn’t serve anyone’s purposes. They’ll make handy scapegoats; you never know when there’s going to be a fire at the Reichstag.

    There has been a tiresome litany of articles about Trump’s capture by the deep state, characterizing him as a puppet for the military and Goldman Sachs. Whatever idealism motivated his run for president is gone and he’s now supposedly just an errand boy. The commentators who bemoaned the firing of Michael Flynn dusted off their articles, changed and rearranged a few things, and bemoaned the departure of Steve Bannon. Poor Donald’s all by himself in big, bad Washington. Except he’s mowing down his enemies one by one (it looks like James Comey may be next), and he’s got the deep state cornered. As for his associates, if there’s one clear lesson from Trump’s life it’s that everyone—wives, employees, Goldman Sachs flunkies, generals, you name it—is expendable. Some of those he’s terminated in the past probably thought they had the upper hand.

    Many of the same Trump-as-puppet commentators dusted off their articles bemoaning Trump’s bombing of the Syrian air base, changed and rearranged a few things, and bemoaned Trump’s Afghanistan escalation. Few of those latter articles mentioned that the Syrian government, with the aid of Russia, Iran, and Hezbollah, has turned the corner on quashing the rebellion, ISIS is on the run, and Syrian refugees are returning home. All of which sets the stage for the US to eventually leave Syria. Look for something similar to eventually play out in Afghanistan, and to go similarly unremarked upon.

    Donald Trump didn’t risk all for the Iron Throne to let Goldman Sachs and the military run the show. He has allied with those power centers, but he’s calling the shots. Trump has allied with another power center: state and local police departments. He has given them fulsome, vocal support, encouragement to be more brutal, rescission of President Obama’s civil asset forfeiture rollback, and promises of more military gear. This is what one would expect of a ruler bent on consolidating his power—secure the praetorians. The Bill of Rights won’t stand in the way of sealing that alliance.

    Trump’s supporters can’t believe their man’s primary motivation is acquiring power. Trump’s enemies, other than Senator Feinstein, can’t believe how good he is at it. Neither side will recognize the real danger until it’s too late. Legions of worrywarts fret that an erratic, captured Trump will go off half-cocked and press a nuclear button or do something else almost as stupidly devastating. What should worry them are the precise calculations and bloodless strategies of the most ruthlessly Machiavellian president since Franklin D. Roosevelt as he further consolidates and extends his power. Given present jurisprudence, nothing in the Constitution stands in his way.

  • North Korea Seen Moving ICBM Into Position For Possible Launch: Report

    The USDJPY and 10Y yields snapped lower and gold kneejerked higher following the latest North Korea-related headline out of Bloomberg, according to which:

    • NKOREA STARTS MOVING ICBM FOR POSSIBLE LAUNCH BEFORE SAT.:DAILY

    Bloomberg references a just released article in the Asia Business Daily, according to which North Korea started moving the ICBM-class missile, produced at a new Pyongyang research center, on Monday following Sunday’s thermonuclear test.

    The report confirms overnight intelligence from South Korea: recall first thing this morning, Yonhap reported that South Korea’s spy agency said it had detected that North Korea is making preparations for a possible intercontinental ballistic missile launch, a move that would further raise tensions a day after it conducted its sixth and most powerful nuclear detonation.

    Chang Kyung-soo, acting chief of the defense ministry’s policy planning office, told lawmakers on Monday that North Korea was making preparations for a missile firing, according to Bloomberg while Yonhap adds that South Korea’s spy agency said there was a chance the North could fire an ICBM into the Pacific Ocean, saying that the isolated state was able to conduct a nuclear test at any time.

    According to the just released Business Daily report, there is high chance N. Korea will fire ICBM missile before Sept. 9 national founding day. More details from the original report, Google translated:

    According to the authorities, one ballistic missile produced by a weapons research institute dedicated to the production of North Korea’s ICBM was found to be moving to the west of Hwanghae Island after being mounted on the 4th Mobile Launch Base (TEL) on the day after the 6th nuclear test.

    Earlier this year, North Korea built a 1980-square-meter weapons lab, which could manufacture ICBMs, in Pyongyang. It was last February that the weapon laboratory was released to the outside world. Although it was a wilderness until 2009, it has now been transformed into a strategic hub for North Korea’s major missiles.

    According to a joint US-ROK report, North Korea has a maximum of 900 ballistic missiles, and it has been confirmed that there are 108 aircraft capable of launching surprise attacks. According to ballistic missiles, the number of Scud missiles and TEL that can mount Scud missiles are the most common. The number of Scud missiles is 430 (TEL 36).

    The report concludes by noting that according to S. Korean intel, “if North Korea conducts further ICBM provocations there is a high possibility that it will choose an unpredictable time and place. To this end, Pyongyang may launch missiles directly from the mobile launch base, or launch multiple missiles at multiple locations simultaneously.

    The report also notes that the ICBM mobile launcher is moving “at low speed mainly during the night time” to avoid detection by foreign intelligence authorities. In other words, the US now has a conveniently moving target and a due date by which North Korea will likely launch its next rocket, effectively giving Trump a greenlight for a “preemptive” strike over the next five days.

    The market’s reaction to the news, while not as dramatic as to Sunday’s nuclear test, confirms just how much on edge traders remain for every headline out of North Korea.

    10Y Yield:

    USDJPY:

    Gold:

    ES:

  • Ron Paul Explains Why "Government 'Aid' Only Makes Disasters Worse"

    Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

    Texans affected by Hurricane Harvey, including my family and me, appreciate the outpouring of support from across the country. President Donald Trump has even pledged to donate one million dollars to relief efforts. These private donations will be much more valuable than the as much as 100 billion dollars the federal government is expected to spend on relief and recovery.

    Federal disaster assistance hinders effective recovery efforts, while federal insurance subsidies increase the damage caused by natural disasters.

    Federal disaster aid has existed since the early years of the republic. In fact, it was a payment to disaster victims that inspired Davy Crockett’s “Not Yours to Give” speech. However, the early federal role was largely limited to sending checks. The federal government did not become involved in managing disaster relief and recovery until the 20th century. America did not even have a federal agency dedicated solely to disaster relief until 1979, when President Jimmy Carter created the Federal Emergency Management Agency (FEMA) by executive order. Yet, Americans somehow managed to rebuild after natural disasters before 1979. For example, the people of Galveston, Texas successfully rebuilt the city following a major hurricane that destroyed the city in 1900.

    FEMA’s well-documented inefficiencies are the inevitable result of centralizing control over something as complex as disaster recovery in a federal bureaucracy.

    When I served in Congress, I regularly voted against federal disaster aid for my district. After the votes, I would hear from angry constituents, many of whom would later tell me that after dealing with FEMA they agreed that Texas would be better off without federal “help.”

    Following natural disasters, individuals who attempt to return to their own property – much less try to repair the damage – without government permission can be arrested and thrown in jail.

    Federal, state, and local officials often hinder or even stop voluntary rescue and relief efforts.

    FEMA is not the only counterproductive disaster assistance program.

    The National Flood Insurance Program was created to provide government-backed insurance for properties that could not obtain private insurance on their own. By overruling the market’s verdict that these properties should not be insured, federal flood insurance encourages construction in flood-prone areas, thus increasing the damage caused by flooding.

    Just as payroll taxes are unable to fully fund Social Security and Medicare, flood insurance premiums are unable to fund the costs of flood insurance. Federal flood insurance was almost $25 billion in the red before Hurricane Harvey. Congress will no doubt appropriate funding to pay all flood insurance claims, thus increasing the national debt. This in turn will cause the Federal Reserve to print more money to monetize that debt, thus hastening the arrival of the fiscal hurricane that will devastate the US economy. Yet, there is little talk of offsetting any of the costs of hurricane relief with spending cuts!

    Congress should start phasing out the federal flood insurance program by forbidding the issuance of new flood insurance policies. It should also begin reducing federal spending on disaster assistance. Instead, costs associated with disaster recovery should be made 100-percent tax-deductible. Those who suffered the worst should be completely exempted from all federal tax liability for at least two years. Tax-free savings accounts could also help individuals save money to help them bear the costs of a natural disaster.

    The outpouring of private giving and volunteer relief efforts we have witnessed over the past week shows that the American people can effectively respond to natural disasters if the government would get out of their way.

  • Japan Prepares For Mass Evacuation Of 60,000 Citizens From South Korea

    It won’t be the first time that a near-panicked Japan has came close to the edge when it comes to North Korea, and in preparation for an “emergency” was planning to evacuate its citizens located in South Korea. The last such notable spike in escalations took place in April, when as the Yomiuri Shimbun reported at the time, the Japanese government had asked the U.S. to provide advance consultation if it is about to launch military action against North Korea, and “ramped up preparations for emergency situations”, including the potential evacuation of some 57,000 Japanese citizens currently in South Korea.

    Fast forward to today, when moments ago Japan’s Nikkei reported that as tensions on the Korean Peninsula reach new heights following Pyongyang’s first (allegedly) hydrogen bomb test, Japan is planning a possible mass evacuation of the nearly 60,000 Japanese citizens currently living in or visiting South Korea.

    “There is a possibility of further provocations,” Japanese Prime Minister Shinzo Abe said at a Monday meeting with ruling coalition lawmakers. “We need to remain extremely vigilant and do everything we can to ensure the safety of our people.”

    In response to North Korea’s sixth nuclear test, Japan and the U.S. are seeking a peaceful resolution by ratcheting up economic pressure on the rogue state through an oil embargo and other measures, while South Korea’s president has also called for a currency/FX blockade of the Kim regime. And yet, what has spooked Tokyo is that on Sunday, Defense Secretary James Mattis also said any threat to the U.S. or its allies “will be met with a massive military response – a response both effective and overwhelming.” Which means thousands of Japanese may soon be in harm’s way.

    According to Nikkei, there are currently about 38,000 long-term Japanese residents in South Korea, as well as another 19,000 or so tourists and other short-term travelers. “If the U.S. decided on a military strike against the North, the Japanese government would start moving toward an evacuation on its own accord regardless of whether the American plans are public,” a Japanese government source said.

    Tokyo is working on a four-tier emergency plan based on the severity of the situation: discouraging unessential travel to South Korea, discouraging all travel to South Korea, urging Japanese citizens there to evacuate, and finally, urging them to shelter in place.

     

    Should skirmishes erupt between the two Koreas, for example, the Japanese government would discourage all new travel to South Korea. At the same time, it would urge citizens already there to evacuate using commercial flights. Although the Japanese Embassy would help secure airline reservations, the government’s role under this scenario would mainly be to provide information.

     

    But Japan would need to coordinate with South Korean authorities under a shelter-in-place scenario. If Pyongyang launched a major military attack that leads to the closure of South Korean airports, the Japanese embassy would urge citizens still in the country to stay at home, or move to a safer area within the South.

    Also in case of a worst case scenario, Seoul has agreed to give Japanese citizens access to safe zones, such as designated subway stations, churches and shopping malls, according to a Japanese source. The Japanese government has already provided its citizens in South Korea with information on over 900 such facilities.

    Furthermore, in the event of airport closures, the best option for Japanese citizens to return home would be by sea from the southeastern port city of Busan. The Japanese government is working to obtain cooperation from U.S. forces stationed in South Korea to transport evacuees across the country from Seoul to Busan.

    Additionally, the Japanese Self-Defense Forces would need permission from South Korea’s government to operate inside the country. Approval has not been forthcoming, Yonhap reports, and could provoke a backlash from a South Korean public harboring historical grievances at the former colonial power. But SDF vessels could help in ferrying Japanese citizens home from Busan.

    Such a crises could make it easier for terrorists and other dangerous individuals to enter Japan disguised as returning citizens. The Japanese government aims to work with the U.S. to prevent such unlawful entry. One proposal would create a temporary holding area for returnees in Busan or Japan.

     

    “We are looking at a range of responses” to a crisis on the Korean Peninsula, from securing evacuees and processing their entry to creating and operating holding facilities, as well as determining whether Japan is responsible for their protection, Abe had said at a parliamentary session in April.

    As we reported in April, and as the infographic below showed, the Japanese government has been contemplating five potential emergency responses should a military clash break out between the US and North Korea. They include the following:

    • Logistical support by Japan’s Self-Defense Forces (SDF) in the event of a local conflict
    • Use of force by the SDF in the event of a full scale war
    • Protection of Japanese citizens in South Korea
    • Preparation for armed attacks against Japan
    • Civil protection and response to evacuees 

  • Get Out While You Still Can: Paris Hilton Pitches An ICO On Twitter

    The ICO market just received an endorsement from the reality television star who tried to copyright the phrase "that's hot."

    Hotel-empire heiress Paris Hilton revealed on twitter that she’s joined the ICO party just as the Chinese government has announced harsh new restrictions that will make it virtually impossible for its citizens, some of the most voracious buyers of these coins, to participate in new offerings.

    Hilton said this weekend that she’s “looking forward” to participating in an offering called Lydiancoin.

    //platform.twitter.com/widgets.js

    According to Business Insider, LydianCoin is a platform that wants to combine the blockchain with "targeted, AI driven digital marketing and advertising services." In its white paper (of course, the company launching the offering hasn’t actually built the product yet), advertising-tech company Gravity4 aims to raise $100 million by selling 20 million Lydian coins at $5 a pop. As BI reports, Gravity4's CEO Gubaksh Chahal pleaded guilty to assault in 2014 after being accused of beating his girlfriend, and was accused of violating his probation by assaulting another woman.

    Hilton joins a pack of celebrities who’ve used their presence on social media to hype ICOs. Floyd “Crypto” Mayweather, has publicized his investments in a handful of ICOs. Dennis Rodman notoriously wore a t-shirt advertising an ICO called “potcoin” when he returned from visiting Kim Jong Un in North Korea earlier this year.

    Rapper the Game has been talking up Paragon Coin, a coin that aims to “revolutionize” the legal marijuana market.

    //platform.twitter.com/widgets.js

    As BI notes, the involvement of celebrities is a sign that ICOs are going mainstream. However, with governments from China to Russia – and even the SEC in the US – preparing to crack down on the nascent market, which is expected to raise nearly $2 billion this year according to analysts at Pitchbook, the combined power of regulators in some of the biggest markets for digital currencies could swiftly put an end to the party.

    According to Bloomberg, fans and skeptics of ICOs will interpret Hilton’s involvement differently.

    To critics of the booming world of ICOs, Hilton’s involvement is the latest example of a fad finance trend that has already seen the offerings raise $1.25 billion this year. To its supporters, it’s evidence of the networking effect that will quicken the development of ICOs.

    Not that the market needs any help. Some of the most successful ICOs have raised more than $200 million – with little more than a white paper sketching out their product idea. Inevitably, the vast majority of these coins will quickly become worthless, while their creators will have extracted hundreds of millions of dollars in wealth from unwitting buyers.

    Get out while you still can.

  • Red October In Washington In 2017?

    Submitted by Iben Thranholm

    Red October in Washington in 2017?

    I recently I came across a video on Youtube showing a presentation by former Soviet KGB propagandist Yuri Bezmenov, aka Tomas Schuman, who worked for Novosti Press Agency during the Soviet era until he defected in 1970. Yuri Bezmenov issued a strong warning to America that they were not living in an age of peace and love as many believed. Quite the contrary, he claimed. America was slowly being subverted into Marxism. He predicted that it would eventually lead to a revolution in the USA that would put an end to the free world. The question is if the revolution in the US he warned against is just about to happen.

    The 1983 video shows a lecture he delivered in Los Angeles on methods of “ideological subversion”, a form of warfare the KGB used against America.

    Bezmenov explains that the main effort of the KGB was not conventional intelligence at all. Only some 15 per cent of resources was spent on James-Bond-style espionage, while 85 per cent was devoted to a slow process called “ideological subversion” or “active measures”.

    What this means, Bezmenov explains, is to change Americans’ perception of reality to such an degree that no American is able to draw a sensible conclusion in the interest of defending themselves, their families, communities and their country, regardless of the abundance of information available to them. It is a massive brainwashing process achieved at a very slow pace. 

    The process is split into four stages: 1) demoralization, 2) destabilization, 3) crisis, and 4) normalization.  

    In his book “Love Letter to America” from 1984, Bezmenov explains how the main principle of ideological subversion is turning a stronger force against itself, and the crucial role demoralization plays in that process.

    He writes, “It takes about 15 to 20 years to demoralize a nation. Why that many (or few)? Simple: this is the minimum number of years needed to ‘educate' ONE GENERATION of students in a target country (America, for example) and expose them to the ideology of the subverter. It is imperative that any sufficient challenge and counter-balance by the basic moral values and ideology of this country be eliminated.

    The main methods used by Marxists in the West, Bezmenov explains, were to: “corrupt the young, get them interested in sex, take them away from religion. Make them superficial and enfeebled […] destroy people's faith in their national leaders by holding the latter up for contempt, ridicule and disgrace […] cause breakdown of the old moral virtues: honesty, sobriety, self-restraint, faith in the pledged word.

    The main targets are religious faith, education, media and culture – hippie-movement of that day. Although to all appearances America firmly rejected Soviet Communism during the Cold War, Bezmenov very correctly observes that there was a massive undercurrent of Marxist-Leninist indoctrination at many, if not most, universities and institutions of learning, in the media and artistic communities in the West throughout the 1960s and 1970s that was never challenged or counterbalanced by fundamental American patriotic values. This was especially true of the entertainment industry. According to Bezmenov, a group of rock or pop-musicians with a message of 'social-justice' sugar-coated in popular 'spiritual' tunes was actually more helpful to the KGB than someone standing in the pulpit preaching Marxist-Leninist doctrine. 

    The 1983 video shows Bezmenov explaining that the demoralisation process in the US had already been completed to a degree beyond the wildest dreams of the top leadership in the Kremlin.

    This proces was done by Americans to Americans thanks to lack of morals.  Most of the people educated in the 1960s, intellectuals are now occupying the positions of power in the government, civil service, mass media and the education system. You are stuck with them,” Bezmenov points out. 

    This has resulted in the ideology of Cultural Marxism, which consists of eroding all traditions and values, thus destroying the foundations of Judeo-Christian culture. The initial round of Marxism, implemented in 1917 in Russia, was mainly about economical reforms and the distribution of financial goods. This model has now collapsed with the demise of the Soviet Union. No one fights for state socialism any more. Multinational companies have taken over. However, the spirit of Communism lives on in the West, the cradle of Marxism, in the shape of false compassion, freedom and equality in absurd measure. The second coming of Marxism, which now unfolds in the West, assumes the form of identity politics, which aims to obliterate all distinctions based on race, gender, culture and religion, using the weapon of open borders and mass immigration. The special target is the traditional family, which s attacked constantly and viciously in the attempt to create a culture in which identity and fundamental relations are dissolved. Transgenderism is another way to deprive a human of his or her fundamental identity. All this is done in order to allow the state or large multinational corporations to control these individuals, who no longer know for certain who they really are. As Soviet Communism dismantled economic class distinctions, cultural Marxism and  multiculturalism will obliterate all identity and national distinctions in order to facilitate global control of the masses. The white, Christian male, branded as a supremacist, is the new capitalist or nobleman, who must go to the scaffold, like the czar and his courtiers. Accusation of hate-speech is the new form of censorship that radical leftists apply to control all discourse. The media have manipulated the concept of truth beyond all recognition of truth and falsehood. Truth is what the powers that be want to apply. 

    As we witness the current development in the USA, especially after the violent clashes in Charlottesville and the disturbances and violence instigated by movements like Antifa and Black Lives Matter, it is relevant to ask – following Bezmenov’s analysis – if the third item, the crisis, of the “ideological subversion” process is unfolding before our eyes in the USA. According to Bezmenov it may take only six weeks to bring a country to the verge of crisis ( as we saw it in Central America in the 1970s) and – after the crisis – the violent change of power, structure and economy, the period of normalization begins, which will usher in a new regime. We have seen the same method used in the Middle East with the Arab Spring, and the Maidan coup in Ukraine in 2014. Western society is now undergoing the same process with destabilization through radical leftist movements and dominance of social justice warriors.

    Just now, protesters carry out a ten-day “civil disobedience” march starting on 28 August in Charlottesville, Virginia, headed to Washington D.C. to fight white supremacy and demand that President Trump be removed from office. 

    "The March to Confront White Supremacy" states it will travel to the nation's capital and then occupy it with non-violent demonstrations. 

    "For years, white supremacist violence, rhetoric, and policies have escalated and intensified – exploding during Donald Trump’s run for president and reaching a boiling point in Charlottesville," the event’s web site reads.

    "We demand that President Trump must be removed from office for allying himself with this ideology of hate and we demand an agenda that repairs the damage it has done to our country and its people," the march organizers wrote. 

    Professor Mark Bray, a historian and lecturer at Dartmouth, author of a new book entitled "Antifa: The Anti-Fascist Handbook,” defined the Antifa movement recently in an interview on NBC News: 

    It’s basically a politics or an activity of social revolutionary self-defence. It’s a pan-left radical politics uniting Communists, Socialists, Anarchists and various different radical leftists together for the shared purpose of combating the far right.

    In the interview, Bray explains that anti-fascists go about resisting fascism, and discusses if they are ethically reasonable as collective self-defence against fascism and Nazism."

    The resistance against the “old, conservative America”, also visible in the dismantling of statues, is now so strong that the opposition to Trump think it is reasonable to discuss if the de radical leftist movements are ethically defensible in their fight against what they call fascism and the policies the claim Trump represents. 

    As I see it, this bears an uncanny resemblance to the political events leading up to the October revolution in Russia in 1917. Antifa, the tearing down of statues and the march on Washington now resemble the revolutionary Bolshevik uprising that brought down the government in 1917 and later, in February 1918, deposed Czar Nicolas II.  Although today’s protesters currently joining in the "The March to Confront White Supremacy” from Charlottesville to Washington DC claim that they are non-violent, their aim is – with or without violent clashes – to depose President Trump and his presidency. If they succeed sooner or later in ousting the president, like the Democrats have attempted to do together with the radical leftist ever since Trump was inaugurated, it will actually amount to a coup d’etat like in the Bolshevik revolution in Russia. 

    This will complete the ideological subversion that Yuri Bezmenov warned against and take it into its final stage, which is normalization. If this happens, everything we have understood American culture to be will be replaced by pure cultural Marxism, that is, a new kind of Soviet regime with multiculturalism as its ideology. 

    Paradoxically, these are the very political movements that spearhead the hysteria of accusations of Russian involvement in America’s democratic elections and Trump’s alleged cooperation with the Russians. The radical leftists hate Russia because they cannot forgive them for abandoning Marxism and instead embracing conservative, Christian values as the foundations of modern Russia.

    Yet how will the right and the movement behind Trump react if the radicals leftist attack Trump in earnest? Former Trump adviser Roger Stone believes a civil war would ensue if Congress were to impeach President Donald Trump.

    In case he is right, the question is whether the right will be able to win such a civil  war. Their Achilles’ heel is that they are themselves soaked in the dye of moral and spiritual culture Marxist ideological subversion. There are few genuine conservatives left, but many of them are moral relativists, who live by the cultural Marxist creed. A good example is British homosexual media personality Milo Yiannopoulos, who often rails against the leftists. In a speech entitled “10 things Milo hates about Islam”, he proclaims his hatred of the left, but simultaneously swears his allegiance to it. He states:

    On the one hand, we’re defending America from the excesses of the left, and the threat they represent to free expression and freedom of association. On the other hand, we have to defend the good things that the left has achieved – women’s rights, gay rights, and tolerance […]

    Thus is the precise predicament in which the right in the West is stuck. They are against the left’s position on mass immigration, but their morals, culture and spirituality are cut from the same cloth. Not that conservatives are against respect and tolerance, but the right’s desire for civil rights are often based on moral relativism, which is at the core of cultural Marxism.

    Demoralization has also had its effect on the right, and therefore it has not the moral superiority to win the battle. It is not fundamentally separate from the left on sexuality and family. The West currently has no real alternative to cultural Marxism unless an entirely new movement arise that re-establishes eternal moral values defined as faith, love, freedom, conscience, family, motherland and nation. Bezmenov also points this out at the closing of his lecture, as he calls for “a very strong national effort to educate people in the spirit of real patriotism and to explain the real danger of socialism, communism, welfare state and big brother state. If people will fail to grasp the impending danger, nothing ever can help the USA. Then its good bye to freedom”, he concludes.

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Today’s News 4th September 2017

  • New NGO Racket: Smuggling, Inc.

    Authored by Soeren Kern via The Gatestone Institute,

    • Although the European Union successfully bribed Turkish President Recep Tayyip Erdogan last year — inducing him to slow the flow of migrants heading through Turkey into Greece — Italy has received almost 100,000 people so far this year.
    • This summer, even more than in previous years, it has become plain that some of the NGOs working in the Mediterranean are acting as something more than intermediaries. Many have in fact been acting as facilitators. This makes the NGOs effectively no more than the benign face of the smuggling networks. Undercover workers have also discovered NGOs handing vessels back to the smugglers' networks, effectively helping them to continue their criminal enterprise indefinitely.
    • A group that which seeks to oppose Europe's current self-destructive insane trajectory can now not even source independent financial support. Groups, however, that continue to push Europe along its current trajectory continue to get all the official support they need. In the difference in reaction to these two groups lies a significant part of the story of the ruin of a continent.

    Sometimes it is in the gap between things that the truth emerges.

    In recent years Europe has been on the receiving end of one of the most significant migrant crises in history. In 2015, in just a single year, countries such as Germany and Sweden found themselves adding 2% to their respective populations. Although much of the public continue to labour under the misapprehension that those still coming are fleeing the Syrian civil war; in fact, the majority of those now entering Europe are from Africa, particularly from sub-Saharan Africa.

    Although the European Union successfully bribed Turkish President Recep Tayyip Erdogan last year — inducing him to slow the flow of migrants heading through Turkey into Greece — Italy has received almost 100,000 people so far this year. Spain — which had ducked much of the movement of recent years — now finds itself receiving thousands of people who are sometimes (as in this memorable footage from earlier this month) simply landing on the country's beaches and running straight into the country. In doing so, they are not only breaking into Europe in a fashion that is illegal, but flouting all the asylum protocols, and other protocols, however inadequate, that are meant to exist.

    In reaction to such events, the Spanish authorities have done something extraordinary. They have gone the way of the Italian authorities and made more efforts to intercept boats heading towards the country. Not in order to turn them around or block them, but in order to "rescue" them. In merely one day last week, the Spanish coastguards "rescued" 600 migrants. The purpose of the quotation marks around "rescue" is because its use in this context is highly contestable. Somebody may be rescued from a burning car, or rescued from a sinking boat. But if thousands of people intentionally head across narrow stretches of water, it can hardly be said that each and every one of them has been "rescued'.

    What have they been rescued from? They may be rescued from war. Or they may be rescued from poverty. Or slightly less rosy economic prospects than someone born in Spain. Most of these people have simply been rescued from Africa or whatever their country of origin. This situation leads to the questions which European politicians even now refuse to address — which is whether Europe should indeed be "rescuing" anyone who ends up in a boat near Europe.

    Whenever they are polled, the public in Europe consistently say that they want the migration to slow down or stop. This is a majority opinion in every European country. Across the EU as a whole, a recent survey found that 76% of the European public think that the European Union's handling of the whole crisis has been poor. But it is in the gap between the treatment of two actors in this crisis that we can discern a terrible fact about the fate of Europe.

    Throughout the crisis of recent years — and especially since the height of the crisis in 2015 — the official vessels operated by the European states have been joined by members of non-governmental organsations (NGOs), either on the vessels or running vessels of their own. A significant amount of the "rescue" part of the migrant crisis (finding boats and transferring those onboard onto safe vessels or guiding their vessels into port) has been done by NGOs. Organisations such as Save the Children and Médecins sans Frontières have been invited to do this by European government agencies, and many of them receive significant levels of government funding as well as charitable giving from the public.

    Yet, this summer, even more than in previous years, it has become plain that some of the NGOs working in the Mediterranean are acting as something more than intermediaries. Many have in fact been acting as facilitators. Agents who have infiltrated the NGO groups have found collusion between the NGOs and the smugglers networks, including coordination with these brutal and mercenary organisations. Investigations have found NGOs to have been breaking their own agreed operating rules by coordinating locations to meet and pick up vessels sent out by the smugglers. This makes the NGOs effectively no more than the benign face of the smuggling networks. Undercover workers have also discovered NGOs handing vessels back to the smugglers' networks, effectively helping them to continue their criminal enterprise indefinitely.

    Some NGOs that work to pick up migrants from boats in the Mediterranean and transport them to Europe have been discovered handing vessels back to smuggler networks, helping their criminal enterprise. Pictured: A small rubber boat overcrowded with migrants passes a boat set alight by the crews of Phoenix, a vessel operated by the "Migrant Offshore Aid Station" (MOAS) NGO, after all passengers were evacuated, on May 18, 2017. MOAS's protocol of torching the smuggling boats after debarkation prevents smugglers from reusing the vessel. (Photo by Chris McGrath/Getty Images)

    In frontline countries such as Italy, this unlawful activity has been causing growing public anger. Elsewhere in Europe, the notion that these NGOs are not entirely angelic in their operations is taking longer to sink in. But compare the reaction to them — in receipt as they continue to be of large quantities of public and governmental money — with a group that has a different view to that of the NGOs.

    At the start of this summer, a group called "Defend Europe" raised money to hire and sail a ship off the coast of Italy. The ship aimed to deter migrants from crossing the Mediterranean. One activist was recorded saying, "We want to get a crew, equip a boat and set sail to the Mediterranean ocean to chase down the enemies of Europe." Some of the other characters and rhetoric associated with this movement may be equally unsavoury. For some weeks, the "Defend Europe" vessel, with banners prominently displayed, has floated in the Mediterranean and told people in a variety of languages, "No Way. You will not make Europe home" and "Stop human trafficking."

    Now one may abhor this tactic, approve of it, or feel a whole range of emotions in between. The treatment of "Defend Europe', however, compared to the pro-migration NGOs, is startling. In recent weeks, when the "Defend Europe" vessel had some minor technical problems, it caused undisguised glee in the Western media. The suggestion that a pro-migration NGO vessel might have to rescue it caused even more delight. Now the group has had its sources of funding withdrawn. Not that "Defend Europe" would ever have received government aid. Far from it. But this past week, the US-based crowd-funding website Patreon shut down the group's profile page, making it impossible for them to raise funds through it. The ostensible cause was that Patreon believed the actions of "Defend Europe" were "likely to cause loss of life."

    It may easily be argued, of course, that pro-migration NGOs that are colluding with smuggling gangs and assisting them in their work are "likely to cause loss of life", if not in the Mediterranean then in encouraging thousands of people to give their money to smuggling gangs and encouraging millions more to set out for a new life in a continent which is increasingly less likely to receive them with warmth. A group that seeks to oppose Europe's current self-destructive trajectory can now not even source independent financial support. Groups, however, that continue to push Europe along its current trajectory continue to get all the official support they need. In the difference in reaction to these two groups lies a significant part of the story of the ruin of a continent.

  • The Rise Of The Deep State: How They Got Their Power To Manipulate For Ultimate Control

    Authored by Mac Slavo via SHTFplan.com,

    While many in the United States firmly believe that the government just isn’t working, it is.  But it’s only working for the powerful and rich elites in the government and the media who have a desire to cling to their oppressive control of others and the money many are willing to allow them to steal.

    The fight has never been between the republicans and the democrats.

    As Americans choose sides, their rights and freedoms are sold to the highest bidder. According to Intellectual Takeout, the fight is between “us” and the deep state; not those on the right and those on the left.  More and more often we are seeing bureaucrats, lobbyists, and elected officials of both parties circle the wagons in an effort to prevent any true reforms of the government. They constantly write laws they exclude themselves from,  come up with inventive ways to tax us to our breaking point and destroy the healthcare system.  And this is all by design.

    According to Joost Meerloo in his seminal book The Rape of the Mind, the author discusses the psychology of brainwashing that’s allowing every American to succumb to tyranny right before their eyes and not only not realize it, but beg for more oppression.  “The burning psychological question is whether man will eventually master his institutions so that these will serve him and not rule him,” said Meerloo in his discussion of the Deep State or the “administrative machine” published in 1956.

    Meerlo describes the rise of the deep state as:

    “… The development of a kind of bureaucratic absolutism is not limited, however, to totalitarian countries. A mild form of professional absolutism is evident in every country in the mediating class of civil servants who bridge the gap between man and his rulers. Such a bureaucracy may be used to help or to harm the citizens it should serve.

     

    It is important to realize that a peculiar, silent form of battle goes on in all of the countries of the world — under every form of government — a battle between the common man and the government apparatus he himself has created. In many places we can see that this governing tool, which was originally meant to serve and assist man, has gradually obtained more power than it was intended to have.

     

    Governmental techniques are no different from any other psychological strategy; the deadening hold of regimentation can take mental possession of those dedicated to it, if they are not alert. And this is the intrinsic danger of the various agencies that mediate between the common man and his government. It is a tragic aspect of life that man has to place another fallible man between himself and the attainment of his highest ideals.”

     

    The Rape of the Mind

    Meerlo goes on to say that the power of simply being in government will corrupt:

    Being a high civil servant subjects man to a dangerous temptation, simply because he is a part of the ruling apparatus. He finds himself caught in the strategy complex. The magic of becoming an executive and a strategist provokes long-repressed feelings of omnipotence. A strategist feels like a chess player. He wants to manipulate the world by remote control. Now he can keep others waiting, as he was forced to wait himself in his salad days, and thus he can feel himself superior.

     

    The Rape of the Mind

    But what we are seeing now is not only the corruption of the government.

    We are witnessing the deep state pulling the strings of every politician and fight to keep their power and moneyThe members of the Deep State are fighting for not only their jobs and their power but their sense of being. It is an ego boost to control entire populations. But what meaning do they have in life if they were shown that they are in fact dispensable, that they and their departments can be eliminated? In the end, their egos depend upon the maintenance and growth of the power and prestige.

    Over many decades, the very government so many still trust to keep them safe has put in place compulsive orders, red tape, and regulations while expanding exponentially to enforce what it creates and stealing more tax money to cover the rising costs. All the while, its roots drive deeper and deeper into the very government many still fight to protect. Even the politicians who we send to D.C. thinking that they represent us are ensnared in the game. They begin to play by the rules set forth by the Deep State; indeed, our elected officials even become dependent upon the Deep State.

    So the question is, how do we combat the deep state and get our freedom back?

  • Trump Has Decided To End DACA, "Igniting A Political Firestorm"

    On Friday, the White House announced that Trump would make his decision whether to end the Obama-era Deferred Action for Childhood Arrivals (DACA), or “Dreamer, program on Tuesday. Well, we won’t have to wait to long, because according to Politico, Trump has made the decision to end the DAVA program with a six-month delay.

    Trump, who has faced strong warnings from both Democrats and Republicans not to scrap the program and struggled with his own misgivings about targeting minors for deportation, is said to have made up his mind and according to Politico, “senior White House aides huddled Sunday afternoon to discuss the rollout of a decision likely to ignite a political firestorm — and fulfill one of the president’s core campaign promises.”

    Trump will announce his decision on Tuesday, with Politico noting that the White House informed House Speaker Paul Ryan of the president’s decision on Sunday morning. Ryan had said during a radio interview on Friday that he didn’t think the president should terminate DACA, and that Congress should act on the issue. However, Trump’s conversations with Attorney General Jeff Sessions, who argued that Congress rather than the executive branch is responsible for writing immigration law, helped persuade the president to terminate the program, although Politico hedges that “the White House aides caution that — as with everything in the Trump White House — nothing is set in stone until an official announcement has been made.”

    In what appears to be another victory for the recently exiled “nationalist” wing of the Trump inner circle, the president’s expected announcement is likely to shore up his base, which rallied behind his broader campaign message about the importance of enforcing the country’s immigration laws and securing the border. At the same time, the president’s decision is likely to be one of the most contentious of his early administration, opposed by leaders of both parties and by the political establishment more broadly. It also indicates that despite his departure, Steve Bannon still continues to have major influence on the Trump White House.

    Still, in a nod to reservations held by many lawmakers, the White House plans to delay the enforcement of the president’s decision for six months, giving Congress a window to act, according to one White House official. But a senior White House aide said that chief of staff John Kelly, who has been running the West Wing policy process on the issue, “thinks Congress should’ve gotten its act together a lot longer ago.”

    As a result, the vast majority of the nearly 800,000 people brought to the country illegally as children and who have benefitted from the program, are expected to lose their legal basis for continued presence in the United States, promoting even greater animosity between the Trump administration and the immigrant community.

  • 'Gunfight' Starts Over School Supplies At WalMart (Or Why Amazon Is 'Winning')

    If you had any reasons to question why increasing numbers of Americans are turning to Amazon.com for their everyday and anyday needs, the following clip will erase them…

    On Monday of last week, an argument broke out between two pairs of women over the last notebook on the shelf at the Novi Towne Center WalMart store, according to police.

    Video from a bystander shows a woman pull out a gun during the fight

    The fight involved two Farmington Hills residents, ages 46 and 32, and a mother and daughter from South Lyon, ages 51 and 20.

    WCRZ-FM reports that the two Farmington Hills women were shopping for school supplies, and when one of them reached for the last notebook on the shelf, a South Lyon woman also reached for it. Police told the Free Press that it was the 20-year-old who reached for it.

    The two women pulled the 20-year-old’s hair, and the woman's mother was pushed aside before pulling out a gun, according to Fox2Detroit.

    *  *  *

    And that's why Amazon's sales are soaring…

  • Latest Projections Show Hurricane Irma Headed For Florida

    As Hurricane Irma continues to move  west as a Category three storm, in what still is said to be an indeterminate path, according to the latest projections from Met Scientist Michael Ventrice, it now looks like Florida has the highest probability of a US landfall…

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    …though that doesn’t mean the Gulf of Mexico can rest easy. Hurricane forecasting is notoriously inaccurate one or two weeks out…

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    Before it nears the US, however, the storm is headed toward the Northern Caribbean, threatening to bring flooding rain and damaging winds to the Leeward Islands. Preparations for the storm should already be taking place in these areas, according to Accuweather.com.

    “Rain and gusty winds may start as early as Tuesday,” AccuWeather Senior Meteorologist Rob Miller said.

    According to Accuweather, Irma’s intensity has vacillated over the past few days. But the storm is expected to strengthen to a category four hurricane with sustained winds of 130-156 mph as it approaches the islands. Thereafter, the storm will turn to the north and west over the coming days. This track will put Antigua and Barbuda, Montserrat, St. Kitts and Nevis, Anguilla and the British Virgin Islands, in the brunt of the storm's rain and wind spanning Tuesday and Wednesday.

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    Cruise and shipping vessels in the hurricane’s path will need to reroute.

    Later in the week, Irma will move close to Puerto Rico and Hispaniola with the worst of the storm expected to miss the islands to the north. Even so, rough surf, gusty winds and heavy rain will increase.

    Experts are concerned that the Turks and Caicos Islands and the Bahamas could face dangerous conditions at the end of the week and into the weekend as Irma passes nearby or possibly through the islands. Impacts will be severe if Irma maintains its strength and passes over them.

    Ultimately, the storm could land in Florida, Georgia, the Carolinas or even closer to the Delmarva Peninsula. Or it could curve northward and miss the east coast entirely.

    “The eastward or northeast progression of a non-tropical system pushing across the central and eastern U.S. this week will highly impact the long-range movement of Irma,” AccuWeather Hurricane Expert Dan Kottlowski said.

    How fast or slow this non-tropical system moves will determine whether Irma takes a west-northwest path toward the southern Atlantic Seaboard or gets steered north and away from land.

    * * *

    Readers may be wondering, if the storm slams southeast Florida, as is looking increasingly likely. Well, the Miami Herald spoke with one engineer who built a “dynamic” weather forecasting model that incorporates data like rainwater evaporation rates and how much of a given surface area is paved.

    “Omar Abdul-Aziz, an engineer and assistant professor at West Virginia University, has done just that with a new model he built while at Florida International University as part of a state-funded project to improve hurricane loss models. At the request of the Herald, he agreed to run three rainfall scenarios that might resemble Hurricane Harvey.

     

    The maps he produced stretch from Homestead north to Port St. Lucie, not including barrier islands which are separate land masses, and depict flooding after 48 hours from 20 inches of rain, 30 inches of rain, and 40 inches of rain.

     

    Because the maps cover a large area, they don’t show flooding at street level. But Abdul-Aziz said they do provide a far more accurate picture of what would happen across the region.”

    If his models are accurate, residents of densely populated cities like Miami might want to start bracing for floods. Abdul-Aziz found that floodwaters in parts of Miami, Hialeah, South Dade and Fort Lauderdale could rise between nine and 17 inches at least with this amount of rain. And with 40 inches of rain, flooding in those same neighborhoods, as well as many more, rises to between 23 inches and more than three feet — enough to begin damaging houses and partially submerge cars.

    “Because of the flat land and low elevation, water does not move fast. It goes slow and the drainage capacity is not designed to take that much rainfall,” he said.

    To build the model, funded with $533,000 from the state, Abdul-Aziz used the Environmental Protection Agency’s latest stormwater management model, which has been used since the 1970s to help communities plan water and sewer systems. They include local hydrology, land cover, ground level and local climate, but cover a smaller area.

    Abdul-Aziz mapped out three different flooding scenarios below:

     

    To be sure, the storm is still at least a week away. Depending on atmospheric conditions, it could menace a wide stretch of the US east coast. If it’s still a powerful category 3 or 4 storm when it hits – as projections suggest it would be – the US could be bracing for its second major natural disaster in two weeks.

  • China Battles "Impossible Trinity"

    Authored by James Rickards via Daily Reckoning blog,

    Just because something is inevitable does not mean it cannot be postponed.

    The popular name for this is “kicking the can down the road,” which is a perfectly good description.

    I prefer more technical terms such as dynamic systems in “subcritical” and “supercritical” state space, but it amounts to the same thing.

    A financial crisis can be a long time in the making, but it will definitely erupt. When it does, there will be huge losses for those who ignored the warning signs.

    China is in a pre-crisis situation today.

    It is confronting the harsh logic of the “Impossible Trinity.”

    The Impossible Trinity theory was advanced in the early 1960s by Nobel Prize-winning economist Robert Mundell. It says that no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time.

    You can have one or two out of three, but not all three. If you try, you will fail – markets will make sure of that.

    Those failures (which do happen) represent some of the best profit-making opportunities of all.

    Understanding the Impossible Trinity is how George Soros broke the Bank of England on Sept. 16, 1992 (still referred to as “Black Wednesday” in British banking circles. Soros also made over $1 billion that day).

    The reason is that if more attractive total returns are available abroad, money will flee a home country at a fixed exchange rate to seek the higher return. This will cause a foreign exchange crisis and a policy response that abandons one of the three policies.

    But just because the trinity is impossible in the long run does not mean it cannot be pursued in the short run. China is trying to peg the yuan to the U.S. dollar while maintaining a partially open capital account and semi-independent monetary policy. It’s a nice finesse, but isn’t sustainable.

    China cannot keep the capital account even partly closed for long without drying up direct foreign investment. Similarly, China cannot raise interest rates much higher without bankrupting state-owned enterprises.

    China is buying time until the Communist Party Congress in October.

    It’s important to realize that for Beijing, the Chinese economy is more than about jobs, goods and services. It’s a means of ensuring its legitimacy. The Chinese regime is deeply concerned that a faltering economy and mass unemployment could threaten its hold on power.

    Chinese markets are wildly distorted by the actions of its central bank. Given the problems inherent in trying to manage an economy without proper price signals, the challenge facing Beijing gets harder by the day.

    China has a long history of violent political fracturing, and the government is deeply worried about regime survival if it stumbles. Many in the West fail to appreciate Beijing’s fears and overestimate the support it has among the disparate Chinese people.

    What does China do next?

    Under the unforgiving logic of the Impossible Trinity, China will have to either devalue the yuan or see its reserves evaporate.

    In the end, China will have to break the yuan’s peg to the dollar in order to stop capital outflows without killing the economy with high rates. The Impossible Trinity really is impossible in the long run. China will find this out the hard way.

  • Gold Pops, Stocks Drop As Futures Open After Korean Chaos

    In an echo of last week's move following North Korea's teating of missiles across Japan's territory, futures markets are opening in a decidedly risk-off mannwr following North Korea's "hydrogen bomb" test. Dow Futs down 100 points, Gold jumping and Treasury bonds bid…

     

    All major US equity indices are down…

     

    Gold is back above $1340…

     

    USDJPY broke below 110.00

     

    And VIX futures are spiking back into last week's Korea crisis region…

     

    Of course, what happens next is anyone's guess as last week saw the BTFDers panic-buy stocks to their best week in 10 months1

  • VIX Set For Lowest Annual Average Ever, But…

    While intra-month the CBOE Volatility Index reached its highest since November, before plunging back to earth into the end of the month, VIX is still on track to post its lowest annual average on record.

    Bloomberg notes that in the past decade, VIX gains in August were followed by September declines in all but one instance.

    While VIX has collapsed so far this year, it may not last.

    Though VIX ended up paring its August gain to 3.2% – a gauge tracking longer-term wagers posted its biggest increase since January 2016.

    In fact, after last month’s 11 percent gain, the CBOE S&P 500 3-Month Volatility Index has reached its highest level relative to the VIX since Aug 2012's European credit crisis.

    The September Federal Reserve gathering and debt-ceiling discussions are among events that could lead to increased market volatility at a time when the S&P 500 Index trades near a record high.

  • What Will Stabilize Used Vehicle Sales? (Hint: Nothing Good)

    Authored by Daniel Ruiz via Blinders Off blog,

    Until this point, a lot of what I've shared with you is theoretically based on my knowledge and experience of used vehicle values and how I believe they affect new vehicle sales velocity. Today, I am going to share some some hard data that I've been researching with a great deal of effort.

    I genuinely believe that used vehicle values have a very significant effect on new vehicle sales velocity. I have explained it on Twitter and on a previous blog post through the concept of trade cycles. Because of this, I am certain that used vehicle values can be used as a leading indicator for inventory management at the manufacturing level, at the retail dealer level and certainly as an investment tool. However, I humbly hold that current used vehicle value indexes sources are not good enough.

    There is a very specific group of vehicles that can be monitored in order to better project results. The Manheim and NADA index both have too much noise in the data. For example, the Manheim Index has no model year restrictions and includes new vehicle price inflation in the calculations. NADA goes up to 8 model years. Both average the data over multiple months and include vehicles which, in my opinion, have little to no impact on new vehicle sales velocity. Therefore, I have decided to make my own index.

    For now, I'm going to use Ford as an example please ignore the red residual line until later.

    I have said numerous times that passenger vehicles are at a different points in the value cycle than trucks and SUVs.

    This is common knowledge at this point, and most have placed their faith on trucks and SUVs. This includes manufacturers shifting production and rental car companies changing their fleet mix to the better performing SUV and truck sector. Most analyst are looking at fuel prices to mark the top of the SUV and truck market. Here's what they've missed:



    Here's WHY this matters:

    Now back to residuals. What I want to drive home, in simple terms, is that assuming no change in demand, supply precedes price changes. When used vehicle values underperform residual values, the return rate of leases goes up. The opposite is also true. Less vehicles returned means less auction volume supporting higher prices. More vehicles returned means more auction volume supporting lower prices. Look at the charts again and note the acceleration of used vehicle value declines when used vehicle values fall below residual values. So where do we stand today? You tell me if this looks supportive of higher used vehicle values:

    You might wonder what will stabilize used vehicle values going forward. Consider this, a used vehicle is nothing more than a new vehicle transaction that drove off the dealer's lot.

    The answer, years of declining new vehicle sales and we are just getting started.

    If you feel that my insight might be a useful part of your investment decisions in the automotive sector, I offer phone consultations as well as in-person presentations through GLG.

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Today’s News 3rd September 2017

  • De-Dollarization Accelerates: China Readies Yuan-Priced Crude Oil Benchmark Backed By Gold

    Authored by Tsvetana Paraskova via OilPrice.com,

    The world’s top oil importer, China, is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan, Nikkei Asian Review reports.

    The crude oil futures will be the first commodity contract in China open to foreign investment funds, trading houses, and oil firms. The circumvention of U.S. dollar trade could allow oil exporters such as Russia and Iran, for example, to bypass U.S. sanctions by trading in yuan, according to Nikkei Asian Review.

    To make the yuan-denominated contract more attractive, China plans the yuan to be fully convertible in gold on the Shanghai and Hong Kong exchanges.

    Last month, the Shanghai Futures Exchange and its subsidiary Shanghai International Energy Exchange, INE, successfully completed four tests in production environment for the crude oil futures, and the exchange continues with preparatory works for the listing of crude oil futures, aiming for the launch by the end of this year.

    “The rules of the global oil game may begin to change enormously,” Luke Gromen, founder of U.S.-based macroeconomic research company FFTT, told Nikkei Asia Review.

    The yuan-denominated futures contract has been in the works for years, and after several delays, it looks like it may be launched this year.

    Some potential foreign traders have been worried that the contract would be priced in yuan.

    But according to analysts who spoke to Nikkei Asian Review, backing the yuan-priced futures with gold would be appealing to oil exporters, especially to those that would rather avoid U.S. dollars in trade.  

    “It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,” Alasdair Macleod, head of research at Goldmoney, told Nikkei.

  • "Don't Mess With Yellowstone Supervolcano" Geologists Warn NASA

    Two weeks ago, we reported that Brian Wilcox, a former member of the NASA Advisory Council on Planetary Defense, had shared a report on what the Space Agency considered one of the greatest natural threats to human civilization: the Yellowstone “supervolcano.”

    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. 

    “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.”

    Yellowstone currently leaks about 60 to 70% of its heat into the atmosphere through stream water which seeps into the magma chamber through cracks, while the rest of the heat builds up as magma and dissolves into volatile gasses. The heat and pressure will reach the threshold, meaning an explosion is inevitable. When NASA scientists considered the fact that a super volcano’s eruption would plunge the earth into a volcanic winter, destroying most sources of food, starvation would then become a real possibility.  Food reserves would only last about 74 days, according to the UN, after an eruption of a super volcano, like that under Yellowstone.  And they have devised a risky plan that could end up blowing up in their faces.  Literally.

    Wilcox hypothesized that if enough heat was removed, and the temperature of the super volcano dropped, it would never erupt. But he wants to see a 35% decrease in temperature, and how to achieve that, is incredibly risky. One possibility is to simply increase the amount of water in the supervolcano. As it turns to steam. the water would release the heat into the atmosphere, making global warming alarmists tremble.

    “Building a big aqueduct uphill into a mountainous region would be both costly and difficult, and people don’t want their water spent that way,” Wilcox says. “People are desperate for water all over the world and so a major infrastructure project, where the only way the water is used is to cool down a supervolcano, would be very controversial.”

    So, NASA came up with an alternative plan: the smartest people on earth believe 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.

    “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.”

    To be sure, NASA itself admitted that drilling into a super volcano comes with its own risks, like the eruption that scientists are desperate to prevent. Triggering an eruption by drilling would be disastrous.

    “The most important thing with this is to do no harm,” Wilcox says. “If you drill into the top of the magma chamber and try and cool it from there, this would be very risky. This could make the cap over the magma chamber more brittle and prone to fracture. And you might trigger the release of harmful volatile gases in the magma at the top of the chamber which would otherwise not be released.”

    Now, it is others’ turn to slam the NASA plan: according to a geologist at Yellowstone national park, the proposal could have dire consequences, including killing countless animals.

    According to the Star, Dr Jefferson Hungerford, who works at Yellowstone, has warned NASA scientists to stay away from the volcano. He said that: “messing with a mass that sits underneath our dynamic Yellowstone would potentially be harmful to life around us.

    “It would potentially be a dangerous thing to play around with.” And he questioned whether the drilling could even work, saying “we’re not there scientifically”.

    More importantly, Dr Hungerford said there is no need for anything to be done proactively at Yellowstone, adding: “We won’t see [an eruption]. Very likely we will never see it.

    Perhaps he is correct: the Earth has 20 known supervolcanoes, which if they erupt, would trigger planet-changing effects. Major eruptions are incredibly rare, with the last one approximately 26,500 years ago in New Zealand. But if a similar event occurred today, it would cause a nuclear winter with humans wiped out in just a few months from starvation.

    For now, what some of the smartest people in the world disagreeing on what to do next, the increasingly more precarious status quo is the most likely outcome.

  • Three Dangerous Delusions About Korea

    Authored by James George Jatras via The Strategic Culture Foundation,

    They say that most of the world’s real dangers arise not because of what people don’t know but because of what they do 'know' that just ain’t so.

    As a case in point, consider three things about Korea that the bipartisan Washington establishment seems quite sure of but are far removed from reality:

    Delusion 1: All options, including U.S. military force, are «on the table.»

    – Everyone knows there are no military «options» the U.S. could use against North Korea that don’t result in disaster. The prospect that a «surgical strike» could «take out» (a muscular-sounding term much loved by laptop bombardiers) Pyongyang’s nuclear and missile capabilities is a fiction. Already impractical when considered against a country like Iran, no one believes a limited attack could eliminate North Korea’s ability to strike back, hard. At risk would be not only almost 30,000 U.S. troops in Korea but 25 million people in the Seoul metropolitan area, not to mention many more lives at risk in the rest of South Korea and perhaps Japan.

     

    – Hence, any contemplated U.S. preemptive strike would have to be massive from the start, imposing a ghastly cost on North Koreans (do their lives count?) but still running the risk that anything less than total success would mean a devastating retaliation. That’s not even taking into account possible actions of other countries, notably China’s response to an American attack on their detestable buffer state.

    Delusion 2: North Korea must be denuclearized.

    – Whether anyone likes it or not, North Korea is a nuclear weapons state outside the Nuclear Non-Proliferation Treaty and will remain so. Kim Jong-un learned the lessons of Saddam Hussein and Muammar Gaddafi. Because Kim has weapons of mass destruction, especially nukes, he gets to stay alive and in power. If he gives them up, he can look forward to dancing the Tyburn jig or getting sodomized with a bayonet, then shot. That’s not a difficult choice.

    Delusion 3: If the U.S. presses China hard enough, Beijing will solve the problem for us.

    – There is no combination of U.S. sanctions, threats, or pressures that will make Beijing take steps that are fundamentally contrary to China’s vital national security interests. (Here, the «vital national security» of China means just that, not the way U.S. policymakers routinely abuse the term to mean anything they don’t like even if it has nothing to do with American security, much less with America’s survival.) Aside from speculation (which is all it is) that China could seek to engineer an internal coup to overthrow Kim in favor of a puppet administration, maintaining the current odious regime is Beijing’s only option if they don’t want to face the prospect of having on their border a reunited Korean peninsula under a government allied with Washington.

     

    – After Moscow’s experience with the expansion of NATO following the 1990 reunification of Germany, why would Beijing take credibly any assurances from Washington (of which there is no indication anyway) not to expand into a vacuum created by a collapse of North Korea? Quite to the contrary, it has been suggested that if China refuses to deal with the North Korea problem on Washington’s behalf, then the U.S. would do it on its terms, presenting Beijing (in the description of former U.S. ambassador to the United Nations John Bolton) with «regime collapse, huge refugee flows and U.S. flags flying along the Yalu River.» Adds Bolton, «China can do it the easier way or the harder way: It’s their choice. Time is growing short.» If under such a scenario U.S. forces end up on China’s border, suggests Bolton, they wouldn’t be leaving anytime soon. Don’t be so sure. In 1950, the last time American forces were on the Yalu River, they weren’t there very long when hundreds of thousands of Chinese soldiers crossed into Korea. Keep in mind that happened when China didn’t have nuclear weapons but the U.S. did.

    The seemingly weekly rise and fall of the decibel level of bellicose rhetoric coming out of Washington and Pyongyang obscures the realities behind these three delusions. Little change can be expected from Pyongyang, whose policy at least has the virtue of simplicity: «if you do anything bad to us, we’ll do something really, really bad to you.»

    So then, what are the prospects Washington could jump off the hamster wheel and come up with something besides threats and sanctions? The omens are not auspicious. Just before he left the White House, Steve Bannon violated the taboo surrounding Delusion 1: «Until somebody solves the part of the equation that shows me that ten million people in Seoul don't die in the first 30 minutes from conventional weapons, I don't know what you're talking about, there's no military solution here, they got us.» Then he was gone.

    But let’s be optimistic. There have been reports of direct «back channel» contacts between North Korea and the U.S. at the United Nations in New York. Even Bolton suggests that some kind of accommodation could be made to China in the form of a pullback of U.S. forces down to the south, near Pusan, so as to be still «available for rapid deployment across Asia.» (Certainly, that’s one idea. Here’s a better one: how about getting us out of Korea entirely and not having Americans available for deployment across Asia?)

    The definitive clarification should have been the Beijing-based Global Times editorial of August 10, 2017 («Reckless game over the Korean Peninsula runs risk of real war»), universally seen as reflecting the position of the Chinese government:

    «China should also make clear that if North Korea launches missiles that threaten U.S. soil first and the U.S. retaliates, China will stay neutral. If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so».

    That means that if Kim attacks the U.S., he’s on his own. If we attack Kim, we’re at war with China. In the latter case, while Russia would not likely directly join the fray we can be sure Moscow would provide China total support short of belligerency. Put mildly, this would not be in the American interest.

    There is one, and only one overriding priority that should now guide U.S. policy on Korea. It’s not regime change in North Korea – despite that regime’s loathsomeness – or even the wellbeing of South Korea or Japan. It’s avoiding Kim’s developing a missile system capable of delivering a nuclear weapon to the United States. How close North Korea might be to such a capability is the subject of wildly conflicting estimations. (Regarding the American lives hung out on the DMZ, there’s a simple solution to ensuring their safety – get them the hell out of there.)

    But what about South Korea and Japan? Our «alliances» with them are a fiction. The U.S. guarantees their security but other than cooperating on the defense of their own territory they do nothing to safeguard ours, nor can they. The U.S. derives no benefit in continuing to make ourselves a target on account of a place that’s more than five thousand miles from the American mainland.

    It’s time that «America First!» meant something. As a start, Washington could take seriously Beijing’s proposal for a double-freeze. On the one hand, Pyongyang would suspend its nuclear and missile programs, in particular halting tests of weapons with potential intercontinental range. Washington and Seoul would suspend joint military exercises, including practicing so-called «decapitation strikes« aimed at North Korea’s leadership.

    If protecting our own territory and people is American officials’ top priority, and not, as they implausibly claim, «regime change» in North Korea, it’s hard to see why a double-freeze would not be a sensible first step. It would be largely up to China to see that the North Koreans complied with their part of the deal. If they did, perhaps it could lead towards a long-overdue settlement of this Cold War-era standoff and, in time, a reunited, neutral Korea. If not, all bets are off – but we’d be hardly worse off than we are now.

  • Modi's Demonetization Called "Colossal Failure That Ruined Economy" As India GDP Growth Slumps To 2-Year Lows

    India's embattled Prime Minister Narendra Modi faced a double whammy of abuse this week as his nation's economic growth collapsed to its weakest since Q1 2014 and India's Central Bank released a report on Modi's extraordinary "demonitization" plan last year showing that 99 per cent of the high denomination banknotes cancelled last year were deposited or exchanged for new currency, crushing Modi's lie that his contentious 'war on cash' would wipe out huge amounts of so-called 'black money'.

    When Modi announced in November that Rs1,000 ($16) and Rs500 notes would no longer be legal tender, he suggested that corrupt officials, businessmen and criminals — popularly believed to hoard large amounts of illicit cash — would be stuck with “worthless pieces of paper”. At the time, government officials had suggested that as much as one-third of India’s outstanding currency would be purged from the economy – as the wealthy abandoned or destroyed it, rather than admit to their hoardings – reducing central bank liabilities and creating a government windfall.

    Since he unleashed his cunning plan, India's GDP growth has slowed dramatically.

    After India's Composite PMI collapsed, India's Q2 GDP growth slowed to 5.7% – its weakest since Q2 2014…

     

    And now, as The FT reports, the Reserve Bank of India’s annual report on Wednesday suggested that most holders of the old currency managed to dispose of it, estimating that banned notes worth Rs15.28tn ($239bn) were returned to the bank. That amounts to 99 per cent of the Rs15.44tn of the old high-value notes that were in circulation when Mr Modi made his announcement, according to the finance ministry.

    The government’s critics were quick to seize on the RBI’s announcement as evidence of the policy’s failure.

    “99 per cent notes legally exchanged! Was demonetisation a scheme designed to convert black money into white?” former finance minister P Chidambaram tweeted.

     

    Rahul Gandhi, de facto leader of the opposition Congress party, tweeted: “A colossal failure which cost innocent lives and ruined the economy. Will the PM own up?”

    The bank’s figures are a political embarrassment to Mr Modi, who had appealed to the nation to endure the disruption and hardship to punish the rich and corrupt, and deprive them of their ill-gotten gains.

    Many lower income Indians hard hit hard by cash shortages supported the demonetisation policy because they believed the rich were suffering more.

    It appears they were suckered!

  • Van Halen, M&Ms, And The Next Market Downturn

    Authored by Adam Taggart via PeakProsperity.com,

    The planet-sized egos of rock & roll performers are legendary.

    Few things symbolize this better than the outrageous requests they often make when on tour.

    These requests are referred to as "riders", and appear in the contract a tour venue receives in advance of the artist's arrival. These contract riders specify the physical conditions that the singer/band requires to be in place before arriving to perform. Stage lighting settings, sound equipment, furnishings, etc — that kind of stuff.

    And these rider requests can get pretty funky – often extremely so — when it comes to backstage perks the performers want.

    For example: A wooden pond filled with koi carp (Eminem). A driver who will not speak or make eye contact (Katy Perry). 20 white kittens and 100 doves (Mariah Carey). Seven dwarves (Iggy Pop). 50,000 bees (Slayer). A sub-machine gun (Mötley Crüe). And, yes, even a great white shark (Hank III).

    The practice of making these kind of outrageous demands stems from a rider Van Halen inserted into the contract for its 1982 world tour, which insisted on a bowl of M&Ms to be provided backstage, but with all of the brown M&Ms removed.

    As this image below of the actual rider shows, the band was very explicit in its seriousness about this:

    Once the media got whiff of this, it had a field day roasting the band's narcissistic chutzpah. A new high-water mark of diva capriciousness had been established, which quickly became legend. A feat of prima donna pampering that subsequent performers have been trying to top ever since.

    But as crazy as it sounds, Van Halen's "no brown M&Ms" rider had nothing to do with caprice. There was a solid rationale behind it.

    In fact, it was quite brilliant.

    The Importance Of Effective Indicators

    Van Halen's 1982 world tour was a massive production, involving a tremendous amount of gear and technical complexity. The contract the band sent in advance to venues was so thick due to all the details within, it was referred to as the "Chinese Yellow Pages".

    Non-compliance with the requirements in the contract could have serious consequences that could ruin the show, or even jeopardize lives.

    So when the band rolled up to its next venue, it needed a quick way to determine if the stage crew there had complied with all of the specifications within its contract.

    And that's why the "no brown M&Ms" rider was inserted. The band could simply hop off the bus and check the candy bowl. If they found brown M&Ms, they knew the contract hadn't been carefully read. And then they'd immediately call for a full-line check of the entire set.

    As lead singer David Lee Roth detailed in his autobiography:

    Van Halen was the first band to take huge productions into tertiary, third-level markets. We’d pull up with nine eighteen-wheeler trucks, full of gear, where the standard was three trucks, max. And there were many, many technical errors — whether it was the girders couldn’t support the weight, or the flooring would sink in, or the doors weren’t big enough to move the gear through.

     

    The contract rider read like a version of the Chinese Yellow Pages because there was so much equipment, and so many human beings to make it function. So just as a little test, in the technical aspect of the rider, it would say “Article 148: There will be fifteen amperage voltage sockets at twenty-foot spaces, evenly, providing nineteen amperes …” This kind of thing. And article number 126, in the middle of nowhere, was: “There will be no brown M&M’s in the backstage area, upon pain of forfeiture of the show, with full compensation.”

     

    So, when I would walk backstage, if I saw a brown M&M in that bowl … well, line-check the entire production. Guaranteed you’re going to arrive at a technical error. They didn’t read the contract. Guaranteed you’d run into a problem. Sometimes it would threaten to just destroy the whole show. Something like, literally, life-threatening.

    Genius.

    Through its rider, the band had created a easy-to-monitor and trustworthy indicator. No brown M&Ms, and the show was likely set up to go smoothly. But if otherwise, don't perform until the entire venue is scrutinized for other missed requirements.

    The lesson to take from Van Halen's wisdom is that having good indicators is key to achieving success.

    This is also extremely true for the world of investing, where you are deploying capital based upon an expected future return. How do you determine when it's a good time to enter into an investment? Once in it, how do you monitor the conditions supporting your rationale for holding it — are those changing? And if so, are they getting better or worse? When should you exit the position?

    For all of these questions, the better the indicators you use, the more accurate and informed your decision-making will be. And the better your returns as an investor will be.

    When The Indicators Are Giving A Signal, Pay Attention

    Over the years, we've compiled a large number of indicators that we monitor closely on an ongoing basis here at PeakProsperity.com. They most definitely inform our economic outlook and forecasting.

    We'll dedicate an upcoming report to laying out the sources and metrics we place the greatest weighting on. But several that we're watching closely right now come from two market analysts that we highly respect.

    The first set comes from Lance Roberts, chief strategist/economist for Clarity Financial. Lance is renowned for his excellent charts and ability to highlight key changes in data trends. Below are several indicators he's recently featured, suggesting weariness in the US financial markets and growing likelihood of economic recession.

    First, the S&P 500 is showing signs of topping out, having broken below the trading range of its latest 8-month bullish trend, and its MACD momentum indicator displaying two recent sell signals:

    Lance warns that such signals suggest that further price gains will be "volatile and limited" unless the S&P returns into its bullish channel. If it indeed does not and drops below the key resistance level of 2390, he sees a swift price correction of 12% as a real possibility.

    But he then combines this near-term technical analysis with more far-sighted data to make the point that the financial markets are not just overbought, but dangerously overvalued at this point. Similar to John Hussman (another producer of market indicators we value highly), Lance shows that, because today's prices are the result of pulling so much of tomorrow's valuation into today (e.g., via the suppression of interest rates and overexuberant speculation), we are living at a rare time in history where the average market return for the next 20 years may well be negative:

    And he recently caught our attention by surfacing this chart of the change in annual Real Value Added to the US economy, a metric that hadn't been on our radar beforehand. This has been a reliable indicator of recession in the US for nearly 70 years, and is now signaling that we've likely already entered one:

    Couple Lance's indicators with those of our other expert, Grant Williams, portfolio advisor at Vulpes Investment Management and co-founder of Real Vision TV. Grant and the team at Real Vision recently issued their latest Killer Charts series, which adds validation and additional weight to Lance's warnings.

    First off, Grant and his team see similar technical signs of "exhaustion" in the S&P 500 and predict lower prices ahead:

    Note that they don't just expect the S&P to correct slightly and then continuing powering higher. Other indicators they track, like the equities-vs-commodities ratio, strongly suggests a bubble peak for the S&P. From here they predict a secular bear trend for stocks (possibly paired with a new bull trend in commodities):

    And like Lance, Grant sees signs that the US economy is poised to slow further…

    .. and is likely, as Lance also concludes, tipping into recession:

    When smart analysts independently find the same patterns in the data, it's time to take notice.

    The charts above are only a few of the indicators Lance and Grant monitor that are now sending strong cautionary warnings about the near-term prospects for the financial markets and the underlying economy. What other key metrics should we also be tracing closely right now?

    To dig much deeper into this, Lance and Grant will be presenting their latest indicators, analysis and forecasts at the Dangerous Markets webinar on September 13th — where they will take ample questions live from the audience. For more information on the webinar, click here.

     

  • North Korea Claims It Has Developed Advanced Hydrogen Bomb, EMP

    A day after Russian President Vladimir warned that the US and North Korea are “balancing on the verge of a large-scale conflict," North Korean leader Kim Jong Un is doing everything in his power to validate Putin’s words.

    To wit, in a segment broadcasted Saturday by the Korean Central Broadcasting Network, the North’s state-run television-news network, the regime claimed that it has “succeeded in making a more developed” hydrogen bomb. In the broadcast, Kim can be seen looking on as a purported thermonuclear warhead is loaded onto an intercontinental ballistic missile, which KCNA described as having “great destructive powers." KCNA added that all hydrogen bomb components are homemade, so the North can "produce as many as it wants." The report also claimed that the North have developed a powerful electromagnetic pulse weapon.

    According to the Wall Street Journal, experts fear an attack with this type of weapon could wipe out electrical networks in the U.S.

    Here are more details from Dow Jones Newswires:

    • North Korea Says It Has ‘Succeeded in Making a More Developed’ Nuclear Weapon
    • Kim Jong Un Witnesses Hydrogen Bomb Being Loaded onto a ‘New ICBM’ —North Korea State Media
    • New Hydrogen Bomb’s Explosive Power Goes Up to Hundreds of Kilotons —North Korea State Media
    • North Korea Threatens ‘Super-Powerful’ EMP, or Electromagnetic Pulse, Attack
    • North Korea Claims All Hydrogen Bomb Components Are ‘Homemade,’ Can Produce ‘As Many As It Wants’

    Reuters explains that the hydrogen bomb's power is adjustable to hundreds of kilotons and can be detonated at high altitudes. Kim Jong Un "set forth tasks to be fulfilled in the research into nukes," KCNA said, but it made no mention of plans for a sixth nuclear test.

    As a reminder, in July, the North launched two ICBMs capable of reaching the US mainland, and after a monthlong break, Kim resumed his provocative missile tests last Friday by launching three short-range missiles into the Sea of Japan – and then on Monday, in another unprecedented provocation, the North fired an intermediate-range missile over the northern Japanese island of Hokkaido.

    Of course, there is no way of knowing whether the warhead is authentic, though we’re sure the intelligence community’s army of analysts will promptly opine one way or the other. Here’s Reuters with a more detailed account of the broadcast…

    “Kim visited the country’s Nuclear Weapons Institute and “watched an H-bomb to be loaded into new ICBM,” KCNA said. “All components of the H-bomb were homemade and all the processes … were put on the Juche basis, thus enabling the country to produce powerful nuclear weapons as many as it wants, he said.”

     

    Juche is North Korea’s homegrown ruling go-it-alone ideology that is a mix of Marxism and extreme nationalism preached by state founder Kim Il Sung, the current leader’s grandfather.

     

    Kim Jong Un “set forth tasks to be fulfilled in the research into nukes,” KCNA said, but it made no mention of plans for a sixth nuclear test.”

    Whether or not the claim of having an H-bomb is a fabrication, professional observers of the Kim regime warn that the report is a signal that the North Korean leader is preparing to carry out what would be the country's sixth nuclear test. North Korea last year conducted its fourth and fifth nuclear tests, claiming that the fourth in January 2016 was a successful hydrogen bomb test, though outside observers raised doubts about this claim. The North conducted a fifth nuclear test in September 2016, which was measured to be possibly North Korea’s biggest detonation ever, but the earthquake it caused was still not believed to be big enough to demonstrate a thermonuclear test, according to Reuters.

    And at least one observer who weighed in on Twitter said that the bomb appears to be authentic, which would confirm that the North is preparing for its most provocative action yet: its sixth nuclear test, which would force Trump to respond, having vowed never to allow North Korea to become a nuclear power with offensive capabilities.

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    Meanwhile, China and Russia have repeatedly urged the US and North Korea to engage in talks – even going so far as to offer a “roadmap” to de-escalation that would ask the North to halt progress on its missile program while the US and South Korea end military exercises.  As always, we await a response from President Donald Trump, who spent Saturday visiting disaster victims of Hurricane Harvey in Texas. As WSJ noted, the State Department has yet to comment.

  • Red Cross Admits It Doesn't Know How Hurricane Harvey Donation Money Is Spent

    Authored by Carey Wedler via TheAntiMedia.org,

    Though the Red Cross has a historical reputation for providing relief to victims of natural disasters and other emergencies, the organization’s practices have tarnished its name over the last few years.

    Amid the catastrophic earthquake in Haiti in 2010, the Red Cross reportedly accepted nearly $500 million in relief money but built only six homes with the funds even though they claimed they had provided homes to 130,000 people. These failures prompted some Haitians to advise the world against donating funds to the Red Cross.

    The organization was accused of diverting resources and supplies to bolster its public image during Hurricane Sandy. As an investigation by NPR and ProPublica found:

    The Red Cross national headquarters in Washington ‘diverted assets for public relations purposes.’  

     

    A former Red Cross official managing the Sandy effort says 40 percent of available trucks were assigned to serve as backdrops for news conferences.

    The outlets reported that [d]istribution of relief was ‘politically driven instead of [Red Cross] planned,’” noting many organizational failures.

    Further, a report released last year by Iowa Sen. Chuck Grassley found that 25% of funds donated to aid in relief for victims of the earthquake was actually spent on internal costs. That amounted to roughly $124 million.

    Now, amid the hurricane in Texas, the Red Cross is admitting it currently doesn’t know how the funds it’s receiving are being spent.

    NPR’s Morning Edition interviewed Red Cross executive Brad Kieserman to ask how the funds will be distributed.  Kieserman said that as of Wednesday morning, “had spent $50 million on Harvey relief, mainly on 232 shelters for 66,000 people.”

    Through donations, how much of every dollar goes to relief? NPR’s Ailsa Chang asked him.

    But he responded without actually providing an answer to her question:

    Yeah, I don’t think I know the answer to that any better than the chief fundraiser knows how many, how much it costs to put a volunteer downrange for a week and how many emergency response vehicles I have on the road today. So I think if he was on this interview and you were asking how many relief vehicles in Texas, I don’t think he’d know the answer and I don’t know the answer to the financial question I’m afraid.”

    She pressed him about the Red Cross’ previous failures and misallocation of resources. According to NPR’s transcript:

    Is that still happening? Such a substantial percentage of donations going to internal administrative costs, rather than to relief?

     

    “Kieserman: It’s not something I would have any visibility on. I can talk about what it costs to deliver certain relief services.

     

    “Chang: Yeah.

     

    “Kieserman: But the way the internal revenue stream works, uhh …

     

    “Chang: You don’t know what portion of that amount.

     

    “Kieserman: Not really.

     

    “Chang: You don’t know what portion of that total amount is for relief.

     

    “Kieserman: No, I really don’t. I wish I could answer your question, but it’s not something I have visibility on in the role that I play in this organization.

    The executive ultimately claimed that “The folks I work for are very, very attentive to cost effectiveness and cost efficiencies in making sure that as much as every dollar that we spend on an operation is client-facing.”

    Slate reporter Jonathan Katz also reported the organization declined to disclose how much money they had spent or raised so far. Katz ultimately urged readers not to contribute to the Red Cross.

    The Red Cross continues to face criticism and urgings for individuals who want to help to take their donations elsewhere. The Independent reports that over the weekend, Dan Gillmor, author and professor at Arizona State University’s Walter Cronkite School of Journalism, advised against donating to the Red Cross. Many other social media users have expressed similar sentiments.

    Despite the Red Cross’ failings, however, there are still many organizations doing important work.

    The group A Just Harvey Recovery lists a number of local efforts accepting contributions. The Cajun Navy, a volunteer effort that previously rescued victims of Hurricane Katrina and the Louisiana floods last year, has also been working round the clock in Texas and is accepting donationsThere are many organizations and shelters working locally to provide relief and essential services. If you would like to contribute or volunteer, you can find some of them herehere and here.

  • Are Grocery Chains About To Join The Retail-Bankruptcy Bloodbath?

    Amazon officially assumed control of Whole Foods Market on Monday and by noon, channel checks at WFM stores revealed that its new tech overlords had already slashed prices by nearly 50%, sending bonds of its grocery-chain rivals reeling as grocers confronted a new dilemma: either slash prices to the point of unprofitability, or hold the line and risk seeing sales evaporate.

    And as bonds of even highly rated grocery chains have underperformed this week, Bloomberg is questioning whether the WFM acquisition has fundamentally changed market dynamics in what was previously an island of stability in a retail sector beset by bankruptcies.

    Even before the WFM acquisition, the industry experienced the first signs of strain as Amazon launched its Amazon Fresh grocery service and Wal-Mart started stocking up on reasonably priced organics – factors that contributed to the massive drop in WFM’s market cap, allowing Amazon to scoop it up for less than $14 billion.

    Prior to this, the conventional wisdom dictated that grocers were impervious to the onslaught of e-commerce that was decimating industries such as clothing and electronics. Investors reasoned that consumers would probably balk at buying perishable goods like food online.

    But Amazon, with its seemingly infinite capacity to slash prices and brook losses, has created new risks for Whole Foods' rivals.

    Apollo Global thought buying North Carolina-based Fresh Market for the “every day low price” of $1.4 billion would be a turnaround slam dunk after its success with Sprouts Farmers Markets. One year later, the future profitability of that deal is in doubt, and that uncertainty is being reflected in the price.

    “The bonds that financed Apollo Global Management’s purchase last year of upscale grocer Fresh Market plunged to new lows this week. The cost of buying contracts to protect against a default in Albertsons Cos.’s debt has jumped. Bonds of Bi-Lo Holdings have lost almost half their value this year.”

     

    When Apollo Global bought Greensboro, North Carolina-based Fresh Market for $1.4 billion last year, the grocery world seemed quite different. The chain, known for its fresh produce, had seen sales slow. To lure customers back to Fresh Market’s roughly 170 stores, the private-equity titan was betting it could rely on its experience with previous – and profitable – investments in companies such as organic grocer Sprouts Farmers Markets.

     

    But Fresh Market is struggling for some of the same reasons that sent Whole Foods into the arms of Amazon. Mainstream competitors including Kroger Co. and Wal-Mart Stores Inc. have pushed deeper into sales of fresh produce and organic products. Supermarkets have opened so many stores that many analysts expect a shakeout. Before the Amazon deal, Fresh Market bonds traded as high as 91 cents on the dollar. Now they fetch less than 76 cents.”

    The reason is simple: Amazon, which is insulated not only by its e-commerce hegemony but also by investors who don’t expect the company to turn a profit. One analyst aptly referred to this as the Amazon-Whole Foods "fear factor.”

    “It’s the fear factor of Amazon,” said Mickey Chadha, an analyst at Moody’s Investors Service. “No retailer can under-price as long as Amazon can, make no money and get away with it. That’s why people are scared.”

    * * *

    News of the Amazon deal obliterated billions of dollars of grocers’ valuations, slicing $2 billion off Kroger’s market cap in one day. The grocer’s stock is down 35% this year. Yet its bonds have held steady.

    Meanwhile, nearly $3 billion in Albertsons bonds due in 2021 have tumbled..

    “Kroger’s bonds, which are investment grade, haven’t been hit. But about $3 billion of Albertsons debt coming due in 2021 has felt a chill. The loans have been trading at 97.6 cents on the dollar. Large, liquid, secured loans of that size typically command par, or 100 cents. A public stock offering for the Cerberus Capital Management-backed grocer was again put on hold after Amazon announced its purchase of Whole Foods.”

    …causing the cost of insuring them to skyrocket.

    As one might expect, analysts now believe that large chains with relatively low debt burdens will somehow manage to survive.

    But smaller chains like Bi-Lo Holdings may soon find that their debt burdens are untenable:

    “For example, Bi-Lo Holdings has borrowed hundreds of millions to make cash payouts to private-equity owner Lone Star Global Acquisitions. One of the bonds the company sold to pay the dividends now trades at levels indicating investors expect to recoup only a third of what they loaned the company.”

    Tops Friendly Markets, another troubled grocer, is being choked by its $720 million debt pile.

    “Tops Friendly Markets, which is reporting millions in losses, is straining under $720 million in debt. Using a maneuver typical of distressed companies, it put off repayments due in 2018 while it grapples with price deflation and traditional rivals in its western New York home turf. If earnings and the balance sheet don’t improve, investors holding the rest of Tops’ bonds could find they’re stuck with spoiled goods.”

    However, there's at least one factor that may insulate the market's weaker hands, at least for a little while. There are 40,000 grocery stores in the US, only 400 of which are WFMs…

    So, should investors be bracing for a wave of grocery bankruptcies resembling this year’s record run of failures among department stores, apparel sellers and electronics retailers? Maybe not right away. But once Amazon's had a few years to expand its footprint, a massive shakeout seems inevitable.
     

  • Facebook Exposed – "You" Are The Product

    Authored by John Lanchester via The London Review of Books,

    At the end of June, Mark Zuckerberg announced that Facebook had hit a new level: two billion monthly active users. That number, the company’s preferred ‘metric’ when measuring its own size, means two billion different people used Facebook in the preceding month. It is hard to grasp just how extraordinary that is. Bear in mind that thefacebook – its original name – was launched exclusively for Harvard students in 2004. No human enterprise, no new technology or utility or service, has ever been adopted so widely so quickly. The speed of uptake far exceeds that of the internet itself, let alone ancient technologies such as television or cinema or radio.

    Also amazing: as Facebook has grown, its users’ reliance on it has also grown. The increase in numbers is not, as one might expect, accompanied by a lower level of engagement. More does not mean worse – or worse, at least, from Facebook’s point of view. On the contrary. In the far distant days of October 2012, when Facebook hit one billion users, 55 per cent of them were using it every day. At two billion, 66 per cent are. Its user base is growing at 18 per cent a year – which you’d have thought impossible for a business already so enormous. Facebook’s biggest rival for logged-in users is YouTube, owned by its deadly rival Alphabet (the company formerly known as Google), in second place with 1.5 billion monthly users. Three of the next four biggest apps, or services, or whatever one wants to call them, are WhatsApp, Messenger and Instagram, with 1.2 billion, 1.2 billion, and 700 million users respectively (the Chinese app WeChat is the other one, with 889 million). Those three entities have something in common: they are all owned by Facebook. No wonder the company is the fifth most valuable in the world, with a market capitalisation of $445 billion.

    Zuckerberg’s news about Facebook’s size came with an announcement which may or may not prove to be significant. He said that the company was changing its ‘mission statement’, its version of the canting pieties beloved of corporate America. Facebook’s mission used to be ‘making the world more open and connected’. A non-Facebooker reading that is likely to ask: why? Connection is presented as an end in itself, an inherently and automatically good thing. Is it, though? Flaubert was sceptical about trains because he thought (in Julian Barnes’s paraphrase) that ‘the railway would merely permit more people to move about, meet and be stupid.’ You don’t have to be as misanthropic as Flaubert to wonder if something similar isn’t true about connecting people on Facebook. For instance, Facebook is generally agreed to have played a big, perhaps even a crucial, role in the election of Donald Trump. The benefit to humanity is not clear. This thought, or something like it, seems to have occurred to Zuckerberg, because the new mission statement spells out a reason for all this connectedness. It says that the new mission is to ‘give people the power to build community and bring the world closer together’.

    Hmm. Alphabet’s mission statement, ‘to organise the world’s information and make it universally accessible and useful’, came accompanied by the maxim ‘Don’t be evil,’ which has been the source of a lot of ridicule: Steve Jobs called it ‘bullshit’. Which it is, but it isn’t only bullshit. Plenty of companies, indeed entire industries, base their business model on being evil. The insurance business, for instance, depends on the fact that insurers charge customers more than their insurance is worth; that’s fair enough, since if they didn’t do that they wouldn’t be viable as businesses. What isn’t fair is the panoply of cynical techniques that many insurers use to avoid, as far as possible, paying out when the insured-against event happens. Just ask anyone who has had a property suffer a major mishap. It’s worth saying ‘Don’t be evil,’ because lots of businesses are. This is especially an issue in the world of the internet. Internet companies are working in a field that is poorly understood (if understood at all) by customers and regulators. The stuff they’re doing, if they’re any good at all, is by definition new. In that overlapping area of novelty and ignorance and unregulation, it’s well worth reminding employees not to be evil, because if the company succeeds and grows, plenty of chances to be evil are going to come along.

    Google and Facebook have both been walking this line from the beginning. Their styles of doing so are different. An internet entrepreneur I know has had dealings with both companies. ‘YouTube knows they have lots of dirty things going on and are keen to try and do some good to alleviate it,’ he told me. I asked what he meant by ‘dirty’. ‘Terrorist and extremist content, stolen content, copyright violations. That kind of thing. But Google in my experience knows that there are ambiguities, moral doubts, around some of what they do, and at least they try to think about it. Facebook just doesn’t care. When you’re in a room with them you can tell. They’re’ – he took a moment to find the right word – ‘scuzzy’.

    That might sound harsh. There have, however, been ethical problems and ambiguities about Facebook since the moment of its creation, a fact we know because its creator was live-blogging at the time. The scene is as it was recounted in Aaron Sorkin’s movie about the birth of Facebook, The Social Network. While in his first year at Harvard, Zuckerberg suffered a romantic rebuff. Who wouldn’t respond to this by creating a website where undergraduates’ pictures are placed side by side so that users of the site can vote for the one they find more attractive? (The film makes it look as if it was only female undergraduates: in real life it was both.) The site was called Facemash. In the great man’s own words, at the time:

    I’m a little intoxicated, I’m not gonna lie. So what if it’s not even 10 p.m. and it’s a Tuesday night? What? The Kirkland dormitory facebook is open on my desktop and some of these people have pretty horrendous facebook pics. I almost want to put some of these faces next to pictures of some farm animals and have people vote on which is the more attractive … Let the hacking begin.

    As Tim Wu explains in his energetic and original new book The Attention Merchants, a ‘facebook’ in the sense Zuckerberg uses it here ‘traditionally referred to a physical booklet produced at American universities to promote socialisation in the way that “Hi, My Name Is” stickers do at events; the pages consisted of rows upon rows of head shots with the corresponding name’. Harvard was already working on an electronic version of its various dormitory facebooks. The leading social network, Friendster, already had three million users. The idea of putting these two things together was not entirely novel, but as Zuckerberg said at the time, ‘I think it’s kind of silly that it would take the University a couple of years to get around to it. I can do it better than they can, and I can do it in a week.’

    Wu argues that capturing and reselling attention has been the basic model for a large number of modern businesses, from posters in late 19th-century Paris, through the invention of mass-market newspapers that made their money not through circulation but through ad sales, to the modern industries of advertising and ad-funded TV. Facebook is in a long line of such enterprises, though it might be the purest ever example of a company whose business is the capture and sale of attention. Very little new thinking was involved in its creation. As Wu observes, Facebook is ‘a business with an exceedingly low ratio of invention to success’. What Zuckerberg had instead of originality was the ability to get things done and to see the big issues clearly. The crucial thing with internet start-ups is the ability to execute plans and to adapt to changing circumstances. It’s Zuck’s skill at doing that – at hiring talented engineers, and at navigating the big-picture trends in his industry – that has taken his company to where it is today. Those two huge sister companies under Facebook’s giant wing, Instagram and WhatsApp, were bought for $1 billion and $19 billion respectively, at a point when they had no revenue. No banker or analyst or sage could have told Zuckerberg what those acquisitions were worth; nobody knew better than he did. He could see where things were going and help make them go there. That talent turned out to be worth several hundred billion dollars.

    Jesse Eisenberg’s brilliant portrait of Zuckerberg in The Social Network is misleading, as Antonio García Martínez, a former Facebook manager, argues in Chaos Monkeys, his entertainingly caustic book about his time at the company. The movie Zuckerberg is a highly credible character, a computer genius located somewhere on the autistic spectrum with minimal to non-existent social skills. But that’s not what the man is really like. In real life, Zuckerberg was studying for a degree with a double concentration in computer science and – this is the part people tend to forget – psychology. People on the spectrum have a limited sense of how other people’s minds work; autists, it has been said, lack a ‘theory of mind’. Zuckerberg, not so much. He is very well aware of how people’s minds work and in particular of the social dynamics of popularity and status. The initial launch of Facebook was limited to people with a Harvard email address; the intention was to make access to the site seem exclusive and aspirational. (And also to control site traffic so that the servers never went down. Psychology and computer science, hand in hand.) Then it was extended to other elite campuses in the US. When it launched in the UK, it was limited to Oxbridge and the LSE. The idea was that people wanted to look at what other people like them were doing, to see their social networks, to compare, to boast and show off, to give full rein to every moment of longing and envy, to keep their noses pressed against the sweet-shop window of others’ lives.

    This focus attracted the attention of Facebook’s first external investor, the now notorious Silicon Valley billionaire Peter Thiel. Again, The Social Network gets it right: Thiel’s $500,000 investment in 2004 was crucial to the success of the company. But there was a particular reason Facebook caught Thiel’s eye, rooted in a byway of intellectual history. In the course of his studies at Stanford – he majored in philosophy – Thiel became interested in the ideas of the US-based French philosopher René Girard, as advocated in his most influential book, Things Hidden since the Foundation of the World. Girard’s big idea was something he called ‘mimetic desire’. Human beings are born with a need for food and shelter. Once these fundamental necessities of life have been acquired, we look around us at what other people are doing, and wanting, and we copy them. In Thiel’s summary, the idea is ‘that imitation is at the root of all behaviour’.

    Girard was a Christian, and his view of human nature is that it is fallen. We don’t know what we want or who we are; we don’t really have values and beliefs of our own; what we have instead is an instinct to copy and compare. We are homo mimeticus. ‘Man is the creature who does not know what to desire, and who turns to others in order to make up his mind. We desire what others desire because we imitate their desires.’ Look around, ye petty, and compare. The reason Thiel latched onto Facebook with such alacrity was that he saw in it for the first time a business that was Girardian to its core: built on people’s deep need to copy. ‘Facebook first spread by word of mouth, and it’s about word of mouth, so it’s doubly mimetic,’ Thiel said. ‘Social media proved to be more important than it looked, because it’s about our natures.’ We are keen to be seen as we want to be seen, and Facebook is the most popular tool humanity has ever had with which to do that.

    *  *  *

    The view of human nature implied by these ideas is pretty dark. If all people want to do is go and look at other people so that they can compare themselves to them and copy what they want – if that is the final, deepest truth about humanity and its motivations – then Facebook doesn’t really have to take too much trouble over humanity’s welfare, since all the bad things that happen to us are things we are doing to ourselves. For all the corporate uplift of its mission statement, Facebook is a company whose essential premise is misanthropic. It is perhaps for that reason that Facebook, more than any other company of its size, has a thread of malignity running through its story. The high-profile, tabloid version of this has come in the form of incidents such as the live-streaming of rapes, suicides, murders and cop-killings. But this is one of the areas where Facebook seems to me relatively blameless. People live-stream these terrible things over the site because it has the biggest audience; if Snapchat or Periscope were bigger, they’d be doing it there instead.

    In many other areas, however, the site is far from blameless. The highest-profile recent criticisms of the company stem from its role in Trump’s election. There are two components to this, one of them implicit in the nature of the site, which has an inherent tendency to fragment and atomise its users into like-minded groups. The mission to ‘connect’ turns out to mean, in practice, connect with people who agree with you. We can’t prove just how dangerous these ‘filter bubbles’ are to our societies, but it seems clear that they are having a severe impact on our increasingly fragmented polity. Our conception of ‘we’ is becoming narrower.

    This fragmentation created the conditions for the second strand of Facebook’s culpability in the Anglo-American political disasters of the last year. The portmanteau terms for these developments are ‘fake news’ and ‘post-truth’, and they were made possible by the retreat from a general agora of public debate into separate ideological bunkers. In the open air, fake news can be debated and exposed; on Facebook, if you aren’t a member of the community being served the lies, you’re quite likely never to know that they are in circulation. It’s crucial to this that Facebook has no financial interest in telling the truth. No company better exemplifies the internet-age dictum that if the product is free, you are the product. Facebook’s customers aren’t the people who are on the site: its customers are the advertisers who use its network and who relish its ability to direct ads to receptive audiences. Why would Facebook care if the news streaming over the site is fake? Its interest is in the targeting, not in the content. This is probably one reason for the change in the company’s mission statement. If your only interest is in connecting people, why would you care about falsehoods? They might even be better than the truth, since they are quicker to identify the like-minded. The newfound ambition to ‘build communities’ makes it seem as if the company is taking more of an interest in the consequence of the connections it fosters.

    Fake news is not, as Facebook has acknowledged, the only way it was used to influence the outcome of the 2016 presidential election. On 6 January 2017 the director of national intelligence published a report saying that the Russians had waged an internet disinformation campaign to damage Hillary Clinton and help Trump. ‘Moscow’s influence campaign followed a Russian messaging strategy that blends covert intelligence operations – such as cyber-activity – with overt efforts by Russian government agencies, state-funded media, third-party intermediaries, and paid social media users or “trolls”,’ the report said. At the end of April, Facebook got around to admitting this (by then) fairly obvious truth, in an interesting paper published by its internal security division. ‘Fake news’, they argue, is an unhelpful, catch-all term because misinformation is in fact spread in a variety of ways:

    Information (or Influence) Operations – Actions taken by governments or organised non-state actors to distort domestic or foreign political sentiment.

     

    False News – News articles that purport to be factual, but which contain intentional misstatements of fact with the intention to arouse passions, attract viewership, or deceive.

     

    False Amplifiers – Co-ordinated activity by inauthentic accounts with the intent of manipulating political discussion (e.g. by discouraging specific parties from participating in discussion, or amplifying sensationalistic voices over others).

     

    Disinformation – Inaccurate or manipulated information/content that is spread intentionally. This can include false news, or it can involve more subtle methods, such as false flag operations, feeding inaccurate quotes or stories to innocent intermediaries, or knowingly amplifying biased or misleading information.

    The company is promising to treat this problem or set of problems as seriously as it treats such other problems as malware, account hacking and spam. We’ll see. One man’s fake news is another’s truth-telling, and Facebook works hard at avoiding responsibility for the content on its site – except for sexual content, about which it is super-stringent. Nary a nipple on show. It’s a bizarre set of priorities, which only makes sense in an American context, where any whiff of explicit sexuality would immediately give the site a reputation for unwholesomeness. Photos of breastfeeding women are banned and rapidly get taken down. Lies and propaganda are fine.

    The key to understanding this is to think about what advertisers want: they don’t want to appear next to pictures of breasts because it might damage their brands, but they don’t mind appearing alongside lies because the lies might be helping them find the consumers they’re trying to target. In Move Fast and Break Things, his polemic against the ‘digital-age robber barons’, Jonathan Taplin points to an analysis on Buzzfeed: ‘In the final three months of the US presidential campaign, the top-performing fake election news stories on Facebook generated more engagement than the top stories from major news outlets such as the New York Times, Washington Post, Huffington Post, NBC News and others.’ This doesn’t sound like a problem Facebook will be in any hurry to fix.

    The fact is that fraudulent content, and stolen content, are rife on Facebook, and the company doesn’t really mind, because it isn’t in its interest to mind. Much of the video content on the site is stolen from the people who created it. An illuminating YouTube video from Kurzgesagt, a German outfit that makes high-quality short explanatory films, notes that in 2015, 725 of Facebook’s top one thousand most viewed videos were stolen. This is another area where Facebook’s interests contradict society’s. We may collectively have an interest in sustaining creative and imaginative work in many different forms and on many platforms. Facebook doesn’t. It has two priorities, as Martínez explains in Chaos Monkeys: growth and monetisation. It simply doesn’t care where the content comes from. It is only now starting to care about the perception that much of the content is fraudulent, because if that perception were to become general, it might affect the amount of trust and therefore the amount of time people give to the site.

    Zuckerberg himself has spoken up on this issue, in a Facebook post addressing the question of ‘Facebook and the election’. After a certain amount of boilerplate bullshit (‘Our goal is to give every person a voice. We believe deeply in people’), he gets to the nub of it. ‘Of all the content on Facebook, more than 99 per cent of what people see is authentic. Only a very small amount is fake news and hoaxes.’ More than one Facebook user pointed out that in their own news feed, Zuckerberg’s post about authenticity ran next to fake news. In one case, the fake story pretended to be from the TV sports channel ESPN. When it was clicked on, it took users to an ad selling a diet supplement. As the writer Doc Searls pointed out, it’s a double fraud, ‘outright lies from a forged source’, which is quite something to have right slap next to the head of Facebook boasting about the absence of fraud. Evan Williams, co-founder of Twitter and founder of the long-read specialist Medium, found the same post by Zuckerberg next to a different fake ESPN story and another piece of fake news purporting to be from CNN, announcing that Congress had disqualified Trump from office. When clicked-through, that turned out to be from a company offering a 12-week programme to strengthen toes. (That’s right: strengthen toes.) Still, we now know that Zuck believes in people. That’s the main thing.

    *  *  *

    A neutral observer might wonder if Facebook’s attitude to content creators is sustainable. Facebook needs content, obviously, because that’s what the site consists of: content that other people have created. It’s just that it isn’t too keen on anyone apart from Facebook making any money from that content. Over time, that attitude is profoundly destructive to the creative and media industries. Access to an audience – that unprecedented two billion people – is a wonderful thing, but Facebook isn’t in any hurry to help you make money from it. If the content providers all eventually go broke, well, that might not be too much of a problem. There are, for now, lots of willing providers: anyone on Facebook is in a sense working for Facebook, adding value to the company. In 2014, the New York Times did the arithmetic and found that humanity was spending 39,757 collective years on the site, every single day. Jonathan Taplin points out that this is ‘almost fifteen million years of free labour per year’. That was back when it had a mere 1.23 billion users.

    Taplin has worked in academia and in the film industry. The reason he feels so strongly about these questions is that he started out in the music business, as manager of The Band, and was on hand to watch the business being destroyed by the internet. What had been a $20 billion industry in 1999 was a $7 billion industry 15 years later. He saw musicians who had made a good living become destitute. That didn’t happen because people had stopped listening to their music – more people than ever were listening to it – but because music had become something people expected to be free. YouTube is the biggest source of music in the world, playing billions of tracks annually, but in 2015 musicians earned less from it and from its ad-supported rivals than they earned from sales of vinyl. Not CDs and recordings in general: vinyl.

    Something similar has happened in the world of journalism. Facebook is in essence an advertising company which is indifferent to the content on its site except insofar as it helps to target and sell advertisements. A version of Gresham’s law is at work, in which fake news, which gets more clicks and is free to produce, drives out real news, which often tells people things they don’t want to hear, and is expensive to produce. In addition, Facebook uses an extensive set of tricks to increase its traffic and the revenue it makes from targeting ads, at the expense of the news-making institutions whose content it hosts. Its news feed directs traffic at you based not on your interests, but on how to make the maximum amount of advertising revenue from you. In September 2016, Alan Rusbridger, the former editor of the Guardian, told a Financial Times conference that Facebook had ‘sucked up $27 million’ of the newspaper’s projected ad revenue that year. ‘They are taking all the money because they have algorithms we don’t understand, which are a filter between what we do and how people receive it.’

    This goes to the heart of the question of what Facebook is and what it does. For all the talk about connecting people, building community, and believing in people, Facebook is an advertising company. Martínez gives the clearest account both of how it ended up like that, and how Facebook advertising works. In the early years of Facebook, Zuckerberg was much more interested in the growth side of the company than in the monetisation. That changed when Facebook went in search of its big payday at the initial public offering, the shining day when shares in a business first go on sale to the general public. This is a huge turning-point for any start-up: in the case of many tech industry workers, the hope and expectation associated with ‘going public’ is what attracted them to their firm in the first place, and/or what has kept them glued to their workstations. It’s the point where the notional money of an early-days business turns into the real cash of a public company.

    Martínez was there at the very moment when Zuck got everyone together to tell them they were going public, the moment when all Facebook employees knew that they were about to become rich:

    I had chosen a seat behind a detached pair, who on further inspection turned out to be Chris Cox, head of FB product, and Naomi Gleit, a Harvard grad who joined as employee number 29, and was now reputed to be the current longest-serving employee other than Mark.

     

    Naomi, between chats with Cox, was clicking away on her laptop, paying little attention to the Zuckian harangue. I peered over her shoulder at her screen. She was scrolling down an email with a number of links, and progressively clicking each one into existence as another tab on her browser. Clickathon finished, she began lingering on each with an appraiser’s eye. They were real estate listings, each for a different San Francisco property.

    Martínez took note of one of the properties and looked it up later. Price: $2.4 million. He is fascinating, and fascinatingly bitter, on the subject of class and status differences in Silicon Valley, in particular the never publicly discussed issue of the huge gulf between early employees in a company, who have often been made unfathomably rich, and the wage slaves who join the firm later in its story. ‘The protocol is not to talk about it at all publicly.’ But, as Bonnie Brown, a masseuse at Google in the early days, wrote in her memoir, ‘a sharp contrast developed between Googlers working side by side. While one was looking at local movie times on their monitor, the other was booking a flight to Belize for the weekend. How was the conversation on Monday morning going to sound now?’

    When the time came for the IPO, Facebook needed to turn from a company with amazing growth to one that was making amazing money. It was already making some, thanks to its sheer size – as Martínez observes, ‘a billion times any number is still a big fucking number’ – but not enough to guarantee a truly spectacular valuation on launch. It was at this stage that the question of how to monetise Facebook got Zuckerberg’s full attention. It’s interesting, and to his credit, that he hadn’t put too much focus on it before – perhaps because he isn’t particularly interested in money per se. But he does like to win.

    The solution was to take the huge amount of information Facebook has about its ‘community’ and use it to let advertisers target ads with a specificity never known before, in any medium. Martínez: ‘It can be demographic in nature (e.g. 30-to-40-year-old females), geographic (people within five miles of Sarasota, Florida), or even based on Facebook profile data (do you have children; i.e. are you in the mommy segment?).’ Taplin makes the same point:

    If I want to reach women between the ages of 25 and 30 in zip code 37206 who like country music and drink bourbon, Facebook can do that. Moreover, Facebook can often get friends of these women to post a ‘sponsored story’ on a targeted consumer’s news feed, so it doesn’t feel like an ad. As Zuckerberg said when he introduced Facebook Ads, ‘Nothing influences people more than a recommendation from a trusted friend. A trusted referral is the Holy Grail of advertising.’

    That was the first part of the monetisation process for Facebook, when it turned its gigantic scale into a machine for making money. The company offered advertisers an unprecedentedly precise tool for targeting their ads at particular consumers. (Particular segments of voters too can be targeted with complete precision. One instance from 2016 was an anti-Clinton ad repeating a notorious speech she made in 1996 on the subject of ‘super-predators’. The ad was sent to African-American voters in areas where the Republicans were trying, successfully as it turned out, to suppress the Democrat vote. Nobody else saw the ads.)

    The second big shift around monetisation came in 2012 when internet traffic began to switch away from desktop computers towards mobile devices. If you do most of your online reading on a desktop, you are in a minority. The switch was a potential disaster for all businesses which relied on internet advertising, because people don’t much like mobile ads, and were far less likely to click on them than on desktop ads. In other words, although general internet traffic was increasing rapidly, because the growth was coming from mobile, the traffic was becoming proportionately less valuable. If the trend were to continue, every internet business that depended on people clicking links – i.e. pretty much all of them, but especially the giants like Google and Facebook – would be worth much less money.

    Facebook solved the problem by means of a technique called ‘onboarding’. As Martínez explains it, the best way to think about this is to consider our various kinds of name and address.

    For example, if Bed, Bath and Beyond wants to get my attention with one of its wonderful 20 per cent off coupons, it calls out:

     

    Antonio García Martínez
    1 Clarence Place #13
    San Francisco, CA 94107

     

    If it wants to reach me on my mobile device, my name there is:38400000-8cfo-11bd-b23e-10b96e40000d

     

    That’s my quasi-immutable device ID, broadcast hundreds of times a day on mobile ad exchanges.

     

    On my laptop, my name is this: 07J6yJPMB9juTowar.AWXGQnGPA1MCmThgb9wN4vLoUpg.BUUtWg.rg.FTN.0.AWUxZtUf

     

    This is the content of the Facebook re-targeting cookie, which is used to target ads-are-you based on your mobile browsing.

     

    Though it may not be obvious, each of these keys is associated with a wealth of our personal behaviour data: every website we’ve been to, many things we’ve bought in physical stores, and every app we’ve used and what we did there … The biggest thing going on in marketing right now, what is generating tens of billions of dollars in investment and endless scheming inside the bowels of Facebook, Google, Amazon and Apple, is how to tie these different sets of names together, and who controls the links. That’s it.

    Facebook already had a huge amount of information about people and their social networks and their professed likes and dislikes. After waking up to the importance of monetisation, they added to their own data a huge new store of data about offline, real-world behaviour, acquired through partnerships with big companies such as Experian, which have been monitoring consumer purchases for decades via their relationships with direct marketing firms, credit card companies, and retailers. There doesn’t seem to be a one-word description of these firms: ‘consumer credit agencies’ or something similar about sums it up. Their reach is much broader than that makes it sound, though Experian says its data is based on more than 850 million records and claims to have information on 49.7 million UK adults living in 25.2 million households in 1.73 million postcodes. These firms know all there is to know about your name and address, your income and level of education, your relationship status, plus everywhere you’ve ever paid for anything with a card. Facebook could now put your identity together with the unique device identifier on your phone.

    That was crucial to Facebook’s new profitability. On mobiles, people tend to prefer the internet to apps, which corral the information they gather and don’t share it with other companies. A game app on your phone is unlikely to know anything about you except the level you’ve got to on that particular game. But because everyone in the world is on Facebook, the company knows everyone’s phone identifier. It was now able to set up an ad server delivering far better targeted mobile ads than anyone else could manage, and it did so in a more elegant and well-integrated form than anyone else had managed.

    So Facebook knows your phone ID and can add it to your Facebook ID. It puts that together with the rest of your online activity: not just every site you’ve ever visited, but every click you’ve ever made – the Facebook button tracks every Facebook user, whether they click on it or not. Since the Facebook button is pretty much ubiquitous on the net, this means that Facebook sees you, everywhere. Now, thanks to its partnerships with the old-school credit firms, Facebook knew who everybody was, where they lived, and everything they’d ever bought with plastic in a real-world offline shop. All this information is used for a purpose which is, in the final analysis, profoundly bathetic. It is to sell you things via online ads.

    The ads work on two models. In one of them, advertisers ask Facebook to target consumers from a particular demographic – our thirty-something bourbon-drinking country music fan, or our African American in Philadelphia who was lukewarm about Hillary. But Facebook also delivers ads via a process of online auctions, which happen in real time whenever you click on a website. Because every website you’ve ever visited (more or less) has planted a cookie on your web browser, when you go to a new site, there is a real-time auction, in millionths of a second, to decide what your eyeballs are worth and what ads should be served to them, based on what your interests, and income level and whatnot, are known to be. This is the reason ads have that disconcerting tendency to follow you around, so that you look at a new telly or a pair of shoes or a holiday destination, and they’re still turning up on every site you visit weeks later. This was how, by chucking talent and resources at the problem, Facebook was able to turn mobile from a potential revenue disaster to a great hot steamy geyser of profit.

    What this means is that even more than it is in the advertising business, Facebook is in the surveillance business. Facebook, in fact, is the biggest surveillance-based enterprise in the history of mankind. It knows far, far more about you than the most intrusive government has ever known about its citizens. It’s amazing that people haven’t really understood this about the company. I’ve spent time thinking about Facebook, and the thing I keep coming back to is that its users don’t realise what it is the company does. What Facebook does is watch you, and then use what it knows about you and your behaviour to sell ads. I’m not sure there has ever been a more complete disconnect between what a company says it does – ‘connect’, ‘build communities’ – and the commercial reality. Note that the company’s knowledge about its users isn’t used merely to target ads but to shape the flow of news to them. Since there is so much content posted on the site, the algorithms used to filter and direct that content are the thing that determines what you see: people think their news feed is largely to do with their friends and interests, and it sort of is, with the crucial proviso that it is their friends and interests as mediated by the commercial interests of Facebook. Your eyes are directed towards the place where they are most valuable for Facebook.

    *  *  *

    I’m left wondering what will happen when and if this $450 billion penny drops. Wu’s history of attention merchants shows that there is a suggestive pattern here: that a boom is more often than not followed by a backlash, that a period of explosive growth triggers a public and sometimes legislative reaction. Wu’s first example is the draconian anti-poster laws introduced in early 20th-century Paris (and still in force – one reason the city is by contemporary standards undisfigured by ads). As Wu says, ‘when the commodity in question is access to people’s minds, the perpetual quest for growth ensures that forms of backlash, both major and minor, are all but inevitable.’ Wu calls a minor form of this phenomenon the ‘disenchantment effect’.

    Facebook seems vulnerable to these disenchantment effects. One place they are likely to begin is in the core area of its business model – ad-selling. The advertising it sells is ‘programmatic’, i.e. determined by computer algorithms that match the customer to the advertiser and deliver ads accordingly, via targeting and/or online auctions. The problem with this from the customer’s point of view – remember, the customer here is the advertiser, not the Facebook user – is that a lot of the clicks on these ads are fake. There is a mismatch of interests here. Facebook wants clicks, because that’s how it gets paid: when ads are clicked on. But what if the clicks aren’t real but are instead automated clicks from fake accounts run by computer bots? This is a well-known problem, which particularly affects Google, because it’s easy to set up a site, allow it to host programmatic ads, then set up a bot to click on those ads, and collect the money that comes rolling in. On Facebook the fraudulent clicks are more likely to be from competitors trying to drive each others’ costs up.

    The industry publication Ad Week estimates the annual cost of click fraud at $7 billion, about a sixth of the entire market. One single fraud site, Methbot, whose existence was exposed at the end of last year, uses a network of hacked computers to generate between three and five million dollars’ worth of fraudulent clicks every day. Estimates of fraudulent traffic’s market share are variable, with some guesses coming in at around 50 per cent; some website owners say their own data indicates a fraudulent-click rate of 90 per cent. This is by no means entirely Facebook’s problem, but it isn’t hard to imagine how it could lead to a big revolt against ‘ad tech’, as this technology is generally known, on the part of the companies who are paying for it. I’ve heard academics in the field say that there is a form of corporate groupthink in the world of the big buyers of advertising, who are currently responsible for directing large parts of their budgets towards Facebook. That mindset could change. Also, many of Facebook’s metrics are tilted to catch the light at the angle which makes them look shiniest. A video is counted as ‘viewed’ on Facebook if it runs for three seconds, even if the user is scrolling past it in her news feed and even if the sound is off. Many Facebook videos with hundreds of thousands of ‘views’, if counted by the techniques that are used to count television audiences, would have no viewers at all.

    A customers’ revolt could overlap with a backlash from regulators and governments. Google and Facebook have what amounts to a monopoly on digital advertising. That monopoly power is becoming more and more important as advertising spend migrates online. Between them, they have already destroyed large sections of the newspaper industry. Facebook has done a huge amount to lower the quality of public debate and to ensure that it is easier than ever before to tell what Hitler approvingly called ‘big lies’ and broadcast them to a big audience. The company has no business need to care about that, but it is the kind of issue that could attract the attention of regulators.

    That isn’t the only external threat to the Google/Facebook duopoly. The US attitude to anti-trust law was shaped by Robert Bork, the judge whom Reagan nominated for the Supreme Court but the Senate failed to confirm. Bork’s most influential legal stance came in the area of competition law. He promulgated the doctrine that the only form of anti-competitive action which matters concerns the prices paid by consumers. His idea was that if the price is falling that means the market is working, and no questions of monopoly need be addressed. This philosophy still shapes regulatory attitudes in the US and it’s the reason Amazon, for instance, has been left alone by regulators despite the manifestly monopolistic position it holds in the world of online retail, books especially.

    The big internet enterprises seem invulnerable on these narrow grounds. Or they do until you consider the question of individualised pricing. The huge data trail we all leave behind as we move around the internet is increasingly used to target us with prices which aren’t like the tags attached to goods in a shop. On the contrary, they are dynamic, moving with our perceived ability to pay. Four researchers based in Spain studied the phenomenon by creating automated personas to behave as if, in one case, ‘budget conscious’ and in another ‘affluent’, and then checking to see if their different behaviour led to different prices. It did: a search for headphones returned a set of results which were on average four times more expensive for the affluent persona. An airline-ticket discount site charged higher fares to the affluent consumer. In general, the location of the searcher caused prices to vary by as much as 166 per cent. So in short, yes, personalised prices are a thing, and the ability to create them depends on tracking us across the internet. That seems to me a prima facie violation of the American post-Bork monopoly laws, focused as they are entirely on price. It’s sort of funny, and also sort of grotesque, that an unprecedentedly huge apparatus of consumer surveillance is fine, apparently, but an unprecedentedly huge apparatus of consumer surveillance which results in some people paying higher prices may well be illegal.

    Perhaps the biggest potential threat to Facebook is that its users might go off it. Two billion monthly active users is a lot of people, and the ‘network effects’ – the scale of the connectivity – are, obviously, extraordinary. But there are other internet companies which connect people on the same scale – Snapchat has 166 million daily users, Twitter 328 million monthly users – and as we’ve seen in the disappearance of Myspace, the onetime leader in social media, when people change their minds about a service, they can go off it hard and fast.

    For that reason, were it to be generally understood that Facebook’s business model is based on surveillance, the company would be in danger. The one time Facebook did poll its users about the surveillance model was in 2011, when it proposed a change to its terms and conditions – the change that underpins the current template for its use of data. The result of the poll was clear: 90 per cent of the vote was against the changes. Facebook went ahead and made them anyway, on the grounds that so few people had voted. No surprise there, neither in the users’ distaste for surveillance nor in the company’s indifference to that distaste. But this is something which could change.

    The other thing that could happen at the level of individual users is that people stop using Facebook because it makes them unhappy. This isn’t the same issue as the scandal in 2014 when it turned out that social scientists at the company had deliberately manipulated some people’s news feeds to see what effect, if any, it had on their emotions. The resulting paper, published in the Proceedings of the National Academy of Sciences, was a study of ‘social contagion’, or the transfer of emotion among groups of people, as a result of a change in the nature of the stories seen by 689,003 users of Facebook. ‘When positive expressions were reduced, people produced fewer positive posts and more negative posts; when negative expressions were reduced, the opposite pattern occurred. These results indicate that emotions expressed by others on Facebook influence our own emotions, constituting experimental evidence for massive-scale contagion via social networks.’ The scientists seem not to have considered how this information would be received, and the story played quite big for a while.

    Perhaps the fact that people already knew this story accidentally deflected attention from what should have been a bigger scandal, exposed earlier this year in a paper from the American Journal of Epidemiology. The paper was titled ‘Association of Facebook Use with Compromised Well-Being: A Longitudinal Study’. The researchers found quite simply that the more people use Facebook, the more unhappy they are. A 1 per cent increase in ‘likes’ and clicks and status updates was correlated with a 5 to 8 per cent decrease in mental health. In addition, they found that the positive effect of real-world interactions, which enhance well-being, was accurately paralleled by the ‘negative associations of Facebook use’. In effect people were swapping real relationships which made them feel good for time on Facebook which made them feel bad. That’s my gloss rather than that of the scientists, who take the trouble to make it clear that this is a correlation rather than a definite causal relationship, but they did go so far – unusually far – as to say that the data ‘suggests a possible trade-off between offline and online relationships’. This isn’t the first time something like this effect has been found. To sum up: there is a lot of research showing that Facebook makes people feel like shit. So maybe, one day, people will stop using it.?

    *  *  *

    What, though, if none of the above happens? What if advertisers don’t rebel, governments don’t act, users don’t quit, and the good ship Zuckerberg and all who sail in her continues blithely on? We should look again at that figure of two billion monthly active users. The total number of people who have any access to the internet – as broadly defined as possible, to include the slowest dial-up speeds and creakiest developing-world mobile service, as well as people who have access but don’t use it – is three and a half billion. Of those, about 750 million are in China and Iran, which block Facebook. Russians, about a hundred million of whom are on the net, tend not to use Facebook because they prefer their native copycat site VKontakte. So put the potential audience for the site at 2.6 billion. In developed countries where Facebook has been present for years, use of the site peaks at about 75 per cent of the population (that’s in the US). That would imply a total potential audience for Facebook of 1.95 billion. At two billion monthly active users, Facebook has already gone past that number, and is running out of connected humans. Martínez compares Zuckerberg to Alexander the Great, weeping because he has no more worlds to conquer. Perhaps this is one reason for the early signals Zuck has sent about running for president – the fifty-state pretending-to-give-a-shit tour, the thoughtful-listening pose he’s photographed in while sharing milkshakes in (Presidential Ambitions klaxon!) an Iowa diner.

    Whatever comes next will take us back to those two pillars of the company, growth and monetisation. Growth can only come from connecting new areas of the planet. An early experiment came in the form of Free Basics, a program offering internet connectivity to remote villages in India, with the proviso that the range of sites on offer should be controlled by Facebook. ‘Who could possibly be against this?’ Zuckerberg wrote in the Times of India. The answer: lots and lots of angry Indians. The government ruled that Facebook shouldn’t be able to ‘shape users’ internet experience’ by restricting access to the broader internet. A Facebook board member tweeted that ‘anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?’ As Taplin points out, that remark ‘unwittingly revealed a previously unspoken truth: Facebook and Google are the new colonial powers.’

    So the growth side of the equation is not without its challenges, technological as well as political. Google (which has a similar running-out-of-humans problem) is working on ‘Project Loon’, ‘a network of balloons travelling on the edge of space, designed to extend internet connectivity to people in rural and remote areas worldwide’. Facebook is working on a project involving a solar-powered drone called the Aquila, which has the wingspan of a commercial airliner, weighs less than a car, and when cruising uses less energy than a microwave oven. The idea is that it will circle remote, currently unconnected areas of the planet, for flights that last as long as three months at a time. It connects users via laser and was developed in Bridgwater, Somerset. (Amazon’s drone programme is based in the UK too, near Cambridge. Our legal regime is pro-drone.) Even the most hardened Facebook sceptic has to be a little bit impressed by the ambition and energy. But the fact remains that the next two billion users are going to be hard to find.

    That’s growth, which will mainly happen in the developing world. Here in the rich world, the focus is more on monetisation, and it’s in this area that I have to admit something which is probably already apparent. I am scared of Facebook. The company’s ambition, its ruthlessness, and its lack of a moral compass scare me. It goes back to that moment of its creation, Zuckerberg at his keyboard after a few drinks creating a website to compare people’s appearance, not for any real reason other than that he was able to do it. That’s the crucial thing about Facebook, the main thing which isn’t understood about its motivation: it does things because it can. Zuckerberg knows how to do something, and other people don’t, so he does it. Motivation of that type doesn’t work in the Hollywood version of life, so Aaron Sorkin had to give Zuck a motive to do with social aspiration and rejection. But that’s wrong, completely wrong. He isn’t motivated by that kind of garden-variety psychology. He does this because he can, and justifications about ‘connection’ and ‘community’ are ex post facto rationalisations. The drive is simpler and more basic. That’s why the impulse to growth has been so fundamental to the company, which is in many respects more like a virus than it is like a business. Grow and multiply and monetise. Why? There is no why. Because.

    Automation and artificial intelligence are going to have a big impact in all kinds of worlds. These technologies are new and real and they are coming soon. Facebook is deeply interested in these trends. We don’t know where this is going, we don’t know what the social costs and consequences will be, we don’t know what will be the next area of life to be hollowed out, the next business model to be destroyed, the next company to go the way of Polaroid or the next business to go the way of journalism or the next set of tools and techniques to become available to the people who used Facebook to manipulate the elections of 2016. We just don’t know what’s next, but we know it’s likely to be consequential, and that a big part will be played by the world’s biggest social network. On the evidence of Facebook’s actions so far, it’s impossible to face this prospect without unease.

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Today’s News 2nd September 2017

  • Coming To A Town Near You: Expert Warns That No-Go Zones Are Growing In America

    Authored by Daniel Lang via SHTFplan.com,

    Nothing epitomizes the failure of Europe’s immigration policies more than the notorious “no-go zones.”

    For decades the West has opened its borders to people who don’t share their values, and the West has utterly failed to encourage these people to assimilate. To even suggest that is now considered racist in many European countries.

    The lack of assimilation has reached a degree that many of these populations have become resentful of their mediocre status in society, and have actually become more insular. Younger generations of these immigrants are more likely to follow ideologies like radical Islam, and they’re less likely than their parents to interact with native born Europeans. Many of them don’t even speak any European languages.

    The result has been the rise of dozens of no-go zones, which dot the urban landscapes of Europe. These are places that act as ethnic enclaves within their host countries. They are nations within nations, where outsiders are routinely shunned, berated, and beaten if they dare enter. In addition to that, they’ve become hotbeds of terrorism and civil unrest. And believe it or not, these Islamic no-go zones are beginning to show up in the United States.

    That’s according to Raheem Kassam, a conservative political activist and author from the UK. He recently wrote a book on the subject of no-go zones, which reveals startling similarities between the Middle Eastern enclaves of Europe and America.

    Places like the Cedar Riverside area of Minneapolis, where Shariah cops make house checks to make sure Somali refugees are not becoming too Westernized, and Hamtramck, Michigan, where the call to prayer is blasted over loudspeakers in Arabic and storefronts that once peddled Polish sausage are now brimming with halal meats.

     

    These can be the early warning signs of a budding no-go zone, says Kassam. But even more crucial, he says, is the level of assimilation by second and third generation Muslim Americans. If the experience of Europe is any indication, trouble is on the horizon for U.S. cities.

    Of course, America has always had neighborhoods that were predominantly inhabited by various immigrant groups. But over time those immigrants still assimilated. That’s not what we’re seeing is America’s Muslim neighborhoods.

    “But you look at the Muslim immigrants and they’re not doing that, they’re actually further ghettoizing, they’re moving inward, not outward.”

     

    Polls by Pew Research show a higher proportion of young Muslims backing terrorism, supporting death for apostasy [leaving Islam], death for homosexuals, and the idea that the woman must cover herself with the hijab or the burqa.

     

    So it’s the opposite trend of Little Italy becoming less like Italy and more like America.

     

    “You see a higher disposition than their parents who believe these things,” Kassam said. “They’re holding onto this Muslim-American sort of thing, and they’re being supported by the political left.”

     

    Kassam includes a whole chapter on Hamtramck, which in 2015 became the first U.S. city to elect a majority-Muslim city council. Several years before that, in 2011, the city approved the Muslim call to prayer over loudspeakers, effectively chasing away many of the last Polish holdouts.

    What’s going on in Europe right now should stand as a warning to Americans. Those countries have made a terrible mistake with their immigration policies, which they may be paying for over the next few generations. But unlike Europe, we still have time to change course. We can still adopt a sensible immigration policy that invites people who treasure our values, and turns back those who would have no respect for what we stand for.

  • The Working Class Can't Afford The American Dream

    For millions of middle- and working-class Americans, the "American Dream" is all but dead.  Far from being able to afford their own homes, the Fed’s latest survey on the wellbeing of US households revealed that nearly a quarter of Americans are unable to pay their monthly bills on time, and nearly half have less than $400 in the bank…

    But in what’s perhaps the most comprehensive analysis of the financial security of American workers, a study published by HowMuch.net explores the true cost of living for working-class Americans in dozens of US cities.

    What they found is hardly surprising. In most areas of the country, the average working-class household would be running a spending deficit. According to HowMuch’s methodology, the best place to live from a financial perspective on an Average Joe’s salary is Fort Worth, Texas, which would leave a working-class family with a $10,447 surplus at the end of the year. On the flip side, that same family would need an additional $91,184 just to break even in New York City.

    To arrive at these scores, the researchers used data from the Bureau of Labor Statistics for income levels, the National Bureau of Economic Research for tax data, and the U.S. Department of Agriculture for the cost of food.

    Newark, NJ, Chesapeake, VA and Jacksonville, FL are the only coastal cities where a worker can adequately support his family without accumulating debt. Notice there are exactly zero affordable cities on the west coast.

    Likewise, San Antonio is the only one of the top 10 most populated cities where a working-class family can afford a decent living. Out of the top 50 cities, only a dozen qualify.

    HowMuch illustrates its data in the map below. The darker the shade of red, the worse off the typical working-class family is. The darker the shade of green, the better off they would be. The size of the bubble also fits on a sliding scale—large and dark red means the city is totally unaffordable. Bigger dark green bubbles likewise indicate a city where the working class can get by.

    And as you can see, the red is much more prominent than the green.

    So where are the best places for working-class families to live? Here are the top five cities with the net surplus wokers are left with after living expenses.

    1. Fort Worth, TX ($10,447)

    2. Newark, NJ (($10,154)

    3. Glendale, AZ ($10,120)

    4. Gilbert, AZ ($9,760)

    5. Mesa, AZ ($7,780)

    And here are the five worst cities, with their associated cost-of-living deficits.

    1. New York, NY (-$91,184)

    2. San Francisco, CA (-$83,272)

    3. Boston, MA (-$61,900)

    4. Washington, DC (-$50,535)

    5. Philadelphia, PA (-$37,850)

    Readers can take a more in-depth look at the data using HowMuch’s True Cost of Living tool, which is available here.
     

  • Precious Metals Outperform Markets In August – Gold +4%, Silver +5%

    Precious Metals Outperform Markets In August – Gold +4%, Silver +5%

     – All four precious metals outperform markets in August
    – Gold posts best month since January, up nearly 4%
    – Gold reaches highest price since US election, climbs due to uncertainty and safe haven demand
    – S&P 500 marginally higher; Euro Stoxx, Nikkei lower for month

    – Platinum is best performing metal climbing over 5%
    – Palladium climbs over 4% thanks to seven year supply squeeze
    – Fear, uncertainty and political sanctions are amongst biggest drivers for precious metals
    – Never been a better time to diversify and rebalance portfolios with stocks and bonds near record highs and looking vulnerable

    Editor: Mark O’Byrne

    Market Performance in August (Finviz.com)

    All four precious metals have made gains in the month of August.

    Whilst platinum and palladium’s leading performances can largely be attributed to industrial factors they have also benefited from the safe haven demand which is driving gold and silver prices.

    Safe haven demand really came into its own this last month. Issues with North Korea have stepped up a level whilst markets have finally begun to question the complacency they have been feeling in regard to the US political and financial situation, geopolitical risk and the increasingly uncertain outlook for the global economy.

    Ultimately very little is known about what will happen with the US debt ceiling, increasingly overvalued stocks (both the NASDAQ and  the S&P500), Trump’s plans for corporate tax, dealings with North Korea and (not forgetting) Venezuela.

    We are living in very uncertain times indeed and investors decided to allocate funds to the ultimate safe havens – the precious metals.

    Gold shines as investors rush into safe havens

    This week gold rose to its highest point so far in 2017 as tensions between North Korea (but really, the rest of the world) and the US ramped up. For the month of August the price is up 3.59%.

    Silver was also up thanks to safe haven demand, but its 5% climb was also in part due to manufacturing demand. Currently, about 55% of all silver consumed is for industrial use.

    Gold has so far risen in every month, bar June.

    Gold’s climb has in part been due to ongoing demand from countries such as China and India, but it has primarily been driven by the desire in the West to own a safe haven. This is not surprising given the ongoing concerns regarding North Korea, Venezuela, the Middle East and a lack of cohesion in the Trump administration.

    One of the dampeners on gold and silver has been the Federal Reserve’s plans to raise interest rates. However, when they did so it had little effect. Expectations for further hikes are falling. Going forward Yellen and team are expected to slow down on further interest-rate increases which has provided an additional boost for the gold price.

    In the very short-term storm Harvey in Houston, Texas has also impacted the price of gold and silver. As a result of lost income and recovery operations, US GDP is expected to be lower in the third-quarter than was initially expected.

    In the long-term investors will look to gold and silver as they begin to price risk into the market. Yesterday we expressed our concerns over market complacency whilst other financial organisations have begun to warn clients about the overpriced equity markets and lack of perceived risk.

    It is also worth noting an expected climb in demand from China. Mark Tinker, Head of AXA Framlington wrote in a note that China’s pricing of assets in yuan (together with the plan by the Hong Kong Stock Exchange to  sell yuan-priced physical gold contracts) could allow them to trade out of the banking system in the US

    “Having accepted payment for oil or gas in RMB, the seller, be it Russia or Saudi Arabia or anyone else for that matter, does not have to worry about having excess RMB, they can simply trade it back into gold,” Tinker said. “We are moving to a multi-polar world.”

    Platinum gains as Russia feels the pain

    Platinum has performed very well so far in the second half of the year. This most recent surge has likely come about thanks to further sanctions being placed on Russia by the US. Russia is the world’s second biggest producer of the metal.

    The World Platinum Investment Council outlined the following arguments for platinum’s role as a safe haven investment asset:

    – Supply demand fundamentals are strong and ETF holdings are stable, despite price volatility
    – Risks of supply declines are underestimated – cost pressure and falling mining investment continue – Downside risks to platinum automotive demand are overestimated
    – Futures positioning follows poor sentiment with high correlation to price
    – Platinum is undervalued against its past, its production cost and against gold

    Palladium climbs on Vauxhall’s woes

    Palladium is currently at a 16 year high. There is a major tightening in the supply of palladium because of increased demand for it in engines. 67% of palladium supply is used in car engines to clean exhaust gases from gasoline engines. There is obviously a major push for ‘clean’ transport and the Vauxhall emissions scandal and obviously helped boost demand.

    Inventories of palladium supply are down by abut 45% this year, whilst supply trails demand by the most in the seven years.

    Despite the increase in supply, there has been a significant number of redemptions in the the two main U.S. and European palladium ETFs – the ETFS Physical Palladium Shares and the ZKB Palladium. By the 22nd August $49 million had been traded in. Supply in the spot market is reportedly so tight that companies are being forced to trade in multiple ETF shares in order to redeem them with the issuer in exchange for physical palladium.

    ETFs are now being treated like palladium warehouses.

    It is also important to note that, like platinum, palladium is also hugely affected by the sanctions on Russia.

    It is also important to note that ETFs are a risky way to invest in precious metals and most investors would be better served owning actual precious metals rather than paper or digital proxies.

    Conclusion: Stars aligning? Outlook good for rest of 2017

    Earlier this week we explained how investors shouldn’t always be focused on price. Whilst it is nice to look at the metrics for August and see that all precious metals are up, we should instead focus on why they are up and most importantly the diversification benefits for our portfolios.

    Precious metals are largely climbing because the perceived risk in the political and financial system is also climbing. Interestingly many commentators do not feel some risky issues have been wholly appreciated by the markets.

    Problems such as North Korea are such serious risks that even someone who pays no attention to markets could spot it. The issue is that you have an overvalued stock market and a US President who cannot get his people together. This means that the US debt ceiling issue might ground the U.S. government to a halt.

    These issues are ones which have not yet been fully priced into the markets. They likely will be in the coming months and then the safe haven role of the precious metals and gold in particular will come into its own.

    News and Commentary

    Gold up 4% in August – largest monthly gain since January (Marketwatch)

    Gold steady near 9-1/2 month highs as N.Korea tensions persist (Reuters)

    Gold Scores Fifth Monthly Increase; US Mint Bullion Sales Slow in August (Coin News)

    Gold edges lower, but N.Korea worries lend support (Nasdaq)

    Massive wartime bomb to be defused near German gold reserves (Irish Times)

    Source: Marketwatch

    From Stocks to Bonds, the Bear-Market Signals Are Multiplying (Bloomberg)

    Rothschild reduces exposure to US stocks amid turmoil (Standard)

    Five charts show why millennials are worse off than their parents (FT.com)

    When the Butterfly Flaps Its Wings – Kunstler (Zerohedge)

    Buffett: North Korea situation is very concerning (CNBC)

    Gold Prices (LBMA AM)

    01 Sep: USD 1,318.40, GBP 1,020.18 & EUR 1,107.98 per ounce
    31 Aug: USD 1,305.80, GBP 1,013.17 & EUR 1,098.31 per ounce
    30 Aug: USD 1,310.60, GBP 1,014.93 & EUR 1,096.71 per ounce
    29 Aug: USD 1,323.40, GBP 1,020.34 & EUR 1,097.36 per ounce
    25 Aug: USD 1,287.05, GBP 1,003.90 & EUR 1,090.90 per ounce
    24 Aug: USD 1,285.90, GBP 1,003.26 & EUR 1,090.44 per ounce
    23 Aug: USD 1,286.45, GBP 1,004.33 & EUR 1,091.68 per ounce

    Silver Prices (LBMA)

    01 Sep: USD 17.50, GBP 13.53 & EUR 14.69 per ounce
    31 Aug: USD 17.34, GBP 13.47 & EUR 14.62 per ounce
    30 Aug: USD 17.44, GBP 13.49 & EUR 14.60 per ounce
    29 Aug: USD 17.60, GBP 13.59 & EUR 14.62 per ounce
    25 Aug: USD 17.02, GBP 13.26 & EUR 14.40 per ounce
    24 Aug: USD 16.93, GBP 13.20 & EUR 14.36 per ounce
    23 Aug: USD 17.06, GBP 13.32 & EUR 14.48 per ounce


    Recent Market Updates

    – 4 Reasons Why “Gold Has Entered A New Bull Market” – Schroders
    – Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards
    – Gold Surges 2.6% After Jackson Hole and N. Korean Missile
    – Diversify Into Gold On U.S. “Political Instability” Advise Blackrock
    – Trump Presidency Is Over – Bannon Is Right
    – The Truth About Bundesbank Repatriation of Gold From U.S.
    – Cyberwar Risk – Was U.S. Navy Victim Of Hacking?
    – Global Financial Crisis 10 Years On: Gold Rises 100% from $650 to $1,300
    – Mnuchin: I Assume Fort Knox Gold Is Still There
    – Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
    – Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High
    – Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard
    – World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF In Q2

    Important Guides

    For your perusal, below are our most popular guides in 2017:

    Essential Guide To Storing Gold In Switzerland

    Essential Guide To Storing Gold In Singapore

    Essential Guide to Tax Free Gold Sovereigns (UK)

    Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

  • Pat Buchanan Exposes What Harvey Really Wrought

    Authored by Patrick Buchanan via Buchanan.org,

    Like 9/11, Hurricane Harvey brought us together.

    In awe at the destruction 50 inches of rain did to East Texas and our fourth-largest city and in admiration as cable television showed countless hours of Texans humanely and heroically rescuing and aiding fellow Texans in the worst natural disaster in U.S. history.

    On display this week was America at her best.

    Yet the destruction will not soon be repaired. Nearly a third of Harris County, home to 4.5 million people, was flooded. Beaumont and Port Arthur were swamped with 2 feet of rain and put underwater.

    Estimates of the initial cost to the Treasury are north of $100 billion, with some saying the down payment alone will be closer to $200 billion. In inflation-adjusted dollars, the cost of Harvey will exceed that of the Marshall Plan, which rebuilt Europe after World War II.

    Though the country has appeared united since the storm hit, it is not likely to remain so. Soon, the cameras and correspondents will go home, while the shelters remain full, as tens of thousands of people in those shelters have only destroyed homes to return to.

    When the waters recede, the misery of the evacuees left behind will become less tolerable. Then will come the looters and gougers and angry arguments over who’s to blame and who should pay.

    They have already begun. Republicans who balked at voting for the bailout billions for Chris Christie’s New Jersey after Hurricane Sandy ravaged the coast in 2012 are being called hypocrites for asking for swift and massive federal assistance to repair red state Texas.

    And whereas George W. Bush soared to 90 percent approval after 9/11, no such surge in support for Donald Trump appears at hand.

    Indeed, the sneering and sniping began on his first visit to Texas.

    He failed to celebrate the first responders, they said…

     

    He failed to hug any of the victims…

     

    He failed to show empathy

     

    First lady Melania Trump wore spiked heels boarding Marine One for Texas.

    A prediction: The damage done by Harvey — as well as the physical, psychic and political costs — will cause many to echo the slogan of George McGovern in 1972, when he exhorted the country to “come home, America.”

    The nation seems more receptive now, for even before Harvey, the media seemed consumed with what ails America.

    The New York and D.C. subway systems are crumbling.

    Puerto Rico is bankrupt.

    Some states, such as Illinois, cannot balance their budgets.

    The murder rates are soaring in Baltimore and Chicago.

    Congress this month will have to raise the debt ceiling by hundreds of billions and pass a budget with a deficit bloated by the cost of Harvey.

    And the foreign crises seem to be coming at us, one after another.

    Russia is beginning military maneuvers in the Baltic and Belarus, bordering Poland, with a force estimated by some at 100,000 troops — Vladimir Putin’s response to NATO’s deployment of 4,000 troops to the Baltic States and Poland.

    The U.S. is considering sending anti-tank missiles to Kiev. This could reignite the Donbass war and bring Russian intervention, the defeat of the Ukrainian army and calls for U.S. intervention.

    In the teeth of Trump’s threat to pour “fire and fury” on North Korea, Kim Jong Un just launched an intermediate-range ballistic missile over Japan. Trump’s answer: U.S. B-1Bs make practice bombing runs near the demilitarized zone. Reports from South Korea indicate that Kim may soon conduct a sixth underground test of an atomic bomb.

    War in Korea has never seemed so close since Dwight Eisenhower ended the Korean War with an armistice more than 60 years ago.

    Despite the opposition of his national security team, Trump is said to be ready to repudiate the Iranian nuclear deal in October, freeing Congress to reimpose the sanctions lifted by the deal.

    This would split us from our NATO allies and, if Iran ignored the new U.S. sanctions or began anew to enrich uranium, force Trump’s hand. Is he, are we as a country, ready for another trillion-dollar war, with Iran, which so many inside the Beltway seem so eager to fight?

    The U.S. and Turkey have urged Iraq’s Kurds to put off their nonbinding referendum on independence Sept. 25. The vote seems certain to endorse a separate state. A Kurdistan, seceded from Baghdad, would be a magnet for secession-minded Kurds in Turkey, Syria and Iran, 30 million in all, and present a strategic crisis for the United States.

    Along with the steady growth of entitlement spending, the new dollars demanded for defense, the prospect of new wars and the tax cuts the White House supports, Hurricane Harvey should concentrate the mind.

    Great as America is, there are limits to our wealth and power, to how many global problems we can solve, to how many wars we can fight and to how many hostile powers we can confront.

    The “indispensable nation” is going to have to begin making choices. Indeed, that is among the reasons Trump was elected.

  • Pension Ponzi Exposed: Minnesota Underfunding Triples After Tweaking This One Small Assumption…

    Defined Benefit Pension Plans are, in many cases, a ponzi scheme.  Current assets are used to pay current claims in full despite insufficient funding to pay future liabilities… classic Ponzi.  But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit.  Everyone from government officials to union bosses are incentivized to maintain the status quo…public employees get to sleep better at night thinking they have a “retirement plan,” public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.  

    So what allows this ponzi to persist?  It all comes down to one simple assumption: Discount Rates.  You see, if you simply discount future liabilities at a high enough discount rate then you can make any massively underfunded pension ponzi look like a stable, healthy retirement gold mine. 

    In fact, just over a year ago we took a look at what would happen if we calculated the true underfunded level of America’s public pensions at more reasonable discount rates.  The result showed that the media’s highly referenced underfunding of $2 trillion soared to something closer to $5-$8 trillion when more reasonable discount rates were employed.

    We decided to take a look at what would happen if all federal, state and local pension plans decided to heed the advice of Mr. Gross. As one might suspect, the results are not pleasant.  We conservatively assume that public pensions are currently $2.0 trillion underfunded ($4.5 trillion of assets for $6.5 trillion of liabilities) even though we’ve seen estimates that suggest $3.5 trillion or more might be more appropriate.  We then adjusted the return on asset assumption down from the 7.5% used by most pensions to the 4.0% suggested by Mr. Gross and found that true public pension underfunding could be closer to $5.5 trillion, or over 2.5x more than current estimates.  Others have suggested that returns should be closer to risk-free rates which would imply an even more draconian $8.4 trillion underfunding.  

     

    Pension Underfudning

     

    Now, the state of Minnesota has gracefully stepped forward to beautifully illustrate our point.  Upon making a few minor “tweaks” to their various funds’ discount rates, the state found that their aggregate pension underfunding more than tripled from roughly $16 billion to over $50 billion.  Here’s more from Bloomberg:

    Minnesota’s debt to its workers’ retirement system has soared by $33.4 billion, or $6,000 for every resident, courtesy of accounting rules.

     

    The jump caused the finances of Minnesota’s pensions to erode more than any other state’s last year as accounting standards seek to prevent governments from using overly optimistic assumptions to minimize what they owe public employees decades from now. Because of changes in actuarial math, Minnesota in 2016 reported having just 53 percent of what it needed to cover promised benefits, down from 80 percent a year earlier, transforming it from one of the best funded state systems to the seventh worst, according to data compiled by Bloomberg.

     

    The Minnesota’s teachers’ pension fund, which had $19.4 billion in assets as of June 30, 2016, is expected to go broke in 2052. As a result of the latest rules the pension has started using a rate of 4.7 percent to discount its liabilities, down from the 8 percent used previously. As a result, its liabilities increased by $16.7 billion.

     

    But other factors also helped boost Minnesota’s liabilities: Eight of Minnesota’s nine pensions reduced their assumed rate of return on their investments to 7.5 percent from 7.9 percent, while three began factoring in longer life expectancy.

    All of which resulted in this:

    Minnesota

     

    Of course, Minnesota’s underfunding didn’t just magically “soar by $33.4 billion” as Bloomberg puts it…in reality, the state’s pensions were always underfunded by ~$50 billion…the only difference is that that some pension administrators finally decided to stop lying to their retirees and report reality.

    All of which rendered this Bloomberg map from just two months ago showing an 80% funding ratio for Minnesota completely obsolete…

     

    …Sorry, Minnesota teachers but you’re almost as screwed as your counterparts in Illinois…you just didn’t know it until your bosses finally decided to stop lying to you.

    Pension map

  • "I'm Not Scared To Shoot You" – Shotgun-Wielding Man Protects Houston Neighborhood

    Authored by Daisy Luther via The Organic Prepper blog,

    A man named Nash decided to protect his community from looters after Hurricane Harvey left the Houston area vulnerable.

    Unfortunately, after a disaster, some people decide it’s the perfect time to steal from others.

    This scenario is commonly known in survivalist circles as “without rule of law.”

    It means that criminals aren’t concerned about consequences, 911 isn’t an option, and it is every person for themselves. If you aren’t ready to protect yourself, you are likely to become a victim.

    You’ll note that the woman who is shooting the video of the man with the shotgun said that even some so-called “rescuers” were stealing from the people who got into their boats to escape their flooded homes.

    This is well worth a listen for anyone who wants to be as prepped for the aftermath of a disaster as for the disaster itself. It’s a strong case for what I’ve said for years. Preppers MUST be armed if they want to be truly prepared. (For more stories like this, please subscribe to my daily newsletter.)

    I wouldn’t mess with this guy. It’s obvious that he means business. This was a Facebook Live video shot by Tay Mayberry. (Warning: profanity.)

    Instructions: Click the arrow at the bottom of the photo below for the video. If you don’t have sound, right click and select “Unmute.” You definitely want to hear this.

    (If the video doesn’t work on your device, go here for the original.)

    So, let’s be absolutely clear. The residents of the area have no option to call 911. There are no cops who will come and save them. They are absolutely on their own. This is what a “without rule of law” situation is like.

    The shotgun-wielding man, identified as “Nash” said, in part:

    If you go back in that store, I’m telling you one time, I’m not scared to shoot you. I’m an ex-f**king SWAT deputy. I will cut your ass in half. Don’t go in that store no goddamn more!

     

    I ain’t got a problem with shooting; I still got a license. Try me if you want! I’m a former law enforcement officer. I still support law enforcement; those that do right.

     

    HPD (Houston Police Department) officers right now in the back of city trucks, all armed with AR-15s gotta go back to the neighborhood that’s still underwater, flooded, and try and protect these people. It don’t make no sense that these guys out here too lazy to get a damn job; the energy they using to rob they didn’t even try to use that energy to rescue people.

     

    If you’re looting, it’s a violation of federal law, it’s a violation of Texas law at the time of a catastrophe.

    Looters can be seen running from the store. Mayberry’s narrative of the video is heartbreaking and gives you a clear picture of the lack of order after a disaster.

    When her mother asks Nash if anyone has called 911 for him, Mayberry replies:

    911 ain’t gonna come, Mama. 911 is outta there. It’s either martial law or everybody else watch you. 911 ain’t out there. There IS no law.

    She says:

    So this is what the hell the news ain’t showing ya’ll. This is what we’re going through on top of this storm. I was scared to call a rescue boat because the people on the rescue boats are rescuing people and then they f**king robbing us ya’ll.

     

    We can’t call rescue boats because they have fake people posing on the rescue boats and when they come to your house they are robbing you in this storm. So you can’t call anybody to rescue you. You literally have to get out yourself.”

    As well…

    “There is no 911. There is no police. There is no law.”

    Being prepared for a disaster is only half the battle. To survive, you have to be prepared for what comes after the disaster.

  • "Trump Should Be Concerned": Mueller Partners With "Elite" IRS Investigations Unit

    Special Counsel Robert Mueller’s team of investigators are leaving no stone unturned in their crusade to find something they can use to try and turn a member of Trump’s inner circle, The Daily Beast is reporting, citing a source close to Mueller, that the special counsel’s office has teamed up with the IRS’s Criminal Investigations Unit. The “elite” IRS investigations squad will help ensure that investigators apply the maximum possible scrutiny to the finances of Trump’s inner circle in an investigation that’s nominally about election fraud.

    Of course, the public has long been aware, thanks to Mueller’s collaborators in the media, that his team has no solid evidence to support a charge of election fraud against Trump or members of his circle. And while this latest “partnership” just confirms widely held suspicions that Mueller & Co. are grasping at straws, it could provide Mueller an opening to strike directly at the president, his family and closest advisers – or at least embarass Trump with a fresh batch of leaks.

    First, as the Daily Beast points out, partnering with the IRS will allow Mueller’s team to access Trump’s tax returns, which we can only assume will promptly be leaked to one of the former FBI director’s favorite journalists at the Washington Post or New York Times.  

    “This unit—known as CI—is one of the federal government’s most tight-knit, specialized, and secretive investigative entities. Its 2,500 agents focus exclusively on financial crime, including tax evasion and money laundering. A former colleague of Mueller’s said he always liked working with IRS’ special agents, especially when he was a U.S. Attorney.

     

    And it goes without saying that the IRS has access to Trump’s tax returns—documents that the president has long resisted releasing to the public.

     

    Potential financial crimes are a central part of Mueller’s probe. One of his top deputies, Andy Weissmann, formerly helmed the Justice Department’s Enron probe and has extensive experience working with investigative agents from the IRS."

    Both Mueller and his deputy, Andy Weissmann, who formerly led the Justice Department’s Enron probe, have “extensive” experience working with IRS agents. So there’s little doubt they will play ball.

    “’From the agents, I know everyone has the utmost respect for both Mueller and Weissmann,’ said Martin Sheil, a retired IRS Criminal Investigations agent.”

    In its report, the Daily Beast shares some fresh insight into the prosecution’s case against Manafort. Naturally, we have a few questions: Can somebody explain what role Paul Manafort’s forgetting to check a box on his tax returned played in the grand conspiracy to rig the 2016 election?

    “It’s been widely reported that the special counsel’s team is trying to “flip” Paul Manafort, the president’s former campaign CEO, in hopes he will provide evidence against his former colleagues. Former federal prosecutors tell The Daily Beast one of Manafort’s biggest legal liabilities could be to what’s called a “check the box” prosecution. Federal law requires that people who have money in foreign bank accounts check a box on their tax returns disclosing that. And there’s speculation that Manafort may have neglected to check that box, which would be a felony. This is exactly the kind of allegation the IRS would look into.”

    Even if Mueller and his team can’t find anything to justify an indictment, at least they can still punish members of Trump’s inner circle for their association with the president. Call it a consolation prize for inconsolable liberals.

    “These investigations, which are often extremely complex, can take a lot of time. That means the people involved sometimes have to spend significant amounts of money on legal fees. The Daily Beast previously reported that targets of Mueller’s probe—including Manafort—are facing financial strain because of the probe, and that Manafort recently parted ways with the law firm WilmerHale in part because of his financial troubles.”

    In a shocking moment of candor, the Daily Beast hints at what looks to be an ulterior motive for Mueller’s partnership with the IRS. The Trump administration never appointed an AAG to supervise the DOJ’s tax division, which would have to sign off on any charges relating to their finances. Therefore, he has “no one to keep Mueller in check,” as one former prosecutor phrased it.  

    “The fact that there is not a senate-confirmed Assistant Attorney General for the Tax Division, and that the Trump people have disregarded it despite warnings as far back as December that they needed to fill the AAG’s spot… shows what a self-created mess the Trump administration has found itself in,” said the former prosecutor, who requested anonymity to speak candidly. “They have no one to keep Mueller and his Brooklyn team honest. They should be concerned about that.”

    To summarize, even if it has nothing to do with Donald Trump Jr.’s willingness to acquire “opposition research” on the Clinton’s, or Jared Kushner’s initial failure to disclosure meetings with certain foreign officials on his security clearance application – or any of the other leaks used to cast aspersions on Trump and his associates – Mueller may have found his opening. It may only be a matter of time before the other shoe drops.
     

  • Rickards: "There Are Three Things Going On With Gold Right Now"

    Authored by Craig Wilson via Daily Reckoning blog,

    Jim Rickards joined Kitco News and Daniela Cambone to discuss the latest news and analysis from gold markets, geopolitics and even bitcoin.  The Wall Street veteran took on the bigger picture facing metals investors and what could be just around the corner in a bubbling market.

    Jim Rickards is the editor of Strategic Intelligence and is the New York Times best-selling author of The Road to Ruin. Rickards’ worked on Wall Street for decades and has advised the U.S intelligence community on international finance, trade and financial warfare.

    When asked why certain geopolitical tensions have greater impacts on gold and hard assets than others Rickards remarked, “There are two things going on,

    “… first is that the North Korean missile threat goes from high tension to back down again. This is a very serious threat and we are headed for war with North Korea. While I don’t know what it will take to not just get gold to go up but stocks and other sectors, ultimately markets are going to be impacted.”

     

    People seem to have very short attention spans but that’s not how to think about it. It’s possible to see that Kim Jong-un is not deviating from his path to get nuclear weapons, the U.S will not allow it. There’s no middle ground there. It would be great if we could have diplomacy. I think we should also ratchet up sanctions on China. But I don’t see either of those happening.”

     

    Don’t underestimate the extent to which gold is being impacted by hedge funds, leverage players, and others that are in the mix for the current high in gold. They don’t really care if it is gold, soybeans, etc. but it is simply another commodity. They receive a nice profit with tight profits, tight stops.”

     

    “The bigger picture to look as here is that gold hit an interim low last December and has been grinding higher ever since.  Now gold is up over $200 an ounce and is one of the best performing assets in 2017. There’s a pattern of higher highs and shows a very positive occurrence.”

    Gold and Weak Dollar Environment

    The interviewer then shot back at Rickards asking whether the price and actions in the market always come back to the U.S dollar? The best-selling author and economist responded, “This all relates to currency wars. I think of gold by weight.”

    When most people look at the cost of gold they relate it to the dollar. That gives the dollar a privilege to say that it is the way to count everything. It is also possible to count gold in euro, yen or even bitcoin. I think of gold as money. These are all just cross rates. When I see a higher dollar price for gold, I think of the dollar as being weaker. Likewise, if I see a lower price for gold it just shows that gold is constant and the dollar got stronger.”

     

    There are three things going on right now in gold. There’s a fear trade, there’s technicals with supply shortages and ultimately a weaker dollar. If you want to know where the dollar price for gold is going, ask yourself where the dollar is headed. As the dollar gets weaker due to Federal Reserve Chair Yellen’s plan to tighten rates into weakness. We’re getting disinflation, not inflation and the desire from the Fed is a weaker dollar.”

    When The Street’s Daniela Cambone prompted Rickards on the rally in gold and whether it would be rejuvenated he leveled,

    I expect to see gold hit $5,000 and eventually to $10,000 an ounce. Maybe not tomorrow or a couple of years but that is the fundamental price of gold as money.

     

    “In a recent conversation with legendary commodity investor Jim Rogers he indicated to me was, ‘nothing goes to that level without a 50% retracing before it resumes its path upwards.’ Moves happen very fast. The question is, what are the catalysts that could take it higher?”

    Is Bitcoin Stealing Gold’s Thunder?

    Speaking on catalysts and what could shake the gold market the interviewer then asked whether Bitcoin could have a significant impact. Rickards pushed back,

    “Bitcoin is a very small market cap compared to gold. I don’t think it has much impact on gold and looks like a bubble right now.”

     

    “As someone who has been around Wall Street a long time I’ve seen a lot of different tricks of the trade and frauds that come and go. I am seeing all of the various schemes in bitcoin right now. There’s good forensic evidence that there are people doing wash sales right now and the suckers don’t know they are getting sucked in. Gold is still the ultimate safe haven.

    German Gold and ‘Weird’ Commodity Movements

    Recently, Germany moved to reacquire its gold being held within the Federal Reserve system. Rickards latest analysis on the situation detailed that,

    “In 2013 the central bank in Germany said it wanted its gold back from the UK, France and the US. Here’s the thing, Germany does not want all of its gold back.”

     

    “As it is going through its election cycle, there are specific factions of the German government that are pushing to get German gold back to domestically being held. The German elections are in mid-September, it is not a coincidence that this happened just before that. It was to appease political dynamics as well as leasing development of gold.

    Looking internally, the recent visit by Treasury Secretary Mnuchin to the US Mint in Fort Knox stirred many commodity investor analysts. Rickards offered,

    “I was shocked to see the visit. It is rare and only the third time that a Treasury Secretary has visited since the 1930’s.”

     

    “The other thing that is strange about the visit is that the monetary elites don’t want to pay any attention to gold. Several years ago Fed Chair Bernanke was asked about gold and he replied that it is given attention because of tradition. The reason that this official visit matters now is that when gold is being given public attention by government leadership, it enhances the value of gold as a monetary asset. They don’t want the general public to pay attention to gold. The question is, why did he do it and tweet out the visit?”

    Finally, speaking on the mounting complexity of issues facing the American government Rickards warned that gold could be well positioned for the remainder of Fall. Rickards sets up,

    We’re coming up against a debt ceiling and budget train wreck. The US budget is at D-Day at the end of September. Separately, the Treasury is literally running out of cash. The government will have to raise the debt ceiling for the Treasury and it will need to, at the very least, pass a continuing resolution.”

     

    The Treasury has a trick up its sleeve. In 1973, the gold on the books of the Treasury is officially valued at $42.22 per ounce. It would be possible to go mark it to the market just like a hedge fund does. The Treasury could raise the value to a raised price and that difference between $42.22 and the heightened amount would only require a certificate to the Fed for money.”

     

    “That is all under the Gold Act of 1934. The move could open up hundreds of billions of dollars out of thin air just by remarking gold. While I am not saying this is going to happen, it is an option that they have available.”

  • Venezuela Headed For "Messiest Debt-Restructuring In History" Thanks To US Sanctions

    After being effectively shut out from global financial markets – a situation that was made more precarious by US sanctions prohibiting purchases of Venezuelan debt (unless you’re buying them off Goldman Sachs, should the bank’s asset-management arm desire to liquidate its $3 billion “hunger bond” position) – Venezuela is drawing ever-nearer to what the Financial Times describes as potentially the “messiest debt restructuring in history.”

    So far, Venezuela has managed to forestall a default by stripping assets from its state-owned oil company, Petroleos de Venezuela, commonly referred to as PVDSA, and shaking down local institutions of spare dollars – not to mention the explicit financial support of China and Russia. Recently, Rosneft, the largest Russian oil company, helped support its troubled ally, which enjoys the largest crude reserves in the world, by offering billions of dollars in advance payments for future crude supplies. Thanks to a deal brokered by deceased former President Hugo Chavez, Venezuela has for years been Rosneft’s largest foreign supplier of crude. Last year, the oil giant accepted a 49.9% stake in PVDSA’s US-based subsidiary, Citgo, as collateral for a $1.5 billion loan.

    Venezuelan President Nicolas Maduro

    However, thanks to the US sanctions, which prohibit purchases of newly issued debt and existing bonds that have so far not been sold outside of Caracas, the country will once again need to innovate or risk sliding into bankruptcy. Making matters all the more urgent, the country recently suffered a loss in US courts after a judge ruled that Canadian miner Crystallex can seize Venezuelan money held in a custody account at Bank of New York Mellon to cover a $1.4 billion judgment awarded by a World Bank tribunal.

    Crystallex’s victory could further embolden the country’s creditors, who collectively may be owed as much as $3.7 billion.

    “Venezuela has been taken to the World Bank’s ICSID tribunal 43 times. Only Argentina has been subjected to more claims. Of these 24 are still pending, including claims from Anglo American, ConocoPhillips, Air Canada and Vestey. The Eurasia Group estimates that Venezuela owes a total of $3.7bn as a result of ICSID rulings, and Crystallex’s progress is likely to embolden other creditors.”

    Adding to the country’s troubles, a major US clearing house has said it will stop settling some Venezuelan bonds, and Cantor Fitzgerald has stopped trading them altogether.

    After months of rhetoric, the US – which for years maintained an uneasy business relationship with Venezuela, formerly South America’s wealthiest economy – has severed the country’s last tenuous ties to the global financial system…

    “The message is that the US doesn’t want its financial system enabling the Venezuelan government in any way,” says Charles Blitzer, of Blitzer Consulting, who is a former International Monetary Fund official.  

    …And with the Crystallex ruling compounding the country’s troubles, its government is being set up for a “slow burn” leading ultimately to financial insolvency as creditors root out and seize whatever foreign assets they can find.

    “Crystallex is the camel’s toe under the tent,” says Mark Weidemaier, a law professor at the University of North Carolina. “It will be a slow burn, but I wouldn’t be surprised to see people use the courts to ferret out where Venezuela’s assets are . . . and break down the barriers between the government, PDVSA and other entities.”

    Typically, in a sovereign bankruptcy, creditors negotiate some kind of debt relief and trade their old, defaulted bonds for less valuable new ones. However, US sanctions may preclude this as an option for Venezuela, as the FT explains.

    “…such a debt exchange would fall foul of the US sanctions regime, precluding any US banks from arranging one and any US bondholders from tendering their debts. In practice, it would mean indefinite financial purgatory for Venezuela until the US administration decides to lift the prohibition.

     

    “If these sanctions stay in place, then Venezuela cannot restructure and it goes into limbo,” says Edward Al-Hussainy, a senior analyst at Columbia Threadneedle."

    Since Venezuela’s economic crisis began four years ago, imports have fallen precipitously, leading to dire shortages of essentials like medicine and foodstuffs as the country's currency depreciated to the point of worthlessness. Unless the country can find some way to circumvent the sanctions, it will be forced to decide between countenancing further import declines, or a disorderly default.

    According to Torino Capital, a Latin American-focused investment bank, Venezuela could choose the latter.

    “Torino Capital…argued that this might counter-intuitively make a restructuring less likely. ‘It is possible that, faced with this choice, Venezuelan authorities end up deciding that the negative effects of a disorderly default on PDVSA’s capacity to generate export revenue are worse than the contractionary effects of further import cuts,’ the bank wrote in a note to clients.”

    To be sure, a default could still be years away. And investors, for one, aren’t worried. The country’s debt has been largely unperturbed by the recent developments: PDVSA bonds have largely traded sideways, despite the recent developments.

    “In the near term the impact will probably be minimal. Given Venezuela’s messy finances, the country is in practice already shut out of the international bond market. And while Crystallex won a legal skirmish, it is far from winning the war. It is unclear how much money Venezuela holds at BNYM and it may still be protected by sovereign immunity. Underscoring the investor view that little has changed, Venezuela and PDVA’s bonds have largely traded sideways.”

    Still, a default, whenever it arrives, could signal the last gasp of the country’s embattled government. The country's foreign reserves have already fallen below $10 billion (though they received a boost following the Goldman deal…).

    “If they default, they will be out of government within three months,” says Federico Kaune, head of emerging market debt at UBS Asset Management. “The calculation is that they’re either in government, in exile or jail.”

    With the fate of the Maduro regime hanging in the balance, we imagine Washington will do everything in its power to force Venezuela into bankruptcy, allowing the US to claim victory over yet another foreign adversary.
     

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