• Thank God 'The People' Are Back in Power: Kushner Family Pitches 'Invest $500k, Immigrate to America' Visa Program in China

  Representatives from the Kushner family descended upon the Ritz Carlton in Beijing to pitch wealthy Chinese the EB-5 visa program aka crony capitalism.

  Nicole Kushner, Jared’s sister, was alleged to be in attendance.

  The pitch was “Invest early, and you will invest under the old rules,” according to the Washington Post.

  The event, which was closed to foreign press, was hosted by the Chinese company Qiaowai — who is working on behalf of the Kushner family for one of their projects in New Jersey.

  It’s dubbed the ‘Kushner 1’ project, like Airforce 1 only cooler: “This project has stable funding, creates sufficient jobs and guarantees the safety of investors’ money, read one of the promotional brochures.

  The materials painted Jared as a ‘celebrity’ in America, encouraging rich Chinese to trust their status and business acumen in America — which is funny considering the ruinous state of their crown jewel property 666 5th avenue (extra anti-Christ). The Kushner’s are trying to restructure the 666 deal, bringing in Chinese insurance giant Anbang, in an effort to finance a massive expansion and conversion of the top floors into posh condos.

  Thank God ‘the people’, plumbers, electricians and all of the other rubes, are running America again. Get the wall up, unless of course all Mexican migrants are willing to fork over $500,000 to invest.
  Content originally published at iBankCoin.com

  

• How Volkswagen Quietly Stashed Half A Million Rigged Cars Around The Country

  Volkswagen bought back hundreds of thousands of emissions-cheating cars. We just discovered what it has done with them all…

  

   

  As Bloomberg reports, the German automaker agreed last year to buy back about 500,000 diesels that it rigged to pass U.S. emissions tests if it can't figure out a way to fix them. Except for a handful of 2015 models, VW dealers can't sell the cars until – and unless – the company comes up with repairs to satisfy regulators. The question they face then is – what to do with the hundreds of thousands of diesel cars it is being forced to buy back?

  Well, now we know… the company is hauling them to storage lots across America…

  

  VW spokeswoman Jeannine Ginivan said "the program is unprecedented in terms of its size and scope and we have devoted significant resources and personnel to help ensure that it is carried out as seamlessly as possible."

  As Jalopnik's David Tracy reports, after a bit of hunting on forums, and a couple of tips from readers and friends, I seem to have found three such “regional facilities”: one in Pontiac, Michigan; one in San Bernardino, California; and one in Baltimore, Maryland.

  The Pontiac Silverdome is a bit of a shitshow in southeast Michigan. It used to be the proud home of the Detroit Lions and the Pistons, and it was even the venue for Super Bowl XVI, multiple NCAA tournament games and some FIFA World Cup matches. But now the huge building lies dormant, with its interior decaying and its parking lots cracking after years of neglect. This makes it the perfect place for VW to stash their bought-back TDIs.

  

  

  

  See here for more images…

  On a remote part of Norton Air Force Base (in San Bernardino, California), which has been decommissioned for over 20 years now, as is now part of the San Bernardino International Airport, lie thousands of California-plated Volkswagens and Audis awaiting their fate…

  

  

   

  Google Street View even has the images..

  

  See here for more images…

  The Port of Baltimore is stuffed full of Volkswagens waiting to die. As one Jalopnik readers noted "a total of five storage lots with what had to be thousands of cars, ranging from older Mk5 Jetta models to high line Audi A3s, Passats and MQB Mk7 Golfs and a huge quantity of Jetta Sportwagens… Several of the lots stretched much farther than I could see."

  

  

  

  See here for more images…

  The images above bring to mind the apocalyptic scenes from 'where cars go to die' during the last crisis in America, but for VW, this seemed to sum it all up nicely…

  "The public doesn’t realize the monumental undertaking that they’ve pulled off to do this in a year and a half," said Matthew Welch, general manager of Auburn Volkswagen near Seattle.

   

  "Nothing like this has ever been done."

  And while VW has only itself (and government regulations) to blame for this scene, we wonder how long before we see the same images for GM vehicles… after all, with inventories at 10-year highs as sales start to collapse, we are feeling a terrible sense of deja vu all over again…

  

  

  

• France Warns Media Not To Publish Hacked Macron Emails, Threatens With Criminal Charges

  After 9 gigabytes of Macron-linked documents and emails were released on an anonymous pastebin website on Friday afternoon in what Macron’s campaign said was a “massive and coordinated” hacking attack, France – fearing a similar response to what happened with Hillary Clinton after 35,000 John Podesta emails were released one month before the US presidential election – cracked down on the distribution of the files, warning on Saturday it would be a “criminal offense” to republish the data, and warning the French media not to publish content from any of the hacked emails “to prevent the outcome of the vote being influenced.”

  

  Quoted by Reuters, the French election commission said in a statement that “on the eve of the most important election for our institutions, the commission calls on everyone present on internet sites and social networks, primarily the media, but also all citizens, to show responsibility and not to pass on this content, so as not to distort the sincerity of the ballot.” Following a rushed meeting on Saturday morning, the commission which supervises the electoral process, said that the data been “fraudulently obtained and could be mixed with false information.” It is unclear, however, how it hopes to enforce any punitive claims, especially when much of the initial document distribution appears to have taken place offshore.

  Domestically, in a similar reaction to the US media’s response to the Podesta emails, French TV news channels chose not to mention the hack, although the left-leading Liberation prominently featured the news on its website. Liberation author Cedric Mathiot wrote that the leak, and its timing, “wants to create chaos” adding that the information was distributed in an “unethical method.”

  On Friday night, as news of what has been hashtagged as @MacronLeaks on twitter spread, Florian Philippot, deputy leader of the National Front, tweeted “Will Macronleaks teach us something that investigative journalism has deliberately kept silent?” In a tweeted response, Macron spokesman Sylvain Fort called Philippot’s tweet “vile”.

  In another parallel to the Clinton leaks, Macron’s En Marche! party said the leaked documents dealt with “the normal operations of a campaign and included some information on campaign accounts.” It said the hackers had mixed false documents with authentic ones to “sow doubt and disinformation.”

  But in the biggest parallel to the Clinton hacking, few have touched upon the actual contents of the documents, which some say confirm prior allegations of illicit financial dealings and offshore accounts, and instead merely sought to attack the messenger. Indeed, as journalist Kim Zetter noted overnight, “Telling journos to not report on hacked emails misses point that nearly all important leaks occur because someone broke law or a contract” and then followed up with the following rhetorical question, flipping the situation by 180 degrees: “If GRU, intending to assault dem., hacks Trump & publishes emails showing his direct connection to Russia, should journos report on those.“

  Telling journos to not report on hacked emails misses point that nearly all important leaks occur because someone broke law or a contract

  — Kim Zetter (@KimZetter) May 6, 2017

  //platform.twitter.com/widgets.js

  If GRU, intending to assault dem., hacks Trump & publishes emails showing his direct connection to Russia, should journos report on those? https://t.co/cJJcjXkgBa

  — Kim Zetter (@KimZetter) May 6, 2017

  //platform.twitter.com/widgets.js

  As reported on Friday evening, WikiLeaks tweeted that the leak contained “many tens of thousands” of emails, photos and attachments dated up to April 24, but it noted that it had come “too late” to affect the election results. In a follow up tweet, the controversial whistleblowing organization posted a tweet sharing the location of all #MacronLeaks archives which are “now available as uncensorable magnet links http://archive.is/aULcm“

  #MacronLeaks archives are now available as uncensorable magnet links https://t.co/woLR5BOhrr@WikiLeaks is still assessing content.

  — WikiLeaks (@wikileaks) May 6, 2017

  //platform.twitter.com/widgets.js

  Since there has been no suggestion WikiLeaks is responsible for this hack, speculation about the source of the hack has grown, with Russia once again emerging as the “usual suspect.”

  Cited by Reuters, Vitali Kremez, director of research with New York-based cyber intelligence firm Flashpoint, said his review indicates that APT 28, a group tied to the GRU, the Russian military intelligence directorate, was behind the leak. He cited similarities with U.S. election hacks that have been previously attributed to that group. Kremez also said that APT28 last month registered decoy internet addresses to mimic the name of En Marche, which it likely used send tainted emails to hack into the campaign’s computers. Those domains include onedrive-en-marche.fr and mail-en-marche.fr.

  “If indeed driven by Moscow, this leak appears to be a significant escalation over the previous Russian operations aimed at the U.S. presidential election, expanding the approach and scope of effort from simple espionage efforts towards more direct attempts to sway the outcome,” Kremez said.

  We expect the Kremlin to deny all allegations shortly.

  To cover all bases, others have also accused the “Alt Right” of being responsible for the leak:

  Ben Nimmo, a UK-based security researcher with the Digital Forensic Research Lab of the Atlantic Council think tank, said initial analysis indicated that a group of U.S. far-right online activists were behind early efforts to spread the documents via social media. They were later picked up and promoted by core social media supporters of Le Pen in France, Nimmo said.

   

  The leaks emerged on 4chan, a discussion forum popular with far right activists in the United States. An anonymous poster provided links to the documents on Pastebin, saying, “This was passed on to me today so now I am giving it to you, the people.”

   

  The hashtag #MacronLeaks was then spread by Jack Posobiec, a pro-Trump activist whose Twitter profile identifies him as Washington D.C. bureau chief of the far-right activist site Rebel TV, according to Nimmo and other analysts tracking the election. Contacted by Reuters, Posobiec said he had simply reposted what he saw on 4chan.

   

  “You have a hashtag drive that started with the alt-right in the United States that has been picked up by some of Le Pen’s most dedicated and aggressive followers online,” Nimmo told Reuters.

  Sunday’s election, whose result is expected in just over 24 hours, is seen as “the most important in France for decades, with two diametrically opposed views of Europe and the country’s place in the world at stake.” Tune in then to find out if Wikileaks is correct, and the #MacronLeaks is nothing more than a tempest in a teapot, unable to chisel away at Macron’s lead over Le Pen which the latest polls calculate to be as much as 25 points.

  

  

• Paul Craig Roberts: 'Sauron' Rules In Washington

  Authored by Paul Craig Roberts,

  

  “The problem is that the world has listened to Americans for far too bloody long.” – Dr. Julian Osborne, from the 2000 film version of Nevil Shute’s 1957 book, On the Beach

  A reader asked why neoconservatives push toward nuclear war when there can be no winners. If all die, what is the point?

  The answer is that the neoconservatives believe that the US can win at minimum and perhaps zero damage.

  Their insane plan is as follows: Washington will ring Russia and China with anti-ballistic missile bases in order to provide a shield against a retaliatory strike from Russia and China. Moreover, these US anti-ABM bases also can deploy nuclear attack missiles unknown to Russia and China, thus reducing the warning time to five minutes, leaving Washington’s victims little or no time in which to make a decision.

  The neoconservatives think that Washington’s first strike will so badly damage the Russian and Chinese retaliatory capabilities that both governments will surrender rather than launch a response. The Russian and Chinese leaderships would conclude that their diminished forces leave little chance that many of their ICBMs will be able to get past Washington’s ABM shield, leaving the US largely intact. A feeble retaliation by Russia and China would simply invite a second wave US nuclear attack that would obliterate Russian and Chinese cities, killing millions and leaving both countries in ruins.

  In short, the American warmongers are betting that the Russian and Chinese leaderships would submit rather than risk total destruction.

  There is no question that neoconservatives are sufficiently evil to launch a preemptive nuclear attack, but possibly the plan aims to put Russia and China into a situation in which their leaders conclude that the deck is stacked against them and, therefore, they must accept Washington’s hegemony.

  To feel secure in its hegemony, Washington would have to order Russia and China to disarm.

  This plan is full of risks. Miscalculations are a feature of war. It is reckless and irresponsible to risk the life of the planet for nothing more than Washington’s hegemony.

  The neoconservative plan puts Europe, the UK, Japan, S. Korea, and Australia at high risk were Russia and China to retaliate. Washington’s ABM shield cannot protect Europe from Russia’s nuclear cruise missiles or from the Russian Air Force, so Europe would cease to exist. China’s response would hit Japan, S. Korea, and Australia.

  The Russian hope and that of all sane people is that Washington’s vassals will understand that it is they that are at risk, a risk from which they have nothing to gain and everything to lose, repudiate their vassalage to Washington and remove the US bases. It must be clear to European politicians that they are being dragged into conflict with Russia. This week the NATO commander told the US Congress that he needed funding for a larger military presence in Europe in order to counter “a resurgent Russia”. 

  Let us examine what is meant by “a resurgent Russia.” It means a Russia that is strong and confident enough to defend its interests and those of its allies. In other words, Russia was able to block Obama’s planned invasion of Syria and bombing of Iran and to enable the Syrian armed forces to defeat the ISIS force sent by Obama and Hillary to overthrow Assad.

  Russia is “resurgent” because Russia is able to block US unilateral actions against some other countries.

  This capability flies in the face of the neoconservative Wolfowitz doctrine, which says that the principal goal of US foreign policy is to prevent the rise of any country that can serve as a check on Washington’s unilateral action.

  While the neocons were absorbed in their “cakewalk” wars that have now lasted 16 years, Russia and China emerged as checks on the unilateralism that Washington had enjoyed since the collapse of the Soviet Union. What Washington is trying to do is to recapture its ability to act worldwide without any constraint from any other country. This requires Russia and China to stand down.

  Are Russia and China going to stand down? It is possible, but I would not bet the life of the planet on it. Both governments have a moral conscience that is totally missing in Washington. Neither government is intimidated by the Western propaganda. Russian Foreign Minister Lavrov said yesterday that we hear endless hysterical charges against Russia, but the charges are always vacant of any evidence.

  Conceivably, Russia and China could sacrifice their sovereignty for the sake of life on earth. But this same moral conscience will propel them to oppose the evil that is Washington in order not to succumb to evil themselves. Therefore, I think that the evil that rules in Washington is leading the United States and its vassal states to total destruction.

  Having convinced the Russian and Chinese leaderships that Washington intends to nuke their countries in a surprise attack (see for example), the question is how do Russia and China respond? Do they sit there and await an attack, or do they preempt Washington’s attack with an attack of their own?

  What would you do? Would you preserve your life by submitting to evil, or would you destroy the evil?

  Writing truthfully results in my name being put on lists (financed by who?) as a “Russian dupe/agent.” Actually, I am an agent of all people who disapprove of Washington’s willingness to use nuclear war in order to establish Washington’s hegemony over the world, but let us understand what it means to be a “Russian agent.”

  It means to respect international law, which Washington does not. It means to respect life, which Washington does not. It means to respect the national interests of other countries, which Washington does not. It means to respond to provocations with diplomacy and requests for cooperation, which Washington does not. But Russia does. Clearly, a “Russian agent” is a moral person who wants to preserve life and the national identity and dignity of other peoples.

  It is Washington that wants to snuff out human morality and become the master of the planet. As I have previously written, Washington without any question is Sauron. The only important question is whether there is sufficient good left in the world to resist and overcome Washington’s evil.

  

  

• Visualizing America's Retail Apocalypse

  The steady rise of online retail sales should have surprised no one. As Visual Capitalist's Jeff Desjardins notes, back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each and every year since then, even through the Great Recession. By 2009, e-commerce made up about 4.0% of total retail sales, and today the latest number we have is 8.3%.

  

  Here’s another knowledge bomb: it’s going to keep growing for the foreseeable future. Huge surprise, right?

  

  Courtesy of: Visual Capitalist

   

  SIGNS OF A RECKONING

  Retailers eye their competition relentlessly, and the sector also has notoriously thin margins.

  The big retailers must have seen the “retail apocalypse” coming. The question is: what did they do about it?

  Well, companies like Sears failed the shift to digital altogether – in fact, it is even widely speculated that the former behemoth might file for bankruptcy later this year.

  The majority of other companies, on the other hand, are trying to combine “clicks and bricks” into a cohesive strategy. This sounds good in theory, but for established and sprawling brick and mortar retailers with excessive overhead costs, such tactics may not be enough to ward off this powerful secular trend. Target, for example, has had impressive growth in online sales, but they still only make up just 5% of total sales. As a result, the company’s robustness is also in doubt.

  Wal-Mart took another route, which could potentially be the smartest one. The company hedged their bets by buying Jet.com, which was one of the fastest growing online retailers at the time. Later, they followed up by buying an online shoe retailer to help fill a perceived gap in footwear. Recent reports have surfaced, saying that these acquisitions are leading to staff shakeups, as the company re-orients its focus.

  After all, going online is not just a tactic to boost sales in the new era of retailing. It has to be a mindset, and one that is central to the company’s strategy. Hopefully Wal-mart gets that, otherwise they will also be in trouble as well.

  APOCALYPSE NOW

  In the midst of all of this is what is described as the “retail apocalypse”.

  There are two main metrics that are pretty black and white:

  Number of Bankruptcies: We’re not even one-third through 2017, and we already have about as many retail bankruptcies as the previous year’s total. If they continue at the current pace, we could see over 50 retailers bankrupt by the end of the year.

  Number of Store Closings: So far we’ve seen roughly 3,000 store closings announced in 2017, and Credit Suisse estimates that could hit 8,600 by the end of the year. That would easily surpass 2008’s total, which was 6,200 closings, to be the worst year in recent memory.

  Here’s some of the companies that have already filed for bankruptcy:

  • Gordmans Stores
  • Gander Mountain
  • Radioshack (again)
  • HHGregg
  • BCBG Max Azria
  • Eastern Outfitters
  • Wet Seal
  • The Limited
  • Vanity Shop of Grand Forks
  • Payless Inc.
  • MC Sports

  And here are the store closings occurring as a result of the retail apocalypse:

  

  

  

• Doug Casey On The End Of Western Civilization

  Authored by Nick Giambruno via InternationalMan.com,

  

  Nick Giambruno: The decline of Western Civilization is on a lot of people’s minds.

  Let’s talk about this trend.

  Doug Casey: Western Civilization has its origins in ancient Greece. It’s unique among the world’s civilizations in putting the individual—as opposed to the collective—in a central position. It enshrined logic and rational thought—as opposed to mysticism and superstition—as the way to deal with the world. It’s because of this that we have science, technology, great literature and art, capitalism, personal freedom, the concept of progress, and much, much more. In fact, almost everything worth having in the material world is due to Western Civilization.

  Ayn Rand once said “East minus West equals zero.” I think she went a bit too far, as a rhetorical device, but she was essentially right. When you look at what the world’s other civilizations have brought to the party, at least over the last 2,500 years, it’s trivial.

  I lived in the Orient for years. There are many things I love about it—martial arts, yoga, and the cuisine among them. But all the progress they’ve made is due to adopting the fruits of the West.

  Nick Giambruno: There are so many things degrading Western Civilization. Where do we begin?

  Doug Casey: It’s been said, correctly, that a civilization always collapses from within. World War 1, in 1914, signaled the start of the long collapse of Western Civilization. Of course, termites were already eating away at the foundations, with the writings of people like Jean-Jacques Rousseau and Karl Marx. It’s been on an accelerating downward path ever since, even though technology and science have been improving at a quantum pace. They are, however, like delayed action flywheels, operating on stored energy and accumulated capital. Without capital, intellectual freedom, and entrepreneurialism, science and technology will slow down. I’m optimistic we’ll make it to Kurzweil’s Singularity, but there are no guarantees.

  Things also changed with the creation of the Federal Reserve in 1913. Before that, the US used gold coinage for money. “The dollar” was just a name for 1/20th of an ounce of gold. That is what the dollar was. Paper dollars were just receipts for gold on deposit in the Treasury. The income tax, enacted the same year, threw more sand in the gears of civilization. The world was much freer before the events of 1913 and 1914, which acted to put the State at the center of everything.

  The Fed and the income tax are both disastrous and unnecessary things, enemies of the common man in every way. Unfortunately, people have come to believe they’re fixtures in the cosmic firmament. They’re the main reasons—there are many other reasons, though, unfortunately—why the average American’s standard of living has been dropping since the early 1970s. In fact, were it not for these things, and the immense amount of capital destroyed during the numerous wars of the last 100 years, I expect we’d have already colonized the moon and Mars. Among many other things…

  But I want to re-emphasize that the science, the technology, and all the wonderful toys we have are not the essence of Western Civilization. They’re consequences of individualism, capitalism, rational thought, and personal freedom. It’s critical not to confuse cause and effect.

  Nick Giambruno: You mentioned that the average American’s standard of living has dropped since the early 1970s. This is directly related to the US government abandoning the dollar’s last link to gold in 1971. Since then, the Federal Reserve has been able to debase the US dollar without limit.

  I think the dollar’s transformation into a purely fiat currency has eroded the rule of law and morality in the US. It’s similar to what happened in the Roman Empire after it started debasing its currency.

  What do you think, Doug?

  Doug Casey: All the world’s governments and central banks share a common philosophy, which drives these policies. They believe that you create economic activity by stimulating demand, and you stimulate demand by printing money. And, of course, it’s true, in a way. Roughly the same way a counterfeiter can stimulate a local economy.

  Unfortunately, they ignore that, and completely ignore that the way a person or a society becomes wealthy is by producing more than they consume and saving the difference. That difference, savings, is how you create capital. Without capital you’re reduced to subsistence, scratching at the earth with a stick. These people think that by inflating—which is to say destroying—the currency, they can create prosperity. But what they’re really doing, is destroying capital: When you destroy the value of the currency, that discourages people from saving it. And when people don’t save, they can’t build capital, and the vicious cycle goes on.

  This is destructive for civilization itself, in both the long term and the short term. The more paper money, the more credit, they create, the more society focuses on finance, as opposed to production. It’s why there are many times more people studying finance than science. The focus is increasingly on speculation, not production. Financial engineering, not mechanical, electrical, or chemical engineering. And lots of laws and regulations to keep the unstable structure from collapsing.

  What keeps a truly civil society together isn’t laws, regulations, and police. It's peer pressure, social opprobrium, moral approbation, and your reputation. These are the four elements that keep things together. Western Civilization is built on voluntarism. But, as the State grows, that’s being replaced by coercion in every aspect of society. There are regulations on the most obscure areas of life. As Harvey Silverglate pointed out in his book, the average American commits three felonies a day. Whether he’s caught and prosecuted is a subject of luck and the arbitrary will of some functionary. That’s antithetical to the core values of Western Civilization.

  Nick Giambruno: Speaking of ancient civilizations like Rome, interest rates are about the lowest they’ve been in 5,000 years of recorded history. Trillions of dollars’ worth of government bonds trade at negative yields.

  Of course, this couldn’t happen in a free market. It’s only possible because of central bank manipulation.

  How will artificially low interest rates affect the collapse of Western Civilization?

  Doug Casey: It’s really, really serious. I previously thought it was metaphysically impossible to have negative interest rates but, in the Bizarro World central banks have created, it’s happened.

  Negative interest rates discourage saving. Once again, saving is what builds capital. Without capital you wind up as an empty shell—Rome in 450 A.D., or Detroit today—lots of wonderful but empty buildings and no economic activity. Worse, it forces people to desperately put their money in all manner of idiotic speculations in an effort to stay ahead of inflation. They wind up chasing the bubbles the funny money creates.

  Let me re-emphasize something: in order for science and technology to advance you need capital. Where does capital come from? It comes from people producing more than they consume and saving the difference. Debt, on the other hand, means you’re living above your means. You’re either consuming the capital others have saved, or you’re mortgaging your future.

  Zero and negative interest rate policies, and the creation of money out of nowhere, are actually destructive of civilization itself. It makes the average guy feel that he’s not in control of his own destiny. He starts believing that the State, or luck, or Allah will provide for him. That attitude is typical of people from backward parts of the world—not Western Civilization.

  Nick Giambruno: What does it say about the economy and society that people work so hard to interpret what officials from the Federal Reserve and other central banks say?

  Doug Casey: It’s a shameful waste of time. They remind me of primitives seeking the counsel of witch doctors. One hundred years ago, the richest people in the country—the Rockefellers, the Carnegies, and such—made their money creating industries that actually made stuff. Now, the richest people in the country just shuffle money around. They get rich because they’re close to the government and the hydrant of currency materialized by the Federal Reserve. I’d say it’s a sign that society in the US has become quite degraded.

  The world revolves much less around actual production, but around guessing the direction of financial markets. Negative interest rates are creating bubbles, and will eventually result in an economic collapse.

  Nick Giambruno: Negative interest rates are essentially a tax on savings. A lot of people would rather pull their money out of the bank and stuff it under a mattress than suffer that sting.

  The economic central planners know this. It’s why they’re using negative interest rates to ramp up the War on Cash—the push to eliminate paper currency and create a cashless society.

  The banking system is very fragile. Banks don’t hold much paper cash. It’s mostly digital bytes on a computer. If people start withdrawing paper money en masse, it won’t take much to bring the whole system down.

  Their solution is to make accessing cash harder, and in some cases, illegal. That’s why the economic witch doctors at Harvard are pounding the table to get rid of the $100 bill.

  Take France, for example. It’s now illegal to make cash transactions over €1,000 without documenting them properly.

  Negative interest rates have turbocharged the War on Cash. If the central planners win this war, it would be the final deathblow to financial privacy.

  How does this all relate to the collapse of Western Civilization?

  Doug Casey: I believe the next step in their idiotic plan is to abolish cash. Decades ago they got rid of gold coinage, which used to circulate day to day in people’s pockets. Then they got rid of silver coinage. Now, they’re planning to get rid of cash altogether. So you won’t even have euros or dollars or pounds in your wallet anymore, or if you do, it will only be very small denominations. Everything else is going to have to be done through electronic payment processing.

  This is a huge disaster for the average person: absolutely everything that you buy or sell, other than perhaps a candy bar or a hamburger, is going to have to go through the banking system. Thus, the government will be able to monitor every transaction and payment. Financial privacy, even what’s left of it today, will literally cease to exist.

  Privacy is one of the big differences between a civilized society and a primitive society. In a primitive society, in your little dirt hut village, anybody can look through your window or pull back the flap on your tent. You have no privacy. Everybody can hear everything; see anything. This was one of the marvelous things about Western Civilization—privacy was valued, and respected. But that concept, like so many others, is on its way out…

  Nick Giambruno: You’ve mentioned before that language and words provide important clues to the collapse of Western Civilization. How so?

  Doug Casey: Many of the words you hear, especially on television and other media, are confused, conflated, or completely misused. Many recent changes in the way words are used are corrupting the language. As George Orwell liked to point out, to control language is to control thought. The corruption of language is adding to the corruption of civilization itself. This is not a trivial factor in the degradation of Western Civilization.

  Words—their exact meanings, and how they’re used—are critically important. If you don’t mean what you say and say what you mean, then it’s impossible to communicate accurately. Forget about transmitting philosophical concepts.

  Take for example shareholders and stakeholders. We all know that a shareholder actually owns a share in a company, but have you noticed that over the last generation shareholders have become less important than stakeholders? Even though stakeholders are just hangers-on, employees, or people who are looking to get in on a shakedown. But everybody slavishly acknowledges, “Yes, we’ve got to look out for the stakeholders.”

  Where did that concept come from? It’s a recent creation, but Boobus americanus seems to think it was carved in stone at the country’s founding.

  We’re told to protect them, as if they were a valuable and endangered species. I say, “A pox upon stakeholders.” If they want a vote in what a company does, then they ought to become shareholders. Stakeholders are a class of being created out of nothing by Cultural Marxists for the purpose of shaking down shareholders.

  *  *  *

  There’s major turmoil ahead for Western Civilization.  We expect the fallout to be far worse than 2008. Most investors can’t handle that sort of chaos. But Doug Casey and his team know how to turn it into huge profits. They’re sharing need-to-know information about the coming global economic meltdown in this time-sensitive video. Click here to watch it now.

  

  

• Why Charles Gave Expects "Total Mayhem" In France Even If Macron Is Elected

  Venerable French investor Charles Gave has been managing money and researching markets for over 40 years; as such France’s elder statesman of asset allocation perhaps best captures the mood ahead of the most crucial Presidential election in a generation. In conversation with Dr. Pippa Malmgren, Charles breaks down national politics to understand why voters have rejected the establishment and the market impact of both outcomes, and what to expect from tomorrow’s election.

  First, Gave, who says “I’m not so sure that Macron will win”, is asked by Malmgren to walk RealVision viewers through what Macron’s agenda would look like in case of a victory. Gave is unable to do so for several simple reasons:

  Well, first, nobody knows. Because during the whole campaign, all these talks were on one hand, on the other. I’m in favor of apple pie, and motherhood, you see. Basically he has, to my knowledge, very little program. So he’s running. That is what Hollande said. That he was going to make some fundamental changes without hurting people. And so Macron is a big, empty suit. That’s what he is. You did the right curriculum vitae, he went to the right schools. And you have the feeling that the guy never had an original idea in his life. He was always a good student.

   

  And moreover, there is a strong suspicion that he’s a kind of golem created by Hollande and all these guys. So since they knew they were going to lose the election, they created a guy in a hologram that would run for them and prevent them from losing power. So to a certain extent, the French political system has been captured by what you can call the Technocratic class. And whether from the left or the right, it didn’t make any difference. And this Technocratic class is presenting Macron as a brand new fellow. He is nothing brand new. These guys have been in power for 50 years for God’s sakes. So this is basically nothing.

  Gave is then asked for his take on the market’s reaction, first to the outcome which now appears to be fully priced in, i.e., a Macron victory. The French investor’s response should be concerning to those who believe France is in for a period of calm and stability.

  If Macron is elected, as I already said, I’m not sure it’s not going to be a triumphant election. So I’m not sure they will have that much legitimacy at first. And second thing is that just after, we have the election for the French Parliament. And then it’s going to be a total mayhem. Because you have four main different currents in France. The extreme left, the Macron left, you see? You have the Fillon right, and you have Le Pen’s right. So you have four. The way it’s done before is that you had only three. Extreme left and the left were joined. And you had the election, you had three guys, and if anyone from the Front National had any chance of being elected, then the worst position of the other two retired. Right away. And said, you must vote for my usual enemy, but we don’t want to. It’s what’s called the Front Republic.

   

  But you see, it’s kind of easy to organize if the organization of the parties are very strong and can force people to retire and to stop running. But if you have four, the organization of the parties having lost all credibility, then nobody is going to retire. Until we are going to have elections. And you could have a majority of MP’s from the Front National The majority of MP’s from Melenchen. Anything is possible. So the fact that Macron is elected doesn’t reduce at all. Not at all. The political risk in France. It may reappear at the election time, big time. So anybody who buys on the idea that the problem is solved in France, let’s move to the next one will have to wait till the middle of June.

  Alternatively, what if Le Pen wins:

  If Le Pen wins, it’s pretty simple. The bond market in France, Italy, Spain cannot open on Monday morning. And I suppose the euro is dead in the following week. And then you have to buy Europe like crazy. Southern Europe.

  Why Southern Europe? Because it is Germany’s markets that would bear the brunt of the selloff, as the dissolution of the euro and European Union would effectively bring about the end of Germany’s economic hegemony (while at the same time benefitting France).

  The Germans have made a colossal mistake, which is that they have all the production in Germany. So they’re extremely efficient, well-organized, and they have developed massive current account surpluses. Half of that surplus is in cars. The margin on cars is around 4%. Imagine that the euro breaks down. The deutschmark comes back. The deutschmark goes up 15, 20%. And the whole German industry, all the production base in Germany, becomes bankrupt in no time at all. Compare that to France. France we have magnificent big companies that have been intelligent enough to produce everywhere in the world, to operate from everywhere in the world, and be totally independent from what’s happening in France. What they have in France is their headquarters. And that’s about it. So if Europe breaks, you should be long France on the stock market, and short Germany. Big time.

  Would a Le Pen victory also mean the end of the EU? Gave answers:

  I wrote a book in 2002, sometime around then, called “Lions Led by Donkeys in France.” It was kind of a bestseller. And I made the point in the book that the euro is going to destroy Europe, the European institutions. And I said, we must get rid of the euro to save Europe. So name of the game, if we have some kind of a crisis like that, is to basically close the market for three weeks and organize an orderly dismembering of the euro. But to maintain what has been good so far, which is the kind of common market. And it’s a difficult call because the movement towards the euro was also a movement to create a European nation.

   

  And so the institutions today are basically federal in nature. But nobody in Europe has ever voted for them. So to a certain extent, the guys with power in Brussels have not been elected by anybody, and you cannot fire them. So it’s totally Technocratic. So we have a hell of a problem. We should not only destroy the euro, but should move back to what Europe was in 1988 or 1987 before they put all these Federalist legislations in. That is going to be a tall order. But if the euro disappears and Europe has a problem, then the negotiating between the UK and Europe is going to be amusing. Because UK is going to say, look, who are we going to negotiate with?

  Finally, on his big picture thoughts ahead of tomorrow’s decisive election:”it’s going to be a close call, a lot closer than people think. And then we have the elections afterwards, which are going to be a total gamble.” Gave adds that in a sense Le Pen has already won because the “worst case scenario” for her, the 2022 elections, is still achievable. As for the parliamentary elections, “Le Pen could have anywhere between 40 to 100 MP’s (she currently has two)…. which would be a total disaster for the ruling class.”

  In other words, even if Macron triumphs on Sunday, “the National Front isn’t going anywhere.” Furthermore, Le Pen’s niece Marion Le Pen is poised to inherit the mantle of party leadership in time for the next presidential election in 2022. The younger Le Pen, already a French MP, would have a distinct advantage over her astringent aunt:

  Marion, she’s very young. She’s 27, 28. She’s an MP in the French Parliament. She’s extremely pretty. And she represents what’s probably very good in the French Catholic Right. She’s very much a Christian person. Very much so. So a lot of people have problems voting for Mrs. Le Pen today. A lot of the Fillon’s elector would have absolutely no problem voting for Marion, you see what I mean? So she has a big appeal on the Classical French Right. Big one. Big one.

  His parting words:”be careful. If she wins, you will have a disaster in the lot of the European bond market. Doesn’t mean a total disaster for the good quality companies. But the risk is not on the stock market. The risk is on the bond market. So be careful. Don’t overstay on the bonds in Europe.”

  While these are the core excerpts from the interview with Charles Gave, there is much more in the full 40 minute version found on RealVision TV.

  

  

  

• Shocking Footage: Venezuelan National Guard Truck Drives Through Crowd Of 'Dissidents'

  Authored by Daniel Lang via SHTFplan.com,

  

  For several weeks Venezuela has been rocked with protests and riots as the Maduro regime increasingly tightens its grip on the population. It seems as if security forces are brutally cracking down on dissidents on a daily basis now. Wednesday in particular, saw some incredibly tense clashes between protesters and government forces in the capital city of Caracas. According to Bloomberg:

  Injuries throughout the city included 134 traumas and 17 cases of people overcome by gas, Mayor Ramon Muchacho of the opposition-dominated Chacao municipality said in a post on his Twitter account. Those hurt included lawmakers Freddy Guevara and Julio Montoya. The opposition coalition, known as MUD, said in a statement that more than 300 people were injured in today’s clashes.

   

  The South American nation has been riven by protests for weeks, and President Nicolas Maduro has called for a popular assembly to write a new constitution, a fresh attempt to consolidate control. Hundreds of thousands have taken to the streets to protest what they say is a plummet into autocracy. Protests over the past month have resulted in at least 30 deaths, and opposition politicians have vowed to continue street actions.

  Of course, those are just statistics. To really appreciate the human costs of these events, you have to see it with your own eyes rather than just read about it. Take a look at what happened yesterday in Caracas, after an armored vehicle owned by the Venezuelan National Guard caught fire.

  This is what civil unrest really looks like. It’s dirty, chaotic, and bloody. Let’s hope it never escalates to this point on our streets.

  

  

• The Last Time This Happened, China Devalued

  "It's quiet, too quiet", "the calm before the storm", "the deep breath before the plunge" – you name the idiom, there is nowhere it applies more than US equity markets (lowest closing range in 65 years).

  Dow has done nothing for 8 days… the longest streak since 1952…

  

   

  However, if ever there was a catalyst for chaos, it is the collapse in uncertainty around the Chinese Yuan…

  As Bloomberg notes, the eerie stability in the yuan is reminiscent of the period leading up to China’s unexpected currency devaluation in August 2015. The one-year implied volatility of the yuan has dropped to about 4.7 percent, from about 8 percent at the beginning of the year.

  

   

  Investors should be worried: The surge in volatility triggered by the yuan’s sudden depreciation two years ago rippled across the world and set off a rout in equities and other risky assets.

  

  

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• "The Brink Of War": The Horror Of The Deep State's Plan Exposed – Part 2

  Authored by Jim Quinn via The Burning Platform blog,

  In Part One of this article I detailed how propaganda has been utilized by the Deep State for decades to control the minds of the masses and allow those in control to reap the benefits of never ending war.

  In Part Two I will discuss recent events, false flags, and propaganda campaigns utilized by the Deep State to push the world to the brink of war.

  

  “We penetrated deeper and deeper into the heart of darkness” – Joseph Conrad, Heart of Darkness

  The use of graphic images, electronically transmitted across the world in an instant, along with a consistent false narrative promoted by the captured corporate media, is the preferred means of appealing to the emotions of those who want to believe atrocity propaganda. Instigating a march to war through the use of unfounded fear, misinformation, staged photo ops, and appealing to passions and prejudices was as revolting to Albert Einstein  in the 1930s as it is today to normal thinking individuals.

  “He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would fully suffice. This disgrace to civilization should be done away with at once. Heroism at command, senseless brutality, deplorable love-of-country stance, how violently I hate all this, how despicable and ignoble war is; I would rather be torn to shreds than be a part of so base an action! It is my conviction that killing under the cloak of war is nothing but an act of murder.” – Albert Einstein

  It seems the level and intensity of the propaganda campaigns has ratcheted up dramatically in the last half dozen years and appears to be reaching a crescendo as we speak. It’s almost as if the Deep State is frantically trying to maintain the status quo, even as the worldwide financial Ponzi scheme of debt approaches the point of collapse. The domestic conditions in Europe, North America, and Asia are deteriorating rapidly. The propaganda doled out trying to convince citizens their financial situation is not worsening has failed.

  The people realize they have been screwed and continue to be screwed by the politicians, bankers and corporate fascists running the show. This is the major reason Trump was elected. People were desperate for someone who offered them a promise of economic revival and reduced government interference in their lives.

  The problem is no one is capable of saving the US Titanic. The iceberg was struck sixteen years ago when the Deep State engineered a plundering campaign driving the national debt from $5.8 trillion to $20 trillion, and unfunded welfare liabilities to $200 trillion. Unpaid for tax cuts will not save us. Unpaid for shovel ready infrastructure projects will not save us. Threatening foreign countries with tariffs will not bring manufacturing jobs back. Excessively low interest rates will not spur investment, but it will create a pension crisis and impoverish senior citizens.

  Devaluing your currency when every country in the world attempts the same “solution” will not work. Passing an Obamacare lite healthcare plan that keeps mega-corporation insurance companies and hospitals in charge solves nothing. The demographic time bomb of boomers turning 65 cannot be reversed. Providing the appearance of normalcy and improvement by artificially boosting the stock and real estate markets to all-time bubble highs only makes the coming crash that much more devastating.

  It is clearly evident to me the drumbeat of war is louder than it has been in decades as this Fourth Turning enters its ninth year. Every previous U.S. Fourth Turning has climaxed with a more horrific war than the previous, as the technological “advances” allow the Deep State controllers to create cannon fodder more efficiently. The year 2011 seems to have been the nexus for the Deep State to create new enemies and sow the seeds of discontent and revolution around the globe. U.S. troops withdrew from Iraq in 2011, while troop levels in Afghanistan remained low.

  The neo-cons were running out of conflicts to keep the profits flowing. The U.S. economy was headed back into recession as the temporary effects of the Fed’s QE heroin injection and Obama’s massive porkulus plan were leading to the inevitable drug withdrawal and fall back into recession. The Deep State managers had to act fast. They needed new enemies, more wars and more QE.

  Was it just a coincidence Hosni Mubarak was overthrown in Egypt during 2011 while the U.S. stood by and did nothing? After the democratically elected replacement turned out to be a Muslim extremist, we fully supported the next coup which placed a military dictator in charge. He just got a grand welcome from Trump a few weeks ago. I guess military dictators are OK when they do what we say.

  A dictator who had the nerve to not honor the U.S. dollar as the currency of choice in his kingdom, Muammar Gaddafi, was swiftly overthrown and killed by a NATO force led by the U.S. in 2011. A stable country was turned into a terrorist haven overnight. It’s now a lawless hellhole inhabited by ISIS, Al Qaeda, and various other Muslim terrorist factions. Along with the vacuum left in Iraq, Libya became a breeding ground for terrorists, armed by the U.S.

  Shockingly, after decades of stability, factions within Syria began a civil war against Assad and his government in 2011. Do you see a connection yet? Just as U.S. military presence in the Middle East began to wane, all hell began breaking out across the region. McCain and his band of neo-con world changers helped arm the “moderate rebels” fighting against the suddenly evil Assad. These moderates became ISIS, who now suddenly became the new bogeyman to be feared by Americans, as professionally produced videos of beheadings and other atrocities began to be disseminated by the mainstream media.

  The War on Terror had a new jolt of gusto and increased funding for more military mis-adventures. The propagandists ignored the inconvenient fact Assad was fighting against ISIS and Al Qaeda. They ignored the fact Assad ruled over a secular country – not a country run by religious American hating Muslim zealots. Fighting against Assad and ISIS doubled the arms dealers’ profits.

  Then Russia threw a monkey wrench into the Deep State plans. They fully supported Assad as an ally because they need his ports. The real reason Assad was attacked was because Saudi Arabia and Qatar need to build their natural gas pipeline across Syria to reach Europe. Virtually all of Europe is dependent upon Russia to supply their natural gas. The Deep State’s retaliation for Putin’s support of Assad was to overthrow the democratically elected president of the Ukraine who had rejected NATO for a closer partnership with Russia. The U.S. instigated coup and installation of a subservient puppet led Putin to put Crimea under Russian control and support Ukrainian rebels as they fought the new regime. This dramatic increase in tensions between NATO and Russia again generated more profits for the military industrial complex. Missiles and troops are pouring into the NATO countries surrounding Russia.

  The American propaganda specialists now had their new enemies. Syria and Russia, with Iran and North Korea providing occasional fear mongering diversions, became the focus of the neo-cons and their pliant media mouthpieces. The false flag downing of a Malaysian airliner over the Ukraine was blamed on Putin and Russia. No radar proof or physical evidence was ever presented implicating the Ukrainian rebels. They were winning the civil war and the U.S./NATO needed to turn world opinion against Putin.

  The first attempt at a false flag gas attack in Syria occurred in 2013, as the U.S. backed rebels murdered over 500 innocent victims in an attempt to turn world opinion against Assad and provoke NATO involvement on par with Libya. When this atrocity propaganda failed to work, the Deep State turned to heartstring pulling photographs of dead and injured children, with a consistent narrative spewed by every media pundit as instructed by the controllers.

  

  The first atrocity propaganda photo was in 2015, functioning as twofer on the propaganda scale. The picture of a three year old Syrian boy who drowned when his boat from Turkey to Greece capsized was spread across the world on every media outlet for a week as faux outrage against Assad and Putin was ramped up to hysterical levels. The evil Assad had caused this refugee crisis, even though it was the rebels who started the war.

  The blame for this tragic death was solely due to his father’s recklessness. The entire family lived in Turkey for three years and was not forced to go to Europe. The father was being funded from a relative in Canada and wanted to go to Europe for dental work. The picture was also used to promote the continued Muslim invasion of Europe. How could Europeans turn away these nice people? George Soros’ master plan was working perfectly.

  

  A year later Aleppo boy was the latest atrocity photo used to reverse public opinion against Assad and Putin, as their military success against ISIS, Al Qaeda and the U.S. supported rebels endangered the Deep State plan. As usual, the American public swallowed the propaganda, hook, line and sinker. The picture suddenly appeared and was disseminated on every mainstream media outlet in the country for days, with pontificating pundits tearfully portraying Assad as a butcher. No context, no proof he was injured by government forces, and no proof it wasn’t just a staged photo op like previous attempts. This last ditch attempt to convince the world to support a Syrian invasion also failed. This atrocity propaganda game loses its impact on a video game addicted, ADD ridden, SJW populace fairly quickly.

  Private citizen Donald Trump was unequivocal in his opposition to Syrian intervention before being elevated to the presidency, as shown in these tweets:

  Many Syrian ‘rebels’ are radical Jihadis. Not our friends & supporting them doesn’t serve our national interest. Stay out of Syria!

  Don’t attack Syria – an attack that will bring nothing but trouble for the U.S. Focus on making our country strong and great again!

  Trump’s non-interventionist rhetoric regarding Syria and unwillingness to declare Putin an evil enemy of America during the campaign resulted in an all-out assault by the Deep State to derail his candidacy, falsely claiming he was a puppet of Russia. These unsubstantiated claims and vitriolic propaganda campaign against Trump to elect Deep State candidate of choice – crooked Hillary – led to a heroic effort by the alternate media across the internet countering the mainstream media propaganda with facts and reason.

  When the corporate media shills rolled out the “fake news” storyline to discredit the alternate truth telling media, it immediately blew up in their faces, as the majority of the public began to realize the fake news was being plied by CNN, MSNBC, CBS, and the rest of the captured corporate legacy media.

  

  The discontent with the status quo among the normal people in flyover America was so great, it overcame all the Deep State propaganda, fake news, vast sums of money behind Clinton, and liberal urban strongholds, to elect Donald Trump as an agent of change who would kick the bums out of Washington. The undermining of Trump’s presidency began before he took office as the propaganda machine kicked into overdrive, with non-stop media squawking about Russia hacking the U.S. election in favor of Trump.

  There were no facts, no evidence, no substance, but plenty of innuendo, plenty of unfounded accusations, and fake news reports at a fanatical level by faux journalists being paid millions to do their part. Putin as an evil manipulator, controlling Trump, was the meme flogged 24 hours a day by the Deep State to keep Trump on the defensive.

  The only question at this point is whether Trump has already been co-opted by the Deep State military industrial complex or whether he is being manipulated through false flags and traditional propaganda techniques. Based on the slow progress on his domestic agenda of immigration reform, Obamacare repeal, tax cuts, infrastructure spending, and trade reform, it appears Trump decided to take the advice of neo-cons within and outside his administration and distract the masses with some new military adventurism.

  The relentless pounding of the Russian hacking narrative put Trump on the defensive. As Syria and Russia were on the verge of crushing the ISIS/Al Qaeda/“moderate rebel” resistance, a new false flag was needed. As McArthur so accurately described seven decades ago, the incessant propaganda of fear is what enriches the military industrial complex.

  

  “Our country is now geared to an arms economy which was bred in an artificially induced psychosis of war hysteria and nurtured upon an incessant propaganda of fear.” – General Douglas McArthur

  In Part Three of this article I will discuss how Trump has been co-opted by the Deep State into doing their bidding with military intervention and bullying across the globe. It’s just a continuation of imperialism run rampant. Empires always decline and fall due to military overreach and economic bankruptcy. The American empire will be no different.

  

  

• Bank Of Japan "Bought The Dip" Over Half The Time In The Last 4 Years

  A year ago, we noted that The Bank of Japan (BoJ) was a Top 10 holder in 90% of Japanese stocks. In December, we showed that BoJ was the biggest buyer of Japanese stocks in 2016. And now, as The FT reports, the real "whale" of the Japanese markets is stepping up its buying (up over 70% YoY) entering the market on down days more than half the time in the last four years.

  Since the end of 2010, The FT notes that the BoJ has been buying exchange traded funds (ETFs) as part of its quantitative and qualitative easing programme. The biggest action began last July, when its annual acquisition target was doubled to ¥6tn. Since then, the whale designation has seemed pretty obvious: the central bank swallows a minimum of ¥1.2bn of ETFs every single trading day (tailored to support stocks that further “Abenomics” policies), and lumbers in with buying bursts of ¥72bn roughly once every three sessions.
   

  

  Some traders say the bank’s supposedly targeted buying has cushioned the whole market. Last year, foreign investors were net sellers of ¥3tn of Japanese shares – a retreat that might have decimated benchmarks had the BoJ not swum in with ¥4.3tn of support via ETFs.

  In the afternoon sessions on days the BoJ comes in big, the average return on the index is about 14 basis points higher.

   

  Since the annual quota was increased to ¥6tn, Nomura says, the BoJ has provided a cumulative boost to the Nikkei of about 1,400 points.

  But, as we've noted in the past, it appears to be the flow, not the stock, that is the big driver…

  

  As in a casino, The FT's Joe Lewis concludes, the whale definition may hinge less on the cash on the table and more on the psychological impact on other gamblers. The BoJ has been at the game long enough for the market to know it reliably buys on weakness.

  Of the 1,038 business days between April 2013 and March 2017 there were 449 sessions where the market was down: the BoJ bought on more than half of them. Whale or not, investors are now primed to think they are swimming with one.

  So given that we know SNB is extremely active in stock markets, and The BoJ is the Japanese stock market, does anyone realistically doubt The Fed is/has been active?

  

  

• A New Street Drug Can Kill You By Touching Your Skin: What You Need To Know

  Authored by Alice Salles via TheAntiMedia.org,

  

  The opioid epidemic is a real tragedy. It has been devastating states like West Virginia, Vermont, and Maine – among others – and it’s been the number one factor in a major incarceration shift that is still seldom discussed by the media.

  But as soon as the Centers for Disease Control and Prevention (CDC) released a new set of national standards for prescribing painkillers, yet another deadly drug threat is beginning to concern authorities in certain states.

  New Hampshire Governor Chris Sununu spoke at a press conference this week, warning that a drug that’s 10,000 times stronger than morphine has made its way into the state. As a result, many first responders have been left scrambling to find a way to handle this new threat.

  Carfentanil, a powerful new opioid, has already claimed three lives.

  Engineered to be used as an elephant tranquilizer, the drug’s lethal dosage is 20 micrograms. Since the product can cause deadly effects just by being sprinkled on someone’s skin, authorities are highly concerned.

  Manchester Fire’s EMS Director Chris Hickey is warning New Hampshire residents they must be “hyper, hyper vigilant of what is out there, hyper vigilant of where you put your hands, what you come in contact with.”

   

  “There is nothing out there other than going on in hazmat suits on every single overdose that is going to completely protect us. We just have to be super, super careful with it,” Hickey told his own crew.

  The drug is so powerful that first responders are even having a hard time reversing overdoses when they arrive at emergency locations.

  On one occasion, Hickey said, one of his men had to use six to eight doses of Narcan, an overdose reversal drug, to revive a victim – twice the dose used in most cases.

  As doctors and first responders notice a pattern, they are also warning the public that Narcan isn’t going to be enough from now on. So what is next?

  Fear, of course.

  As state and local authorities find themselves panicking over this issue, many will ask for tougher laws. Federal agencies will then intervene, adding further restrictions to the already heavily regulated drug market in the United States. Adding fuel to the fire, the drug war will continue to target opioids like heroin and opium while Congress continues the process of imposing strict limits on some opioid prescriptions.

  As more restrictions are applied, users will have a harder time gaining access to the substances they are already addicted to, forcing them to turn to the black market for their fix.

  With this, incidents like the ones we’re seeing in New Hampshire will become even more common, prompting further government involvement. As this snowballs into further restrictions, the opioid epidemic will reach unimaginable levels, killing a record number of people, making orphans out of countless children, and creating another boom in U.S. incarceration rates.

  While it’s easy to understand why locals in New Hampshire are afraid, the rhetoric and reality on the ground should not be used to push for more heavy-handed intervention from local and federal governments. Instead, it’s time to look deep into how the opioid crisis started, keeping in mind that the government’s own fruitless battle against drugs was the very root of what is now concerning New Hampshire authorities.

  Like New Hampshire’s Drug Lab Director Tim Pifer, we agree that “this is certainly unfortunately just the tip of the iceberg.” But just like any iceberg, its base lies in dark, cold waters. Unless we’re ready to be honest with ourselves, finding the courage to dive deep to find where it begins, we will never know how huge this problem really is. And if we’re not willing to look at the root of the problem, we won’t be able to find a proper solution.

  

  

• Artist's Impression Of The Future Of Obamacare Repeal

  False summit?

   

  

  Source: MichalePRamirez.com
  

  

  

• Axel Merk: "There's More To Investing Than Chasing Companies That Want To Make Mars Inhabitable"

  Authored by Axel Merk via MerkInvestments.com,

  How does one construct a portfolio in an era of seemingly ever rising and highly correlated asset prices? Years of asset prices moving higher has changed both retail and institutional investors; it has changed the industry; and, in my humble opinion, those changes spell trouble. The prudent investor might want to take note to be prepared.

  

  I allege that for many, investing is no longer about prudent asset allocation, but about expressing themes. If you like green technology, you tilt your portfolio towards green energy. If you are socially conscious, there’s an ETF for that. I have no problem with anyone allocating money to any specific theme. However, has anyone else noticed that it doesn’t matter what theme you allocate money to? Investors are all playing the lottery and guess what: everyone’s a winner!

  Now, clearly, that’s an over simplification, as not every industry does well all the time – just ask those who invested in MLPs (master limited partnerships) in pursuit of income from fracking. Let me rephrase: the more of a monkey you have been, i.e. the less you have been thinking, the better you’ve likely performed over the past nine years. “Buying the dips” has been a consistently profitable strategy.

  That has created numerous oddities:

  • Take the investor who diversifies, rebalancing part of a portfolio to near zero-income generating fixed income. Advisors pursing such strategies have seen their clients take money away, as they are not willing to pay a management fee for essentially holding cash.

  The problem: cash is discarded even if it may be a prudent investment choice.

  • Take the investor who diversifies, rebalancing part of a portfolio to alternative income streams.

  The problem: Anything that generates an income in a zero-income environment is, almost by definition, risky. That is, both stock and fixed income securities in such a portfolio are so-called risk assets, i.e. I believe they are likely to move in tandem, not providing desirable diversification in a downturn.

  • Take the prudent investment advisor who has allocated part of a portfolio to true alternatives, such as long/short equities or long/short currencies. While providing diversification, such portfolios have likely underperformed during the relentless rise of equities. Worse, when the markets have had a hiccup, such as in early 2016, many of those portfolios still lost money, as the volatility of risk assets overwhelmed the cushion provided by the alternatives. Read: clients have been abandoning advisors, lured by competitors showing how great their performance has been, investing 100% in equities since the spring of 2009.

  The problem: Those solicitations conveniently skip the inconvenient fact that their clients lost huge in 2008.

  • Take the investor who wants to participate in the upside, but be protected on the downside.

  The problem: they spend a small fortune buying insurance, even when they might be better off just holding a cash buffer (again, advisors don’t hold cash, as clients would withdraw that cash at some point).

  • If many want to buy insurance, someone needs to write insurance. The one thing more profitable than buying stocks may well have been to write insurance. Funds that “sell volatility”, amongst others, have been amongst the best performers in the first quarter. Mind you, we do not recommend you touch any such product with a broomstick unless you know exactly what you are doing and able to stomach some serious losses. The theory behind many of these funds is that you collect what amounts to an insurance premium when volatility is low; the periods when you have to pay up are short and intense, but those setbacks are ultimately temporary.

  The problem: Earlier this year, one such fund was in the news for substantial losses, not because volatility spiked, but because portfolio management got cornered when they tried to roll derivative contracts. Let’s just say: something that looks too good to be true, may well be. Interesting things may well happen (read “contagion”) if and when these positions unwind.

  • Active management is dead. Long live passive investing. Never mind that anything but an index fund on the broad market is an active investment choice. The point being that you don’t want to pay some smart cookie to try to beat the market. That’s because those so-called experts were wrong in 2008 (and many times since). What can they possibly know? Besides, your favorite green tech investment fund is doing just fine, thank you very much.

  The problem: Cautions provided by active managers help one frame possible risk scenarios. Managing risk is important, even if many risks never materialize.

  • Active managers are leaving the industry. Who needs anyone skilled in navigating rough waters when you have robots providing liquidity?

  The problem: it may be helpful to have a captain on board when the auto-pilot fails.

  • Brokers are increasingly hand-holding relationship people, with portfolio allocation decisions being made by a small group creating model portfolios. After all, why risk your job trying to go out on a limb for your client?

  The problem: there’s nothing wrong per se with this trend, except that it increasingly concentrates investment decisions for huge amounts of money into very few people. We hope they are smart. Importantly, we hope investors understand who makes the investment decisions and what the conflicts are. Let’s just say: when something goes wrong, class action lawyers will have their day in court.

  • An increasing number of investors are skipping advisers altogether. After all, why not cut out the middle man if they don’t know any better than you do?

  The problem: there’s no problem with do-it-yourself investing except, just as professionals, investors owe it to themselves to make prudent investment decisions. We think that many individual investors do a better job than some professional investors these days in allocating their money. That said, that’s a very low bar.

  • If you have enough money, you allocate some money to venture capital. At least you have something to talk about at cocktail parties. It might help if you knew what your venture capital fund invested in, but let’s not get distracted by details.

   

  The problem: no problem if you can afford it. May I make the suggestion, though, that you first try to understand your overall portfolio, before you dabble in illiquid investments?

  What could possibly go wrong?

  Quite simply, markets do go down, not just up. In my view there is an increased risk of a flash crash in an environment where we are ever more dependent on automated liquidity providers that might withdraw liquidity the instant there’s an anomaly in the market (read: if you place a market order to sell a security, don’t complain if the market price is dramatically below the most recent trade on an exchange).

  While regulators may be all over flash crashes and possibly bail you out by canceling your order, a more pronounced decline is something you might want to prepare for as well. We hear pundits proclaim that we cannot have a bear market unless there’s a recession. There are couple of problems with that:

  • First, it’s not true. There was no recession during the October 1987 crash.
  • Second, we often don’t know whether there’s a recession until we are well into it; there have been instances when we didn’t know there was a recession until it was over.
  • Third, we’ll only know we are in a “bear market” when the market is down 20%. That’s kind of late to prepare for a bear market. Except, of course, if the market tumbles much more than that, such as the Nasdaq after 2000; or the S&P 500 in 2008.

  Is there a better way?

  The other day, we met with an investor who has 40% of his portfolio in cash. He doesn’t like market valuations and has decided, he’ll put money to work if the market declines by 10%; then more money to work if it declines another 10%. We think this investment philosophy beats that of many. At least, he has taken chips off the table during the good times and has money to deploy. Before readers cry out: “There’s so much cash on the sidelines, this market must go up!”, I would like to caution that this investor is a rare exception of many investors I talk to – and I talk to retail investors, advisors, family offices, to name a few. The same person, by the way, told me he is at a loss on what to advise his friends, as he doesn’t want to encourage them to get into the markets given current valuations.

  Indeed, this appears to be a market where just about every pessimist is fully invested. Because folks have been wrong so many times calling the market top, we believe many market bears are fully invested.

  I think there’s a better way. The better way of investing is to take the long view. Sure it’s great to have one’s stock portfolio surge, but investing, in the opinion of yours truly, isn’t about gambling, but about asset allocation with humility. Passive investing is all right for certain things, but should not replace common sense. When the likely successor to Janet Yellen (we put our chips on Kevin Warsh) has complained that asset holders have disproportionally benefited from monetary policy, and that the focus has to shift, I think it’s but one indication to do a reality check on one’s portfolio, as headwinds to asset prices may well increase.

  The short answer is that investors may well look at their portfolios more like pension funds or college endowments do. Except, well, many pension funds and college endowments have fallen into the same traps individual investors and advisors have. Let me rephrase: investors might want to invest according to a philosophy a well-run endowment might have. Let me just mention a few principles here. Here’s the investment allocation of an endowment of a private college – I’m not suggesting this specific allocation is the right one for any specific person or institution, but want to provide it as food for thought:

  • 31% hedged strategies
  • 27% equities
  • 21% private equity
  • 8% real assets
  • 6% cash
  • 5% fixed income
  • 2% equity-like credit

  Note that the equity holdings are less than 30%, not the 60% often touted in a “60/40” portfolio (with 40% referring to bonds). The number can be larger or smaller for any one investor, but I believe we should get away from the notion that one needs to have a large portion invested in equities. Endowments are long-term investors, yet don’t go to 100% equities; so why should a young investor be all in equities? By allocating a far smaller portion, you don’t need to lose sleep over asset bubbles. Instead, you can indeed rebalance or make gradual shifts.

  Note the biggest bucket is “hedged strategies.” We have long advocated that investors need to look for uncorrelated returns. A long/short equity strategy or long/short currency strategy might generate such returns. Importantly, this bucket of alternatives is far higher than what many advisors choose. In an era of very expensive assets, we think this may be rather prudent. This doesn’t solve the issue of how to find the right hedged strategy – remember that those strategies will have under-performed the overall market. Important here is the investment process of the underlying ETF, mutual fund or whatever product one might want to consider.

  Private equity is obviously not accessible to many investors. Relevant though is that there’s a big bucket allocated to investments where one expects a long-term return without seeing the daily price moves. Sometimes it’s good not to have tick-by-tick data. An individual investor might be able to replicate this by opening another account, selecting a few long-term ideas, then throwing away the key to the account for a few years. Well, one should still review the investments periodically, but the point being: it is okay to invest different portions of a portfolio according to different philosophies. Say, be a day trader for a small portion, but do hold strategic positions. Some of this can be achieved by intentionally mixing up the styles of different investment products. If not all of them perform well at the same time, that’s a good thing!

  This particular portfolio has a small allocation to “equity-like credit”; we are not making a judgment whether this is too high or too low; the point again is that there’s a very broad allocation to different asset classes. Note, by the way, that ‘equity-like credit’ is likely to perform, well, like equities. Even with those assets added, the equity portion is still modest.

  Not mentioned in this particular portfolio, as least not in the headline numbers, is an allocation to precious metals or commodities. Those who have followed us for some time know that we encourage investors to consider gold as a diversifier. We have often referred to gold as the “easiest” diversifier because it’s easier to understand than some exotic long/short strategy. In our analysis, the price of gold has had a near zero correlation to the S&P 500 since 1970; however, over shorter periods, correlations can be elevated. In our analysis, gold has done well in every bear market since 1971, with the notable exception of the bear market in the early 1980s when then Fed Chair Volcker raised interest rates rather substantially.

  The point of all of this is not to suggest that investors need to add equity-linked credit or private equity to their portfolio. No, the point is that there’s more to investing than chasing high flying companies that promise to make Mars habitable.

  You might have also noticed that I squeezed in the word “humility” in asset allocation above. Have some respect that things that go up can also go down. Having respect means that one doesn’t adjust one’s lifestyle (expenditures) as a reaction to rising asset prices. Investors can control expenses more so than income. So maybe we should be spending far more time talking about how we spend our money rather than how we invest it. But I digress…

  

  

• Crisis Meet China – China Meet Crisis

  By Chris at www.CapitalistExploits.at

  Earlier this week, Kyle Bass spoke on Bloomberg about the reckless expansion of the credit system in the Middle Kingdom.

  

  He warned about the ballooning asset-liability mismatch in the shady $4-trillion wealth management products (WMPs) market.

  And went on to say “this is the beginning of the Chinese credit crisis” while admitting it could take some time for things to really start unraveling.

  A fair call…

  How many of us have figured the trend out, only to allocate too much capital to a trade and even lose on a trade which finally works… eventually? I know I have. I’m pretty sure Kyle’s position sized pretty well. After all, this is far from his first rodeo.

  In the interview Kyle referenced an SCMP article from a few weeks ago that went largely unnoticed by most. It was on the Chinese government coming up with more and more creative ways to stem the capital outflow underway since mid-2014:

  “China’s foreign exchange regulator, SAFE, has asked for cooperation from multinationals, including Sony, BMW, Daimler, Shell, Pfizer, IBM and Visa, to manage and control the flow of capital out the country.”

  This all feels a bit deja vu-ish.

  Long-time readers will know we’ve been bearish on China and the renminbi for well over 2 years now. Back in October 2014 we said that:

  “I don’t know exactly how a breakdown in the renminbi will play out. However, it is a sure bet that all those markets that prospered over the last 15 years or so on the back of a China will do badly. Where things become shady is the collateral damage to other markets that have had nothing to do with the Chinese economic miracle.”

  A few months later, we took a closer look at the cracks appearing in China’s interbank lending market, indeed feeling (correctly in hindsight – lucky us) that timing had arrived to short the currency cross via the options market:

  “The interbank lending market is an integral part of any country’s banking system as it is where banks maintain their short-term liquidity requirements. Often a bank will have a mismatch between between short-term assets and obligations and as such they will have to enter the interbank lending market to maintain optimal liquidity. If a bank has excess short-term reserves they may want to lend these out to other banks who have a shortfall in short-term reserves. The opposite also occurs where a bank, with a short-term funding deficit, will enter the market to borrow funds to match short-term liabilities.

   

  The behavior of the interbank lending market can provide one with a good appreciation for the liquidity of the banking system as a whole. If there is a lot of liquidity in the system (more short term assets than liabilities) the interbank rate will fall, if there is scarcity of short term assets relative to liabilities then rates will rise. So a rising interbank rate is generally associated with contracting liquidity conditions. Rapid rises in interbank lending rates are often associated with banking or credit crisis. This happened in the lead up to the GFC. What happened was that as banks began to fear the ability of other banks, who are their counter-parties, to make good on their obligations they demanded higher rates especially from banks already facing liquidity problems which only compounded their original the situation.

   

  A rapid rise in a country’s interbank lending market is also a good predictor of the direction of a country’s currency, or at worst a confirming indicator. Let’s have a look at the interbank lending market of a few emerging nations over the last 12-18 months and then look at what is happening with the renminbi. I think it is instructive for what we have been positioning for in our funds.”

  In truth, it was an easy bet to make.

  Volatility was around 2%! NOT buying put options would have been like having Scarlett Johansson invite you into her bed and then falling promptly asleep. You just couldn’t do that. And so you had to buy.

  Taking a look at the Chinese interbank lending today:

  

  Not yet getting critical but worth watching.

  And pricing of the options:

  

  So a 6.6% move to make 100%. Seems reasonable but nowhere near as good as it looked in late 2014 – unfortunately.

  

  The problem – if there is one – is that 12 months is a long time to date an ugly girl, work for a nasty boss, or drive a Lada. But it isn’t a particularly long timeframe to hold an option for.

  And yet that’s the best the option market gives us.

  Sure, you can throw your towel into the ring in the futures markets but if, like me, you dislike leverage and margin calls (because you WILL get it wrong at some point), then you’re going to have to figure some better way to ride this pony.

  The answer, I think, is this.

  – Chris

  “What you see when the liquidity dries up is people start going down… and this is the beginning of the Chinese credit crisis.” — Kyle Bass

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• College Enrollment Is Surging But Is It Really Worth It? (Aside From The Frat Parties, Of Course)

  College enrollment has been surging over the past 4 years with 67.4% of high school men enrolling directly in college after high school in 2016 versus only 61.3% in 2012. 

  Ask any economics professor at an Ivy League school what is driving the trend of higher college enrollments and you’ll get a quick response that implies that our young 18-year-old snowflakes are simply hedging their future employment opportunities against the devastating consequences of globalization and a deteriorating manufacturing base in the United States.

  And while their complex econometric models prove their point well beyond a shadow of a doubt (even though you’ll never understand them so don’t even try), we suspect the real answer may have something to do with the federal government throwing student loan dollars at anyone with a pulse while simultaneously offering to erase all that debt when you graduate.  Call us cynics. 

  Meanwhile, we find it absolutely shocking that a bunch of 18-year-old boys would happily take $40,000 from the federal government every year to do this:

  

   

  But, whatever the reasoning, there is no doubt that college enrollment is soaring.  Per Bloomberg:

  

   

  And while over-educated elitists of our liberal bastions of higher education are all too eager to explain why more kids are choosing college these days, you’ll rarely hear them comment on whether or not it’s actually worth it…it just wouldn’t progress any of their liberal narratives or serve their self interests, so why bother?

  So we decided to take a quick look at the math of a college education.

  First, according to Quora.com, attending college these days can cost anywhere from $22,500 per year for a public, in-state university to $75,000 for a private education.  So, lets just assume that, on average, our snowflakes are spending $30,000 per year on a 4-year bachelor, or $120,000.

  • Attend a public in-state university for four years, living on campus ($22,500 per year for four years) for $90,000
  • Attend a public out-of-state college for four years:  $35,000 per year for four years for a total of $140,000
  • Attend a private four year college in an expensive area like Manhattan at $75,000 per year for a total of $300,000

  So what do they get for that?  Well, per the Bureau of Labor Statistics, that $120,000 degree in Anthropology will earn you roughly $464 extra dollars per week or ~$24,000 per year.

  

   

  So, doing some quick math, we find that $24,000 tax-effected at a 25% tax rate equals about $18,000 of extra annual earnings for a college grad and implies a 15% return on invested capital. 

  Not bad…but, unfortunately, the story doesn’t end there.  You see, by choosing the college route our snowflakes not only incur the cost of college, in the form of massive student loans, but also forgo 4 years of earnings, which equates to roughly $110,000 ($692*52*.75) on a tax-effected basis. 

  So lumping in that opportunity cost brings the true average cost of that Anthro degree up closer to $250,000, implying a roughly 7.2% ROIC. 

  Of course, that’s assuming that young Tripp Hollingsworth III actually graduates in 4 years and then promptly finds a job shortly thereafter rather than returning to mom’s basement.

  So you decide, is a 7.2% return on invested capital sufficient to take on a life time of debt?  In fairness, it is awfully difficult to calculate the present value of a frat party, which for an 18-year-old boy may be infinite.

  

  

• Mike Krieger Asks: Can Bernie Sanders Be Convinced To Launch A New Political Party?

  Authored by Mike Krieger via Liberty Blitizkrieg blog,

  

  I am 100% in the camp that supports Bernie Sanders severing himself completely from the hopelessly captured and corrupt Democratic Party and launching an entirely new movement. I’ve spent a lot of time since the 2016 election writing about how worthless the Democratic Party is and why it will never fundamentally change. The sad truth when it comes to American politics at the moment is “we the people” have no political representation whatsoever. Both the Republican and Democratic parties are corporate and oligarch donor owned, and will never push forward the sort of sweeping change average Americans need in order to enjoy a higher quality of life.

  This post isn’t meant as an endorsement of Sanders or all of his policies, but it’s an endorsement of creating something new so that the public can enter a new era in which the needs of the people are addressed. Truth be told, we’ve been fooled into thinking that we have two distinct political parties proposing vastly different policy solutions to help the public. The reality is we have two political parties proposing various solutions to help the donors. Nobody represents the people. We need to discard these parties and form new ones, and the sooner we do so, the better.

  As I wrote in the post, In Defense of Populism:

  Despite my refusal to self-identify, I am comfortable stating that I’m a firm supporter of populist movements and appreciate the instrumental role they’ve played historically in free societies. The reason I like this term is because it carries very little baggage. It doesn’t mean you adhere to a specific set of policies or solutions, but that you believe above all else that the concerns of average citizens matter and must be reflected in government policy.

   

  Populism reaches its political potential once such concerns become so acute they translate into popular movements, which in turn influence the levers of power. Populism is not a bug, but is a key feature in any democratic society. It functions as a sort of pressure relief valve for free societies. Indeed, it allows for an adjustment and recalibration of the existing order at the exact point in the cycle when it is needed most. In our current corrupt, unethical and depraved oligarchy, populism is exactly what is needed to restore some balance to society.

   

  Whether people identify as on the “right” or the “left” there’s general consensus (at least in U.S. populist movements) of the following: oligarchs must be reined in, rule of law must be restored, unnecessary military adventures overseas must be stopped, and lobbyist written phony “free trade” deals must be scrapped and reversed.

  Trump was the first President in my lifetime to win the office on a populist wave. Unfortunately, his actual style of governing in practice looks a lot like authoritarian-corporatism, an ideology and mindset which I find nauseating and dangerous. As such, the best chance of an alternative populism in the near-term would come from a Bernie Sanders led party.

  I seriously hope he takes the plunge, because as recent reports from a Florida lawsuit against the DNC demonstrate, the Democratic Party is beyond repair.

  As the Observer reports:

  On April 28 the transcript was released from the most recent hearing at a federal court in Fort Lauderdale, Fla., on the lawsuit filed on behalf of Bernie Sanders supporters against the Democratic National Committee and former DNC chair Debbie Wasserman Schultz for rigging the Democratic primaries for Hillary Clinton. Throughout the hearing, lawyers representing the DNC and Debbie Wasserman Schultz double down on arguments confirming the disdain the Democratic establishment has toward Bernie Sanders supporters and any entity challenging the party’s status quo.

   

  Shortly into the hearing, DNC attorneys claim Article V, Section 4 of the DNC Charter—stipulating that the DNC chair and their staff must ensure neutrality in the Democratic presidential primaries—is “a discretionary rule that it didn’t need to adopt to begin with.” Based on this assumption, DNC attorneys assert that the court cannot interpret, claim, or rule on anything associated with whether the DNC remains neutral in their presidential primaries.

   

  Later in the hearing, attorneys representing the DNC claim that the Democratic National Committee would be well within their rights to “go into back rooms like they used to and smoke cigars and pick the candidate that way.” By pushing the argument throughout the proceedings of this class action lawsuit, the Democratic National Committee is telling voters in a court of law that they see no enforceable obligation in having to run a fair and impartial primary election.

  That’s your “Democratic” Party.

  As a result of the obvious sham, there’s a new movement afoot to “Draft Bernie” into a new political party. Its founder is Nick Brana, and here’s a great interview of him  by Jordan Chariton.

   

  Here’s my bottomline. If Sanders doesn’t do something like this and do it fast, the Democrats are going to nominate another corrupt loser in 2020, and Trump will win a second term no matter how unpopular he might be.

  

  

• California Wants To Give More Money To Eric Holder To Fight Trump

  California Attorney General Xavier Becerra apparently doesn’t think that $858 million is nearly enough taxpayer money to fight the Trump administration.  That is precisely the amount that California’s state budget proposal, laid out by Governor Jerry Brown in January, allocated to Becerra’s Justice Department but in testimony before the Senate Budget committee yesterday Becerra said he needs even more to attract and keep qualified lawyers to defend the state.  Per The Hill:

  “No one anticipated the extent to which federal executive actions would impact the people of California and the Department of Justice. Who knew that the federal government would play so fast and loose with the law and taxpayers’ pocketbooks?”

   

  “I am operating with a budget that was assembled without addressing the needs of current mandates and before our new reality of dealing with federal executive orders,” Becerra said. “If it feels like the attacks are constantly coming, it’s because they are.”

  

   

  After taking over the state Justice Department in January, Becerra has joined or initiated several lawsuits challenging the Trump administration over everything from an immigration to changes to federal fuel efficiency standards.

  Meanwhile, after the passage of the Obamacare repeal bill yesterday, Becerra issued a statement defining healthcare as a “right” of all Americans and suggesting that the next front in his legal war against the Trump administration could come over the Republicans’ efforts to undo Obama’s legacy.

  “I believe health care is a right. Today’s House vote takes a dangerous step towards jeopardizing the health security of millions of people in our state and throughout the country.”

   

  “As a Member of Congress, I was proud to help expand health coverage and lower costs for hardworking Americans. Every Member of Congress who voted for today’s bill must answer why it is good to take away an American’s access to his or her doctor. Would they do this to themselves or their family?”

   

  “As California’s Attorney General, I will use every legal tool at my disposal to safeguard the healthcare the people of our state depend on.”

  And while we would never question Becerra’s brilliant legal mind, we would love it if he could point us to the specific language in the U.S. Constitution that guarantees every U.S. citizen the “right” to healthcare. 

  Of course, the additional funding request from Becerra is even more questionable in light of the fact that California recently retained the law firm of Obama’s former Attorney General, Eric Holder, to also fight the Trump administration.  You just have to wonder how much of that incremental funding over and above $858 million will make its way into Holder’s pocket?  Per our post from January:

  “With the upcoming change in administrations, we expect that there will be extraordinary challenges for California in the uncertain times ahead.  This is a critical moment in the history of our nation. We have an obligation to defend the people who elected us and the policies and diversity that make California an example of what truly makes our nation great.”

   

  “Having the former attorney general of the United States brings us a lot of firepower in order to prepare to safeguard the values of the people of California,” Kevin de León, the Democratic leader of the Senate, said in an interview. “This means we are very, very serious.”

  Meanwhile, the sole Republican on California’s budget committee asked what would seem like the most logical question following Becerra’s request, namely why should taxpayers provide more money to Becerra to fight laws that could ultimately result in the state losing access to millions of dollars of federal funding.

  State Sen. Joel Anderson, R-Alpine, the budget subcommittee’s sole Republican, pressed Becerra to quantify how much money his office receives from the federal government and how much could be put at risk by state policies, such as those embodied in Senate Bill 54, the “sanctuary state” bill.

   

  “It makes no sense to give you an increase if your sole focus is to pursue policies that cut off” potentially hundreds of millions of federal dollars. “I don’t see why I would want to backfill someone hellbent on having their budget cut.”

  Here’s a radical idea Mr. Becerrra, how about you just do your job and simply enforce the laws of the land rather than trying to bend them to fit your own personal political beliefs.  It would save California taxpayers a whole lot of money.

  

  

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• Where Is Craft Beer Most Popular In America?

  It’s difficult to miss the degree of variety beer lovers can enjoy at this moment in the US. This is due to the explosion of small breweries coming on to the scene, which emphasize experimenting with flavors and styles.

  As Priceonomics.com notes, over the past 40 years (thanks to deregulation in the beer industry) the number of breweries in America expanded from a post-prohibition low of under 100, to over 5,000 in 2016. The bulk of this growth comes from small breweries, the most familiar to consumers being the microbrewery.

  According to the Brewers Association, a trade group for American craft brewers, a microbrewery is any local and independent brewer that sells fewer than 15,000 barrels of beer per year and sells at least 75% through other bars, restaurants, and liquor stores.

  Unfortunately, it’s not the case that you can walk to your local liquor store and choose from 5,000 different breweries to bring home tonight. The reach of small breweries are confined to particular markets as most microbreweries have limited and local distribution. The variety from these small craft breweries is typically limited to the state or metro area the brewery where the brewery is located. The fact is, some areas of the country are just better for beer aficionados who want lots of options.

  So where do you have the best chance to sample the greatest variety of beer possible? Which states and cities have the most breweries overall?

  We analyzed business listing data from Priceonomics customer Datafiniti to offer some perspective into that. This data set included the listings of craft breweries along with their locations. We combined this with supplementary information from the Brewers Association catalog of breweries, to offer more specific details.  

  From our analysis, we are able to find out in what parts of America breweries reign supreme.

  So, which state has the most breweries?

  

  Number one is California by a serious margin, with over 600 breweries. Colorado and Washington are the next closest with about 350 each. With 15 or fewer breweries, Hawaii, Mississippi, Washington D.C. and North Dakota are at the bottom of our list. We found that cities in the Pacific Northwest and Colorado are your best bet for finding the most breweries in one place. Cities along the coasts and in the Midwest are also solid destinations. There are also some exciting small cities outside of this trend that should not be overlooked (like Asheville, NC). Vermont is the state with the most craft breweries per capita, while Boulder, Colorado is the city with the highest density of craft breweries.

  Looking at the information in absolute terms skews our list towards the larger states with greater population. It’s intuitive that states with more people (and therefore more beer drinkers) would be able to support more breweries.

  Understanding the number of breweries per capita will tell us where breweries are most plentiful relative to population…

  

   

  The title of most breweries per capita goes to Vermont. Even though they only have about 50 in total, since the state is so small, that equates to 8 breweries per person. Montana, Colorado, Maine, and Oregon all have about 6 breweries per person. Overall we see a strong presence of breweries in the Pacific Northwest, New England, and the Midwest.

  

  Read more details here…

  

  

• Paul Craig Roberts Warns American Democracy Is "A Dead Man Walking"

  Authored by Paul Craig Roberts,

  Trump’s “sell-out,” as it is called, coming on top of Obama’s eight-year “sell-out,” is instructive. We have now had a Democratic president who sold out the people who elected him and a Republican president who has done the same thing. This is a very interesting point, the meaning of which most people miss.

  But not Russia’s president, Vladimir Putin. At the Valdai discussion club, Putin summed up Western democracy, which I paraphrase as follows:

  In the West, voters cannot change policies through elections, because the ruling elites control whoever is elected. Elections give the appearance of democracy, but voting does not change the policies that favor war and the elites. Therefore, the will of the people is impotent.

   

  People are experiencing that they and their votes have no influence on the conduct of affairs of the country. This makes them afraid, frusrated, and angry, a combination of emotions that is dangerous to the ruling elite, who in response organize the powers of the state against the people, while urging them with propaganda to support more wars.

  Obama promised to get out of Afghanistan or Iraq or perhaps it was both. He promised to reverse the police state created by the George W. Bush regime. He promised to focus American resources on American domestic problems, such as health care.

  But what did he do? He expanded the wars and launched new ones, destroyed Libya and attempted to destroy Syria, but was stopped by British non-participation and Russian objection. Obama overthrew democratic governments in Honduras and Ukraine. He expanded the police state. He began the demonization of Russia and Putin. He betrayed the American people again by allowing the private insurance industry to write his health care plan known as Obamacare. The private interests wrote a plan that diverts public monies from health care to their profits.

  All of this is forgotten when the ruling elites and the presstitutes that serve only them refocused the demonization on Trump. Suddenly, it was the president-elect of the United States who was the main danger to the US and the American people. Trump was a Russian agent. He had conspired with Putin to steal the US election from Hillary Clinton and make the White House a partner of Putin’s alleged reconsruction of the Soviet Empire.

  The nonsense was hot and furious, and it was effective. Trump succumbed to pressure and sacrificed his National Secuity Advisior, who was supportive of Trump’s promise to normalize relations with Russia. Trump replaced him with a Russophobic idiot who apparantly cannot wait to see mushroom clouds over cities all over the Western world.

  Why did two presidents in succession completely sell out the people who voted for them?

  The answer is that presidents are not as powerful as the interest groups who make the decisions.

  Trump was going to get us out of Syria, so he committed an unambigious war crime by gratuitously attacking Syria with Tomahawk missiles.

  Trump was going to normalize relations with Russia, so his Secretary of State announces that US economic sanctions will stay on Russia until Russia hands over to Ukraine the Russian Crimean naval base on the Black Sea.

  It is impossible to normalize relations when the cost to the other party of the normalization is national suicide.

  Despite Trump’s complete surrender to the powers that be, today (May 2) on NPR I heard raw propaganda dressed up as “expert opinion” that Trump is biased against the media, when what all of us have seen is massive media bias against Trump, including the program to which I was listening.

  For example, NPR had accumulated “experts” who said that Trump had slandered Obama by accusing him of intercepting his comunications. NPR said nothing about the Obama regime’s charge that Trump conspired with Putin to steal the election from Hillary Clinton.

  If anything was slander, this was, but all the talk was about how Obama could sue Trump.

  But, of course, both are public figures, and neither can sue the other.

  I wonder why NPR’s “expert” didn’t get around to this point.

  Why is the ruling oligarchy still using its presstitutes to campaign against a president who has surrendered to them?

  Perhaps the answer is that the real powers that be are going to make an example out of Trump so that never again does a person running for elected office make a populist appeal to the electorate.

  

  

• "Someone Is Blowing Up": RBC Warns China-Induced Unwinds Are Escalating

  "Something is off," warns RBC's head of cross-asset strategy Charlie McElligott in the introduction to his latest market noting that the swing in US fiscal policy optimism is coming at a critical time as the China's liquidity tightening is spooking the reflation story.

  

  SUMMARY:

  Movement on US fiscal policy is currently driving US rates and equities higher, counteracting the tremendous negative implications of this ‘Chinese tightening / deleveraging’ story and the impact this is having upon commodities (industrial metals & crude) and thus, ‘inflation expectations.’

   

  ‘Connecting the dots’ between the crude oil / commodities selloff and a strong (negative) reversal in ‘mean reversion strategies’ both cross- and inter- sector (energy) within equities, as well as notable drawdowns in ‘momentum’ market-neutral strategies over the past few weeks.

  *  *  *

  FISCAL POLICY OPTIMISM SWING COMES AT CRITICAL TIME, AS CHINA LIQUIDITY TIGHTENING STORY IS SPOOKING REFLATION:

  The big +++ story overnight: Republicans are planning a ‘make or break’ vote on the ACA repeal today, as the GOP feels they now have the votes to pass the Trump campaign healthcare promise.  This sudden swing to ‘movement’ / optimism speaks to the ‘pessimistic overshoot’ seen across the Street with regards to the consensually negative view on ‘fiscal policy’ implementation, following the administration’s / Republicans’ self-inflicted wounds of the past few months.

  NOW, this opens the door again to not just tax reform (as it creates a much more benign revenue ‘starting point’ for tax-cut offsets), but potentially infrastructure as well, which might too be bundled into the tax plan.  Yes, none of this is ‘imminent’ per se, but the sentiment-inflection here is swift and of extreme importance to the ‘reflation’ trade. 

  As such, equity futures and US nominal rates are currently holding higher, despite what looks to be a total breakdown in crude oil and commodities turning outright ugly now.

  

  And today is seeing the move accelerate…

  

  with the biggest single day drop since Nov 2016…

  

   

  This newly-found ‘US fiscal policy optimism’ could not have come at a better time for the ‘reflation’ camp, who have been sweating bullets in recent days because our much-discussed ‘Chinese tightening / deleveraging’ theme is playing-out real-time and wreaking havoc on global commodities–particularly with industrial metals (Dalian Iron Ore limit-down overnight -8.0% and reopening down another -5% today).  Look at the carnage on the Shanghai Futures Exchange, particularly in the MTD / QTD columns: 

  

  This comes following the total meltdown in copper (-4.0%, and another -1.7% move this a.m.) during yesterday’s US session, while too we see the breakdown in the crude oil complex accelerating with WTI making YTD lows this morning while falling through its trend-support line dating back to last August.  BHP and RIO are the proxy for the breakdown in the equities-complex (while a popular US equities ‘inflation’ basket is crushed a massive -4.3% over the past five days), while too we see China- / resources- levered AUD come unglued in the FX space, now -2.3% month-to-date despite a very ‘meh’ USD.  At the same time, we’ve now seen weaker Chinese Manu PMIs and Caixin Composite PMIs over the past week, in conjunction with an ISM Manufacturing misses in US.

  All of this is tied-into the enhanced Chinese efforts to deleverage the economy via ‘measured tightening’ (higher money markets rates—see O/N SHIBOR again making new 2 year highs last evening) and reduced liquidity (net removals as MLF loans roll-off versus now-smaller / not offsetting RR cash injections and OMO’s).  In conjunction with these quantitative efforts, the Chinese are also ‘cracking down’ on shadow financing and wealth management products, both of which participate in the liquidity / commodity-price feedback daisy-chain (to my point yesterday and in the past on higher short-term rates acting as ‘margin calls’ on ‘commodities as collateral’ financing trades).

  Mark Orsley and I have been working on a “Chinese Liquidity Monitor” which tracks the PBoC’s various measures (repos, reverse repos, OMOs, SLFs, MLFs, Pledged Supplementary programs)—see below.  The key point here: it’s not just the sharp decline in the ‘rate of change’ of PBoC ‘lending’ / ‘financing’ / ‘credit creation’….it’s that liquidity is being outright REMOVED.

  

  It makes total sense too—the Chinese have recently used the ‘air-cover’ of the Fed’s own tightening to conduct their own–so the current timing is perfect, as a June FOMC hike became that much more of a ‘lock’ after yesterday’s hawkish message was successfully delivered (looking through the Q1 data softness as “transitory”).

  The simple fact is that global liquidity–and thus, financial conditions as well–are tightening.

  US real rates are gapping-tighter, as 5Y TIPS yields have swung from -24bps on April 12th to this morning’s +13bps.  3m LIBOR has MORE THAN DOUBLED since June and currently sits at highs since March 2009.  As mentioned earlier, overnight SHIBOR printed another new 2 year high, same for Chinese 10Y government bond yields.  US nominals are back approaching the upper end of their recent range as well.  Yes, if this was a pure reflection of growth, it would be an outright ‘risk-asset positive.’  But it’s much more nuanced than that, especially from the Chinese ‘demand driver’ impact on the global economy.  Tighter financial conditions à slower growth à lower inflation.

  From a risk-perspective though, this is then counter-balanced via by-and-large ‘still expansionary’ global PMIs, BIG corporate earnings growth and now, into the aforementioned (and SUDDEN) positive uptick in sentiment around US fiscal policy movement.  If fiscal can re-jigger ‘animal spirits’ (especially on the ‘optimism’- / confidence- side), then it becomes much more attractive to put those ‘reflation trades’ back on (rates shorts, long cyclicals / banks / value factor, potential to re-load USD length as well).  To this point, I will continue watching that 2.40 / .45 level (smack-dab btwn 50- and 100-dma’s in UST 10Y yields and the overhead resistance level since late-March—H/T Mark Orsley)…while still feeling confidence that this ‘Chinese tightening’ story (and the impact it is have on commodities and thus, global inflation expectations) will keep US rates ‘anchored’ despite the Fed’s hiking intentions.

  NOW LINKING THE ABOVE ‘COMMODITIES / CRUDE DISTRESS’ INTO A NOTABLE DEVELOPMENT IN EQUITIES FACTOR MKT NEUTRAL:

  In yesterday’s note, I pointed-out particularly acute ‘unwind’ price-action in US equity 1m ‘momentum’ factor market neutral strategies seen on Tuesday—as ‘momo leaders’ were splattered, while ‘momo losers’ squeezed sharply-higher.  We have now seen a ‘clustering’ of 1.5- to 2.0- standard-deviation drawdowns in the strategy over the past few weeks (almost dating-back to the start of the quarter frankly), which is anecdotally quite atypical in a ‘flat to up’ intraday tape.  It would be safe to surmise that there is either signaling a rotation that is playing-out in the market, or conversely, an unwind of some sort.

  

  Looking back to the start of the quarter though, we haven’t really seen that sector- or factor-level rotation generally-speaking, as thematically, ‘growth’ factors / sectors continue to lead, while at the bottom, we see cyclicals / value / anti-beta still lagging, as they have all year.   But if looking at a strategy such as ‘prior quarter mean reversion’ you begin to see something interesting.

  This is crude, but using a simple ‘Q1 mean reversion’ proxy (deployed in Q2), where I go long Energy (worst perf S&P sector Q1) vs short Tech (best perf S&P sector Q1), I see significant signs of ‘stress’ or outright unwind in recent weeks.  The above portfolio run $-neutral has experienced a near 5% swing over the past 3 weeks, with the loss doubling over the past week alone–it’s likely this ‘rate of change’ that is the problem from the risk management perspective.  This of course correlates with the breakdown occurring in crude oil, as WTI is now -11.8% over the past three weeks.

  

  Sector-specific within energy, you see signs as well.  Energy equities trader Ryan Businski noted the following ‘unwind’ behavior across Texas shale plays: “Seeing long sales across the Niobrara names today forcing unwinds/covering in Bakken names. WLL, OAS, CLR rallying with no news Bakken related.”

  With the sector now -10.4% YTD within the S&P / -20.3% within the Russell, alongside a lot of talk in recent-weeks of a number of multi-manager shops shuttering energy books, I feel comfortable in stating that somebody’s ‘mean-reversion’ strategy (likely a stat arb / quant fund) has triggered ‘stop outs’ as the underlying commodities space now ‘catches down’ to the behavior already exhibited across the energy equities space throughout the course of 2017.

  

  

• Earth Overshoot: How Sustainable Is Population Growth?

  Authored by Mike Shedlock via MishTalk.com,

  For decades people have been predicting overpopulation would wipe out energy resources if not the entire planet. Every year the population bomb and peak oil crowd have been proven wrong. But how long can the status quo of generating growth by population explosion last?

  Every year the population bomb and peak oil crowd have been proven wrong. But how long can the status quo of generating growth by population explosion last?

  Reader Rick Mills at Ahead of the Herd addresses the subject in a guest blog that first appeared on his blog as Earth Overshoot Day.

  Earth Overshoot Day

  The second half of the 20th century saw the biggest increase in the world’s population in human history. Our population surged because of:

  • Medical advances lessened the mortality rate in many countries
  • Massive increases in agricultural productivity caused by the “Green Revolution”

  The global death rate has dropped almost continuously since the start of the industrial revolution – personal hygiene, improved methods of sanitation and the development of antibiotics all played a major role.

  Green Revolution

  The term Green Revolution refers to a series of research, development, and technology transfers that happened between the 1940s and the late 1970s.

  The initiatives involved:

  • Development of high-yielding varieties of cereal grains
  • Expansion of irrigation infrastructure
  • Modernization of management techniques
  • Mechanization
  • Distribution of hybridized seeds, synthetic fertilizers, and pesticides to farmers

  Tractors with gasoline powered internal combustion engines (versus steam) became the norm in the 1920s after Henry Ford developed his Fordson in 1917 – the first mass-produced tractor. This new technology was available only to relatively affluent farmers and it was not until the 1940s tractor use became widespread.

  Electric motors and irrigation pumps made farming and ranching more efficient. Major innovations in animal husbandry – modern milking parlors, grain elevators, and confined animal feeding operations  –  were all made possible by electricity.

  Advances in fertilizers, herbicides, insecticides, fungicides and antibiotics all led to better weed, insect and disease control.

  There were major advances in plant and animal breeding – crop hybridization, artificial insemination of livestock, growth hormones and genetically modified organisms (GMOs).

  Further down the food chain came innovations in food processing and distribution.

  All these new technologies increased global agriculture production with the full effects starting to be felt in the 1960s.

  Cereal production more than doubled in developing nations – yields of rice, maize, and wheat increased steadily. Between 1950 and 1984 world grain production increased by over 250% – and the world added a couple billion more people to the dinner table.

  The modernization and industrialization of our global agricultural industry led to the single greatest explosion in food production in history. The agricultural reforms and resulting production increases fostered by the Green Revolution are responsible for avoiding widespread famine in developing countries and for feeding billions more people since.

  The Green Revolution helped kick start the greatest explosion in human population in our history – it took only 40 years (starting in 1950) for the population to double from 2.5 billion to five billion people.

  We goosed agra machine’s growth and saved a billion people who birthed billions more.

  Malthusian pessimism

  “The power of population is indefinitely greater than the power in the earth to produce subsistence for man“. Thomas Robert Malthus

  Malthusian pessimism has long been criticized by doubters believing technological advancements in:

  • Agriculture
  • Energy
  • Water use
  • Manufacturing
  • Disease control
  • Fertilizers
  • Information management
  • Transportation

  would keep crop production ahead of the population growth curve. Malthus’s prediction hasn’t come true because, so far, rising agricultural yields have always outpaced population growth.

  Norman Borlang, Father of the Green Revolution, is on record as saying if we did everything right the Earth has a human carrying capacity of 10 billion people.

  Ester Boserup, an agricultural economist says don’t worry, that population growth is the driver of land productivity – our planet’s human carrying capacity is based on the capabilities of our social systems and our technologies more than environmental limits.

  Ester’s downgrading of environmental limits to second place doesn’t give me much comfort moving forward. It seems a little shortsighted.

  Population

  In 1950 the world’s population stood at 2.52 billion people. Today there are over 7.5 billion of us living on Earth.

  Current World Population: 7,500,072,439

  According to United Nations predictions humans could number 9.7 billion people by 2050, and over 11 billion by 2100.

  

  The earth might be big enough for one billion people, four billion maybe even eight or nine or even the 10 billion as Borlang believed. But the time is quickly coming when our sheer numbers will demand more than the earth can possibly supply.

  Some say that number has already been surpassed.

  Ecological Overshoot

  For most of human history, there is no doubt we were consuming resources at a rate far lower than what the planet was able to regenerate.

  Unfortunately, we have crossed a critical threshold. The demand we are now placing on our planet’s resources appears to have begun to outpace the rate at which nature can replenish them.

  The gap between human demand and supply is known as ecological overshoot. To better understand the concept think of your bank account – you have $5000.00 paying monthly interest. Month after month you take the interest plus $100. That $100 is your financial, or for our purposes, your ecological overshoot and its withdrawal are obviously unsustainable.

  

  Humans are currently withdrawing more natural resources than our Earth bank is able to provide on a sustainable basis. How much more? At today’s rate of withdrawal, we need just over another half earth. We’re on track to require the resources of two planets by 2050.

  If today, everyone on earth were to start consuming the same amount of natural resources as the average Australian we’d need 5.4 planets, an ecological overshoot of 4.4 planets.

  Earth Overshoot Day

  According to the Global Footprint Network (GFN) August 8th was Earth Overshoot Day 2016 – the day when humanity exhausts our ecological budget, the day when our consumption exceeded the environment’s renewal capacity for the entire year.

  The rest of the year we’re in ecological overshoot and we currently use the renewable resources of 1.6 Earths.

  The GFN predicts that by 2030, Earth Overshoot Day will be in June – meaning it will take two entire Earths to sustain our species’ consumption.

  Loss of species

  Every two years, Global Footprint Network, WWF, and the Zoological Society of London publish the Living Planet Report. The Living Planet Report 2016 (October) is an eye opener:

  • • The Global Living Planet Index shows a decline of 58% between 1970 and 2012 Trend in population abundance for 14,152 populations of 3,706 species monitored across the globe between 1970 and 2012.

  • • The terrestrial LPI shows a decline of 38% 1970 and 2012 Trend in population abundance for 4,658 populations of 1,678 terrestrial species monitored across the globe between 1970 and 2012

  • • The tropical forest species LPI shows a decline of 41 per cent 1970 and 2009 Trend in population abundance for 369 populations of 220 tropical forest species (84 mammals, 110 birds, 10 amphibians and 16 reptiles) monitored across the globe between 1970 and 2009.

  • • The grassland species LPI shows a decline of 18 per cent between 1970 and 2012 Trend in population abundance for 372 populations of 126 grassland species (55 mammals, 58 birds, and 13 reptiles) monitored across the globe between 1970 and 2012.

  • • The freshwater LPI shows a decline of 81 per cent 1970 and 2012 Trend in population abundance for 3,324 populations of 881 freshwater species monitored across the globe between 1970 and 2012.

  • • The wetland-dependent species LPI shows a decline of 39 per cent between 1970 and 2012 Trend in population abundance for 706 inland wetlands populations of 308 freshwater species (4 mammals, 48 birds, 224 fish, 4 amphibians and 28 reptiles) monitored across the globe between 1970 and 2012.

  • The marine LPI shows a decline of 36 percent between 1970 and 2012 Trend in population abundance for 6,170 populations of 1,353 marine species monitored across the globe between 1970 and 2012.

  The Earth has gone through five major extinction events – from the Ordovician-Silurian (350 million years ago) to the Cretaceous-Paleogene (65 million years ago), in each event 70-90% of all species died.

  The Anthropocene, or the age of the humans, is considered by scientists to be a 6th extinction event. That’s real bad news long before even 50% extinction – loss of species means loss of pollinators – which is a real problem since so many varieties, and so much of our food crops rely on insects (ie. bees) to pollinate.

  The revolution wasn’t really green

  The modern agricultural complex spawned by the Green Revolution may have allowed us to grow more food, but dependence on this high-cost industrial input type of system extracts an extreme toll:

  • Agricultural output did increase as a result of the Green Revolution, but the energy input to produce a crop increased faster – the ratio of crops produced to energy input has decreased. This is because High Yielding Varieties (HYVs) of seeds only outperform traditional varieties when adequate irrigation, pesticides, and fertilizers are used
  • Green Revolution agriculture produces monocultures of cereal grains. This type of agriculture relies on the extensive use of pesticides because monoculture systems – with their lack of genetic variation – are particularly sensitive to bug infestations
  • The transition from traditional agriculture to GR agricultural meant farmers became dependent on industrial inputs – not made on the farm inputs. Farmers faced severely increased costs because they now had to purchase such items as farming machinery, fertilizer, pesticides, irrigation equipment and seeds
  • The increased level of mechanization on larger farms removed a large source of employment from the rural economy. New machinery – mass produced gas tractors, large self-propelled combines and mechanical cotton pickers – all combined to sharply reduce labor requirements
  • Less people were affected by hunger and died from starvation – but many more are affected by malnutrition such as iron or Vitamin A deficiencies. Green Revolution grains do not have the same nutritional values as traditional varieties. The switch from heavily rotated multiple crops to mono-cropping or dual cropping reduces total soil fertility and the nutritional value of our food
  • The Green Revolution reduced agricultural biodiversity by relying on just a few varieties of each crop. The food supply could be susceptible to pathogens that cannot be controlled by agrochemicals
  • Many valuable genetic traits, bred into traditional varieties over thousands of years, are now lost
  • Wild plant and animal biodiversity was hurt because the Green Revolution expanded agricultural development into new areas where it was once unprofitable or too arid to farm
  • The 20/80 phenomenon – the rapid increase in farm size and the concentration of production among large producers means 20% of producers generate 80% of the agricultural output
  • As a result of modern irrigation practices, aquifers in places like India (once Borlaug’s greatest triumph) and the US midwest have become depleted.  There are two types of aquifers: replenishable, most of the aquifers in India and the shallow aquifer under the North China Plain are replenishable – depletion means the maximum rate of pumping is automatically reduced to the rate of recharge. For fossil or nonreplenishable aquifers – like the U.S. Ogallala aquifer, the deep aquifer under the North China Plain, or the Saudi aquifer – depletion brings pumping to an end. In the more arid regions like the southwestern United States or the MiddleEast, the loss of irrigation water could mean the end of agriculture in these areas
  • Green Revolution techniques rely heavily on chemical fertilizers, pesticides and herbicides, some of these are developed from fossil fuels which makes today’s agriculture regime much more reliant on petroleum products
  • Farming methods that depend heavily on chemical fertilizers do not maintain the soil’s natural fertility and because pesticides generate resistant pests, farmers need ever more fertilizers and pesticides just to achieve the same results
  • The increased amount of food production and foods low price led to overpopulation worldwide

  I said earlier we currently use the renewable resources of 1.6 planets and that by 2030 we’ll use the renewable resources of two planets. We do that by agricultural inputs – the massive use of fertilizers, diesel, insecticides, pesticides, fresh water for irrigation etc.

  Has anyone thought about the further effects on our environment of ramping up fertilizer, pesticide, insecticide and herbicide applications even further?

  How about increasing use of pollution emitting fossil fuels and fresh water for irrigation to enable big agra to feed 2.2 billion more of us?

  Have you thought about the effects of the existing billions of people (who don’t live even close to a western lifestyle) all wanting to live, or at least consume, like an American or Australian does? What happens when urbanization increases all the newly minted urbanites living standards and all those new consumers start to climb the protein ladder alongside the future 2.2 billion coming to the table?

  It’s obvious the world needs a new farm – one the size of South Africa.

  Unfortunately, the UN also says that by 2030 an area twice the size of South Africa will become unproductive due to desertification, land degradation, and drought.

  Desertification

  Desertification is a phenomenon that ranks among the greatest environmental challenges of our time. Unfortunately, most people haven’t heard of it or simply don’t understand it. Desertification doesn’t refer to the advance of deserts which can and do expand naturally.

  

  Desertification is a different process where land in arid or semi-dry areas becomes degraded – the soil loses its productivity and the cover vegetation disappears or is degraded to the point where wind and water erosion can carry away the topsoil leaving behind a highly infertile mix of dust and sand.

  Desertification and land degradation is a global issue with desertification already affecting one quarter of the total land surface of the globe today

  Today the pace of arable land degradation is estimated at 30 to 35 times the historical rate. Desertification is degrading more than 12m hectares of arable land every year – the equivalent of losing the total arable area of France every 18 months.

  The issue of desertification is not new, it has constantly played a significant role in human history, even contributing to the collapse of the world’s earliest known empire, the Akkadians of Mesopotamia.

  Climate change can accelerate and intensify the degradation process.

  Climate Change

  When Norman Borlang made his estimate of our planet’s human carrying capacity Climate Change was not the huge driver behind his modeling as it would have to be today.

  According to science the world is going to continue to get warmer, polar ice caps will melt, so will the Greenland ice sheet and most glaciers. More sunlight will be absorbed by the Earth’s oceans, causing increased evaporation. Water vapor is a greenhouse gas and amplifies twofold the effects of other greenhouse gasses. With Earth’s ice gone there will be significantly less sunlight reflected back into space, vast expanses of Arctic tundra will thaw releasing unbelievable amounts of methane, a greenhouse gas twenty times more potent than CO2.

  The polar jet stream has already been altered, wide swinging north-south deviations (meanders) have become the norm – deviating far from its normal path and meandering north into Canada, the jet stream brings warm air while dipping far south over Europe, the polar jet stream brings record cold and snow.

  Ocean currents will be altered further impacting our climate and sea levels will rise – coastlines will be flooded forcing mass migrations inland. Freshwater aquifers will suffer from saltwater intrusion, once habitable zones will become uninhabitable.

  Because of increased average global temperatures, the tropical rain belt will have widened considerably and the subtropical dry zones will have pushed pole-ward, crawling deep into regions such as the American Southwest and southern Australia, which will be increasingly susceptible to prolonged and intense droughts.

  A report by the Intergovernmental Panel on Climate Change (IPCC) concluded that climate change will amplify extreme heat, heavy precipitation, and the highest wind speeds of tropical storms. Extreme weather events are going to happen with increasing frequency, the climate for the area you live in is, if it hasn’t started already, going to change. We are all watching and experiencing these events and changes in real time because changes that use to take tens and tens of thousands of years are now happening in decades.

  Conclusion

  We humans have been changing the world around us for tens of thousands of years. It’s pretty much what we do, we shape and we change the existing environment through design and then indifference to the results of our actions. One of the most basic, fundamental problems (other than the rapid depletion of our fresh water resources) we’ve created for ourselves is the impact of human activities on the land we need to cultivate for our very survival.

  Our exploding population, our accelerating demand for the world’s treasures (it’s natural resources) our ‘who cares’ attitude towards pollution and habitat destruction are all increasing what were once tolerable pressures towards, and sometimes already beyond, the breaking point in ecosystems all over the world.

  Are Norman and Ester right? Does population growth march lockstep into the future with technological advances keeping food production on the increase?

  Were they correct in their Malthusian pessimism?

  I don’t think so, but they might have been thinking about feeding you a diet of algae, jellyfish, and tofu. Bon appetite.

  Are food, fresh water and climate change on your radar screen?

  If not, maybe they should be.

  *  *  *

  Mish Comments

  The comments and concerns of Rick Mills are well thought out and well presented.

  In regards to Mills’ post I do not know what will happen, and since he ends with a slew of questions, he doesn’t pretend to either.

  That said, Mills asks the right questions thereby providing ample room for discussion.

  

  

• The Toronto Housing Market Is About To Collapse By This Measure

  With the collapse of Home Capital Group focusing the world's attention on the Canadian real estate market, nowhere is the subprime debt time bomb more likely to go off than Toronto, which as we recently noted "has gone nuts."

  Even Bank of Canada Governor Stephen Poloz (who declined to comment on questions about Home Capital Group and whether he’s worried about contagion), noted that Toronto is out control tonight while answering questions following a speech in Mexico City…

  "pretty sure recent gains in Toronto home prices were not sustainable and that the city’s housing market had elements of speculation"

   

  "Financial stability is part of the Bank of Canada’s monetary policy decision making, but the central bank’s primary mission is inflation targeting,… it would be odd to use interest rates to target home prices in just one city."

  Perhaps Mr. Poloz… But, as we noted previously, it doesn’t take a genius to figure out that this will end in tears.  Even the big Canadian banks are fretting. “Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,” Bank of Montreal Chief Economist Doug Porter warned clients. But the bubble’s deflation would push the city into a fiscal and financial sinkhole

  

   

  Jason Mercer, TREB’s Director of Market Analysis, explained the basic supply and demand problem:

  “Annual rates of price growth continued to accelerate in March as growth in sales outstripped growth in listings,” he said.

   

  “A substantial period of months in which listings growth is greater than sales growth will be required to bring the GTA housing market back into balance.”

  And that is exactly what Capital Economics is pointing out is occurring – in a very accelerated manner… as listings flood the market and an extreme lack of affordability means homes remains unattainable to all but the oligarchs seeking safe-haven for their 'hard'-hidden gains, prices will have to adjust rather rapidly.

  

  Additionall, Mercer told policy makers to tread carefully: “As policy makers seek to achieve this balance, it is important that an evidence-based approach is followed,” he said. This is a gravy train, and it must be allowed to speed on until the last cent has been extracted.

  What we don’t know yet is when it will end in tears, and whose tears it will end with. But we already know: When it does end in tears, real estate organizations will first be denying it, and then they’ll be clamoring for a bailout of their stakeholders – so it will end in the tears of others.

  

  

• "Chicago Is A War Zone": Police Suicide Rate Surges To 60% Above The National Average

  During his early days on the force, 30-year-old, rookie Chicago police officer, Scott Tracz, was described by colleagues as an “upbeat” cop who had always dreamed of becoming a police officer to help people in his city.  That is, until he sat in a black sports car outside his girlfriend’s suburban house late last year, put his gun to his head and took his own life.  Per Reuters:

  Tracz had long dreamed of becoming a police officer to help others. But working in the violence-stricken Chicago Lawn district, he came face to face with the city’s violent crime. The area accounted for 58 of the city’s more than 760 murders last year, as well as 228 shootings.

   

  “He would say, ‘You can never imagine what the human race is capable of doing,’ then he would just put his head down,” said his cousin Maciaszek, 46.

  

   

  Unfortunately, stories just like the one of Scott Tracz are becoming all too common on the Chicago police force as officers deal with the psychological side effects of having to go to work every single day in Chicago’s “war zone.”

  “Chicago is a war zone,” said Alexa James, the executive director of the National Alliance on Mental Illness-Chicago. “They (officers) are seeing the worst day of everybody’s life every day.”

   

  “Suicide is killing officers, alcohol is killing officers, at a far greater rate than ambushes, but there is not the same sense of urgency around this issue,” said Christy Lopez, a former Justice Department official who led the Chicago federal probe.

   

  Chicago police’s suicide rate was 29.4 per 100,000 department members between 2013 and 2015, the report said, citing police union figures. The department disagreed in the report, putting the rate at 22.7 suicides per 100,000 members. Both estimates were higher than the national average of 18.1 law enforcement suicides per 100,000.

   

  As we’ve noted many times in the past, Chicago’s homicide rate in 2016 soared to levels not seen since the mid-90s when gang wars plagued the streets of cities all around the nation (charts via HeyJackAss!).

  

   

  And, things aren’t getting any better so far in 2017…

  

   

  …particularly in the city’s South and West side neighborhoods.

  

   

  To add insult to injury, because of Chicago’s onerous gun laws that permanently prohibit anyone who has been involuntarily committed for in-patient mental health treatment from carrying a gun, a requirement for cops, the folks working for the Chicago PD generally refuse mental health services out of fear of losing their job.

  Some officers believe that seeking counseling will result in the loss of their Firearm Owner Identification Card, a requirement to carry a firearm under state law, according to current and former officers, as well as health officials. That view is mistaken, say Justice Department officials.

   

  Still, “If someone thinks I have talked to EAP they think I’m unstable, so I’m not going to call,” said one veteran officer, who asked not to be identified.

   

  Chicago Police Superintendent Eddie Johnson said in February the department’s past approach to mental health was wrong. In a report issued in March, the department said it would review mental wellness support services.

   

  “Law enforcement historically has been seen as a very macho profession,” Johnson said at a public forum about police reform. “To say you needed help was seen as a sign of weakness and we were wrong for looking at it that way, we were simply wrong.”

  But hey, at least the Obama administration sought to help Chicago Police officers by dropping a DOJ study, one week prior to departing the White House, effectively labeling their department as nothing more than a bunch of racist, hate-mongering bullies who routinely resort to the use of “deadly force” in violation of the Fourth Amendment of the Constitution.

  

  

• ALERT: Euro impending collapse, but don't worry – FX is simple

  Forex is the most simple market in the world.  As we explain in our book Splitting Pennies – Forex is the underpinning of the world’s financial system.  Although it is also the least understood market, there’s nothing ‘sophistocated’ about FX.  Take a dollar, exchange it for a euro.  The rate changes – exchange it back.  Simple!  Trading money.

  There is no ‘2 day settlement’ in Forex, a custodian, there’s no Reg D, no Reg NMS – there’s no HFT front running your orders, there’s no ‘order types’ – there’s no exchange rules (because there’s no exchange).  Actually, when you strip away the complexities of most markets like securities, bonds, real estate, commodities, FX is many times over the most simple market.  

  Understandably, the securities market is the most widely promoted to investors because of the potential for making high returns from participating in corporate ownership (and thus ownership of profits).  But securities are a derivative.  Investors don’t really own the companies – they own the shares.  And actually to be technical, they don’t own the shares too – they are controlled by a huge custodian DTCC.  The securities, bond, and futures markets are the core of modern capitalism.  But they aren’t a necessity, they are an abstration and thus – have complex rules.  Or to say differently – the banking system needs the real economy – the real economy doesn’t need the banking system.

  How do these abstract markets drive inflation?  Here’s how.  QE doesn’t directly go into the economy.  However, by keeping interest rates low, both in real terms and buy the Fed’s various asset purchase programs – it means money has never been cheaper.  With cheap money, it’s easy for i-banks to borrow at zero or near zero rates, invest in any index at 2x or 4x leverage and get their 20% – 40% per year with virtually no risk (that is, no seen risk – there is huge tail risk that one day the market will collapse, which it will for sure, like the big bubble that it is.)  

  The ‘stock markets’ have become so intertwined with the real economy, they have made themselves a necessity.  Like a virus that has taken over a host, now it would be practically impossible to kill the market without affecting the overall economy.  All of this has become so complicated, with so many involved parties – it has become a giant spider web.

  On the topic of the Fed and their direct stock market alleged manipulation, consider the following.  The Fed is owned by the member banks.  The Fed gives it’s QE to the member banks, almost all of which are now publicly traded companies.  Here’s where the paper trail begins for the ‘conspiracy crowd’ about the Fed being owned by nefarious 13 families:  Public disclosure rules mean that anyone can lookup what’s going on at Bank of America (BAC).  Hiding significant information at public companies is very difficult, and becoming more and more difficult with the digitization of records, communications, and basically all aspects of business, which by the way is all ‘doubled’ and recorded on a network level by ATT (T) another public company – and stored in an NSA database.  America Inc. is technically a corporation and the states such as South Carolina are more like countries (hence the name ‘states’) – although you can’t buy and sell shares of America Inc. you sort of can, it’s called immigration – citizens of USA are sort of like shareholders.  And there’s a short side too, record numbers of US Citizens are giving up their citizenship.  So, does the Fed manipulate the stock market?  It’s not a fair question, because Fed ownership and operations are completely intertwined with the stock market.  During the time when the Fed was created, America was just passing the wildcat banking era, where there were thousands of private banks.  Do not confuse ‘private banking’ with a ‘privately owned bank’ – private banking is discreet services for rich people who may want to hide their assets or not let others know how rich they are.  Privately owned banks are nearly non-existant in the USA today, for a number of reasons – mostly caused by generational wealth transfer and generally a trend towards the institutionalization of assets.  What does that mean?  It means that 100 years ago, things were in YOUR name, if you were JP Morgan or Andrew Carnegie.  Today, it’s all in tax havens, the Carnegie foundation, trust funds, and almost nothing is in YOUR name.  That includes banks, which are mostly publicly traded and thus, publicly owned.  The individual has become obsolete.  

  So all these tendencies, make the market so complicated it’s even confusing to describe.  

  All this drama created by Nixon is really in the eye of the beholder – this idea of ‘economic collapse’ is a fantasy promulgated by religious types in armaggedon style packaging, as if the Earth will explode and burn in a big singularity event.  The reality is that ‘economic collapse’ is happening every day, simply that only some of us notice it.  

  Forex simply guages the tides as they ebb and flow, EUR/USD rate changes, but not really that much.  Brexit gave us a 9% move which is huge for FX but not really statistically significant in the grand scheme of things.

  Take a look at EUR/GBP for last 10 years:

  

  This is a monthly chart.  You can see why FX is not interesting for the general public.  But it takes a lot less time to understand FX than the stock markets.  FX is simple.

  As we head into a potential complete meltdown of the Euro, and tomorrow’s NFP, we’re heading into an event that may change the face of FX forever.

  Dear Trader, With the upcoming second round of the French Presidential Election this weekend, we require that your account balance plus any open profit or loss covers at least 3% of the total notional exposure across all EUR crosses and EUR Equity Index CFDs by 4pm (UK time) Friday, 5th May 2017. Where the cover is lower than 3%, we may reduce your positions to increase the cover on your account before the market close. Exit polls will be released prior to the market open on Sunday, 7th May 2017 and there is increased risk of wide spreads and large price gaps on the market open and through the night. Please ensure you are comfortable with the exposure on your open positions leading into the market close on Friday, 5th May 2017. If you have any queries, please do not hesitate to contact Client Services by calling +44 20 3192 XXXX or emailing XXXXXX. FX and CFDs are leveraged products that can result in losses exceeding your deposit. They are not suitable for everyone so please ensure you fully understand the risks involved. Kind regards LMAX Exchange Client Services Team

  To get a primer on what this FX is all about and how it’s really more simple than any other market – checkout Splitting Pennies – Understanding Forex.

  

• Italian Prime Minister Secretly Meets With George Soros In Rome Amid Migrant Transport Scandal

  Submitted by Gefira

  In the past few weeks, the transport of migrants from the African shores has become a case of national importance for Italy, and is now under investigation from the prosecutor of Catania, who recently testified to the Defence Committee of the Italian Senate and will meet soon with the Superior Council of the Magistrates.

  Harsh criticism of the activities of the NGOs has come from opposition parties Forza Italia, Lega Nord and even Movimento 5 Stelle, normally more neutral on immigration issues, while Prime Minister Gentiloni has opted to let the judicial system run its course.

  Yet, a new element will further exacerbate the situation; George Soros, a billionaire who is incredibly active politically on both sides of the Atlantic, met in secrecy with Prime Minister Gentiloni, less than a week after the latter had commented on the NGOs activities. The meeting was not listed on the website of the Italian government as official and its timing is at the very least suspicious.

  George Soros had penned multiple arguments in favour of immigration, suggesting that Europe should welcome “at least one million refugees a year” and that the EU should create EU-bonds to support attendant expenses.

  He’s no stranger to NGOs either: one of them, MOAS (Migrant Offshore Aid Station), facing the harshest criticism , received half a million dollars from Avaaz, another NGO, co-founded by MoveOn, an online community, receiving donations from none other than George Soros himself.

  Save The Children, another NGO involved in the Mediterranean migrant shipping, lists among its partners Open Society Foundation, George Soros’s primary NGO. Finally, even, Médicins Sans Frontiéres is listed among the partners of Open Society and the Soros network.

  Soros had already been named by Lega Nord leader Salvini as the secret financier behind the NGOs and his well-timed arrival is bound to create further controversy.
  No information has been leaked so far about the content of the meeting between Soros and Gentiloni.

  Is the cat out of the bag?

  

  

• Macron Document Leaker Releases New Images, Promises More Information

  Via Disobedient Media

  The anonymous source of documents alleging Emmanuel Macron’s involvement with an operating agreement for a Limited Liability Company (LLC) in the Caribbean island of Nevis returned to release several high quality images of the purported documents along with promises to identify account locations and the extent of the assets Macron is supposedly hiding from regulatory authorities.

  The images, released anonymously less than an hour ago on online messageboard 4chan, are higher resolutions of alleged documents leaked yesterday which claimed to show that Emmanuel Macron had entered into an operating agreement for a Limited Liability Company (LLC) in the Caribbean island of Nevis, and that the company may have had a business relationship with a bank which has been previously involved in tax evasion cases in the Cayman Islands. The anonymously released PDF files purported to show corporate records of a company named La Providence LLC apparently created by Mr. Macron in Nevis, a noted offshore tax haven.

  The new images are of the second document, a fax between La Providence Ltd. and First Caribbean International Bank, as well as the first page and signature from the purported operating agreement.

  

  Screenshot of image showing the alleged Macron signature on the operating agreement

  The leaker revealed that Macron’s assets were not located in the Bahamas as was been reported by some media outlets, but in the Cayman Islands, another known hotspot for tax evasion. They further stated that they were taking measures to conceal their identity because they are located in the European Union and did not wish to be arrested. The leaker also explained that they were one of a small group of individuals working online with a source in the Cayman Islands to expose the leaked information. They claimed that they were in possession of SWIFTNet logs dating back for several months, and would soon not only know where Mr. Macron’s alleged accounts are located but also the “extent of the money he is hiding from [France’s] government.”

  Macron has strenuously denied the authenticity of the leaks, telling France Inter radio “I have never had accounts in any tax havens whatsoever, firstly because it is not in my nature and secondly because I have always wanted to return to the public domain.” His team has further alleged that the news was being disseminated by an “obviously Russian” network, without providing any proof of this contention. French prosecutors described the leak as “a suspected attempt to tar presidential candidate Emmanuel Macron” and have opened a probe into the origin of the leaks after Mr. Macron filed a complaint.

  

  

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• The Death Of Facts

  Authored by Douglas Murray via The Gatestone Institute,

  • Needless to say, none of this is true. Nowhere has Heather Mac Donald suggested that black people or any other type of person has "no right to exist". The accusation is levelled without evidence. But as with all anti-free-speech activists today, the line is blurred not merely between actual words and violence, but between wholly imagined words and violence.

  Every week in America brings another spate of defeats for freedom of speech. This past week it was Ann Coulter's turn (yet again) to be banned from speaking at Berkeley for what the university authorities purport to be "health and safety" reasons — meaning the health and safety of the speaker.

  Each time this happens, there are similar responses. Those who broadly agree with the views of the speaker complain about the loss of one of the fundamental rights which the Founding Fathers bestowed on the American people. Those who may be on the same political side but find the speaker somewhat distasteful find a way to be slightly muted or silent. Those who disagree with the speaker's views applaud the banning as an appropriate response to apparently imminent incitement.

  The problem throughout all of this is that the reasons why people should be supporting freedom of speech (to correct themselves where they are in error, and strengthen their arguments where they are not) are actually becoming lost in America.

  No greater demonstration of this muddle exists than a letter put together by a group of students at Claremont McKenna College earlier this month to protest the appearance on their campus of a speaker with whom they disagreed.

  Heather Mac Donald is a conservative author, journalist and fellow of the Manhattan Institute in New York. Her work has appeared in some of the world's most prestigious journals. Of course, none of that was enough to deter students at Claremont from libelling her as much as possible in advance of her speech and then preventing her speech from taking place. At Claremont McKenna College, where Mac Donald was due to speak about her recent book, The War on Cops, angry students surrounded the building, screamed obscene words and banged on the windows. Mac Donald ended up giving the speech to a mainly empty room via live video-streaming and then fleeing the university under the protection of campus security. As recent events, such as the hospitalisation of a professor at Charles Murray's recent speech at Middlebury College have shown, intimidation and violence are clearly regarded by today's North American students as legitimate means to stop people from speaking.

  Heather Mac Donald, speaking at Claremont McKenna College on April 6, addressed a mainly empty room via live video-streaming, as angry student protesters surrounded the building. She then fled the college under the protection of campus security. (Image source: Claremont McKenna College video screenshot)

  The reason, if any, may well come down to the possibility that facts have become diminished in importance on American campuses and have gradually lost out to the greater imperative of short-term political "narratives" and victories that come from thuggish intimidation. A letter sent to university authorities at Claremont ahead of Mac Donald's speech is one of the most important recent documents chronicling the descent of this most crucial American value, freedom of speech.

  The letter to university authorities from "We, few of the Black students here at Pomona College and the Claremont Colleges" loses no time in libelling their subject:

  "If engaged, Heather Mac Donald would not be debating on mere difference of opinion, but the right of Black people to exist. Heather Mac Donald is a fascist, a white supremacist, a warhawk, a transphobe, a queerphobe, a classist, and ignorant of interlocking systems of domination that produce the lethal conditions under which oppressed peoples are forced to live."

  Needless to say, none of this is true. Nowhere has Mac Donald suggested that black people or any other type of person has "no right to exist". The accusation is levelled without evidence. But as with all anti-free-speech activists today, the line is blurred not merely between actual words and violence, but between wholly imagined words and violence. Thus the students write:

  "Advocating for white supremacy and giving white supremacists platforms wherefrom their toxic and deadly illogic may be disseminated is condoning violence against Black people. Heather Mac Donald does not have the right to an audience at the Athenaeum, a private venue wherefrom she received compensation. Dictating and condemning non-respectable forms of protest while parroting the phrase that 'protest has a celebrated' place on campus is contradictory at best and anti-Black at worst."

  Amid the semi-literacy, linguistic ostentation and intellectual dishonesty, it is hard to single out what is worst about this letter. But, against stiff competition, what is worst is that the whole thing is built on one massive misunderstanding which might also be described as a false premise.

  "Historically, white supremacy has venerated the idea of objectivity, and wielded a dichotomy of 'subjectivity vs. objectivity' as a means of silencing oppressed peoples. The idea that there is a single truth–'the Truth'–is a construct of the Euro-West that is deeply rooted in the Enlightenment, which was a movement that also described Black and Brown people as both subhuman and impervious to pain. This construction is a myth and white supremacy, imperialism, colonization, capitalism, and the United States of America are all of its progeny. The idea that the truth is an entity for which we must search, in matters that endanger our abilities to exist in open spaces, is an attempt to silence oppressed peoples."

  As the English philosopher Roger Scruton wrote in his book Modern Philosophy, "A writer who says that there are no truths, or that all truth is 'merely relative,' is asking you not to believe him. So don't."

  Of course, the students at Claremont go farther than this. They make claims about people that are lies, yet state them as though they are categorical truths. And then they declare that "truth" is a "construct" — and one that they do not believe in. Their letter makes that plain, without them having any need to state the fact. But that they have stated it is convenient; it saves any honest observer from having to expend much energy considering the validity of their other claims. Anyone studying the decline of education in privileged Western democracies in the early 21^st century will find documents like this immensely rewarding as historical testaments, and also a warning of what can happen when the thinking goes wrong.

  

  

• THe KiM SCReaM…

  

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

• The Real Reasons Why Trump Has Flipped On His Campaign Promises

  Authored by Brandon Smith via PersonalLiberty.com,

  Back in December of 2016 I wrote an article titled Trump Is Exactly Where The Elites Want Him, which I think was very difficult for a large part of the liberty movement to read and accept. In that article I outlined the future of the Trump presidency; a future dominated by Washington insiders, Goldman Sachs internationalists and Neo-Con warmongers. Trump, at the very onset of his administration, broke one of his most important campaign promises — to “drain the swamp.” Instead, he filled his cabinet with all of the same swamp creatures he originally attacked; the same swamp creatures Hillary Clinton was notorious for serving.

  I also warned in numerous articles that because of this initial broken promise, conservatives should not expect that Trump would fulfill most if any of his original plans. In the best case scenario, Trump is surrounded by enemies dictating policy from every corner and corridor of the White House.

  This article, of course, triggered quite a bit of wrath from hardcore Trump supporters. And, of course, time has so far proven I was right yet again.

  The only argument at this point in defense of Trump is that it is still very early in his first year and that no president should be expected to accomplish much in just a few months. Okay, I’ll entertain that notion, but let’s be realistic here and look at the current circumstances.

  As I write this, Congress is on the brink of forging a spending bill which essentially removes all backing for Trump’s original projects, including the southern border wall. Now, given, the bill only provides funding for government until the end of September, but we have witnessed very little resistance from the Trump administration so far. Are we about to see the Republicans roll over yet again in the name of avoiding a government shutdown? I would say yes, for now.

  This is one area where Trump could light a firestorm. By forcing a government shutdown, a real fight for conservative national projects and spending cuts could take place. Yet, we are still struggling with the broken monstrosity of Obamacare, we have yet to see any plan for defunding Planned Parenthood, the border wall looks to be a distant dream and military spending is slated to increase by $54 billion. At this point Trump supporters are left wondering where their limited government pit bull negotiator disappeared to?

  On the foreign front, Trump has been backing off of his threats against NAFTA. In an interview with The Wall Street Journal, Trump explained his decision by saying that he is “a nationalist and a globalist.” Yikes.

  Trump has now also refused to label China a currency manipulator, which was an action many originally thought he would pursue. This decision, in my view, is likely in preparation for a strike on North Korea; a war no one asked for and which America cannot possibly afford at this time. China’s move to step back from its protective stance with North Korea supports my longstanding argument that Eastern nations are completely tied to globalist geopolitics; meaning, they do what they are told. If China remains hands-off, a conflict with North Korea is nearly a certainty.

  This kind of saber rattling would be contrary to Trump’s position on Iraq during his campaign, which was, to summarize his many remarks, a quagmire, a mess of a war that made little sense and gained America nothing. If Iraq was a mess, then what will North Korea be with its far better armed military and more ideologically dedicated soldiers? A war in North Korea would take twice as much time and capital to complete, but maybe that is the point…

  So, the question is, why has Trump flipped so completely and so quickly on is political positions since November of last year? I believe there are at least two identifiable reasons.

  First, it is important to note that Trump was placed in office as a means to scapegoat all conservatives and the principles of sovereignty and limited government for the disasters that will inevitably follow. This is the premise that I used to successfully predict Trump’s election win, and it is the premise that I used to successfully predict Trump’s behavior and policy shifts up to this point. Trump is in office for one reason — to destroy the name of conservatism for all time.

  That said, Trump’s support from conservatives has not been as blind and faithful as the globalists might have hoped. We remain rather critical, and thankfully, ever watchful. We are not a zombie mob that can be easily exploited by some fearless leader on a white horse; unlike Obama’s sycophantic army of liberal followers, we still retain our principles.

  This does not necessarily save us from being scapegoated by internationalist propaganda in the years to come. I have heard many argue that Trump’s sudden flip-flop negates the idea that Trump is a conservative scapegoat because “he is not acting like a conservative.” These people are oblivious to human psychology.

  The fact is, Trump ran on a conservative nationalist platform, and his rhetoric continues to fuel his nationalist image, even if his actions do not. The globalists will paint him as a conservative and the majority of people around the world will continue to accept this narrative because rhetoric is often more powerful in people’s minds than tangible results. Liberals in particular will never let go of the idea that Trump is a conservative because they desperately long for vindication that conservative principles are “evil.” Every mistake Trump makes, though not conservative at all in nature, will be blamed on conservatism and nationalism as a whole. From what I have seen so far, the only people that are rationally critical of Trump as a conservative are actual liberty minded conservatives.

  Yes, we despise the crazed cultural Marxists of the social justice cult, and we are rightly concerned about the liberal population’s shift towards full bore communism. Plus, we do not like Islamic extremism and won’t tolerate it within our borders. But we also are not too keen on the idea of being puppets for a fake conservative government, either.

  This is one reason I believe Trump has suddenly flipped; the globalist scheme to co-opt the liberty movement and constitutional conservatives has failed. There is no point in Trump continuing to play his role as a stalwart of sovereignty. We have not been won over in a way that makes us easy to manipulate, which means we might not support certain globalist initiatives like martial law in the wake of a crisis, a national federalized ID card in the name of immigration control, regime changes in Syria or North Korea, etc. We may even organize in opposition to such measures.

  This leads to the next reason why I believe Trump has so swiftly reversed his positions: Perhaps he and his establishment handlers no longer need to maintain the conservative sovereignty facade because a full spectrum crisis is about to take place; a crisis so consuming that the public will be completely distracted while the elites push their agenda forward and blame conservatives at the same time.

  The move against North Korea may be part of this event. By itself, North Korea would be a very cumbersome regional war that could bankrupt the U.S. The level of determination to increase tensions with North Korea is truly astounding. I have not seen such senseless rhetoric from the White House since the Iraq War.

  However, I continue to believe that a greater crisis is brewing that is economic and global in nature. With numerous financial bubbles artificially inflated over at least eight years of central bank stimulus, the question is not “if” but when the system will enter the final stages of its ongoing collapse.

  The behavior of the Trump administration may be nothing more than poor timing or poor planning on the part of the globalist establishment. Perhaps they just didn’t play this part of the long game in an expert manner. But, I tend towards caution rather than naive hope and unicorns.

  The record setting flip-flop by Trump should not be taken lightly or simply treated as aimless schizophrenia on the part of the White House.  While the Obama administration flipped on numerous campaign promises, they did so subtly while maintaining their lies in a strategic way for two full terms. This is not what is happening today. Trump’s dramatic change, in my view, should be taken as a signal that a much greater game is afoot, with far higher stakes. It should also be treated as a sign that if a crisis is on the verge of being engineered, then it will be happening rather soon, perhaps before 2017 is over.

  There will be ongoing arguments as to whether the Trump White House has been hijacked or if it was a controlled element all along. I lean towards the position that it was controlled all along. I have seen little to no resistance on the part of Trump against the establishment, only rhetoric. And, as I have said so many times, rhetoric is meaningless, only actions matter.

  It is exceedingly positive in a way that Trump’s reversal has been so fast and so complete. It shows that conservatives and liberty champions have not been subsumed into the so called “alt-right” (a made up term designed to pigeonhole and demonize all true conservatives); that the elites failed miserably in their plans to co-opt us. That said, for every success there are consequences. It may be that our refusal to “buy into” the Trump momentum and cast off our skepticism has caused the establishment to adjust their timetable. And, when the elites do not get what they want, they tend to fall back on their tried and true tool kit of violence and disaster.

  

  

• Is The World's Largest Bitcoin Exchange Headed For A Mt. Gox-Style Collapse

  Could Bitfinex, the world’s largest, Hong-Kong based cryptocurrency exchange, be headed for a Mt. Gox-style collapse? It’s starting to look that way.

  When Mt. Gox first halted customer withdrawals in February 2014, it waited more than two weeks to admit the truth to its customers: that hackers had stolen more than $450 million of their assets, leaving the exchange bankrupt and them holding the bag.  That hack effectively crippled the entire digital currency ecosystem, ushering in a two-year bear market that at one point carried the bitcoin price below $200, from what was then a record high north of $1,200 reached in November 2013.

  So when another exchange engages in similarly shady behavior – withholding critical information about customer funds, or failing to produce audited financials despite promising to do so – it should prompt crypto traders to ask themselves why, with dozens, if not hundreds, of cryptocurrency exchanges operating around the world, they’re choosing to do business with this one.

  That’s the question that customers of Bitfinex should be asking nearly two weeks after the exchange, once one of the world’s largest, first revealed that it had been cut off from sending outbound dollar-denominated wires to its customers.

  Of course, halting customer withdrawals isn’t uncommon in the cryptocurrency world: All three of China’s largest exchanges suspended customer withdrawals in February. And last year, Kraken, one of the biggest U.S.-based exchanges, suspended withdrawals temporarily because of a glitch in its trading software.  But this freeze is particularly troubling because, like Mt. Gox, Bitfinex inexplicably decided to wait before informing customers of a critical problem. It also has implications that stretch beyond the bitcoin market, to another cryptotoken called tether that was launched by Bitfinex back in January 2015, and has since been dogged by allegations that it’s a scam.

  The halt is already costing Bitfinex’s customers money. On Tuesday, bitcoins were going for $1,547 on Bitfinex’s platform, a premium of more than $100 over most of the other popular exchanges. Investors, apparently, feel that eating a 7%-8% loss is preferable to leaving their assets in Bitfinex’s care any longer.

  

  Reddit users reported that wire transfers requested as early as March 9 were cancelled, and that the exchange offered only vague excuses as to why. It took the exchange until April 13, after it had filed a lawsuit against Wells Fargo & Co., whose correspondent banking division had effectively shut Bitfinex out of the global financial system, that the exchange disclosed the problem to its customers.

  And while Bitfinex has repeatedly said it would make things right – it has promised to either establish a new banking relationship and to allow customers access to other fiat currencies  – only a handful of customers have been able to get their assets out of the exchange.

  As part of the freeze, Bitfinex has established a moratorium on cashing in tether tokens held by its customers. These tokens were created by Bitfinex in 2015 to allow customers to exchange an asset that’s pegged to the dollar at a one-to-one ratio, allowing them to avoid costly wire transfers that must be processed through the banking system.

  But the withdrawal freeze has put pressure on the tether market; for only the second time since they were introduced, investors are selling these tokens at a discount. The price of a single token has been languishing below the $1 level for more than a week.

  

  More troubling still is that Bitfinex has so far refused to provide an audit of the fiat funds that allegedly backstop the tether float, despite promising that it would be “fully transparent and audited to demonstrate 100% reserves at all times” when it first launched the token.

  This has lead some to speculate that the exchange could be commingling tether funds with other customer assets.

  While evidence of this could cause irreparable damage to Bitfinex’s reputation, leading to a wave of withdrawals that could add further strain to its already thinning bitcoin reserves, as Twitter user @Bitfinexed points out, it’s not technically a violation of the tether terms of service.

  Here’s an excerpt: “There is no contractual right or other right or legal claim against us to redeem or exchange your tethers for money. We do not guarantee any right of redemption or exchange of tethers by us for money. There is no guarantee against losses when you buy, trade, or redeem tethers.”

  Given the preponderance of scams in the cryptocurrency market, investors who haven’t already, should probably take what’s left of their money and run, if they can of course.

  

  

• "Anti-Fascist" Militia Training Video Shows Leftists Are Preparing For Armed Confrontation

  Authored by Mac Slavo via SHTFplan.com,

  

  Following the Berkeley protests last month, where numerous Anti-Fa(scist) activists complained of getting a beatdown after they attempted to intimidate peacefully assembling Trump supporters, we learned that the left-leaning organizations are taking their organization efforts to the next level. Among other things, they have called for more combat training, better equipment, and even guns in an effort to scare those who disagree with their message of forced tolerance, equal rights and inclusion.

  Today, we get a better look at what that means, with somewhat hilarious results.

  The Conservative Tribune explains:

  Poorly-regulated militias, it seems, are good for only one thing: laughs.

   

  In case you missed our previous reportage on the Phoenix John Brown Gun Club, it’s a “militia” made up of Arizona liberals who conspicuously rediscovered the Second Amendment right about the time that Donald Trump had become the clear front-runner for the Republican nomination.

   

  …

   

  This militia, in case you hadn’t noticed, is named after abolitionist John Brown. For those of you who have gone through Common Core American history and are unfamiliar with the name, he was an insurrectionist who was hanged after an armed rebellion against the Democrat-backed slave owners of the antebellum South. Say what you will about his methods, he was a man of conviction and bravery.

   

  These idiots, meanwhile, are nothing more than cowardly defenders of the modern incarnation of the party Brown died fighting. They back an ideology that has no respect for gun rights, but they’re willing to compromise that in order to intimidate Americans into giving up their freedom of speech and assembly.

   

  Perhaps it’s unsurprising that individuals with such negligible convictions and morals also have such negligible skill at handling a firearm. These dress-up militia members couldn’t hit the side of a Chick-fil-A from 20 feet, though I fear that may not be for lack of trying.

   

  Full report: Lib Militia Releases “Range Day” Footage… And It’s a Complete Joke

  Watch the full video:

  As noted near the end of the video, the Phoenix John Brown Gun Club is:

  Working to stem the tide of reactionary recruitment within white working class communities, fight white supremacy, and build community defense.

  Curiously and all of a sudden, the left supports the Second Amendment.

  With lyrics like “we’re getting organized… you fascists are bound to lose” playing in the background, it doesn’t take that much of a stretch of the imagination to realize that what these people are training for is armed conflict.

  Just last week a family friendly Rose Parade was cancelled in Portland, Oregon after AntiFa groups threatened to violently attack parade goers, including children who would have attended.

  Make no mistake: These people want war. They want blood. And anyone who doesn’t subscribe to their special brand of crazy will be a target.

  

  

• Obamacare Implosion: Last Major Healthcare Provider Pulls Out Of Iowa Leaving No Options In 2018

  For the past several months we’ve observed in complete amazement as Democrats have repeatedly hailed the ‘great accomplishments’ of Obamacare while the system was literally, and quite tangibly, collapsing in epic fashion all around them.  The ability to blindly and shamelessly support a partisan cause irrestpective of overwhelming facts proving the ineffectiveness of that cause is truly a talent reserved only for politicians, on both sides of the aisle.

  The latest evidence of Obamacare’s implosion comes from its stunning collapse in the state of Iowa in just a matter of a few weeks.  Early last month, 2 of Iowa’s 3 remaining healthcare providers, Aetna and Wellmark, announced they would not participate in the state’s exchange in 2018.  Per Bloomberg:

  “Earlier today we informed the appropriate federal and state regulators that Aetna will not participate in the Iowa individual public exchange for 2018 as a result of financial risk and an uncertain outlook for the marketplace,” Aetna spokesman T.J. Crawford said in an email. “We are still evaluating Aetna’s 2018 individual product presence in our remaining states.”

  On Monday, Wellmark Inc. said it planned to give up on the Iowa Obamacare market in 2018. Wellmark is one of the state’s largest insurers.

  

   

  Those decisions left the overwhelming majority of Iowans with just one insurance option for 2018, Medica.  That is, until today when Medica also announced that, “due to instability in the market,” they too would likely have to pull out of Iowa in 2018.  Per the Des Moines Register:

  Medica, a Minnesota based health insurer, released a statement suggesting it was close to following two larger carriers in deciding not to sell such policies in Iowa for 2018, due to instability in the market.

   

  “Without swift action by the state or Congress to provide stability to Iowa’s individual insurance market, Medica will not be able to serve the citizens of Iowa in the manner and breadth that we do today. We are examining the potential of limited offerings, but our ability to stay in the Iowa insurance market in any capacity is in question at this point,” the company’s statement said.

  Medica’s exit is expected to leave roughly 70,000 Iowans without a single option to purchase a personal health insurance policy in 2018, even if they wanted to.  Unless a replacement carrier is found, the change also means moderate-income Iowans in most counties will not be able to use Affordable Care Act subsidies to help pay premiums for private insurance.

  Medica is a relatively small carrier, which faced a daunting prospect in Iowa after Aetna and Wellmark announced they would no longer sell individual health insurance plans there. The two large carriers announced they had lost tens of millions of dollars in Iowa, largely because they covered too many older Iowans with chronic health problems and not enough young, healthy people. If Medica remains in the market, it would face the prospect of shouldering all of that risk by itself.

  Of course, all of this should come as little surprise to our readers as we’ve been writing for years that the entire Obamacare system was on the “verge of collapse” as premiums were soaring, risk pools were deteriorating and insurers were pulling out of exchanges all around the country leaving many Americans with just a single ‘option’ for health insurance (see “Obamacare On “Verge Of Collapse” As Premiums Set To Soar Again In 2017“).  In fact, the following charts provide a stunning illustration of that collapse (charts per Bloomberg):

  

   

  Unfortunately, things are likely to get even worse in 2018, even if Trump leaves subsidies in place.  Humana has already announced they won’t offer marketplace plans in 2018, a move which will result in 1,000s of people in Tennessee not having a single health insurance option starting 1/1/18.

  

   

  Meanwhile, Anthem has also signaled they may exit all exchanges next year as well which would leave another 250,000 consumers with no health insurance options.

  

   

  But sure, Republicans are trying to ‘ruin’ healthcare in America.

  

  

• Chinese Commodities Crash Limit-Down As Wealth Management Product Issuance Collapses

  It seems Kyle Bass' warning was extremely timely. The deleveraging of China's $4 trillion shadow banking system just accelerated massively as Bank Wealth Product Issuance crashes 15% month-over-month. With stocks and bonds already plunging, commodities joined the ugliness tonight with Dalian Iron Ore limit down (8%) at the open (not helped by tumbling auto demand).

  

  As Bloomberg reports, China April Bank Wealth Product Issuance Falls 15% M/m

  Number of wealth management products issued by banks fell to 10,038 from 11,823 in March, 21st Century Business Herald reports, citing citing Wind Info data. The decline came after regulator tightens regulation on macro-prudential assessment and interbank business. Among top ten banks by wealth product sales, nine sold less than previous month (with the Agricultural Bank coillapsing 48%) only Minsheng Bank issued more.

  And it's weighing on the economy al;ready as China PMIs are all plunging (with Caixin Services tonight) – Activity in China’s services sector grew at its weakest rate in 11 months, a survey sponsored by Caixin showed on Thursday, in a further sign the world’s second-largest economy is losing some steam. The Caixin China General Services Business Activity Index fell for the fourth straight month to 51.5 in April, down from 52.2 in March and the lowest since May 2016’s 51.2, according to the poll compiled by international information and data analytics provider IHS Markit.

  As Bass concluded so ominously:

  "What you see when the liquidity dries up is people start going down… and this is the beginning of the Chinese credit crisis."

  And that's what we are seeing…

  Commodities…

  

  

  Are following Bonds…

  

   

  And stocks…

  

   

  And as PIMCO noted earlier, the China credit impulse is now running in reverse…

   

  

  The question now is not if China slows, but rather how fast. Equally important perhaps is the extent to which commodity prices will correct lower, especially in light of the current enthusiasm about the potential strength of the global growth cycle. The impending slowdown in China could be compounded by ongoing government efforts to rein in shadow bank credit; the cost of policy mistakes rises once the credit impulse goes into reverse.

  

  

• Kyle Bass Warns "All Hell Is About To Break Loose" In China

  China's credit system expanded "too recklessly and too quickly," and "it's beginning to unravel," warns Hayman Capital's Kyle Bass.

  Crucially, Bass notes that ballooning assets in Chinese wealth management products are another sign of a looming credit crisis in the nation.

  "Some of the longer-term assets aren't doing very well," Bass said on Bloomberg TV from the annual Milken Institute Global Conference in Beverly Hills, California. "As soon as liabilities have problems – meaning the depositors decide to not roll their holdings – all hell breaks loose."

  The wealth management products, or WMPs, have swelled to $4 trillion in assets in the last few years, he said., on a $34 trillion banking system…

  "think about this – in the US, our asset-liability mismatch at the peak of our subprime greatness was around 2%! … China's mismatch is more than 10% of the system."

  Must Watch simplification of the next stage of the credit cycle in China…

  Timing the drop is hard, Bass notes, reminding Bloomberg's Erik Schatzker that "in the US, the first bumps in the road hit in early 2007, and we didn't start to really accelerate until mid 2008… even a large unraveling takes a while."

  Bass has been sounding the alarm for some time that debt-burdened Chinese banks need to be restructured…

  "What you see when the liquidity dries up is people start going down… and this is the beginning of the Chinese credit crisis."

  And judging by the collapse in both Chinese stocks and bonds, the deleveraging is accelerating…

  

   

  And liquidity is getting desperate again…

  

   

  

  

• Pondering The Real Perils Of Risk Parity Portfolios

  Authored by Kevin Muir via The Macro Tourist blog,

  The other day, fabled hedge fund manager Paul Tudor Jones made headlines when he issued a bold warning to Janet Yellen & Co. (from Bloomberg):

  The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years. That measure – the value of the stock market relative to the size of the economy – should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him.

   

  Jones is voicing what many hedge fund and other money managers are privately warning investors: Stocks are trading at unsustainable levels. A few traders are more explicit, predicting a sizable market tumble by the end of the year.

  Nothing really new there. A bunch of smart hedgies have recently been ringing the alarm bell. What was interesting is how Jones thought a crash would manifest itself (from Dealbreaker):

  While the billionaire didn’t say when a market turn might come, or what the magnitude of the fall might be, he did pinpoint a likely culprit. Just as portfolio insurance caused the 1987 rout, he says, the new danger zone is the half-trillion dollars in risk parity funds. These funds aim to systematically spread risk equally across different asset classes by putting more money in lower volatility securities and less in those whose prices move more dramatically. Because risk-parity funds have been scooping up equities of late as volatility hit historic lows, some market participants, Jones included, believe they’ll be forced to dump them quickly in a stock tumble, exacerbating any decline. Risk parity,” Jones told the Goldman audience, “will be the hammer on the downside.”

  

  Whoa! That’s a pretty big indictment of risk parity. Them’ sounds like fight’ng words.

  Of course the risk parity folks rushed to refute Jones’ forecast, assuring us there was no way risk parity would cause the next crash (from Bloomberg):

  For AQR Capital Management LLC, a giant in the risk parity field, the concerns are overblown, with any selling forced by the strategy having an “utterly trivial” impact on the $23 trillion U.S. equity market.

   

  “There are scenarios in which risk parity funds sell equities, but the possible magnitude of that is very small,” said Michael Mendelson, a risk-parity portfolio manager at AQR.“Some reports have grossly exaggerated the potential impact.”

  Far be it from me to get in between these hedge fund heavyweights, but I respectfully suspect they might both be wrong.

  For those who are not aware, risk parity was the brainchild of Ray Dalio’s firm Bridgewater. I am oversimplifying it, but at its heart, risk parity is based on the idea that assets have varying volatlities, so when constructing a portfolio, one needs to adjust the position size to account for this. The easiest example is the difference between equities and bonds. Stocks, by their nature, are much more volatile than bonds. Dalio surmised it was not fair to look at the long run returns of stocks and compare them to bonds. Stocks’ returns would be higher, but there would be all sorts of violent ups and downs. If you leveraged up the bond position to have equal volatility, then bond returns all of a sudden became much more attractive. Not only that, but during times of stress, bonds and stocks have negative correlations, making the use of leverage far less dangerous, and overall, reducing the volatility of the portfolio. This was the essence of Bridgewater’s All-Weather portfolio that has ultimately become the largest hedge fund in the world.

  Paul Jones’ risk parity crash thesis is based on the idea that, because the positions are volatility weighted, risk parity managers buy more in times of low volatility (which almost always coincides with a rising market), and then are forced to sell when volatility increases (which usually accompanies a decline). It sounds suspiciously like the dreaded portfolio insurance strategy that contributed to the ‘87 crash (which Jones accurately forecasted and secured his place in the hedgie hall of fame).

  OK, here goes my argument on why Jones might be wrong, not about risk parity causing a market dislocation, but instead the market in which risk parity will cause problems.

  Risk parity was created in 1996. Since then, interest rates have only gone one way – down.

  

  Not only that, but Dalio founded BridgeWater in 1975. Although the first few years were ugly for the bond market, since then, Dalio has grown his firm in the shadow of the greatest bull market in bonds that America has ever experienced.

  

  Here’s what the total return profile looks like for the broad bond index during that period.

  

  It’s not difficult to spot why Dalio’s strategy of adding a leveraged bond position to his portfolio has been so successful.

  Yeah, yeah, I know, there is a lot more to risk parity than simply levering up the bond portion of a balanced portfolio. But what I worry about is the fact that the strategy does not recommend increasing equities exposure because of its volatile nature, but instead advocates for a leveraged fixed income component because of its non-volatile tendency. Risk parity portfolios don’t have significantly more equities than most balanced funds, but they have a lot more bonds.

  And then ask yourself, what have Central Banks being doing since the Great Financial Crisis? Buying bonds (they are also buying some equities, but the vast majority of the purchases have been fixed income). What does that do to volatility? It crushes it. And what does lower fixed income volatility mean for risk parity? They buy more.

  So although I understand Jones’ argument that increases in equity volatility will cause risk parity funds to lighten up their stock exposure, I am much more worried about increases in bond volatility. Don’t forget, risk parity portfolios use the most leverage in the non-volatile asset classes (like bonds). The genius in risk parity was not increasing leverage in the volatile stock portion, but by cranking exposure to the non-volatile fixed income portion (which also happened to be negatively correlated to risky assets).

  Risk parity managers are obviously not the biggest players in the bond market. So maybe all the arguments that risk parity guys make defending their minor influence on the stock market can be equally transferred to the bond side.

  But I worry fixed income managers are already suffering from an inability to imagine rates ever heading higher. The boat is lopsided with four generations of portfolio managers who have never seen a real bear market in bonds. While many, like Paul Jones, are positioned to capitalize on lower stock prices, there are precious few who are set up short in the bond market. Forty year bull markets have a funny way of discouraging naysayers.

  If we ever get a bear market in bonds, the risk parity guys will make it dramatically worse. It’s always the leveraged positions that cause major market dislocations, and I just don’t see the big excesses being in stocks.

  Time will tell if risk parity was truly as revolutionary as many claim, or if it was just a way to justify levering up the greatest bond bull market of our lifetime.

  *  *  *

  P.S. While researching this piece, I stumbled on some pictures of Paul Jones and his wife. I know that most believe that ShowTime’s drama Billions’ main character, Bobby Axelrod, is based on Steve Cohen (even though Bill Ackman desperately wants it to be about him – sorry Bill, you’re nowhere near as cool as Axe), but I can’t help but wonder if everyone is wrong. This season we learned that Axelrod started trading in the commodity pits. Well, that sounds suspiciously similar to another legendary hedge fund manager. Paul Jones was a cotton trader before moving upstairs. If you look, Bobby and Laura resemble a younger Mr. and Mrs. Jones… And by the way, I know Axe would absolutely detest risk parity.

  

  

  

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• Will The Second Civil War Turn Violent?

  Authored by Dennis Prager via TruthRevolt.org,

  "If college presidents, mayors and police chiefs won’t stop left-wing mobs, other Americans will."

  

  In a recent column, I made the case that Americans are fighting the Second Civil War. The deep chasm that has opened up between the left – not liberals, the left – and the rest of the country is so wide and so unbridgeable that there is no other way to describe what is happening. But I noted that at least thus far, unlike the First Civil War, this war is not violent.

  Unfortunately, there is now reason to believe that violence is coming. In fact, it’s already here. But as of now, it’s only coming from one direction.

  Left-wing thugs engage in violence and threats of violence with utter impunity. They shut down speakers at colleges; block highways, bridges and airport terminals; take over college buildings and offices; occupy state capitals; and terrorize individuals at their homes.

  In order to understand why more violence may be coming, it is essential to understand that left-wing mobs are almost never stopped, arrested or punished. Colleges do nothing to stop them, and civil authorities do nothing to stop them on campuses or anywhere else. Police are reduced to spectators as they watch left-wing gangs loot stores, smash business and car windows, and even take over state capitals (as in Madison, Wisconsin).

  It’s beginning to dawn on many Americans that mayors, police chiefs and college presidents have no interest in stopping this violence. Left-wing officials sympathize with the lawbreakers, and the police, who rarely sympathize with thugs of any ideology, are ordered to do nothing by emasculated police chiefs.

  Consequently, given the abdication by all these authorities of their role to protect the public, some members of the public will inevitably decide that they will protect themselves and others.

  This ability of the left to get away with violence is one of the gravest threats to American society in its modern history. Since the Civil War, I can think of only two comparable eruptions of mob violence that authorities allowed. One was when white mobs lynched blacks. The other was the rioting by blacks, such as the Los Angeles riots 25 years ago, and the recent riots in Ferguson, Missouri, and Baltimore, Maryland.

  Today, authorities in what we once proudly proclaimed the “Land of the Free and Home of the Brave” are intimidated to the point of paralysis.

  And exactly what do they fear? Not violence — they have made peace with left-wing violence. What they fear is the left-wing media. If the Black Lives Matter movement is forcefully prevented from blocking tens of thousands of cars from entering or leaving San Francisco, the police and local authorities will be labeled racist by black leaders, a smear that will then be echoed by The New York Times and rest of the left-wing media.

  Likewise, if a college president requests enough police to come to a college campus so that a Heather Mac Donald, a Charles Murray or an Ann Coulter can deliver a lecture, some of the student-gangsters engaged in violence might be injured — and that college president will then be pilloried by the mainstream media.

  Furthermore, left-wing violence doesn’t only succeed where it takes place. It succeeds where nothing happens. The left can now shut down places and events just by threatening violence. This is what happened last week in Portland, Oregon. One leftist called in a threat to the 82nd Avenue of Roses Parade, saying that the Republican Party contingent marching in the parade would be beaten up. The business leaders organizing the parade canceled the whole event for the first time in its 10-year history. If they’d had any reason to believe that the police would have adequately protected the marchers in left-wing Portland, one assumes (hopes?) that they would not have canceled the parade.

  An email sent to parade organizers perfectly summed up the left’s dominance of America through violence. It said, “You have seen how much power we have downtown and that the police cannot stop us from shutting down roads so please consider your decision wisely.”

  Meanwhile, the press lies about alleged white supremacists in President Trump’s administration and an alleged massive surge in anti-Semitism in order to do what the left has done since Lenin: blame others while it alone organizes violence.

  So, here’s a prediction: If college presidents, mayors and police chiefs won’t stop left-wing mobs, other Americans will. I hope this doesn’t happen, because electing conservative Republicans and not donating money to colleges will be more effective. But it is almost inevitable.

  Then the left-wing media — the mainstream media — will enter hysteria mode with reports that “right-wing fascists” are violently attacking America.

  And that’s when mayors and college presidents will finally order in the police.

  

  

• President Trump Responds To Hillary Clinton's Blame-mongering

  Following Hillary Clinton's earlier proclamation that she "was on the way to winning before Jim Comey's letter and 'Russian' Wikileaks… scared off late voters," it appears President Trump has his own perspective on how he won the greatest upset election in US history…

  FBI Director Comey was the best thing that ever happened to Hillary Clinton in that he gave her a free pass for many bad deeds! The phony…

  — Donald J. Trump (@realDonaldTrump) May 3, 2017

  //platform.twitter.com/widgets.js

  …Trump/Russia story was an excuse used by the Democrats as justification for losing the election. Perhaps Trump just ran a great campaign?

  — Donald J. Trump (@realDonaldTrump) May 3, 2017

  //platform.twitter.com/widgets.js

  "FBI Director Comey was the best thing that ever happened to Hillary Clinton in that he gave her a free pass for many bad deeds! The phony… …Trump/Russia story was an excuse used by the Democrats as justification for losing the election. Perhaps Trump just ran a great campaign?"

  

  We leave it to Hillary to conclude this brief blamescaping with an admission she made later in today's interview…

  "I take absolute personal responsibility. I was the candidate. I was the person on the ballot."

  Indeed you were.

  

  

• Why There Will Never Be A Political Solution To America's Problems

  Authored by Michael Snyder via The Economic Collapse blog,

  Why do things never seem to change no matter who we send to Washington? 

  

  It seems like for decades many of us have been trying to change the direction of this country by engaging in the political process.  But no matter how hard we try, the downward spiral of our nation just continues to accelerate.  Just look at this latest spending deal.  Even though the American people gave the Republicans control of the White House, the Senate and the House of Representatives, this deal very closely resembles “an Obama administration-era budget”.  It increases spending even though we have already been adding more than a trillion dollars a year to the national debt, it specifically forbids the building of a border wall, it fully funds Planned Parenthood, and there are dozens of other concessions to the Democrats in it.  As I previously warned, these “negotiations” were a political rout of epic proportions.

  Perhaps many of us were being highly unrealistic when we expected that Donald Trump could change things.  Because fixing America is going to take a lot more than getting the right number of “red” or “blue” politicians to Washington.  Rather, the truth is that the real problem lies in our hearts, and the corrupt politicians that currently represent us are simply a reflection of who we have become as a nation.

  The generations of people that founded this nation and established it as the greatest republic that the world had ever seen had far different values than most Americans do today.

  So until there is a dramatic shift in how most of us see the world, it is quite likely that not much in Washington will change.

  Throughout the campaign, Donald Trump spoke boldly about “draining the swamp”, but this spending deal very much reflects the swamp’s priorities.  The Washington Post has published a list of eight ways that “Trump got rolled in his first budget negotiation”, and in this case the Post is quite correct…

  1. There are explicit restrictions to block the border wall.

   

  2. Non-defense domestic spending will go up, despite the Trump team’s insistence he wouldn’t let that happen.

   

  3. Barack Obama’s cancer moonshot is generously funded.

   

  4. Trump fought to cut the Environmental Protection Agency by a third. The final deal trims its budget by just 1 percent, with no staff cuts.

   

  5. He didn’t defund Planned Parenthood.

   

  6. The president got less than half as much for the military as he said was necessary.

   

  7. Democrats say they forced Republicans to withdraw more than 160 riders.

   

  8. To keep negotiations moving, the White House already agreed last week to continue paying Obamacare subsidies.

  In essence, the Democrats got virtually everything that they wanted, and the Republicans got next to nothing.

  Trump and the Republicans are promising that they will fight harder “next time”, but we have already heard that empty promise from Republicans year after year going all the way back to 2011.

  Among many other conservative pundits, author Daniel Horowitz is absolutely blasting these “weak-kneed Republicans”…

  Now, with control of all three branches and a president who sold himself in the primaries as the antithesis of weak-kneed Republicans who don’t know the first thing about tough negotiations, we are in the exact same position. Last night, President Trump signaled that, after not even fighting on refugee resettlement and Planned Parenthood, he would cave on the final budget issue – the funding of the border fence. But fear not, he’ll resume his demand … the next time!

   

  This degree of capitulation, with control of all three branches, is impressing even me … and I had low expectations of this president and this party. They have managed to get run over by a parked car. It’s truly breathtaking to contrast the performance of Democrats in the spring of 2009 with what Republicans have done today with all three branches. At this time in 2009, Democrats passed the bailouts, the stimulus, the first round of financial regulations, an equal pay bill, SCHIP expansion, and laid the groundwork for other, bigger proposals, such as cap and trade and Obamacare. Then they got everything they wanted in the March 2009 omnibus bill, and a number of GOP senators voted for it. We, on the other hand, are left with nothing.

  And even the mainstream media is admitting that the Democrats made out like bandits in this deal.

  Just check out the following quotes…

  • “Overall, the compromise resembles more of an Obama administration-era budget than a Trump one,” Bloomberg reports.
  • The Associated Press calls it “a lowest-common-denominator measure that won’t look too much different than the deal that could have been struck on Obama’s watch last year.”
  • Reuters: “While Republicans control the House, Senate and White House, Democrats scored … significant victories in the deal.”
  • The Los Angeles Times describes the agreement as “something of an embarrassment to the White House”: “Trump engineered the fiscal standoff shortly after he was elected, insisting late last year that Congress should fund the government for only a few months so he could put his stamp on federal spending as the new president.”

  If Trump can’t get his priorities funded now, do you think that the Democrats will somehow become more agreeable after he has spent a year or two in the White House?

  Of course not.

  If there ever was going to be a border wall, it was going to happen now.

  If Planned Parenthood was ever going to be defunded, it was going to happen now.

  The next “big battle” is going to be over a bill to repeal and replace Obamacare, but the truth is that “Trumpcare” is going to end up looking very much like Obamacare.

  Instead of repealing it, the Republicans are trying to “fix” Obamacare, and that is kind of like going to the dump and trying to “fix” a big, steaming pile of garbage.

  But like I explained earlier, we should not expect things to move in a positive direction in Washington D.C. until the values of those representing us change.

  At this point, there are only a few dozen members of the House and a handful of members of the Senate that even give lip service to the values of our founders.

  And until our values change, we are not going to send representatives to Washington that share the values of our founders.

  Sadly, most Americans know very little about the history of early America.  I would encourage everyone to look into why our founders came to this country in the first place, what they believed was most important in life, and how they viewed the world.

  If we ever want to “make America great again”, we need to return to those values.  Otherwise, we are just blowing a lot of hot air.

  

  

• China Issues Unprecedented Warning To Citizens In North Korea: Return Home

  In an unprecedented move, the Chinese Embassy in North Korea has advised Korean-Chinese residents to return home amid concern that the North's military provocations may trigger a U.S. attack on the North.

  

  The Korea Times reports that the embassy began sending the message on Apr. 20, five days before the North celebrated the 85th anniversary of the Korean People's Army with a show of military power, according to Radio Free Asia (a U.S.-based station specializes in North Korea).

  The station cited a Korean-Chinese living in the North's capital, who said he left for China late last month after the embassy contacted him. He said he has been visiting China every two to three months but, after being told he should "stay in China for a while," left North Korea a month early.

  "The embassy has never given such a warning. I was worried and left the country in a hurry," said the man, whose name was withheld.

  But he said that most Korean-Chinese residents in Pyongyang were ignoring the message.

  The city's "peaceful" atmosphere, despite the global crisis due to the state's threats involving missiles and nuclear tests, might have kept them unaware of the situation, he added.

  The embassy's warning indicates that China is worried that the saber-rattling North and U.S. moves to destabilize the Kim Jong-un regime might affect Chinese citizens abroad.

  

  

• "It's A Public Health Crisis" – Is Pittsburgh The Next Flint?

  We have noted that Flint, Michigan is not alone with its 'poisonous water' problems, it appears Pittsburgh is near a tipping point as WSJ reports, according to EPA data, a total of seven U.S. water systems, which each serve more than 100,000 people, had lead concentrations above the federal action level of 15 parts per billion in recent months. "It's a public health crisis," warns one city official.

  A Reuters investigation late last year uncovered nearly 3,000 different communities across the U.S. with lead levels higher than those found in Flint, Michigan, which has been the center of an ongoing water contamination crisis since 2014.

  click image for link to interactive map…

  

  Last week, Michigan’s legislature voted to send $100 million in federal funds to Flint for lead-pipe replacements and other infrastructure upgrades. The funds were approved by the Obama administration in December.

  And now, as The Wall Street Journal reports, Pittsburgh, which exceeded the lead limit last July for the first time, is drawing renewed attention to the problems besetting crumbling and heavily indebted water systems nationwide. Pittsburgh’s troubled water authority has nearly $1 billion in debt and has been plagued with allegations of overbilling and water-main breaks. It began testing for lead in the late 1990s.

  The Pittsburgh Water and Sewer Authority serves about two-thirds of the city, or about 250,000 people. It treats water from the Allegheny River and distributes it through 1,000 miles of pipes to 81,000 homes.

  The authority estimates that a quarter of those homes have lead pipes.

  The lead levels in Pittsburgh’s drinking water, based on sampling from a limited number of homes, reached 22 parts per billion last July and fell to 18 ppb in December. The next test results will be released in June. Exceeding the 15 ppb federal action level triggers increased regulatory oversight, and cities are typically required to begin replacing lead pipes and launch a public awareness campaign about the hazards of lead in water.

  “It’s a public health crisis,” said Ms. Wagner, a Democrat who has criticized the mayor for not responding quickly enough when higher lead levels were found last year.

  

  Marc Edwards, a Virginia Tech researcher who helped uncover lead contamination in Flint, said Pittsburgh’s lead woes are representative of issues facing many older cities. “No one in Pittsburgh with a lead pipe should be drinking the water without a filter,” he said.

  He criticized Pittsburgh officials for replacing only the public portion of lead service lines. In the short term, the disruption typically causes more lead to be released from the remaining lead pipe, he said.

  “We have old pipes, and some of those pipes are lead,” said Mayor Bill Peduto, a Democrat. “What took many decades to happen with the system itself will take at least a decade to solve.”

  

  

• What Nassim Taleb Can Teach Us

  Authored by Jeff Deist via The Mises Institute,

  Nassim Nicholas Taleb does not suffer fools gladly. Author of several books including The Black Swan and Antifragile, Taleb is known for his incendiary personality almost as much as his brilliant work in probability theory. Readers of his very active Medium page will experience a formidable mind with no patience for trendy groupthink, a mind that takes special pleasure in lambasting elites with no “skin in the game.”

  “Skin in the game” is a central (and welcome) tenet of Taleb’s worldview: that we are increasingly ruled by an intellectual, political, economic, and cultural elite that does not bear the consequences of the decisions it makes on our (unwitting) behalf. In this sense Taleb is thoroughly populist, and in fact he correctly identified trends behind the Crash of ’08, Brexit, and Trump’s election. He understands that globalism is not liberalism, that identity and culture matter, and most of all that elites don’t understand how randomness and uncertainty threaten the inevitability of a global order. 

  Thus Taleb argues the intelligentsia are not only haughty when they plan our future, they are also clueless: fragility abounds, and threatens to crash the Party of Davos. Hubris results from unearned wealth and prominence, coupled with a blindness to the Black Swans lying in wait.   

  Born in Lebanon to a prominent family, educated at the University of Paris and Wharton, Taleb was poised to become part of the cognitive aristocracy he mocks. But he was never one of them. His hard-nosed persona, enhanced by a dedication to rigorous deadlift workouts, is quickly evident in his notorious interviews and very public Twitter brawls. His willingness to delve into history and and religion sets him apart from the neoliberals who hope to wish them both away. Taleb writes for the intelligent everyman, and this blue-collar approach also extends to his description of himself as a “private intellectual, not a public one.”

  Austro-libertarians will find much to admire in his brilliant takedowns of the “pseudo-experts” he identifies in academia, journalism, politics, and science. But Taleb is no Austrian. While he holds a decidedly jaundiced view of most economists—calling for the Nobel in economics to be cancelled— he does not denounce economics as a field of study per se. Nor does he claim heterodox or reactionary inclinations:

  “I am as orthodox neoclassical economist as they make them, not a fringe heterodox or something. I just do not like unreliable models that use some math like regression and miss a layer of stochasticity, and get wrong results, and I hate sloppy mechanistic reliance on bad statistical methods. I do not like models that fragilize. I do not like models that work on someone's computer but not in reality. This is standard economics.”

  While he is not averse to using mathematics and statistics in economics, Austrians share his perspective that both are tools for economists. Statistical models are mostly bunk that provide no value to economic forecasters or investors, despite the highly paid Ivy League quants who produce them. In fact, models often have harmful effect of creating a false sense of relative certainty where none exists. It's refreshing to see Taleb make this claim so effectively from outside the Austrian paradigm of praxeology. But if his view of economics is mainline, his tone is Rothbard meets Hayek:

  I'm in favour of religion as a tamer of arrogance. For a Greek Orthodox, the idea of God as creator outside the human is not God in God's terms. My God isn't the God of George Bush.

   

  We know from chaos theory that even if you had a perfect model of the world, you'd need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don't have anything like that.

  Taleb does see a role for government, and supports consumer protection laws against predatory lending as one example. But he also purportedly supported Ron Paul in the 2012 presidential election, and has indeed mentioned Hayek as an influence regarding the dispersal of knowledge in society. He’s also applied special venom to several worthy targets in professional economics, including Paul Krugman, Joseph Stiglitz, and Paul Samuelson. Taleb labels as “Stiglitz Syndrome” the process whereby public intellectuals suffer no financial or career consequences for being spectacularly wrong in their predictions.

  This is especially galling to a man who correctly called (and in fact became wealthy as a result of) economic crises in 1987 and 2008. In both instances, Taleb had “skin in the game” as a market trader. His own money and reputation were on the line, unlike the court economists in the New York Times.

  For an excellent (albeit indirect) analysis of how Austrians and libertarians can advance their cause from a minority position, Taleb’s recent article The Most Intolerant Wins: The Dictatorship of the Small Minority is a must-read. He reminds us that a small minority with courage—the most important form of skin in the game— can prevail over the slumbering masses. And he also reminds us that courageous individual actors, not 51% mass movements, drive real changes in every society:

  The entire growth of society, whether economic or moral, comes from a small number of people. So we close this chapter with a remark about the role of skin in the game in the condition of society. Society doesn’t evolve by consensus, voting, majority, committees, verbose meeting, academic conferences, and polling; only a few people suffice to disproportionately move the needle. All one needs is an asymmetric rule somewhere. And asymmetry is present in about everything.

  Economics is lost, mired in a quicksand of predictive models that fail to predict and macro-analysis that fails to analyze.

  Democratic politics is lost, ruined by bad actors with perverse incentives to burn capital rather than accumulate it.

  And academia is lost, still stuck in a centuries-old model run by hopelessly sheltered PhDs.

  Taleb gets all of this, and does an admirable job of explaining it. Austro-libertarians would be wise to see him as a valuable ally and voice in the ongoing fight against states, central banks, and planners of all stripes.

  

  

• Who Is Interested In A Conflict In North Korea?

  Authored by Federico Pieraccini via The Strategic Culture Foundation,

  In case of war with North Korea, the US would face a military challenge as perhaps never before in the last seventy years. This is why a conventional deterrence is actually more important than the nuclear one if we break down a realistic war scenario. The downside is that the DPRK is fully aware that if it responded to a US attack, even in a limited way and only on military targets, it would be flagged as an aggressor, paving the way for a larger foreign intervention.

  

  To answer this question, it is necessary to examine what would entail a US attack on North Korea. Suffice it to say that as the neocon Senator John McCain has admitted, the US would be unable to defend Seoul (as well as its US bases nearby) in the first 24 to 48 hours of a conflict. A city of 20 million inhabitants, together with military bases containing thousands of soldiers, would suffer untold loss of life.

  The United States would certainly suffer huge losses, revealing weaknesses that could be exploited in future conflicts, a consideration that would need to be considered if contemplating shooting down DPRK missiles.

  China would certainly not be happy to risk a humanitarian catastrophe on its own border, not to mention being eventually forced to intervene to defend its ally (there is a treaty between the two countries). Japan and South Korea would be hit hard, being clearly exposed to a North Korean retaliatory attack; so they clearly do not want a war with Pyongyang. The great truth about the Korean Peninsula is that despite the fact that every country flexes its muscles and seems ready to act, no one wants this eventuality, as no one could win this war, and everyone would suffer devastating effects both economically and militarily. This is not to mention the popular uproar that would arise from so many civilian deaths, let alone were there to be a nuclear escalation.

  In the Korean peninsula, we are faced with a great strategic game in which the DPRK becomes more difficult to attack with each passing day, thanks to its conventional forces rather than its nuclear power. This is something that western planners tend to ignore in order to avoid accentuating the power of the DPRK. Unfortunately for them, this is something that is far too well known to US soldiers, and especially South Koreans, which is why a real attack on the DPRK is absolutely out of the question for Seoul.

  Finally, there is a worrying aspect to consider for the DPRK’s opponents, namely the alleged ways in which the DPRK preserves and launches its conventional forces. In the parade on April 15, a large availability of solid-fuel mobile platforms was displayed. This creates two great advantages: the first being the ability to launch a missile within a short space of time, thereby minimizing the risk of detection during such things as refueling operations; and the second, of course, being the ability to launch a missile and then quickly change position (shoot and scoot). With mobile launchers, it is impossible to track and hit all such systems in a preemptive attack. This is without factoring into the equation the North Korean submarines that are said to be able to launch medium- and short-range SLBMs with conventional or nuclear warheads.

  An indication of the confusion that prevails amongst military planners regarding North Korea can easily be seen with the story of USS Carl Vinson. Ships with significant attack capabilities, Trump said a few days ago, were sailing towards the DPRK with the intention of inducing Kim to talks through military intimidation. However, the reality was that the carrier group was actually thousands of miles away, continuing to navigate in the opposite direction. Even without this ridiculous situation, US military leverage hardly works with the DPRK for the reasons explained above.

  With this unprecedented gaffe, the United States is at least divided internally on what to do, sending a troublesome message to its allies, leaving them with the following set of questions: Is Trump really in control of the armed forces? Can his words be taken seriously? Is he consistent with his intentions? The first 100 days of the Trump presidency raise these questions, and in difficult scenarios such as the one that obtains in the Korean Peninsula, they take a heavy toll. At the end of the day, in Korea we are faced with a lot of smoke and mirrors, threats and promises. But realistically, no one wants an actual conflict.

  On the contrary, war rhetoric rewards virtually all the actors involved.

  Japan and South Korea aim for more American involvement in the region, but for very different reasons.

  The South Korean elite is in a crisis, Park Geun-hye daughter of the founder of the country having been fined for corruption and the likely new president seeming to have positions on the DPRK and the alliance with the US that are very different from that of his predecessors. The danger the US sees is that a substantial part of the South Korean elite prefers a shift from a strongly anti-DPRK and pro-US policy to a more balanced one, especially with China, South Korea's main partner. The best solution to prevent this change is to raise the level of tension with the DPRK (and, as a consequence, with China), aiming to solidify the US presence in the country (witness the urgent deployment of the THAAD system, which candidate Moon Jae-in seems to oppose).

  The Japanese case is even more explicit, with Abe's nationalist vision aiming for a constitutional revision that does away with the limits placed on Tokyo’s armed forces.

  The US war industry will of course benefit, ready to sell weapons of all kinds to Japan in to reassure its ally over the “North Korean threat”.

  China and Russia start from different assumptions in their relations with the DPRK, but both have enough problems on the world stage to become embroiled in an open crisis involving the DPRK. Obviously, Moscow and Beijing would like a reasonable diplomatic resolution, negotiated by several actors, with the backdrop of talks with the Iranian Islamic Republic over nuclear matters. The latter is a matter, as we have seen, that is difficult to reach between Washington and Pyongyang for lack of mutual trust. In the case of an extended negotiation with other regional and global actors, perhaps Beijing and Moscow could ensure the inviolability of the DPRK’s territory in exchange for disarmament that would lead to a lifting of the sanctions and embargo on Pyongyang.

  This is still a controversial consideration, as Russia and China should provide military aid to the DPRK without Pyongyang having nuclear deterrence. From another point of view, it is the conventional forces of the DPRK that provide real deterrence, so a multi-stakeholder peace proposal is to be considered the second most likely outcome of tensions in the region.

  What will happen next?

  In the first place, a likely outcome is immobility and inaction, coupled with strong statements filled with threats from both the US and its allies, as well as a defiant response from Pyongyang. Personally, I am convinced that Kim would like an acknowledgement of his country’s status as a nuclear power in exchange for a halt in his development of nuclear weapons, thereby standardizing relations with neighbors and with the United States as well as gaining greater independence from China.

  It should not be surprising that Pyongyang also has a more multi-polar vision in its foreign policy, but this relies more on Washington than Beijing. Unfortunately, it is difficult to imagine an immediate resolution of the situation given the commitment of Japan and South Korea to maintaining a hostile climate for the DPRK in the region, calling for American involvement. It is likely that the situation will not degenerate but instead return to normal as tensions in the region progressively subside, without seeing any particular concessions from either side.

  

  

• Feds Send In Reinforcements After Baltimore Mayor Pleads For Help: "Murder Is Out Of Control"

  There have been 108 homicides so far this year in the city of Baltimore.  According to the Baltimore Sun, there were five murders in the city just last weekend alone.

  The only year that Baltimore has ever come close to recording so many murders in just the first 4 months of the year was in 1993 during the height of America’s gang wars that plagued inner cities all across the country.  In that year, some 24 years ago, 110 people were killed through the end of April. The city went on to record 353 homicides that year, the most in its history.  That said, Baltimore has about 110,000 fewer residents now than in 1993, making this year’s murder rate the highest ever, on a per capita basis.

  Meanwhile, if the level of violent crime in Baltimore continues at the same rate as the first four months, for the remainder of the year, the city will blow right through the previous all time record high 353 homicides from 1993.

  

   

  Therefore, it should come as little surprise that just yesterday we noted that Baltimore Mayor Catherine Pugh had publicly requested federal help from the FBI to combat the surging homicide rates in her city.  Per CBS Baltimore:

  “I’m calling on all the assistance we can possibly get because I can’t imagine going into our summer months with our crime rate where it is today, what that’s going to look like by the end of the summer.”

   

  “Murder is out of control.”

   

  “We are looking for all the help that we can get.”

  Now, just one day after a plea for help from a concerned mayor, the ATF has announced plans to send in reinforcements to help fight Baltimore’s surging violent crime…

  On Tuesday, the Bureau of Alcohol, Tobacco, Firearms and Explosives plans to begin using a gun-tracing van in Baltimore to try to quickly solve gun crimes.

   

  Daniel L. Board Jr., the ATF Baltimore Field Division special agent in charge, called the gun-tracing technology and the national database it connects to a “critical piece to solving and preventing gun violence in Baltimore.”

   

  Bond said the van will be “a tremendous asset to Baltimore by supporting a timely and comprehensive collection of firearm-related evidence at crime scenes, which in turn will help us reduce and prevent violent crime.”

   

  The network is used by law enforcement throughout the United States to generate leads in gun-related crimes. The van will be deployed in Baltimore starting this week and will be available throughout portions of the spring and summer, federal officials said.

  …reinforcements which were gratefully received by concerned city officials.

  “We’re grateful to the federal intervention in the city of Baltimore,” Pugh said. “We are looking for all the help we can get. Murder is out of control. There are too many guns on the streets.”

  City Councilman Brandon Scott, chairman of the council’s Public Safety Committee, said he welcomed the federal resources.

   

  “Every little bit helps,” Scott said. “It’s clear we have to do things differently. What we’re doing currently isn’t working. The strategy isn’t working.”

  Ironically, Martin O’Malley, the former Mayor of Baltimore and a Democratic candidate for President in the 2016 election, took to his blog to advocate for cops to take a harsh stand against violent crime with a “zero tolerance” policy. 

  Former mayor and governor Martin O’Malley wrote in a recent blog post that “sadly, my own hometown of Baltimore chose to forget a lot of hard-earned lessons learned about crime reduction.”

   

  O’Malley was known for a data-based policing policy that resulted in high arrest rates. While homicides and other crime declined, the “zero tolerance” policy was blamed in a Department of Justice report for harming the relationship between the police and the community.

  Of course, such advocacy from a democrat is surprising in light of the efforts taken by Obama’s DOJ to intentionally undermine the authority of cops by labeling excessive enforcement actions as inherently ‘racist’ (for example, see: “DOJ Finds Pattern Of “Racial Discrimination” And Unconstitutional Use Of Force By Chicago Police“). 

  

  

• Former Facebook Exec: "They're Lying Through Their Teeth"

  Authored by Antonio Garcia-Martinez (former Facebook product manager), author of Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, originally posted at The Guardian,

  For two years I was charged with turning Facebook data into money, by any legal means. If you browse the internet or buy items in physical stores, and then see ads related to those purchases on Facebook, blame me. I helped create the first versions of that, way back in 2012.

  The ethics of Facebook’s micro-targeted advertising was thrust into the spotlight this week by a report out of Australia. The article, based on a leaked presentation, said that Facebook was able to identify teenagers at their most vulnerable, including when they feel “insecure”, “worthless”, “defeated” and “stressed”.

  Facebook claimed the report was misleading, assuring the public that the company does not “offer tools to target people based on their emotional state”. If the intention of Facebook’s public relations spin is to give the impression that such targeting is not even possible on their platform, I’m here to tell you I believe they’re lying through their teeth.

  Just as Mark Zuckerberg was being disingenuous (to put it mildly) when, in the wake of Donald Trump’s unexpected victory, he expressed doubt that Facebook could have flipped the presidential election.

  Facebook deploys a political advertising sales team, specialized by political party, and charged with convincing deep-pocketed politicians that they do have the kind of influence needed to alter the outcome of elections.

  I was at Facebook in 2012, during the previous presidential race.

  The fact that Facebook could easily throw the election by selectively showing a Get Out the Vote reminder in certain counties of a swing state, for example, was a running joke.

  Converting Facebook data into money is harder than it sounds, mostly because the vast bulk of your user data is worthless. Turns out your blotto-drunk party pics and flirty co-worker messages have no commercial value whatsoever.

  But occasionally, if used very cleverly, with lots of machine-learning iteration and systematic trial-and-error, the canny marketer can find just the right admixture of age, geography, time of day, and music or film tastes that demarcate a demographic winner of an audience. The “clickthrough rate”, to use the advertiser’s parlance, doesn’t lie.

  Without seeing the leaked documents, which were reportedly based around a pitch Facebook made to a bank, it is impossible to know precisely what the platform was offering advertisers. There’s nothing in the trade I know of that targets ads at emotions. But Facebook has and does offer “psychometric”-type targeting, where the goal is to define a subset of the marketing audience that an advertiser thinks is particularly susceptible to their message.

  And knowing the Facebook sales playbook, I cannot imagine the company would have concocted such a pitch about teenage emotions without the final hook: “and this is how you execute this on the Facebook ads platform”. Why else would they be making the pitch?

  The question is not whether this can be done. It is whether Facebook should apply a moral filter to these decisions. Let’s assume Facebook does target ads at depressed teens. My reaction? So what. Sometimes data behaves unethically.

  I’ll illustrate with an anecdote from my Facebook days. Someone on the data science team had cooked up a new tool that recommended Facebook Pages users should like. And what did this tool start spitting out? Every ethnic stereotype you can imagine. We killed the tool when it recommended then president Obama if a user had “liked” rapper Jay Z. While that was a statistical fact – people who liked Jay Z were more likely to like Obama – it was one of the statistical truths Facebook couldn’t be seen espousing.

  I disagreed. Jay Z is a millionaire music tycoon, so what if we associate him with the president? In our current world, there’s a long list of Truths That Cannot Be Stated Publicly, even though there’s plenty of data suggesting their correctness, and this was one of them.

  African Americans living in postal codes with depressed incomes likely do respond disproportionately to ads for usurious “payday” loans.

  Hispanics between the ages of 18 and 25 probably do engage with ads singing the charms and advantages of military service.

  Why should those examples of targeting be viewed as any less ethical than, say, ads selling $100 Lululemon yoga pants targeting thirtysomething women in affluent postal codes like San Francisco’s Marina district?

  The hard reality is that Facebook will never try to limit such use of their data unless the public uproar reaches such a crescendo as to be un-mutable. Which is what happened with Trump and the “fake news” accusation: even the implacable Zuck had to give in and introduce some anti-fake news technology. But they’ll slip that trap as soon as they can. And why shouldn’t they? At least in the case of ads, the data and the clickthrough rates are on their side.

  

  

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• A Chinese Factory Slave Explains Why Manufacturing Jobs Are Never Coming Back To America

  Authored by Mac Slavo via SHTFplan.com,

  

  While we all loved President Trump’s campaign pledge to bring jobs back to America, there are powerful economic forces at work that suggest the shift to cheap labor is pretty much irreversible. Yes, Trump has spoken with the leaders of some of America’s biggest companies and he’s been successful at getting those chief executives to commit to creating or keeping a few thousands jobs here and there, but when you consider that the competing foreign labor force primarily responsible for manufacturing America’s consumer goods numbers in the hundreds of millions of people, the notion that we’re somehow going to see explosive manufacturing growth over the next four or eight years is nothing more than a pipe dream.

  But don’t take it from us. A Chinese factory worker explains exactly why we have absolutely no way to compete with the near slave-like conditions found in foreign factories:

  Zeng walked CNBC through his decision to spend six weeks in a factory working 12 hours shifts Monday through Saturday, mostly during the night, and what he discovered along the way.

   

  “They just gave me the address of the factory and I just went. I just showed up. When I was there I saw people holding luggage waiting in a long line, so I just stood in the line,” Zeng told CNBC in an interview.

   

  “When it was my turn they asked for my ID, asked to see my hand and asked me to recite the English alphabet. I got in after that. It took less than 30 seconds. You don’t have to apply or have any skills.“

   

  …

   

  “The first thing I can think of from a labor perspective is that the wages are unacceptable for American workers. So, in the factories, I was getting paid about 3100 yuan, or $450, per month. I don’t think American workers can accept those kind of wages based on living conditions and prices here,” Zeng said.

  “Even if they relocate factories to the U.S. they’d replace workers with robots,” Zeng said. He said Pegatron already uses robots to apply cameras to iPhones, and to drop batteries into the devices. Robots, Zeng said, are more precise than human workers, and precision is particularly important for those two components.

   

  If President Trump wants iPhones manufactured in the U.S., Apple will need to front the cost to pay the much higher wages required in the U.S., which means that consumers will have to be willing to pay more. Either that, or it will have to rely a lot more on machines, which won’t create jobs, and might end up taking them.

   

  Source: Yahoo News

  For those who are having trouble visualizing the cumulative effect of what Zeng describes, this chart pretty much sums it up and shows how much manufacturing jobs as a percentage of America’s total workforce have declined since the 1960’s:

  

  At first glance you may be thinking that we have no where else to go but up.

  The problem, of course, is that if you do try to shift jobs back to America, and even if you triple the wages from what factory workers are making in China, those taking a monthly paycheck and benefits from the government already make more money for doing nothing than they would assembling mobile phone components for 12 hours a day.

  One recipient of welfare summed it up succinctly in the following shocking interview:

  While workers out there are preaching morality at people like me living on welfare, can you really blame us?

   

  I get to sit home… I get to go visit my friends all day… I even get to smoke weed…

   

  Me and people that I know that are illegal immigrants that don’t contribute to society, we still gonna get paid.

   

  Our check’s gonna come in the mail every month… and it’s gonna be on time… and we get subsidized housing… we even get presents delivered for our kids on Christmas… Why should I work?

   

  Ya’ll get the benefit of saying “oh, look at me, I’m a better person,” but when ya’ll sit at home behind ya’lls I’m a better person… we the ones gettin’ paid!

   

  So can you really blame us?

  There’s always hope, we suppose, that the millennial generation, currently demanding free college and living in their parents’ basements, will rocket America into its next great manufacturing boom.

  But we’re not going to hold our breaths.

  

  

• Dr. Pieczenik Says Counter Revolution Taking Place Inside White House to Silence Alt-Right

  Dr. Steve Pieczenik, the consummate intelligence insider, made a bold claim on the Alex Jones show today, suggesting the National Security Advisor H.R. McMaster and Jared Kushner were behind a counter revolution to silence the alt-right. He cited the outing of General Flynn, the demotion of Stephen Bannon, Gorka and others, as evidence that something was happening inside the White House to silence the movement that got Trump elected.

  Moreover, Dr. Pie warned the U.S. military was ‘out of control’, waging and fomenting wars in five different countries.

  Interestingly, he mentioned how $KBR was in countries that the United States had no interest in for the sole purposes of looting it (I am long KBR).

  Now on the important matter of Jared Kushner.

  Pieczenik said the Kushner family is an ‘incredibly corrupt family’ that cannot be allowed in the White House. Jones said Trump’s sons are ‘total patriots’ and have been leaking information to Mike Cernovich and others.

  “Trump is for real, but he is being pulled by every side. There is an attempt to have a soft coup against the President,’ said Jones.
   
  Pieczenik weighed in, ‘I’ve repeatedly said that Jared has to leave. There’s no question he’s involved in corruption with the Chinese, […] the Israeli family, the Steinmetz, who were already indicted for diamond smuggling,’ further illuminating the point that AG Sessions was ‘fully aware’ that the Kushner’s were corrupt.
   
  Dr. Pie fired a shot across the President’s bow, saying ‘we have the neocons coming back. I am warning the administration, again and again, I did not take the time and the effort and the liberty and the risk that others weren’t willing to do to bring back pathetic neocons like Elliot Abrams or John Bolton or anyone of those morons that you put in there. If Mcmaster doesn’t understand how he came to power, he came to power because Tom Clancy and I gave him money. He came to power because he sat on the boards of other companies.’
   
  He warned against any preemptive strike against N. Korea as being both ‘idiotic and inept.’He described intervention in Syria as being foolhardy, saying ‘putting in artillery and howitzers into Syria when you have no idea who the Al-Waleed’s are. You have no idea how many Christians the Bashar family are protecting, millions of them. And you’re gonna do a regime change because you have some moron named Pompeo, who’s head of the CIA because he was #1 at West Point, but had never been in intelligence? He’s never been overseas, really never understood anything…’
   
  Watch.
  

  Content originally published at iBankCoin.com

  

• Big Brother Is Still Watching You: Don't Fall For The NSA's Latest Ploy

  Authored by John Whitehead via The Rutherford Institute,

  

  “You had to live – did live, from habit that became instinct – in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized.”—George Orwell, 1984

  Supposedly the National Security Administration is going to stop collecting certain internet communications that merely mention a foreign intelligence target.

  Privacy advocates are hailing it as a major victory for Americans whose communications have been caught in the NSA’s dragnet.

  If this is a victory, it’s a hollow victory.

  Here’s why.

  Since its creation in 1952, when President Harry S. Truman issued a secret executive order establishing the NSA as the hub of the government’s foreign intelligence activities, the agency has been covertly spying on Americans, listening in on their phone calls, reading their mail, and monitoring their communications.

  For instance, under Project SHAMROCK, the NSA spied on telegrams to and from the U.S., as well as the correspondence of American citizens. Moreover, as the Saturday Evening Post reports, “Under Project MINARET, the NSA monitored the communications of civil rights leaders and opponents of the Vietnam War, including targets such as Martin Luther King, Jr., Mohammed Ali, Jane Fonda, and two active U.S. Senators. The NSA had launched this program in 1967 to monitor suspected terrorists and drug traffickers, but successive presidents used it to track all manner of political dissidents.”

  Not even the passage of the Foreign Intelligence Surveillance Act and the creation of the FISA Court, which was supposed to oversee and correct how intelligence information is collected and collated, managed to curtail the NSA’s illegal activities.

  In the wake of the 9/11 attacks, George W. Bush secretly authorized the NSA to conduct warrantless surveillance on Americans’ phone calls and emails.

  Nothing changed under Barack Obama. In fact, the violations worsened, with the NSA authorized to secretly collect internet and telephone data on millions of Americans, as well as on foreign governments.

  It was only after whistleblower Edward Snowden’s revelations in 2013 that the American people fully understood the extent to which they had been betrayed once again.

  What this brief history makes clear is that the NSA cannot be reformed.

  This is an agency whose very existence – unaccountable and lacking any degree of transparency – flies in the face of the Constitution.

  Despite the fact that its data snooping has been shown to be ineffective at detecting, let alone stopping, any actual terror attacks, the NSA has continued to operate largely in secret, carrying out warrantless mass surveillance on hundreds of millions of Americans’ phone calls, emails, text messages and the like, beyond the scrutiny of most of Congress and the taxpayers who are forced to fund its multi-billion dollar secret black ops budget.

  As long as the government is allowed to make a mockery of the law—be it the Constitution, the FISA law, or any other law intended to limit its reach and curtail its activities—and is permitted to operate behind closed doors, relaying on secret courts, secret budgets and secret interpretations of the laws of the land, there will be no reform.

  Presidents, politicians, and court rulings have come and gone over the course of the NSA’s 60-year history, but none of them have done much to put an end to the NSA’s “technotyranny.”

  The beast has outgrown its chains. It will not be restrained.

  Moreover, even if the NSA could be reformed, the problem of government surveillance goes far beyond the criminal activities of this one agency.

  In fact, long before the NSA became the agency we loved to hate, the Justice Department, the FBI, and the Drug Enforcement Administration were carrying out their own secret mass surveillance on an unsuspecting populace. Just about every branch of the government—from the Postal Service to the Treasury Department and every agency in between—now has its own surveillance sector, authorized to spy on the American people.

  Then there are the fusion and counterterrorism centers that gather all of the data from the smaller government spies—the police, public health officials, transportation, etc.—and make it accessible for all those in power. And of course that doesn’t even begin to touch on the complicity of the corporate sector, which buys and sells us from cradle to grave, until we have no more data left to mine.

  Consider that on any given day, the average American going about his daily business will be monitored, surveilled, spied on and tracked in more than 20 different ways, by both government and corporate eyes and ears. A byproduct of this new age in which we live, whether you’re walking through a store, driving your car, checking email, or talking to friends and family on the phone, you can be sure that some government agency, whether the NSA or some other entity, is listening in and tracking your behavior.

  Corporate trackers monitor your purchases, web browsing, Facebook posts and other activities taking place in the cyber sphere. For example, every time you use a loyalty card at the grocery store or elsewhere, your purchases are being monitored, mined for data, and sold to the highest bidder. Every time you use your credit or debit card, or your digital “wallet,” your transactions are being tracked. Uber’s ride service app knows where you are even when you are not actively using the service. Even store mannequins are being used to monitor and identify shoppers with facial recognition software. 

  Major cities are being transformed into “Smart Cities” filled with sensors in everything from pavement to lamp posts, and all of that data is being linked together to monitor the day-to-day lives of everyone in them. In some cities, even the sewage is being monitored and could potentially be used to find out what drugs a household may have used.

  All of your medical data in the near future will be constantly monitored, and while the data is supposed to only be shared with your doctor, in practice it will be accessible by any number of government and private actors.  Microchips in “smart pills” can communicate with tablet devices to ensure the elderly take their medications already exist. And a transponder injected into the skin that contains a person’s entire medical history has been approved by the FDA.  Wearable health-monitoring devices likewise can be used to monitor you, and the information collected can be used in a court of law.  Smart toothbrushes can monitor your brushing habits and communicate them to your dentist, or anyone else.  Smart alarm clocks can monitor your sleep habits. 

  Like all other devices relying on the Internet of Things (IoT) to communicate, these can be hacked into by government and private corporations.

  The “internet of things” refers to the growing number of “smart” appliances and electronic devices now connected to the internet and capable of interacting with each other and being controlled remotely. These range from thermostats and coffee makers to cars and TVs.

  Of course, there’s a price to pay for such easy control and access. That price amounts to relinquishing ultimate control of and access to your home to the government and its corporate partners. For example, while Samsung’s Smart TVs are capable of “listening” to what you say, thereby allow users to control the TV using voice commands, it also records everything you say and relays it to a third party. Same goes for Amazon’s Echo.

  “Smart houses” filled with IoT-capable devices are just starting to come into play, but by 2020 Samsung pledges that all of its devices, including its household appliances, will be IoT capable.  Such products include ovens, microwaves, vacuums (including robot vacuums), refrigerators, dishwashers, washing machines, and dryers, as well as smart hubs which coordinate everything.  Coffee makers and toasters are also being made IoT compatible. 

  Smart TVs seemingly out of Orwell’s 1984 will also collect data and spy on you.  Modern gaming consoles likewise have internet connections, and those with cameras can be used to spy like any smartphone or computer.  Smart power outlets can turn your lights on and off remotely, and smart thermostats work similarly. 

  All of them monitor when you’re at home or not, as can smart home security systems.  Wi-Fi routers can even monitor the inside of your home and distinguish between different individuals in the house, while reading their lips to “hear” what they say.  Other forms of home monitoring systems for the elderly can be hacked and used by anyone. 

  Already the web-enabled “Hello Barbie” doll has been the center of a hacking controversy, in which security experts disclosed a number of significant security flaws with the toy.  Other smart objects include smart golf clubs, which monitor the speed, acceleration, and swing plane of your golf swing, smart shoes which track your location and can guide you on where to go. Tostitos has even unveiled a promotional smart bag of chips which can tell you if you’ve been drinking too much.

  That doesn’t even begin to touch on all of the government’s many methods of spying on its citizens. For instance, police have been using Stingray devices mounted on their cruisers to intercept cell phone calls and text messages without court-issued search warrants.

  Doppler radar devices, which can detect human breathing and movement within in a home, are already being employed by the police to peer inside a suspect’s home.

  License plate readers, yet another law enforcement spying device made possible through funding by the Department of Homeland Security, can record up to 1800 license plates per minute. These surveillance devices can also photograph those inside a moving car. Recent reports indicate that the DEA has been using license plate readers in conjunction with facial recognition software to build a “vehicle surveillance database” of the nation’s cars, drivers and passengers.

  Sidewalk and “public space” cameras, sold to gullible communities as a sure-fire means of fighting crime, is yet another DHS program that is blanketing small and large towns alike with government-funded and monitored surveillance cameras. It’s all part of a public-private partnership that gives government officials access to all manner of surveillance cameras, on sidewalks, on buildings, on buses, even those installed on private property.

  Couple these surveillance cameras with facial recognition and behavior-sensing technology and you have the makings of “pre-crime” cameras, which scan your mannerisms, compare you to pre-set parameters for “normal” behavior, and alert the police if you trigger any computerized alarms as being “suspicious.”

  Capitalizing on a series of notorious abductions of college-aged students, several states are pushing to expand their biometric and DNA databases by requiring that anyone accused of a misdemeanor have their DNA collected and catalogued. Technology is already available that allows the government to collect biometrics such as fingerprints from a distance, without a person’s cooperation or knowledge. One system can actually scan and identify a fingerprint from nearly 20 feet away.

  Radar guns have long been the speed cop’s best friend, allowing him to hide out by the side of the road, identify speeding cars, and then radio ahead to a police car, which does the dirty work of pulling the driver over and issuing a ticket. Now, developers are hard at work on a radar gun that can actually show if you or someone in your car is texting. No word yet on whether the technology will also be able to detect the contents of that text message.

  It’s a sure bet that anything the government welcomes (and funds) too enthusiastically is bound to be a Trojan horse full of nasty surprises. Case in point: police body cameras. Hailed as the easy fix solution to police abuses, these body cameras—made possible by funding from the Department of Justice—are turning police officers into roving surveillance cameras. Of course, if you try to request access to that footage, you’ll find yourself being led a merry and costly chase through miles of red tape, bureaucratic footmen and unhelpful courts.

  And the FBI can remotely activate the microphone on your cellphone and record your conversations. The FBI can also do the same thing to laptop computers without the owner knowing any better.

  Government surveillance of social media such as Twitter and Facebook is also on the rise. Americans have become so accustomed to the government overstepping its limits that most don’t even seem all that bothered anymore about the fact that the government is spying on our emails and listening in on our phone calls.

  Drones, which are taking to the skies en masse, will be the converging point for all of the weapons and technology already available to law enforcement agencies. This means drones that can listen in on your phone calls, see through the walls of your home, scan your biometrics, photograph you and track your movements, and even corral you with sophisticated weaponry.

  It’s a given that the government’s tactics are always more advanced than we know, so there’s no knowing what new technologies are already being deployed against us without our knowledge. Certainly, by the time we learn about a particular method of surveillance or new technological gadget, it’s a sure bet that the government has been using it covertly for years already.

  If you haven’t figured it out yet, we’ve all become suspects, a.k.a. potential criminals.

  As I make clear in my book, Battlefield America: The War on the American People, we now find ourselves in the unenviable position of being monitored, managed and controlled by our technology, which answers not to us but to our government and corporate rulers.

  This is the creepy, calculating yet diabolical genius of the American police state: the very technology we hailed as revolutionary and liberating has become our prison, jailer, and probation officer.

  So don’t get too excited about the NSA’s latest concession.

  It won’t stop Big Brother from watching you.

  

  

• 51% Of Murders In The U.S. Come From Just 2% Of The Counties

  Authored by John R. Lott, Jr. via Crime Prevention Research Center

  

   

  The Distribution of Murders

  The United States can really be divided up into three types of places. Places where there are no murders, places where there are a few murders, and places where murders are very common.

  In 2014, the most recent year that a county level breakdown is available, 54% of counties (with 11% of the population) have no murders.  69% of counties have no more than one murder, and about 20% of the population. These counties account for only 4% of all murders in the country.

  The worst 1% of counties have 19% of the population and 37% of the murders. The worst 5% of counties contain 47% of the population and account for 68% of murders. As shown in figure 2, over half of murders occurred in only 2% of counties.

  Murders actually used to be even more concentrated.  From 1977 to 2000, on average 73 percent of counties in any give year had zero murders. Possibly, this change is a result of the opioid epidemic’s spread to more rural areas. But that question is beyond the scope of this study.  Lott’s book “More Guns, Less Crime” showed how dramatically counties within states vary dramatically with respect to murder and other violent crime rates.

    

  

   

  Breaking down the most dangerous counties in Figure 2 shows over half the murders occur in just 2% of the counties, 37% in just the worst 1% of the counties.

  

   

  Figure 1 illustrates how few counties have a significant number of murders. Figure 3 further illustrates that with a cumulative perspective. 54% of counties have zero murders, 69% have at most one murder, 76% have at most two murders, and so on. To put it differently, only the top four percent of the counties have 16 or more murders.

  If the 1% of the counties with the worst number of murders somehow were to become a separate country, the murder rate in the rest of the US would have been only 3.4 in 2014. Removing the worst 2% or 5% would have reduced the US rate to just 3.06 or 2.56 per 100,000, respectively.

  

   

  Even within the Counties with the murders, the murders are heavily Concentrated within those counties

  When you look at individual counties with a high number of murders, you find large areas with few murders. Take Los Angeles County, with 526 murders in 2014, the most of any county in the US. The county has virtually no murders in the northwestern part of the county. There was only one murder each in Beverly Hills, Hawthorne, and Van Nuys. Clearly, different parts of the county face very different risks of murder.

  

   

  The map below shows the distribution of murders in Indianapolis, with 135 murders. Although the city extends well beyond the 465 Highway that encircles downtown Indianapolis, there are only four murders outside of that loop. The northern half of the city within 465 also has relatively few murders.

  

   

  Washington, DC has large areas without murders. 14^th Street NW divides the eastern and western parts of the district, with murders overwhelmingly limited to the eastern half. The area around the capitol is also extremely safe.

  

   

  Here is the murder map for Dallas.

  

   

  Gun Ownership

  According to a 2013 PEW Research Center survey, the household gun ownership rate in rural areas was 2.11 times greater than in urban areas (“Why Own a Gun? Protection is Now Top Reason,” PEW Research Center, March 12, 2013).   Suburban households are 28.6% more likely to own guns than urban households. Despite lower gun ownership, urban areas experience much higher murder rates. One should not put much weight on this purely “cross-sectional” evidence over one point in time, but it is still interesting to note that so much of the country has both very high gun ownership rates and zero murders.

  Conclusion

  This study shows how murders in the United States are heavily concentrated in very small areas. Few appreciate how much of the US has no murders each year.  Murder isn’t a nationwide problem.  It’s a problem in a very small set of urban areas, and any solution must reduce those murders.

  

  

• Citi Issues An Alert On Its Most Popular Index

  Citi's US Economic Surprise Index went negative late last week, but after this morning's data, it has collapsed to the lowest level since Oct 2016.

  

  This is the biggest crash in US Macro data in 6 years…

  

  And Citi is worried:

  "After a weak Q1, downside misses in economic data this week have a heightened capability to trigger a reassessment of the whole growth trajectory."

  This week's main focus will now be the US employment report on Friday, with all eyes firmly on average hourly earnings, with investors looking for it to confirm or deny the upward pressure seen in last Friday's ECI report. From there, we'll look for Chair Yellen's assessment on the economy Friday afternoon at 1330ET (which should be entertaining given the carnage above).

  Who could have seen this coming? 'Soft' Data has tumbled to 3-month lows…

  

  

  

• Trump, Putin To Speak In Phone Call On Tuesday

  President Trump is scheduled to hold another phone call with Russian President Vladimir Putin On Tuesday. The call is scheduled for 12:30 p.m. that afternoon in the Oval Office, the White House said on Monday evening.

  The topic of the conversation was not disclosed, and while the White House did not provide any further details to AB, potential discussion topics include the civil war in Syria, ongoing events in Turkey, and of course, the North Korean standoff.

  Trump and Putin have spoken several times since Trump’s election, including last month following the attack in St. Petersburg, which Trump condemned.

  Last month Trump confirmed what Putin spokesman Dmitry Peskov said previously that U.S.-Russian relations “may be at an all-time low.” It was a reversal from the rhetoric during his campaign, when Trump said he hoped he and Putin could work together in the fight against terrorism. FBI and congressional investigations continue into the Trump campaign’s contacts with Russia and Russia’s meddling in the election.

  Separately, earlier in the day Japanese media reported that Trump had also held a 30 minute phone call with Japan’s Prime Minister Shinzo Abe. Since there has not been an official readout from the White House, the topic of conversation was also unknown.

  Another @POTUS–@AbeShinzo phone call, lasting about 30 minutes, took place today (May 1), according to Japanese media reports.

  — Steve Herman (@W7VOA) May 1, 2017

  //platform.twitter.com/widgets.js

  

  

• WTF Chart Of The Day: Korean Stocks Record High Edition

  In early 2016, when Kim Jong Un was hitting the headlines almost daily with threats (and missile tests), the Korean stock market tumbled reflexively as 'risk' was priced into equity markets.

  That is a very different picture to what is happening now.

  

  (Note the correlation – lower pane – between "nuclear, Korea" stories and the price of the Korean stock market is now strongly positive (as opposed to the more rational negative 'norm')

  As the threat of global thermonuclear war surges amid US-North Korean tensions, 'investors' are piling into South Korean stocks, sending the KOSPI to a new record high…

  

  So as the title suggests… WTF!

  

  

• Trump Destroys Michelle O's Legacy; Makes School Lunches Great Again

  Michelle Obama made it her mission during her 8 years in the White House to eradicate all taste from school lunches.  Afterall, what kind of self-respecting liberal would she be if she allowed school districts and families all across the country to actually choose what food best suited their communities and children?

  She even made inspiring videos like “Turnip For What!?”, a clever play off Lil Jon’s track (great role model for children, btw)…see what she did there?

   

  Unfortunately, no amount of cutsie jingles or rap lyrics were sufficient to make the following school lunches appealing to young school kids…and we can’t imagine why…

  

   

  In fact, in the end, rather than eating a meal with slightly too much sodium, kids simply stopped eating lunch altogether.  As the Washington Times pointed out back in 2014, over 1 million students stopped eating school lunch in the 2012-2013 school year alone.  Meanwhile, schools all around the country reported they were buying food that just ended up getting thrown away or fed to pigs at local farms because no one would eat it.

  The National School Lunch Program saw a sharp decline in participation once the healthy standards went into effect during the 2012-2013 school year. A total of 1,086,000 students stopped buying school lunch, after participation had increased steadily for nearly a decade.

   

  The report found that 321 districts left the National School Lunch Program altogether, many of which cited the new standards as a factor.

   

  The decline was “influenced by changes made to comply with the new lunch content and nutrition standards,” state and local officials said.

  But, in one of his first actions as Agriculture Secretary, Sonny Perdue took steps today to reintroduce some common sense into school lunches noting that “If kids aren’t eating the food, and it’s ending up in the trash, they aren’t getting any nutrition – thus undermining the intent of the program.” 

  Per The Hill, in an interim final rule, aimed at giving schools more flexibility, Perdue and his department are postponing further sodium reductions for at least three years and allowing schools to serve non-whole grain rich products occasionally as well as 1 percent flavored milk.

  The rule allows states to exempt schools in the 2017-2018 school year from having to replace all their grains with whole-grain rich products if they are having a hard time meeting the standard.

   

  Sodium levels in school lunches now must average less than 1,230 milligrams in elementary schools; 1,360 mg in middle schools; and 1,420 mg in high school.

   

  Before Perdue’s rule, schools were expected to reduce sodium even further to average less than 935 milligrams in elementary schools, 1035 milligrams in middle school lunches and 1,080 in high school lunches by the week by July 1, 2017.

   

  Further reductions were set to take effect by July 1, 2022.

  Unsurprisingly, the School Nutrition Association and kids everywhere praised Perdue’s efforts to Make School Lunches Great Again.

  The School Nutrition Association, which represents nutrition directors at schools across the country, was quick to praise Perdue. The group has been lobbying Congress for more flexibility in what the have called “overly prescriptive regulations.”

   

  SNA claims less kids are buying lunch because they no longer like the food and schools are being forced to spend more money on lunches that largely end up in trash.

   

  The former standards required all grains, including croutons and the breading on chicken patties, to be whole grain rich.

   

  “School Nutrition Association is appreciative of Secretary Perdue’s support of school meal programs in providing flexibility to prepare and serve healthy meals that are appealing to students,” the group’s CEO Patricia Montague said in a statement.

   

  “School nutrition professionals are committed to the students they serve and will continue working with USDA and the Secretary to strengthen and protect school meal programs.”

  Of course, just like when Mayor Bloomberg’s Big Gulp ban got overturned, it’s unclear how/if families will be able to cope with returning to a world where they actually have to make their own decisions regarding sodium intake.  

  

  

• Where Do You Go In A 'Hurricane'?

  Submitted by Jeff Thomas via InternationalMan.com,

  

  As a West Indian, I’ve lived through quite a few hurricanes in my time. My level of responsibility in each varied quite a bit. I was eight years old in my first hurricane and I thought it was great fun, as it was so exciting during the hurricane and, afterward, the landscape had changed so much that I had lots of new places to play.

  On the other end of the scale, in 2004, my country, the Cayman Islands, experienced a Category 5 hurricane, with winds up to 200 miles per hour that sat on us without moving for 36 hours. I was responsible for ensuring that safety be provided for scores of my employees prior to the hurricane. After the storm, one of my companies took on the complete rebuilding of the country’s wholesale and retail food distribution facilities in order to ensure that the country’s population would have the most essential commodities—food and water. (A big change in level of responsibility over the years.)

  In addition to having spent decades planning for hurricane damage, I’ve also spent decades as an economist, planning for major economic storms. In 1999, I determined that the world would experience what Doug Casey has termed a Greater Depression that would be more devastating than any economic event the world had ever seen. I predicted that it would happen in stages and that the final stage would be the most devastating. I would have been quite pleased to have been incorrect, but unfortunately, my predictions have come to pass. I believe we’re now quite close to the final destruction stage, a period that will lead to the collapse of many of the world’s formerly strongest economies, coinciding with a period of devastating warfare. In both the economic and warfare cases, those who are the world’s major players will believe that they’ll be able to control the extent of devastation and even profit from it, but events will go beyond their control and take on a life of their own.

  As in the image above, there will not be just one, but multiple epicentres. Europe and North America will be hit the hardest economically. Next in line will be those countries, such as Japan, Australia, etc., that are the most closely linked economically with these centres. The next tier down will be those countries that are dependent on the centres, but more peripherally, such as Panama or Mexico. Finally, there will be those countries that are the least linked to the major centres, such as Uruguay or Thailand.

  All countries will be impacted by the coming economic hurricane, but the effects will vary. Those in the US and Europe will experience the equivalent of a Category 5 hurricane. Those in Australia and Japan will experience a Category 4. Countries in the third tier will experience a Category 3, and those countries that are either distant from or the least economically dependent upon the epicentres will experience Category 2 or even Category 1 damage.

  This is not mere speculation. In examining previous depressions and the last two world wars, we can see that those countries that were the least connected to events tended to fare well. This will hold true this time around as well.

  When we turn on the television and the weatherman says that a hurricane is approaching, we have to make a decision. Do we trust in the hope that it might not pass directly over us? Do we question the severity of the storm as it’s being described to us? Should we plan to stay at home, as in a Category 1 or Category 2 storm, or should we plan to go to a local shelter as in a Category 3 or Category 4 storm? Or, do we believe we’ll be experiencing the devastation of a Category 5, in which case we’d pack our bags, wave goodbye to our home, and get as far away from the epicentre as possible?

  Well, first, we’d better look at the categories, then, based on where we’re located, ask ourselves what we need to do. We’re presently already experiencing Category 1 conditions.

  Category 1 Warfare: Minor civil disobedience and/or riots
  Category 1 Economics: Increased mortgage foreclosures, some strip-shop and mall closings, decreased spending overall

   

  Category 2 Warfare: Major civil disobedience, riots, and/or insurrection
  Category 2 Economics: The above, plus tariff wars, stock and bond market crashes

   

  Category 3 Warfare: Minor bombing and/or ground invasion
  Category 3 Economics: The above, plus minor inability of governments to pay entitlements, significant inflation, credit collapse

   

  Category 4 Warfare: Major bombing and/or ground invasion
  Category 4 Economics: The above, plus the end of the dollar as a reserve currency/end of the petrodollar, considerable inflation, short-term bank closures

   

  Category 5 Warfare: Nuclear destruction
  Category 5 Economics: The above, plus major inability of governments to pay entitlements, permanent closure of the majority of banks, currency collapse, confiscation of deposits, major internal capital controls

  The above descriptions are not by any means comprehensive. They represent basic categories, to which many details can and should be added.

  So, what should your personal plan be? Well, if you’re located in one of the epicentres (the EU and US), you might devise a plan to head out to the country, if you have a destination that you either own or rent. Then, depending on the severity of the storm, you may survive the damage. (A rural area is the equivalent of a hurricane shelter.) However, if you’re dependent on your government for income, you may not be able to survive a Category 3 storm. Even if your income is independent of your government, you may not be able to survive a Category 4 or 5 storm, as you’ll still be under the control of a collapsing system.

  The closer you are to an epicentre, the worse the damage promises to be to you personally. And the stronger the hurricane, the greater the damage. It’s important to remember that personal preparedness will help, but the worse the state your government, infrastructure, local businesses and neighbours will be in, the more you’ll be impacted by their condition, even if you’re personally prepared.

  As an example, those who choose to sit out a Category 5 monetary and/or warfare hurricane in Uruguay would be likely to fare quite well, just as the Europeans who went there during the world wars. (Very few of them returned after the wars, having found a better life abroad.)

  In a Category 4 hurricane, life would be likely to remain relatively stable in areas such as the southeastern provinces of Mexico. In a Category 3, New Zealand might just be manageable.

  However, in order to assess your personal situation, it would be advisable to have another look at the categories above and decide for yourself what degree of damage is likely in the near future, then make a personal assessment as to whether you’re willing to chance experiencing that level of damage.

  We’ve passed the point of whether there’ll be a hurricane; we just can’t be sure how severe it’ll be. The winds are already picking up and those who choose to make a move will need to do so soon.

  *  *  *

  If you live in the US or the EU, expect the coming financial hurricane to be a Category 5. Think major currency collapses, big bank closures, and capital controls. In other words, total financial mayhem. New York Times best-selling author Doug Casey and his team share all the details in this urgent video. Click here to watch it now.

  

  

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• 20 Amazing Things That Happen Every Single Minute Of Every Single Day In Our Rapidly Changing World

  Authored by Michael Snyder via The End of The American Dream blog,

  Our world is changing at a blinding pace that is accelerating with each passing day. 

  

  Thanks to the Internet, information travels at a speed that would have been unimaginable at other times in human history, and our technological capabilities are advancing at a rate that is exponentially increasing.  What all of this means is that seismic cultural shifts that used to take decades can now be accomplished in a matter of months or even weeks. 

  The following are 20 amazing facts about what happens every single minute of every single day in our rapidly changing world… 

  #1 250 babies will be born, and 113 of them will be born into poverty.

  #2 500 hours of video will be uploaded to YouTube.

  #3 The Earth will travel 1,118 miles around the sun.

  #4 McDonald’s will sell 4,500 hamburgers.

  #5 Lightning will strike our planet about 6,000 times .

  #6 28,500 trees will be cut down.

  #7 51,000 applications will be downloaded from Apple’s App Store.

  #8 65,000 barrels of oil will be used used.

  #9 People will watch 64,444 hours of content on Netflix.

  #10 120,673 pounds of edible food will be thrown away in the United States.

  #11 $203,596 worth of products will be sold on Amazon.com.

  #12 448,800 tweets will be posted on Twitter.

  #13 527,760 photos will be shared on Snapchat.

  #14 3.3 million posts will be made to Facebook.

  #15 3.8 million Google searches will be conducted.

  #16 5 million pounds of garbage will be generated.

  #17 6 million chemical reactions will happen in each one of our cells.

  #18 20.8 million messages will be sent using WhatsApp.

  #19 25 million Coca-Cola products will be consumed.

  #20 204 million emails will be sent.

  So will all of this change lead to a wonderfully positive future for humanity, or will it result in a dystopian nightmare?  Only time will tell, but what everyone can agree on is that our world is rapidly becoming a much different place than the world that our parents and grandparents grew up in.

  

  

• Doug Casey On Why Gold Is Money

  Authored by Doug Casey via InternationalMan.com,

  

  It’s an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money.

  Now, why do I say that?

  Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That’s where we get the word “pecuniary” from: the Latin word for a single head of cattle is pecus. Salt has been used as money, also in ancient Rome, and that’s where the word “salary” comes from; the Latin for salt is sal (or salis). The North American Indians used seashells. Cigarettes were used during WWII. So, money is simply a medium of exchange and a store of value.

  By that definition, almost anything could be used as money, but obviously, some things work better than others; it’s hard to exchange things people don’t want, and some things don’t store value well. Over thousands of years, the precious metals have emerged as the best form of money. Gold and silver both, though primarily gold.

  There’s nothing magical about gold. It’s just uniquely well suited among the 98 naturally occurring elements for use as money…in the same way aluminum is good for airplanes or uranium is good for nuclear power.

  There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.

  When I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now—what are they? Can’t recall them? Read on, and this time, burn them into your memory.

  Money

  If you can’t define a word precisely, clearly, and quickly, that’s proof you don’t understand what you’re talking about as well as you might. The proper definition of money is as something that functions as a store of value and a medium of exchange.

  Government fiat currencies can, and currently do, function as money. But they are far from ideal. What, then, are the characteristics of a good money? Aristotle listed them in the 4th century BCE. A good money must be all of the following:

  • Durable: A good money shouldn’t fall apart in your pocket nor evaporate when you aren’t looking. It should be indestructible. This is why we don’t use fruit for money. It can rot, be eaten by insects, and so on. It doesn’t last.

  • Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don’t use things like porcelain for money—half a Ming vase isn’t worth much.

  • Consistent: A good money is something that always looks the same, so that it’s easy to recognize, each piece identical to the next. This is why we don’t use things like oil paintings for money; each painting, even by the same artist, of the same size and composed of the same materials is unique. It’s also why we don’t use real estate as money. One piece is always different from another piece.

  • Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don’t use water for money, as essential as it is—just imagine how much you’d have to deliver to pay for a new house, not to mention all the problems you’d have with the escrow. It’s also why we don’t use other metals like lead, or even copper. The coins would have to be too huge to handle easily to be of sufficient value.

  • Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; even if I’m not a jeweler, I know that someone, somewhere wants gold and will take it in exchange for something else of value to me. This is why we don’t—or shouldn’t—use things like scraps of paper for money, no matter how impressive the inscriptions upon them might be.

  Actually, there’s a sixth reason Aristotle should have mentioned, but it wasn’t relevant in his age, because nobody would have thought of it…it can’t be created out of thin air.

  Not even the kings and emperors who clipped and diluted coins would have dared imagine that they could get away with trying to use something essentially worthless as money.

  These are the reasons why gold is the best money. It’s not a gold bug religion, nor a barbaric superstition. It’s simply common sense. Gold is particularly good for use as money, just as aluminum is particularly good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. Not money. If you try to make airplanes out of lead, or money out of paper, you’re in for a crash.

  That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges.

  *  *  *

  Doug thinks the price of gold could hit $5,000 in the coming years. To help you take advantage of this rare opportunity, he’s sharing the specific method he’s used to make gains as large as 487%, 711%, and even 4,329% in previous gold bull markets. The “Casey Method” is unlike any other investing strategy. If used properly, it could make you HUGE gains over the next few years. Doug explains it all right here. You’ll also learn how to get instant access to a special report that names 9 gold stocks with huge upside. Each of these stocks could rise 100%, 200%, or more in the coming years. Click here to get started.

  

  

• No, the NSA Has NOT Stopped Spying On Americans’ Emails

  The NSA announced Friday that they would stop the controversial program which sweeps up all emails and text messages which an American exchanges with someone overseas that makes reference to a real target of NSA surveillance.

  By way of background, if Russia’s Putin was an NSA target, and an American received an email from a Russian saying “I hate Putin”, then that American could be surveilled by the NSA.

  Washington’s Blog asked Bill Binney what he thought of the NSA’s announcement.

  Binney is the NSA executive who created the agency’s mass surveillance program for digital information, who served as the senior technical director within the agency, who managed six thousand NSA employees, the 36-year NSA veteran widely regarded as a “legend” within the agency and the NSA’s best-ever analyst and code-breaker, who mapped out the Soviet command-and-control structure before anyone else knew how, and so predicted Soviet invasions before they happened (“in the 1970s, he decrypted the Soviet Union’s command system, which provided the US and its allies with real-time surveillance of all Soviet troop movements and Russian atomic weapons”).  Binney is the real McCoy.  Binney has been interviewed by virtually all of the mainstream media, including CBS, ABC, CNN, New York Times, USA Today, Fox News, PBS and many others.

  Specifically, we asked Binney:

  Do you buy it? https://www.yahoo.com/tech/us-nsa-spy-agency-halts-controversial-email-sweep-215107654.html 

  Or do you think they’re just collecting under a different authorization/program?

  Binney responded:

  Short answer, NO.

   

  This is a farce given the bulk continuous domestic data collection and storage from the Upstream programs: Fairview, Stormbrew and Blarney. [Here’s background on Fairview/Stormbrew/Blarney.]

   

  This FAA 702 [Section 702 of the Foreign Intelligence Surveillance Act] has been a charade from the beginning. [Specifically, the NSA is spying on all Americans under Executive Order 12333, and only talking about Section 702 to confuse people as to what they’re doing.]

   

  It was a way to make people/congress/judiciary think that they were trying to conform to the law.

  And, by spreading false information, which our useless MSM fail to challenge, it’s a way of subverting our republic – all done in secret with only a few people in the know of what really is going on.

   

  Meanwhile in the background, NSA through program “Muscular” was unilaterally tapping the fiber lines between Google and Yahoo and others data centers; so that when they backed up their data between centers, NSA got it all and the companies did not even know that was happening.

  Absolutely nothing has changed.

  

• Silver Takes the Elevator Down, Report 30 April, 2017

  Last week, we talked about the effect of the French election on the gold and silver markets, and noted:

  Of course, traders want to know how this will affect gold and silver. As we write this, we see that silver went down 30 cents before rallying back up to where it closed on Friday. Gold went down about $20, and then half way back up.

  At this point, we are not sure if the metals are supposed to go up because more printing. Or go down because the euro constrains France from printing. Or silver at least should go up because the economy is going to be better with France remaining in the Eurozone. Or go down because the ongoing malaise will only progress as it has been. Or some other logic… and the price gyrations this evening show that traders don’t agree either.

  It didn’t take too long. Here is what happened to silver this week. The graph below shows the price of silver in real money (i.e. gold).

  The Price of Silver in Real Money
  

  Silver has been falling for going on one year, but clearly since March 1. After one last hurrah at the end of March, it has been taking the elevator down. And by its fundamentals it should be quite a bit lower—0.0125.

  In any case, we are interested in watching what the fundamentals of the metals are doing. We will take a look at the graphs below, but first, the price and ratio charts.

  The Prices of Gold and Silver
  

  Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It had another major move up this week, after a major move up last week.

  Last week, we said:

  If prior peaks are an indication, there may be a spot of resistance at 72.5 (+0.8 above Friday’s close) and another at 73.25. If the ratio should go over these levels, then it may go all the way to its fundamental level (discussed below).

  Well, it broke those levels and ended the week just under 74.

  The Ratio of the Gold Price to the Silver Price
  

  For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

  Here is the gold graph.

  The Gold Basis and Cobasis and the Dollar Price
  

  The scarcity (i.e. the cobasis, the red line) was on the rise this week. It makes sense, that as the price of gold drops (which is the mirror of what this graph shows, the price of the dollar in gold milligrams) the metal becomes scarcer. This means speculators are selling their paper. If owners of metal were selling, then the metal would not become scarcer and might even become more abundant.

  However, it only became a little scarcer while the price dropped almost twenty bucks. So our calculated fundamental price fell $15 to $1,274, a few bucks above the market price.

  Now let’s look at silver.

  The Silver Basis and Cobasis and the Dollar Price
  

  In silver, the price fell a lot. 72 cents. The cobasis rose (i.e. abundance dropped and scarcity increased).

  Last week, we asked:

  Some speculators definitely got flushed. However, the question is how many and how much?

  Clearly it happened to more of them this week. And, unless the fundamentals get stronger, it is likely to flush even more leveraged futures positions. Our calculated fundamental price fell three cents this week, now a buck thirty under the market.

  © 2017 Monetary Metals

  

• Congress Reaches Deal To Keep Government Open Through September

  Update: Senate Democratic Leader Chuck Schumer seems very positive on the bipartisan agreement too (but can’t resist a few jabs at President Trump)…

  “This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table.

   

  The Bill “ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure”

   

  “Early on in this debate, Democrats clearly laid out our principles..” and the deal “reflects those principles.”

  *  *  *

  As we detailed eariler, one of the biggest political overhangs facing the market may have just been removed, when moments ago AP and other newswires reported that House Democrats and Republicans are said to have reached a $1 trillion spending deal to keep the government – which is currently operating thanks to a last minute one-week stopgap measure enacted on Friday – open until October 1.

  BREAKING: Congressional Republicans, Democrats reach agreement on $1T measure to fund government until Oct. 1.

  — AP Politics (@AP_Politics) May 1, 2017

  //platform.twitter.com/widgets.js

  According to Washington Post, negotiators from both parties reached an agreement on a spending package to fund the government through the end of September, alleviating fears of a government shutdown later this week. Congress is expected to vote early this week on the package, with the bipartisan agreement expected to include increases for military spending and border security, a major priority for GOP leaders in Congress.

  The agreement follows weeks of tense negotiations between Democrats and GOP leaders after President Trump insisted that the deal include funds to begin construction of a wall along the U.S. border with Mexico. Trump eventually dropped that demand, leaving Congress to resolve lingering issues over several unrelated policy measures.

  There is a non-trivial chance the Sunday night announcement is merely a trial balloon, because as the WaPo adds “the details of the agreement were not yet clear on Sunday night” which would suggest that there is a high likelihood that whatever tentative deal was reached, ultimately falls through.

  For now, however, this is good news, and it has sent both the pound and yen sliding, and the dollar rising on hopes that politics will not be a major risk factor for at least 5 months.

  House Republicans have struggled in recent weeks to keep their members focused on spending as White House officials and conservatives pressed leaders to revive plans for a vote on health-care legislation. The health-care fight became tangled last week with the spending talks as leaders worried that forcing a vote to repeal the Affordable Care Act risked angering Democrats whose votes are necessary to avoid a government shutdown.

  Another possible threat is that the GOP pushes on with Obamacare repeal, a gambit which may prompt Democrats to withdraw any support they voiced for Sunday’s “deal.”

  GOP leaders worked last week to determine if there are enough votes in the House to pass a revised health-care bill brokered by the White House, the head of the conservative House Freedom Caucus and a top member of the moderate Tuesday Group. House Speaker Paul D. Ryan (R-Wis.) and his top lieutenants announced Thursday that they did not have sufficient votes to be sure the health-care bill would pass but vowed to press on.

   

  “We’re still educating members,” House Majority Leader Kevin McCarthy (R-Calif.) told reporters after a late-night health care meeting last week. “We’ve been making great progress. As soon as we have the votes, we’ll vote on it.”

  And now, in the spirit of trial balloons everywhere, we await the denial from yet other “unnamed sources.”

  

  

• North Korea Threatens To Sink "Doomed" US Nuclear Submarine

  North Korea threatened to sink a US nuclear sub currently deployed in South Korean waters if the US take provocative action, responding to a statement from Donald Trump that the president won’t be “happy” if Pyongyang conducts another nuclear test.

  

  After the US deployed a nuclear-powered submarine and an aircraft carrier to South Korean waters amid high Korean tensions, Yonhap reported that North Korea on Sunday threatened to sink the submarine, accusing America of stepping up military intimidation.

  “The moment the USS Michigan tries to budge even a little, it will be doomed to face the miserable fate of becoming a underwater ghost without being able to come to the surface,” the North’s propaganda website Uriminzokkiri wrote in a vivid article. North Korea’s nuclear deterrent will assure that American aircraft carriers, nuclear submarines, and other military hardware will be “shattered into pieces of molten metal” if they threaten Pyongyang, the article read.

  The North warned – once again using its dramatically vivid jingoist language – that “whether it’s a nuclear aircraft carrier or a nuclear submarine, they will be turned into a mass of scrap metal in front of our invincible military power centered on the self-defense nuclear deterrence.”

  “The urgent fielding of the nuclear submarine in the waters off the Korean Peninsula, timed to coincide with the deployment of the super aircraft carrier strike group, is intended to further intensify military threats toward our republic,” the website further claimed. According to the article, recent statements from the Trump administration indicate that Washington is close to implementing a strategic scenario in which an actual military confrontation is a real possibility.

  Earlier on Sunday, Donald Trump told CBS that he “will not be happy” if North Korea conducts another nuclear test. When asked to clarify, the US president said: “I would not be happy. If he (North Korean supreme leader, Kim Jong-un) does a nuclear test, I will not be happy.”

  “And I can tell you also, I don’t believe that the president of China, who is a very respected man, will be happy either,” Trump said, adding that he believes Xi Jinping was also “putting pressure” on North Korea to bring a halt to its nuclear tests.

  CBS host John Dickerson then directly asked Trump whether US military action was possible, the US president replied: “I don’t know. I mean, we’ll see.”

  The guided-missile submarine USS Michigan sailed into the South Korean port of Busan on April 25 before heading out to sea four days later. The Ohio-class submarine is reportedly conducting various drills. At the same time, the U.S. has also directed the nuclear-powered aircraft carrier USS Carl Vinson to the waters near South Korea. The supercarrier is currently engaged in a joint exercise with South Korean naval forces of the Korean peninsula.

  The threat followed North Korea’s failed missile launch. On early Saturday, North Korea fired off a ballistic missile which the South Korean military said exploded after flying only 71 kilometers. The launch marks the third missile test in April.

  Trump told CBS that the failed test wasn’t significant enough to warrant action against North Korea. “This was a small missile. This was not a big missile. This was not a nuclear test, which he was expected to do three days ago. We’ll see what happens,” the president said.

  Joint US-South Korean naval wargames, Foal Eagle, involving 20,000 Korean and nearly 10,000 American troops kicked off in the region on Sunday.

  Washington has said that the USS Carl Vinson aircraft carrier and USS Michigan nuclear sub will remain in the area due to the spike in tensions between Washington and Pyongyang.

  

  

• The Real WMD In Syria – The West's Weapon Of Mass Disorientation

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  

  A senior Rand analyst, inadvertently, gave the game away in a recent article inculpating Syrian President Bashar al Assad over the alleged toxic massacre of civilians on April 4. The Rand Corporation, a longtime conduit for CIA propaganda, wrote: «The use of chemical weapons today provokes international condemnation… Those who order their deployment risk being charged with war crimes».

  The Western objective, as tacitly admitted above, is therefore to brand the Syrian leader and his government as depraved war criminals, deserving pariah status and excommunication by the «international community».

  The alleged use of chemical weapons, a particularly odious weapon of mass destruction (WMD), serves as an effective prop to channel Western public outrage against Assad. Allegedly killing civilians with bullets and bombs just doesn’t have the same psychological power to incite public disgust. Poisoning little children with lethal chemicals is a more effective label with which to demonize the alleged perpetrator.

  But the more pertinent WMD issue here is Weapon of Mass Disorientation. And in particular how Western governments, their servile corporate-controlled media, like the Rand Corp, New York Times, CNN, BBC, Guardian and France 24, and so on, and local proxy mercenaries inside Syria are covertly deploying deadly chemicals in a series of propaganda stunts. Not only deploying deadly chemicals against civilians in a most cynical and callous way, but getting away with their crimes of murder through an audacious distortion of reality. All made possible because of the West’s media weapon of mass disorientation.

  By massive manipulation of facts and images, the Western public are disorientated to condone the wider criminal agenda that their governments are pushing – that of regime change. Part of that disorientation involves the Western public suspending critical thinking over what are otherwise highly dubious circumstances and claims; it also involves an abject manipulation of perception and emotions, whereby some victims of violence are the focus for Western public trauma, while many other victims in Syria and elsewhere are unseen or overlooked with callous indifference. Those anomalies surely speak of a phenomenal disorientation of Western public intelligence, emotion and morals.

  Immediately following the incident in the militant-held Syrian town of Khan Sheikhoun, in northern Idlib Province, on April 4, Western governments and the corporate news media began accusing the Syrian leader of responsibility for a «chemical weapon attack». The US ambassador the UN Nikki Haley made a dramatic presentation at the Security Council on April 5, holding aloft enlarged photos purportedly of children dying from toxic exposure. Two days later, on April 7, US President Donald Trump ordered a full-scale barrage of cruise missile strikes on a Syrian airbase out of «revenge» for the murder of «beautiful babies».

  Trump’s decision to attack Syria was reportedly prompted by his disgust at watching videos of the alleged victims, and by the emotional angst that his daughter and special advisor Ivanka Trump felt on also watching the same footage. The video and images were, by the way, released to the Western news media solely by militant-aligned sources, the so-called White Helmets, operating at the location of the alleged chemical weapon attack.

  White House spokesman Sean Spicer later said that any one «who gases a baby» can expect more US military retribution. Spicer also made the crass claim that Syrian President Assad was «worse than Hitler» because of his alleged uniquely barbaric use of chemical weapons on civilians.

  Meanwhile, US and British warplanes operating in Syria, Iraq and Yemen are slaughtering at the very same time hundreds of civilians. In Yemen, thousands of children are dying from starvation due to a US-backed blockade on that country by Saudi Arabia in its war for regime change there. Why aren’t Donald Trump, his daughter Ivanka, and his spokesman Sean Spicer traumatized by these deaths? Why is the Western public also not outraged, traumatized?

  In Syria, on Easter Saturday, April 15, busloads of civilians were murdered by terrorist suicide bombers, whom the Western governments and media refer to as «rebels». Over 120 civilians were massacred including 68 children. Where was the Western outrage at the images of charred children’s bodies hanging out of mangled buses? Indeed, the Western media coverage of that carnage was minimal and was downplayed with insidious words that the victims were «pro-regime supporters».

  But the victims of the bus attacks were more numerous than those allegedly killed during the chemical weapons incident two weeks before at Khan Sheikhoun.

  President Trump has condemned Syria’s Assad as an «animal» due to the alleged use of chemical weapons. Britain’s Foreign Secretary Boris Johnson has also called Assad a «monster». Clearly, the image-projection here is aimed at demonizing and dehumanizing the Syrian leader. Once that image-making is «successful» – and the saturation pejorative Western media coverage is crucial to that success – then a moral, legalistic mandate is created which allows Washington and its allies to escalate their aggression against Syria. Either through diplomatic sanctions at the United Nations or by military means with direct military force, as seen with Trump’s cruise missile barrage on April 7, or with increased support to proxy militant groups inside Syria.

  All the while that Western governments and media have been demonizing Syria over alleged chemical weapons, the political-media campaign has also been directed at smearing Russia for alleged complicity because of its alliance with Syria.

  Britain’s Johnson said earlier this month that Russian leader Vladimir Putin had «toxified» Russia’s international reputation by its alliance with Syria. The British diplomat’s choice of words betrayed an overly contrived attempt to push the propaganda theme.

  In what should be seen as a transparently crude effort, the Western governments tried to splice Russia’s support for Syria by hyping up the «horror» of chemical weapons. The Western political momentum has since dissipated somewhat, but there was an obvious bid by the West in the days following the incident at Khan Sheikhoun to force an ultimatum on Moscow to abandon the Assad government, and to in effect cede to Western demands for regime change in Damascus.

  Russia seems to have succeeded in rebuffing this tawdry tactic by holding firm to principles of international law and objective facts.

  Last week, the UN-affiliated Organization for the Prohibition of Chemical Weapons (OPCW) issued a statement claiming that there was «incontrovertible evidence» that the lethal chemical weapon sarin was used in Khan Sheikhoun on April 4.

  The OPCW did not say who used the alleged sarin. But the inference pushed by Western media was that it was the Syrian government.

  Russia’s Foreign Minister Sergey Lavrov deprecated the OPCW as «discrediting» itself. The supposedly neutral, scientific organization was basing its conclusions on samples supplied by illegally armed groups, in a dubious chain of «evidence» that is neither impartial nor verifiable.

  The «sarin conclusion» announced by the OPCW is in accordance with the assertions made by the US, Britain, France and Turkey. They are not disinterested parties. They are protagonists for regime change and sponsors of a covert war against the Syrian government since March 2011. Yet, audaciously, their partisan claims are afforded credibility by Western media.

  Russia’s call last week for an impartial, on-site investigation into what actually happened at Sheikhoun was rejected by the Western governments. Russia’s demand for an independent probe was also supported by Iran and the Syrian government.

  As Sergey Lavrov noted: «The spreading of false information on the use of chemical weapons by the Syrian government is being used to move away from implementing UN resolutions on finding a peaceful settlement and instead to switch to the long-cherished objective of regime change».

  There is abundant evidence that sarin was not the toxic agent used at Khan Sheikhoun on April 4. American MIT professor Theodore Postol, a highly accredited weapons expert, as well as neuroscientist Dr Denis O’Brien, are just two of many sources who have concluded from the observing the symptoms and circumstances that sarin could not have possibly been used.

  There is abundant evidence too that the Western-backed regime-change militants in Syria have been involved in fabricating supposed «chemical weapons» incidents, creating media-ready videos which the Western news outlets have avidly disseminated and which Western governments have cited as «evidence» against Assad. That was the conclusion of the Swedish Doctors for Human Rights, among other reputable sources.

  Considering that the only «evidence» for the latest chemical weapon incident on April 4 comes in the form of unverifiable videos supplied by terrorist-affiliated groups, it is highly plausible that the narrative put out by these groups, the Western governments and media is false. That narrative is that Syrian warplanes dropped chemical weapons on Khan Sheikhoun, killing over 80 civilians.

  By contrast, it is plausible that the entire incident is an orchestrated fabrication. That is, that there was no chemical «weapon of mass destruction» used at Khan Sheikhoun. If a weapon of that sort were used, as alleged, then one would expect the death toll to be in the hundreds, if not thousands, as happened at Halabja in 1988 when up to 5,000 Kurdish civilians were massacred by the Iraqi dictator Saddam Hussein.

  Instead, what likely happened in Syria was simply the murder by intoxication of civilians by militants using lethal chemicals, such as cyanide or chlorine. Why were the supposed aid responders of the White Helmets not also poisoned if highly toxic sarin had been used? Why do the «responders» seem too preoccupied with making videos instead of actually treating victims with due medical care? Why have no sarin antidotes or decontaminants been requested or sent to Khan Sheikhoun in the days and weeks following the alleged attack?

  Thus the militants and their media-savvy agents in the White Helmets (who are funded by Western military intelligence) could very well have staged the poisoning of unwitting civilians. The despicable, cynical act of homicide may not have even happened on the alleged date of April 4, or even in the alleged location of Khan Sheikhoun.

  Bear in mind that it has been reported in the past that US and other Western military forces have «trained» the so-called Syrian «rebels» (terrorists) on the handling of lethal chemicals. Those Western media reports mendaciously spun the notion that the «rebels» were being trained in the event of Assad’s «chemical weapons arsenal being unleashed».

  The Syrian government has repeatedly and categorically denied that its forces used chemical weapons at Khan Sheikhoun earlier this month or in any other incident. It says that all its chemical weapons were destroyed back in 2014 under a Russian-brokered deal, a result that was confirmed at the time by the OPCW.

  Tenuously, the US Secretary of Defense James Mattis claimed last week that the Syrian government cheated the OPCW and secretly kept a portion of chemical weapons in reserve.

  The Western narrative of chemical weapons (sarin) used by the Syrian government is riven with anomalies if interrogated with critical thinking. Indeed, when looked at with due skepticism, it is apparent that the Western narrative is not merely a misinformed, erroneous perspective. The whole affair is a deliberate, carefully constructed and delivered Western psychological operation, a false-flag propaganda stunt, to demonize and dehumanize the Syrian government in order to propel the Western agenda of regime change. The American CIA and British MI6 have been trying to implement regime change in Syria since 1949 in on-off clandestine projects. The chemical weapon of mass destruction allegation is but the latest ploy in a long-running project.

  Western governments, their military intelligence agencies and the propaganda service of the corporate media have been working on this particular psychological operation for several years in Syria, going back to the first major «chemical weapon» incident in East Ghouta, near Damascus, in August 2013. That stunt failed to effectively demonize the Assad government then. But the Western operation has continued and evolved over time until its latest episode at Khan Sheikhoun on April 4. The «chemical weapon» nomenclature is spurious from the nature of the injuries inflicted. It is more likely an incident of mass poisoning by militants carried out on hapless victims, which is conveniently broadcast around the world by Western governments and media as a «chemical weapon of mass destruction» used by the «Assad regime».

  What is overlooked, however, is the WMD weapon of mass disorientation being used against Western public. The disorientation of critical thinking, emotions and moral standards is deployed in order to more easily manipulate public consent for the Western governments’ criminal enterprise of regime change in Syria.

  There is an abominable charade taking place before our very eyes. A charade in which supposedly «moral», «law-abiding», «democratic» Western governments are colluding with the most vile terror groups using the most vile means of deception and murder. Why this simple glaring truth is not recognized more widely by the Western public is because their own governments have deployed weapons of mass disorientation through dutiful mass media purporting to act as «news services».

  

  

• Contagion Fears Rise In Aftermath Of Home Capital Group Collapse

  With the bank run at Home Capital Group hitting a crescendo on Friday, when in one day 36% of the liquidity at Canada’s largest non-bank lender escaped through the front door, and only an emergency rescue loan yielding over 20% has prevent a liquidation at HCG so far, suddenly some are wondering if the dreaded “C” word is applicable to what Bloomberg has dubbed “one of the world’s strongest financial systems.”

  The word in question is contagion, and the party casually bringing it up is Mawer Investment Management, one of HCG’s largest former investors. Jim Hall recalculating the odds of a contagion widening across one of the world’s strongest financial systems.

  According to Bloomberg, Mawer CIO Jim Hall is recalculating the odds of a contagion widening across the Canadian financial system.

  “The probability has gone from infinitesimal to possible — unlikely, but possible,” said Hall, chief investment officer of the Calgary-based money manager, in an interview Saturday. “If depositors or bondholders start to lose faith in their banks, well then that becomes systemic.”

  Mawer is not waiting to find out either way: the company which oversees more than C$40 billion in assets, sold about 2.8 million shares, or a 4.3 percent stake, in Home Capital in the past week, joining another Calgary-based money manager, QV Investors Inc., in exiting its investment amid the imbroglio consuming the Toronto-based lender.

  Speaking to Bloomberg, Hall said that in his view, the odds that woes at Home Capital – which had C$20.5 billion in assets at the end of 2016, and whose C$15 billion home-loan book represents about 1% of Canada’s C$1.45 trillion mortgage market – spread through Canada’s financial system are low, “despite a growing chorus of voices speculating such fears in a nation gripped by an overheated housing market and runaway home prices in two of its three biggest real-estate markets: Vancouver and Toronto.“

  “It’s a pretty hot fire in one little corner of the forest, and it doesn’t look like it’s spreading,” Hall said. “There are firefighters standing around it right now, so if it starts to move, they’ll put it out.”

  Unless, of course, the firefighters are just as capable as the rating agencies or the company’s investors, the vast majority of whom never saw this coming.

  As reported last week, after admitting it was the subject of a furious bank run, Home Capital secured a loan to stem dwindling deposits and said it’s weighing a sale, hiring RBC Capital Markets and BMO Capital Markets to advise on financing and “strategic options.” Canada’s banking regulator says it’s closely monitoring the situation and surveying other financial firms to assess their condition. 

  “The assets look, at this point, still reasonably good,” Hall said, adding that Home Capital’s problem is a matter of confidence. “Confidence was lost in this company and the business model breaks apart. That’s the problem with banks.”

  So what would a worst case scenario look like?

  Canada’s financial system has lots of fire breaks, as Hall describes it, to prevent problems from spreading.

   

  “Even if a bank gets itself into a confidence issue, it can be effectively bailed out by another bank or by another financial institution or by ultimately the regulator,” Hall said.

   

  Bank failures in Canada’s financial system, deemed the world’s soundest by the World Economic Forum for eight straight years until 2016, are rare. Canadian banks sidestepped the worst of the 2008 financial crisis, having only a fraction of the $1.95 trillion of writedowns and losses suffered by financial firms worldwide.

  Ultimately, it is the “safest” financial systems, those that have taken virtually no reserves against a downside case, that end up being most exposed to unexpected shock factors.

  “In a system that’s well capitalized, there are lots of firefighters around and they’ve got lots of equipment and they’ve got lots of water – that’s kind of where we’re at right now,” Hall said. “But it doesn’t mean it can’t get out of control.” As a reminder, in the US stocks surged for months after the US had its own “New Century” moment, hitting all time highs nearly half a year later, when it took months for the market to digest just what the collapse of subprime meant for the US and global economy.

  

  

• HaPPY MaY DaY 2017…

  

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• Alex Jones Invites Media to Discuss His Child Custody Trial, Then Delivers His Magnum Opus

  The media was gleefully cheering on the specter of Jones losing sole custody of his children. So he invited them to the front of the courthouse to discuss the facts about the trial, and then about 15 minutes in started to redpill them on things, like chimeras and other wondrous and nightmarish mutations.

  This was his magnum opus.

  Watch.

  Content originally published at iBankCoin.com

  

• Paul Craig Roberts Asks "Does Washington Plan To Nuke Russia & China?"

  Authored by Paul Craig Roberts,

  Not everyone likes to hear about the threat of nuclear war. Some find refuge in denial and say that nuclear war is impossible because it makes no sense. Unfortunately, humankind has a long record of doing things that make no sense.

  In previous posts in recent years I have pointed out both written documents and changes in US war doctrine that indicate that Washington is preparing a preemptive nuclear attack on Russia and China. More recently, I have shown that Washington’s demonization of Russia and President Putin, the incessant lies about Russian deeds and intentions, and the refusal of Washington to cooperate with Russia on any issue have convinced the Russian government that Washington is preparing the Western populations for an attack on Russia. It is obvious that China has come to the same conclusion.

  It is extremely dangerous to all of mankind for Washington to convince two nuclear powers that Washington is preparing a preemptive nuclear strike against them. It is impossible to imagine a more reckless and irresponsible act. Yet this is precisely what Washington has done.

  Lt. Gen. Viktor Poznikhir, Deputy Head of Operations of the Russian General Staff has concluded that Washington in pursuit of global hegemony is implementing an anti-ballistic missile system that Washington believes can prevent a Russian nuclear response to a US pre-emptive attack. 

  Careful studies have convinced the Russians that Washington is investing in and arranging components that have no other function than to devastate Russia and cripple the country’s retaliatory capability. In short, Washington is preparing to launch a nuclear war. 

  As I explained previously, the theory behind this insane scheme is that after America’s preemptive strike Russia will be so devastated that Russia would not retaliate with any remaining forces out of fear that Washington would launch a second major strike. Washington also plans to use agents in place to assassinate as many members as possible of the Russian government, thus leaving the government in confusion without leadership.

  Yes, the insane American/Israeli neoconservatives are this determined to exercise hegemony over the world.

  Yes, Washington is sufficiently criminally insane to risk the destruction of life on earth based on the supposition that Washington’s offense will work perfectly and Russia and China’s capabilities will be so degraded that no retaliatory response will occur.

  One might hope that the American and Western populations would be outraged that Washington is so power-crazed that Washington is subjecting all life to such risks. But there is no sign of an anti-war movement. The Western leftwing has degenerated into Identity Politics in which the only threat comes from white heterosexual males who are portrayed as misogynists, racists, and homophopes. The Western leftwing is no longer war-conscious. Indeed, the leftwing has become diverted into such silly irrelevancies as transgender rights to toilets of their choice. The impotence of the Western left is so overwhelming that the left might as well not exist.

  Where then is the hope? Russia and China cannot simply sit there and await America’s preemptive nuclear strike.

  Possibly Washington does not intend a preemptive strike, but only to convince Russia and China that Washington’s preparations give Washington so much predominance in a conflict that Russia and China will submit to Washington’s hegemony. But this interpretation of Washington’s intention implies no less risk. Why would Russia and China wait for Washington to complete its preparations for war, preparations that permit Washington to turn Russia and China into puppet states?

  The US military/security complex has clearly prevailed over Trump’s intention to normalize relations between the US and Russia, and anti-Russian venom continues to pour out of NATO and Washington’s European vassal states. The majority of the American people seem to have accepted the propaganda that Russia is the number one threat to the United States. With propaganda controlling the explanation, Washington’s aggressive actions are explained as defense against a threat and not as a policy that will end life on earth.

  The chances are high that life on earth is approaching its end. The responsibility lies heavily on the American people, whose success, due to the mistakes of others, made Americans think that they are exceptional and privileged. Unaware of the inhumane threat to all life that is embodied in the neoconservative claim that Americans are exceptional and indispensable, the self-satisfied American public is unaware of the consequences of such hubris. Hubris is leading them, and the entire world, to slaughter in thermo-nuclear war.

  The neoconservative claim of American exceptionalism is the identical claim made for Germans by Hitler. If Americans are indispensable, everyone else is dispensable and can be “bombed into the stone age” as one US government official put it, or nuked as Washington intends to do to Russia and China. The claim of American exceptionalism is not accepted by Russia and China. Therefore, the insane, crazed monsters who rule over the West in Washington are bringing life on earth to an end.

  And there are no protests. The idiot British, the idiot Germans, the idiot French, Italians, Canadians, Australians, Belgians, Greeks, Portuguese, Spanish, Japanese, rally behind the insanity that is Washington.

  And so apparently do the American people, a population stupid beyond all belief.

  

  

• "It's Just Crazy" (Again): 2-Bedroom LA House Sells 40% Above Asking

  Two days ago we looked at the latest troubling development in US home price trends: a new bubble appears to be emerging in all the “usual suspect” places. As we noted on Thursday, “home prices in markets that bubbled over back in 2006/2007, like Las Vegas and San Francisco, got cut in half in 2009 but have since doubled again of their lows.  Meanwhile, markets like Denver and Dallas that didn’t participate as much in the 2007 mania are now surging to all-time highs, with Dallas prices up 55% over the past 5 years.”

  

  The Wall Street Journal added that some of the home buying behaviors of consumers, like paying prices well above appraisal values and waiving home inspections, are starting to be eerily reminiscent of 2006:

  In some markets, bidding wars are breaking out. Agents said some buyers are kicking in extra cash when properties don’t appraise for the asking price, and some are waiving their right to home inspections.

   

  “It can’t be sustained,” said David Berson, chief economist at Nationwide Insurance and a former chief economist at mortgage giant Fannie Mae, referring to the frenzied buying. “It can’t go on forever.”

  Other signs of overexuberance have emerged, including surging levels of licensed Realtors all chasing a quick buck.

  The number of licensed Realtors has jumped by nearly 25% since 2012, hitting a nine-year high in 2016 and sitting just 9% below the peak in 2006, according to real-estate consultant John Burns. In Denver, homes are selling briskly. The median number of days that homes spent on the market declined to eight in the first three months of the year from 61 in 2012, according to Redfin. Home prices rose 8.5% in Denver over the year ended in February, according to Case-Shiller.

   

  Nicki Thompson, an agent in Denver, said she recently had a listing that was on the market for two weekends at $1.2 million and she received multiple all-cash offers above the listing price. 

   

  “It’s just crazy,” she said.

  And for a practical example of just how crazy it truly is, take this renovated 2-bedroom, 1,948 sq. ft house first built in 1951 in the Eagle Rock section of Los Angeles, which was listed in mid-March for $699,000, was estimated by Redfin at $780,000, and sold yesterday for $980,888 (more than $500/sq foot) and 40% above asking, just over a month after it was first listed.

  

  Maybe it was the house’s profile “description” that unleashed the buying frenzy:

  In the 1960s-80s drums played on some of the most famous pop songs known (Good Vibrations, Mrs. Robinson, A Little Less Conversation, to name a few) were built in this garage in our beloved Eagle Rock. A. F. Blaemire and his wife, Kirsten, filled this home with music and creativity for decades, and now it’s ready for its next inspired owner! With freshly refinished hardwood floors and repainted interior, 5208 Monte Bonito is a blank canvas with great potential. The rooms are bright and spacious, including a downstairs recreation room perfect for a jam room, art studio, den (or all of the above!). The two-car garage has direct access to the house and an additional storage room. The back yard has plenty of space for entertaining and gardening – there is already an avocado tree, an orange tree, and a pitaya to get you started! Views of the Eagle Rock from the master bedroom, and sunset views from the front porch make this the ideal setting to call home.

  Then again, maybe not.

  So what do you get for just under a million in LA these days? Not much: two bedrooms, less than two bathrooms, a 2 car garage, a decorative fireplace, a rec room, and a 7,195 sq foot lot.

  

  Here are some photos showing what a “million dollar house” looks like in the latest US housing bubble.

  

  

  

  

  

  

  

  

  

• Global Reflation Trade In Trouble: Chinese Economic Data Plunges To 6-Month Lows As New Orders Dry Up

  New Orders for Manufacturing and Services sectors of the economy tumbled to their lowest levels in at least 6 months, weighing down both PMIs to their lowest levels since October 2016. After Q1's record surge in new credit creation, it appears the rapid tightening in China's financial conditions is already having an impact on the real economy (as well as the bond and stock market).

  As a reminder, for the first quarter, TSF reached a new record high 6.93 trillion yuan – equivalent to the size of Mexico's economy – and well above last year's first quarter total. At today's Yuan exchange rate, China's credit creation in Q1 amounted to just over 1 trillion US dollars.

  

   

  And since then PMIs have plunged from multi-year high to six-month lows… and it's broad-based…

  

   

  The manufacturing data shows and sudden sharp drop in New Orders, output prices (commodity crash), and

  

   

  But Services data is even worse – the 4th month of contraction in employment and a drop in doemstic and export new orders…

  

   

  The global engine of reflation just hit a wall…

  

  

  

• The Fruits of the Arab Spring Have Bore an Open Air Slave Market in Libya

  Regime change was all the rage under the Obama administration — especially in the middle east. The pitch was MUH democracy needed to be exported to savage lands, whose populations were largely an illiterate ensemble of archaic tribes hellbent on blowing each other up over the interpretation of their fictional holy books.

  Here was two time failed Presidential candidate, Hillary Clinton, flippantly opining about the fate of Libyan leader, Muammar Gaddafi.

  Since then, Libya has been a staging ground for terrorist activities and an open hole in North Africa by which an endless stream of migrants use to enter Italy. All of the weapons stockpiled by Gaddafi were taken by ‘rebels’ who used them to take over large swaths of land in Syria and Iraq. Our embassy was run over, and our Ambassador killed. All of this because we wanted to ‘free’ the Libyan people from their misery — which, ironically, resulted in a greater and deeper misery than they could’ve ever imagined.

  So what has the liberal/neocon policy of regime change done for Libya lately?

  Fucking slavery (please contain your outrage).

  According to a report by the UN Migration Agency, Libyan rebels are capturing poor Africans seeking to enter Europe, housing them in parking lots and make-shift prisons, in order to sell them on the open market like the days of antiquity, for as little as $100.

  Source: CNBC
  “We talk to returning migrants every day and we hear this stories every day — stories of exploitation, psychological, physical and sexual abuse,” Giuseppe Loprete, Niger-based chief of mission of the UN International Organization for Migration, told CNBC recently.

  For thousands of migrants paying to be smuggled out of North Africa, Libya remains the only route to Europe, and is a “black hole” where many disappear into exploitation, he said, adding: “The situation is only getting worse.”
   
  The going price for kidnapped migrants ranges from $200 to $500 in Libya, according to survivors who have returned to the IOM’s transit center. In the last few months, the organization has arranged for the repatriation of 1,500 migrants back to their homes, which include Nigeria, Senegal and Gambia.
   
  Libya is a gateway to Italy from Africa, with an estimated 25,000 migrants having crossed the Mediterranean Sea this year. Although Italy has taken measures to stem the flow of migrants from Libya, IOM data suggest crossings are on pace to challenge the nearly 182,000 migrants who landed in Italy last year.

  
   
  Former National Security Council officer under Obama, Eric Pelofsky laments, “It is a terrible situation thriving in the shadows created by the larger conflict in Libya.”
   
  Leonard Doyle, Spokesperson of the Director General at the International Organization for Migration (IOM), sums it up: “Migrants who go to Libya while trying to get to Europe, have no idea of the torture archipelago that awaits them just over the border.” He grimly adds, African migrants “become commodities to be bought, sold and discarded when they have no more value.”

  Content originally published at iBankCoin.com

  

• All The Plenary's Men

  Via BestEvidence,

  “The King can do no wrong.”

  —William Blackstone, Commentaries on the Laws of England

  “When the president does it, that means that it is not illegal.”

  —Ex-President Richard Nixon, interview with David Frost

  The question at bar is why the U.S. Department of Justice has failed to prosecute any too-big-to-fail banks or – more importantly – their bankers, even for admitted crimes.

  It’s a crucial question, because after eight straight years of unremitting prosecutorial failure, it looks very much as if a select group of top banks can, in fact, do no wrong. If that’s the case, then our constitutional republic isn’t merely in trouble. It's dead.

  A person or group of people who satisfy Blackstone’s criterion for ultimate sovereign power—the power to commit crimes with impunity—can’t exist in a nation where the law reigns supreme. And yet here we are a decade after the financial crisis began in earnest, and not one TBTF bank executive has gone to jail.

  Legally, the TBTF banks are indistinguishable from the King, since the power to commit crimes with impunity swallows all other sovereign powers; such a power isn’t even supposed to exist in the U.S., and yet it does.

  Moreover, since there can’t be two kings in a kingdom, the entire U.S. government, from the president on down, is just one of the King’s men under this formulation of power. The real job of the U.S. government, then, isn’t to represent the will of the people at all, it’s to do the King’s bidding. A nation that isn’t governed by law is governed by instead by a king—it’s one or the other—and the president’s inferiority to such an above-the-law sovereign was confirmed over 40 years ago with Nixon’s ouster. The president, unlike the King, answers to the law (despite Nixon's opinion).

  Now, you may say that while the TBTF banks might arguably have the de facto power of the King, that’s a far cry from wielding such power formally (i.e., having de jure criminal immunity).

  The reply to that objection is set forth in this film, “All the Plenary’s Men,” which is a sequel to “The Veneer of Justice in a Kingdom of Crime.”

  Another objection, raised by the DOJ itself, is that it HAS prosecuted TBTF bankers, citing cases like that of Raj Rajaratnam. These cases, however, in fact reveal the DOJ acting on behalf of the criminal global banking cartel.

  On that score, the DOJ’s abysmal track record is by now so extensive and so thorough that it’s possible to spot legal patterns in the DOJ’s protracted miscarriage of justice, and, as you’re about to see, those patterns are very deeply disturbing indeed. What’s been going on cuts right past a garden variety constitutional crisis like Watergate straight to a crisis of sovereignty.

  The backdrop for all of this is HSBC’s exoneration in December of 2012 for laundering money for drug dealers and terrorists, about which the House Financial Services Committee issued a report in July of 2016. Whether it was due to the political circus in town at the time, or to the Republican authorship of that report (albeit without dissent), it didn’t get nearly the scrutiny it deserved.

  You see, prosecutors working on the HSBC case were actually going to indict the bank, but they got overruled, and HSBC and its team of criminals skated. The story of how exactly that reversal came about reveals, if not the King himself, then certainly many of the King’s top men.

  Make the coffee extra strong before viewing. Lots of ground gets covered, quickly.

  And don’t mothball those pitchforks and torches just yet.

  

  

• Land Of The Free-ish

  …Free to have the same opinion as me or else…

   

  

  Source: Townhall.com

  

  

• Peter Schiff: Damn The Deficits, Huge Tax Cuts Ahead!

  Authored by Peter Schiff via Euro Pacific Capital,

  Donald Trump has made good on one of his most audacious campaign promises by submitting what he describes as the biggest tax cut in U.S. History. For once, at least, this does not appear to be Trumpian braggadocio. It really may be the mother of all tax cuts. But if passed, what may this bunker buster do to the economy? While I have rarely met a tax cut I didn’t like, this one just may be more likely to send the economy into a downward spiral than it is to send up to orbit.

  

  As I mentioned in my January commentary, Donald Trump’s big-spending, tax-cutting campaign rhetoric threatened to make him the biggest borrower in presidential history. He comes to office at a particularly vulnerable time for budget dynamics. After contracting by nearly two thirds from 2010 to 2015 (from the mind-bending $1.3 trillion to the merely enormous $438 billion), the Federal deficit started expanding again in 2016, moving up to $587 billion (Govt. Publishing Office, Office of Management & Budget (OMB). Current projections have it going up nearly every year over the next two decades. The Congressional Budget Office expects it to permanently surpass $1 trillion annually by 2021 or 2022. But these ominous forecasts were made well before anyone thought Trump had a snowball’s chance of ever becoming president. Now that he is in the office, those projections will be the floor. The ceiling is anyone’s guess.

  The forecasts assume that the taxing and spending laws in place during the Obama Administration won’t change. The steep increase in projected deficits towards the end of this decade and into the next is largely driven by the retirement of the Baby Boom generation, which will lead to simultaneous increases in entitlement spending and decreases in tax revenue. This brick wall has been hiding in plain sight for decades but the can-kickers in Washington have serially failed to do anything to avert the inevitable collision.

  (These forecasts also optimistically assume that the economy never again enters recession, inflation never again rears its ugly head, and that our creditors never get concerned enough about our growing debt to demand a premium for the risk of financing it.)

  But now that Trump occupies the Oval office, this date with destiny may come much sooner…and she will definitely be ordering the lobster.

  Before I go negative, let me give credit to Trump for picking the right taxes to cut. He kills the estate tax, an ugly beast that should have been euthanized years ago. Some may see this simply as a gift to the very rich. But legal wizards have long since devised strategies that offer almost complete protection from the death tax. None of these structures offer any real benefit to the businesses these millionaires typically own, or to the economy in general. Killing the tax will cost the government almost nothing, but it will remove tremendous impediments that have prevented family-run companies from growing over generations. He also kills the Alternative Minimum Tax, a complex parallel system of taxation that few understand but somehow manages to ensnare more and more taxpayers every year.

  Most importantly, he brings down the corporate tax rate from the globally non-competitive rate of 35% to the much more manageable 15%. Taxing corporations has always been a bad way to raise revenue. Corporations, after all, don’t pay taxes, which are simply treated as a cost of doing business. The real costs are borne by customers, who must pay higher prices, and employees, who must suffer with lower wages. But high domestic corporate taxes have hamstrung U.S. corporations and greatly contributed to the decline of American manufacturing. A more competitive corporate sector will shower benefits on all manner of consumers and employees.

  On the individual tax side, his decisions are much more problematic. Although Trump makes the sensible decision of compressing the seven individual tax brackets into just three (10%, 25%, and 35%), and doubles the standard personal deductions (thereby saving many people from the hassles of itemization), the headline-grabbing component of the proposals has to do with the lowering of the “pass-through” tax rate to the same 15% level that applies to corporations. This means that wealthy business owners, highly paid freelancers, and partners at law firms, medical groups, and management consultancies, will qualify for the 15% rate. This will be a huge windfall to some of the richest people in the country, who typically pay the highest marginal tax rate (currently 39%). And since the top one percent account for nearly 50% of tax revenue, this one provision promises to cost Uncle Sam plenty and to dramatically shake up the corporate landscape.

  Small business owners and independent contractors will in fact receive the benefit of the 15% pass through rate. But “Mom and Pop” entrepreneurs rarely have income that is high enough to be taxed at the higher rates. These smaller earners will likely be be trading a 15% tax for a 15% tax. All the big benefits will go to the really big fish. Whereas the vast majority of Tom Cruise’s income would have been taxed at the 39% rate, it will now be taxed at just 15%. His taxes will be reduced by nearly 60% from current law. The same holds true, in lesser degree, to lawyers, doctors, and consultants making more than a few hundreds of thousands of dollars annually.

  Is there any reason that could justify why a hedge fund manager making a million dollars per year should pay 15%, but a full time CEO at a corporation making half that would be subject to the highest marginal rate of 35%? It’s absurd. Now I’m not a big fan of the “progressive” tax system, whereby the tax rate goes up with income. I think a “flat” tax system, in which everyone paid the same rate, would be better. (Ideally I would like to see income taxes replaced by far less onerous and intrusive consumption taxes). But I certainly don’t believe in a “regressive” tax system in which lower-earning citizens pay higher rates than those at the top. But that’s exactly what Trump is trying to do.

  Given this wide disparity in tax rates, we can assume that the employment landscape will adjust dramatically. We should expect that legions of highly-paid full-time employees will start to form Limited Liability Corporations (LLCs) to work freelance rather than as employees. There are few barriers that would prevent such a shift, and the growth of internet-based work scenarios will continue to break down the traditional barrier between employee and freelancer. Yes, there are some labor rules that seek to separate employees from freelancers, but those rules may be easily circumvented, especially when the reward is so great. Rather than envy the lawyer earning more and paying less, the CEOs of the country will likely incorporate and sell their services freelance to their former employers.

  This shift will mean that a great many of the country’s highest earners will be paying taxes at the lowest rate. As a result, the reductions in tax revenue would likely be far greater than what is predicted in the standard modeling. 

  But unlike most prior tax cuts, the Trump version does not even make any attempt to balance the cuts with corresponding cuts in government spending. If Trump’s tax cuts don’t immediately generate sustained 4% growth or more, we may be staring down the barrel of $2 to $3 trillion in annual deficits. Is this an experiment that we really want to try?

  But even if the reforms can kick the economy into higher gear, thereby creating higher revenues with lower rates (The Laffer Curve), our current low interest rate environment provides significant obstacles to permit that growth to be sustained. If growth kicks up to the 4% range, the Federal Reserve will have to accelerate its rate increase schedule. Allowing rates to remain two to three percent below the growth rate could risk an overheated economy with inflation spiraling out of control. These higher rates will act as a stiff headwind to an economy that has grown increasingly dependent on ultra low rates.

  But increases in rates would also cost the economy in another way. Our current bonded national debt is ready to surge past the $20 trillion mark. The Trump tax cuts will push it beyond that very quickly. If the Fed raises rates to keep pace with higher growth, then the Government will have to pay much more to finance the outstanding debt. At $20 trillion, every point of increase in interest rates will cost the government $200 billion annually. At that level, if interest rates were at 3.75%, instead of the current .75%, then the Federal Government would have to come up with about another $600 billion per year in interest payments. (That number will be much higher when the debt grows past $20 Trillion).

  But it's not just Uncle Sam that is over-loaded with debt. Corporations and households would see their interest costs surge as well with rising interest rates. So what lower taxes giveth, higher interest rates will taketh away. 

  Consider the housing market. Not only will higher interest rates substantially increase the cost of home ownership (through higher mortgage rates), but Trump’s tax proposals will dramatically increase the cost of ownership for those living in high tax states. Under the proposal, homeowners will no longer be able to deduct property taxes, and a doubling of the standard deduction means a much larger percentage of homeowners will not be able to deduct mortgage interest from their federal income tax. Plus, with the top tax rate reduced from 39.6% to 15%, the mortgage interest deduction will be far less valuable to those higher earners who can still take advantage of it. Higher mortgage rates and lower tax subsidies will increase the cost and decrease the appeal of home ownership. This could lead to a crash in real estate prices, especially in the high end of the market. Falling prices could wipe out what little home equity many Americas have left, and lead to another wave of foreclosures. The losses to Fannie Mae and Freddie Mac could be significant, with the costs falling directly on the Federal government, further driving up annual deficits. 

  The reality is that years of massive deficits, runaway government spending, artificially low interest rates, and three rounds of quantitative easing, have left the economy so sick that any tax cut large enough to revive it may actually kill it instead. The only silver lining to this cloud may be that the coming fiscal train wreck leaves lawmakers no choice but to slash government spending. If the real Republican agenda is to starve the beast, its success is assured.

  

  

• Portland Rose Parade Cancelled Amid Violent Threats From Anti-Fa: "You've Seen How Much Power We Have… Police Can't Stop Us"

  Authored by Mac Slavo via SHTFplan.com,

  For a bunch of peace loving, tolerance spewing social justice warriors, it sure does appear that the new “progressive” movement in America is rapidly turning to Bolshevik tactics to force their will upon a free and non-violent people.

  

  The latest example of a society on the brink of civil war comes to us from Portland, Oregon, where every year the 82nd Avenue of Roses Business Association kicks of the city’s annual Rose Festival with a family-friendly parade.

  Except this year, there will be no parade. Organizers have cancelled the event amid threats of violence from groups referring to themselves as “Anti-Fascist.” According to The Washington Post, the reasoning behind the threats is reportedly outrage over the fact that the county’s Republican Party was given one of the nearly 100 spots in the parade.

  Then came an anonymous and ominous email, according to parade organizers, that instructed them to cancel the GOP group’s registration — or else.

   

  “You have seen how much power we have downtown and that the police cannot stop us from shutting down roads so please consider your decision wisely,” the anonymous email said, referring to the violent riots that hit Portland after the 2016 presidential election, reported the Oregonian. “This is nonnegotiable.”

   

  The email said that 200 people would “rush into the parade” and “drag and push” those marching with the Republican Party.

   

  “We will not give one inch to groups who espouse hatred toward LGBT, immigrants, people of color or others,” it said.

  Earlier this month we reported that members of the so-called anti-fascist, left leaning progressive movements are preparing for war by organizing combat fighting classes and even going so far as to suggest it’s time to start bringing guns to such protests as a show of force:

  In short, as predicted, they are turning to militancy and mob action by mobilizing individuals and groups to attend combat training seminars, acquiring better equipment like baseball bats and helmets, and of course, if things really go bad… guns.

  Yes, we seemed to have lost today. The alt-right held their ground. If we wanna take action against them, we need to be better organized and better trained. It doesn’t help that it’s only the far left opposing them, any trump supporter can be radicalized far easier than any liberal.

  I hope we learn from today

   

  …

   

  A shocking number of our comrades went in there with absolute no combat training. We need to set up seminars or something of the sort.

   

  …

   

  We also need better equipment

  Full report: There Will Be Blood: Left Prepares For War After Berkeley Beat Down: “Combat Training, Better Equipment, Guns…”

  While these folks may think silencing the free speech of political ideologies contrary to theirs through violence is a means to a worthy end, it was the Bolshevik ideology, similar to what we’re seeing from “comrades”  in the anti-fascist movement, that eventually gave way to one of the world’s most brutal dictators and was responsible for the deaths of, quite literally, over 100 million people in the 20th century.

  On another and perhaps equally interesting note, we’ll mention the fact that for years the Department of Homeland Security and domestic law enforcement agencies had warned Americans that it was lone wolves with conservative values who stockpiled guns, food, bibles and peacefully protested government overreach who were, by officials and congressional members, deemed terrorists.

  In fact, there were a variety of identifiers used to qualify an American citizen as a potential domestic terrorist:

  So how does a person qualify as a potential domestic terrorist?  Based on the training I have attended, here are characteristics that qualify:

  • Expressions of libertarian philosophies (statements, bumper stickers)
  • Second Amendment-oriented views (NRA or gun club membership, holding a CCW permit)
  • Survivalist literature (fictional books such as “Patriots” and “One Second After” are mentioned by name)
  • Self-sufficiency (stockpiling food, ammo, hand tools, medical supplies)
  • Fear of economic collapse (buying gold and barter items)
  • Religious views concerning the book of Revelation (apocalypse, anti-Christ)
  • Expressed fears of Big Brother or big government
  • Homeschooling
  • Declarations of Constitutional rights and civil liberties
  • Belief in a New World Order conspiracy

  We wonder if similar classifications will be assigned to those who threaten families and children at parades?

  

  

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• Two Blondes, Two Fates

  From the Slope of Hope: Earlier this week, my son asked me a sincere question: “How come Marissa Mayer got $200 million by screwing up Yahoo?”

  It was a good question, and one I had trouble answering at first, because I’d like him to think that there’s some level of fairness, meritocracy, and sensibility to this world of ours. In Mayer’s case, however, there is none. Her entire massive fortune is due to being in the right place, at the right time, on multiple occasions. She is no more clever or shrewd than someone who won the mega-jackpot lottery

  When I had time to discuss the reality of the situation with him thoroughly, I laid out the bare truth for him. It is as follows:

  (1) Mayer was a senior at Stanford, trying to figure out which of her many job offers she would accept. A startup named Google was looking for a product manager, so they sent her an email. Seeing the subject line, she intended to press the Delete key, because she wanted to join Bain Consulting (a very typical place for a graduate of an elite school to begin their career), but she accidentally pressed the Space bar, showing the email’s contents. She was intrigued enough to read it and talk to the founders, and she took the plunge. Word on the street is she that was a Friend With Benefits to Larry Page during her tenure there, which didn’t hurt matters. Suffice it to say she made her first fortune by stumbling into Google the moment she left college and being real chummy with one of the Google guys.

  

  (2) During this same time period, Yahoo couldn’t do anything right. They’ve always been a pretty crappy site, but they had the good fortune of being a “first mover” when the Internet first appeared, and their popularity fed on itself. They stupidly said no to a great buyout offer from Microsoft, and they kept lurching from one failed CEO to another, including, notably, Carol Bartz, who is basically an older, more pissed-off version of Marissa.

  http://www.youtube.com/v/zq4A1uCQ1w0

  (3) In a perfect illustration of the Peter Principle, Mayer had risen to her own level of incompetence at Google, and she started getting sidelined. It slowly began to dawn on people that she wasn’t particularly good at anything, except narcissistically posing for magazine covers, and she started to be pushed farther and farther away from senior management. She was rich enough to never work again, but her glory days seemed to be behind her.

  (4) Yahoo, desperate for a shot at rejuvenating itself, reached out to Mayer for the plum post of CEO. What I explained carefully to my son is that when a public company really, really wants someone, that “someone” can construct a deal so that they make a fortune no matter how badly they fuck up. And that’s precisely what Marissa did. She got a monster signing bonus and a pay package that was Gigantic if she screwed everything up and Super Gigantic if things went well. For a while, the world declared that, as with Steve jobs did with Apple in 1996, she was going to save Yahoo.

  

  (5) In the five or so years that she ran Yahoo, she did just about everything wrong. She enriched friends by paying insane figures for their startups. She spent $1.3 billion in tumblr, which failed. She hired Katie Couric at $10 million a year to – – I dunno – – sit in front of a camera and show her big, white teeth. She wasted money like mad, didn’t turn the company around, and was essentially an epic screwup.

  So how come Yahoo’s stock price didn’t reflect this? I can answer that with one word: Alibaba.

  See, many years earlier, Yahoo put money into the tiny company Alibaba, and its 40% stake became very, very valuable. Indeed, Yahoo had a NEGATIVE enterprise value. The one and ONLY thing that preserved shareholder value was that it just happened to have a big stake in BABA whose share price just kept going up. That’s it. End of story. Dumb luck. And Mayer benefited from this happy accident more than anyone. She is, I assured my boy, creepily laughing all the way to the bank.

  http://www.youtube.com/v/OinvdoyBsEc&t

   

  So why did I call this post TWO blondes? Because in sharp contrast with the dumb luck of Marissa Mayers is the rotten luck of someone who almost got away with it – – but didn’t – – good old “Crazy Eyes” Elizabeth Holmes, who had the gall to hold herself out to the world as the reincarnation of Steven P. Jobs.

  

  You know the story well, so I won’t go into much detail. The thumbnail sketch is that she left Stanford at 19, put Theranos together, somehow convinced venture capitalists (distracted, I suppose, by her trim figure and fake blonde hair) into valuing her company at $9 billion, and then – – whoops – -it turns out that she hasn’t invented a goddamn thing, and that their technology doesn’t work. The result? Government investigations, investor lawsuits, employee suicides, and a net worth of Holmes collapsing from $4.5 billion to $dick.

  The massive wealth she created for herself and others was as fake as that gorgeous blonde hair of hers.

  

  Oh, you thought it was real? C’mon now. These women like to create an image. In spite of their post-feminist bluster, they will happily pander to whatever sexist notions they believe will garner them the highest paycheck. I offer you this tidbit of reality as well.

  

  Pretty amazing what a lot of cash can buy in terms of a facade, isn’t it?

  

  Same person. Honest. And maybe a touch of Photoshop.

  So, in the end, you’ve got one woman who was able to pull the wool over everyone’s eyes and make a fortune of about a quarter billion dollars, and you’ve got another who almost pulled the wool over everyone’s eyes, but got caught before she got away with it, and is left with nothing.

  Two fake blondes. Two different fates. There is no real sense to any of this. Right time. Right place. Luck of the draw. And a little helping of what the boys like, just to grease the skids.

  

• Here's Who NATO Will Probably Be Fighting If There's A World War III

  Authored by Darius Shahtahmasebi via TheAntiMedia.org,

  

  Russia recently said it would support Iran’s bid to join the Shanghai Cooperation Organization, an emerging economic and political alliance led by China. This Shanghai Bloc was originally formed in 1996 before it was rebranded in 2001. Its membership includes Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Last year, India and Pakistan also signed the memorandum of obligations and are expected to become full members sometime this year. The bloc has expanded into a military organization over the last few years and has run joint military exercises in the past.

  Russian Foreign Minister Sergei Lavrov said Iran now fully fits the criteria for membership and that discussions on its bid to join will take place this summer.

  “Next in line [for membership]…is Iran, which has resolved issues related to sanctions from the U.N. Security Council,” Lavrov told Russian state news agency Itar-Tass, as reported by Newsweek.

  The country now “fully meets the criteria for membership,” Lavrov told journalists at the end of a meeting of the group’s foreign ministers.

  Iran currently has observer status in the organization, meaning it can attend summits. As is quite clear, Iran and Russia already cooperate closely both economically and militarily, particularly regarding the Syrian conflict. What is especially notable about this alliance, however, is the fact that the U.S. was rejected from gaining observer status in 2004, which, as Newsweek reports, reinforces “the impression that its goal is to exist in opposition to Western political and military alliances.”

  Further complicating this issue is the fact that NATO member Turkey expressed a desire to join this organization at the end of last year. As Turkey transitions from a so-called democracy to a nearly outright dictatorship, Turkish President Tayyip Erdogan may find he has more in common with his eastern counterparts than he does his western ones.

  If this scenario were to occur, it would place a NATO ally in direct alliance with NATO’s longtime arch-rivals Iran and Russia.

  As the world is seemingly preparing for a third world war between NATO and the growing Eastern bloc, we are witnessing the strengthening of alliances as well as the switching of some very strategic ones. One can only hope that as alliances switch and strengthen, the balance of power could shift just enough to prevent the powers-that-be from launching this disastrous war in the first place.

  

  

• You Can't Buy Love… But You Can Rent It

  According to the Digital Market Outlook (DMO) by Statista, the country with the largest share of adults paying for a dating service is the United States.

  

  You will find more statistics at Statista

  As Statista's Martin Armstrong details, at 26.4 percent, over a quarter of Americans are spending their money on trying to find love (or a sexual encounter).

  The DMO analysts classified 'dating services' as either 'matchmaking', 'online dating', or 'casual dating'. Making up the top three were the UK and Germany on 20 and 17 percent respectively.

  

  

• ISIS Apologized To Israel For Attacking IDF Soldiers

  In a curious incident that is certain to provoke questions about the proximity, not to mention fund flow, between Israel and ISIS the former Israeli Defense Minister, cited by the Times of Israel, said that  Islamic State terrorists have on at least one occasion “apologized” to Israel for mistakenly attacking IDF soldiers in the occupied Golan Heights. The disclosure may also provide some insight into why after reportedly attacking virtually every religion and ethnicity in the region, there have been virtually no documented attacks by the Islamic State on Israel or its citizens.

  

  Discussing the wider Israeli policy of “neutrality” in Syria, former defense minister Moshe Ya’alon accidentally admitted that Israel has an open communications channel with an Islamic State cell which operates in Gollan Heights.

  “There was one case recently where Daesh opened fire and apologized,” Ya’alon said on Saturday, quoted by the Times of Israel.

  Asked to expand on his controversial statement, Ya’alon’s office refused to elaborate. The IDF also declined to comment. Under Israeli law, any communication with terrorists is considered illegal, unless of course the Israel state covertly does not consider ISIS terrorists.

  Ya’alon served as Israel’s Defense Minister from 2013 until his resignation in May 2016, and his comments were reportedly referring to the first direct incident involving clashes between Israel and Islamic State terrorists. In that incident which took place last November, the Shuhada al-Yarmouk cell, which has pledged allegiance to ISIS, exchanged fire with Israeli forces after the IDF’s Golani Brigade crossed the security fence with Syria to conduct an “ambush operation.”

  
  Former Israeli defense minister Moshe ‘Bogie’ Ya’alon speaks at the Hebrew University

  While the official Israeli position is pursuing neutrality in the Syrian conflict, Tel Aviv has on several occasions engaged Syrian military targets in Syria – most recently on Wednesday – usually under the pretext of preventing the alleged transfer of weapons to Hezbollah, considered a terrorist group by Israel. Last month, Tel Aviv confirmed conducting airstrikes on several targets in Syria, after Damascus activated its air defense system against the IDF jets.

  While Prime Minister Benjamin Netanyahu has justified the repeated incursions, explaining that IDF planes targeted a Hezbollah weapons convoy, Damascus has said that the Israeli strikes only benefit the Islamic State and other terrorist groups. Earlier this month the Syrian President Bashar Assad once again blamed Israel of helping militants terrorizing his country.

  “You can assume that these terrorists are fighting for Israel. If they aren’t part of the regular Israeli army, they’re fighting for Israel. Israel has common goals with Turkey, the United States, France, Britain, Saudi Arabia, Qatar and other countries,” Ynet quoted Assad as as saying.

  “Israel is working on helping these terrorists wherever the Syrian army is advancing. It attacks in one form or another to provide them with assistance, and to stop the Syrian army’s momentum in the face of the terrorists,” the Syrian leader added.

  In light of Ya’alon’s comments, Assad may have been right.

  

  

• Will Trump Release The Missing JFK Files?

  Authored by Philip Shenon via Politico.com,

  

  The nation’s conspiracy-theorist-in-chief is facing a momentous decision. Will President Donald Trump allow the public to see a trove of thousands of long-secret government files about the event that, more than any other in modern American history, has fueled conspiracy theories – the 1963 assassination of President John F. Kennedy?

  The answer must come within months. And, according to a new timeline offered by the National Archives, it could come within weeks.

  Under the deadline set by a 1992 law, Trump has six months left to decide whether he will block the release of an estimated 3,600 files related to the assassination that are still under seal at the Archives. From what is known of the JFK documents, most come from the CIA and FBI, and a number may help resolve lingering questions about whether those agencies missed evidence of a conspiracy in Kennedy’s death. As with every earlier release of JFK assassination documents in the 53 years since shots rang out in Dealey Plaza in Dallas, it is virtually certain that some of the files will be seized on to support popular conspiracy theories about Kennedy’s murder; other documents are likely to undermine them.

  There is no little irony in the fact that decision will be left to Trump, long a promoter of so many baseless conspiracy theories about everything from his predecessor’s birthplace to the notion that the father of one of his campaign-trail rivals was in league with JFK assassin Lee Harvey Oswald.

  For the first time, the Trump White House is acknowledging that it is focused on the issue, even if it offers no hint about what the President will do. A White House official, speaking on condition of anonymity, told Politico last week that the Trump administration “is familiar with the requirements” of the 1992 law and that White House is working with the National Archives “to enable a smooth process in anticipation of the October deadline.”

  Under the 1992 JFK Assassination Records Collection Act, the library of documents about Kennedy’s death must be made public in full by the deadline of this October 26, the law’s 25th anniversary, unless Trump decides otherwise. It is his decision alone.

  The prospect of the release of the last of the government’s long-secret JFK assassination files has long tantalized historians and other scholars, to say nothing of the nation’s armies of conspiracy theorists, since no one can claim to know exactly what is in there.

  Martha W. Murphy, the Archives official who oversees the records, said in an interview last month that a team of researchers with high-level security clearances is at work to prepare the JFK files for release and hopes to begin unsealing them in batches much earlier than October – possibly as early as summer.

  Beyond releasing the 3,600 never-before-seen JFK files, the Archives is reviewing another 35,000 assassination-related documents, previously released in part, so they can be unsealed in full. Short of an order from the president, Murphy said, the Archives is committed to making everything public this year: “There’s very little decision-making for us.”

  Many of the documents are known to come from the files of CIA officials who monitored a mysterious trip that Oswald paid to Mexico City several weeks before the assassination – a trip that brought Kennedy’s future killer under intense surveillance by the spy agency as he paid visits to both the Soviet and Cuban embassies there. The CIA said it monitored all visitors to the embassies and opened surveillance of Oswald as soon as he was detected inside the Soviet compound for the first time.

  Other documents are known to identify, by name, American and foreign spies and law-enforcement sources who had previously been granted anonymity for information about Oswald and the assassination. At least 400 pages of the files involve E. Howard Hunt, the former CIA operative turned Watergate conspirator who claimed on his deathbed that he had advance knowledge of Kennedy’s murder.

  The documents were gathered together by a temporary federal agency, the Assassination Records Review Board, that was established under the 1992 law. In an interview last month, its former chairman, Judge John R. Tunheim of the Federal District Court in Minnesota, said he “wouldn’t be surprised if there’s something important” in the documents, especially given how much of the history of the Kennedy assassination has had to be rewritten in recent decades.

  He said he knew of “no bombshells” in the files when the board agreed to keep them secret two decades ago, but names, places and events described in the documents could have significance now, given what has been learned about the assassination since the board went out of business. “Today, with a broader understanding of history, certain things may be far more relevant,” he said.

  Murphy, the Archives official, said she, too, knew of no shocking information in the documents – but she said her researchers were not in a position to judge their significance. “As you can imagine, we’re not reading them for that, so we’re probably not the best people to tell you,” she said. “I will say this: This collection is really interesting as a snapshot of the Cold War.”

  The Review Board, created by Congress to show transparency in response to the public furor created by Oliver Stone’s conspiracy-minded 1991 film “JFK,” did force the release of a massive library of other long-secret documents from the CIA, FBI, Secret Service and other federal agencies, as well as from congressional investigations of the assassination.

  Many showed how much evidence was withheld from the Warren Commission, the independent panel led by Chief Justice Earl Warren that investigated the assassination and concluded in 1964 that there was no evidence of a conspiracy in Kennedy’s death.

  The documents showed that both the CIA and FBI had much more extensive information about Oswald—and the danger he posed to JFK—before the assassination than the agencies admitted to Warren’s investigation. The evidence appeared to have been withheld from the commission out of fear that it would expose how the CIA and FBI had bungled the opportunity to stop Oswald.

  Under the 1992 law, agencies may make a final appeal to try to stop the unsealing of specific documents on national security grounds. But the law grants only one person the power to actually block the release: the president. The law allows Trump to keep a document secret beyond the 25-year deadline if he certifies to the National Archives that secrecy was “made necessary by an identifiable harm to military defense, intelligence operations, law enforcement or conduct of foreign relations” and that “the identifiable harm is of such gravity that it outweighs the public interest in disclosure.”

  Both the CIA and FBI acknowledged in written statements last month that they are reviewing the documents scheduled for release; neither agency would say if it planned to appeal to the White House to block the unsealing of any of the records. “CIA continues to review the remaining CIA documents in the collection to determine the appropriate next steps with respect to any previously-unreleased CIA information,” said agency spokesperson Heather Fritz Horniak. The FBI said it had a team of 21 researchers assigned to the document review.

  According to a skeletal index of the documents prepared by the Archives, some of the files appear to involve, at least indirectly, a set of conspiracy theories that Trump himself promoted during the 2016 campaign – about possible ties between Cuban exile groups in the United States and Oswald. On the campaign trail, Trump repeatedly promoted an article published last April in the National Enquirer that suggested a connection between Oswald and the Cuban-born father of Senator Ted Cruz of Texas, one of Trump’s rivals for the Republican nomination. The article was based entirely on a 1963 photograph that showed Oswald, a self-proclaimed Marxist and champion of Fidel Castro’s Communist revolution in Cuba, handing out pro-Castro leaflets in New Orleans with a man who, the tabloid suggested, was Cruz’s father, Rafael.

  The Cruz family denied that the senator’s family was the man depicted in the photo and that Rafael Cruz had any connection to Oswald; there is no other evidence of any connection.

  The National Archives index shows that the documents to be released this year include a 86-page file on a prominent CIA-backed anti-Castro exile group that Oswald appears to have tried to infiltrate in New Orleans, his hometown, in order to gather information that might be of use to the Castro government.

  Judge Tunheim said that Oswald’s trip to Mexico City in September and October 1963 figures directly or indirectly in many of the documents that remain under seal, including the internal files of CIA operatives who worked at the American embassy there.

  Historians agree that the trip, which Oswald apparently undertook in hopes of obtaining a visa to defect to Castro’s Cuba, much as he had once tried to defect to the Soviet Union, has never been fully investigated.

  “I still think there are loose threads in Mexico City that no one has ever explored,” Tunheim said. “It was a bizarre chapter – there’s no question about it.” Previously declassified CIA and FBI documents suggest that Oswald openly boasted to Cuban officials there about his intention to kill Kennedy and that he had a brief affair with a Mexican woman who worked in Cuba’s consulate. The American ambassador to Mexico at the time of the assassination said later that he believed the woman had probably been working for the CIA.

  Tunheim said the Review Board agreed to keep the Mexico-related documents secret in the 1990s at the request of the State Department, the CIA and other agencies that warned that their release could do damage to relations with the Mexico government, which worked closely with the CIA and FBI during the Cold War. “Mexico City was where everybody spied on everybody else,” the judge said.

  But given the chill in relations between the United States and Mexico following Trump’s election and early moves by his administration to build its long-promised wall along the Mexican border, a similar plea to keep the documents secret may not go very far with the new president. Said Tunheim: “I guess we don’t have much of a relationship with the Mexican government to protect anymore.”

  

  

• UC Davis Rolls Out "Morning After Pill" Vending Machines – "It Encourages Responsibility"

  The University of California at Davis has a revolutionary solution for all their binge-drinking students who find it difficult to control their primal urges after a night of frat-hopping…the ‘Plan B’ vending machine.  For $30 a box students can now flush that pesky, potentially-fertilized egg without the hassle of having to walk all the way to a pharmacy. 

  Of course, the female students on campus seem to love the idea, saying…“It’s like useful”….yeah, totally, and stuff.

  “It’s easier to take a Plan B than have to tell your parents that you’re pregnant.”

   

  “It’s like useful….so that you don’t have to go to a pharmacy…”

  Meanwhile, one parent actually told CBS Sacramento that the vending machine “encourages responsibility.”

  “It encourages responsiblity.  I mean if you mess up then you mess up.  It’s better than waiting to see if you get pregnant and have an abortion.”

  We suspect many other parents might have a slightly different definition of “responsibility”…but what do we know?
  

   

  But the machine isn’t just for emergencies…it also offers condoms for those who prefer to plan ahead.

  The vending machine was the brain child of UC Davis student, Parteek Singh, who said he came up with the idea after his “friends” had a close encounter one Friday night when the local pharmacy ran out of Plan B pills.

  “There was an incident where my friends went to the one pharmacy that was open 24/7 in town on a Friday night.  And they were all out of emergency contraceptive.”

   

  “I want to see this on every college campus.”

  What more is there to say really?
  

  

  

• "The CIA Has Been Deeply Humiliated" – Ron Paul Interviews Julian Assange

  Having blasted the Trump administration for their hyprocritical flip-flop from “loving WikiLeaks” to “arrest Assange,” Ron Paul made his feelings very clear on what this signals: “If we allow this president to declare war on those who tell the truth, we have only ourselves to blame.” Today he sits down with WikiLeaks founder Julian Assange for a live interview…

  “The CIA has been deeply humiliated as a result of our ongoing publications so this is a preemptive move by the CIA to try and discredit our publications and create a new category for Wikileaks and other national security reporters to strip them of First Amendment protections,“

  Assange said in a preview clip from the interview below…:

  TODAY at 12pm ET … Julian Assange joins me on The Liberty Report! https://t.co/ZpE9V7y7nX pic.twitter.com/gR9Y3VkktA

  — Ron Paul (@RonPaul) April 28, 2017

  //platform.twitter.com/widgets.js

  Full interview below… 
  

  

  

• The Rise Of The Generals

  Authored by Patrick Buchanan via Buchanan.org,

  Has President Donald Trump outsourced foreign policy to the generals?

  So it would seem. Candidate Trump held out his hand to Vladimir Putin. He rejected further U.S. intervention in Syria other than to smash ISIS.

  He spoke of getting out and staying out of the misbegotten Middle East wars into which Presidents Bush II and Obama had plunged the country.

  President Trump’s seeming renunciation of an anti-interventionist foreign policy is the great surprise of the first 100 days, and the most ominous. For any new war could vitiate the Trump mandate and consume his presidency.

  Trump no longer calls NATO “obsolete,” but moves U.S. troops toward Russia in the Baltic and eastern Balkans. Rex Tillerson, holder of Russia’s Order of Friendship, now warns that the U.S. will not lift sanctions on Russia until she gets out of Ukraine.

  If Tillerson is not bluffing, that would rule out any rapprochement in the Trump presidency. For neither Putin, nor any successor, could surrender Crimea and survive.

  What happened to the Trump of 2016?

  When did Kiev’s claim to Crimea become more crucial to us than a cooperative relationship with a nuclear-armed Russia? In 1991, Bush I and Secretary of State James Baker thought the very idea of Ukraine’s independence was the product of a “suicidal nationalism.”

  Where do we think this demonization of Putin and ostracism of Russia is going to lead?

  To get Xi Jinping to help with our Pyongyang problem, Trump has dropped all talk of befriending Taiwan, backed off Tillerson’s warning to Beijing to vacate its fortified reefs in the South China Sea, and held out promises of major concessions to Beijing in future trade deals.

  “I like (Xi Jinping) and I believe he likes me a lot,” Trump said this week. One recalls FDR admonishing Churchill, “I think I can personally handle Stalin better than … your Foreign Office … Stalin hates the guts of all your people. He thinks he likes me better.”

  FDR did not live to see what a fool Stalin had made of him.

  Among the achievements celebrated in Trump’s first 100 days are the 59 cruise missiles launched at the Syrian airfield from which the gas attack on civilians allegedly came, and the dropping of the 22,000-pound MOAB bomb in Afghanistan.

  But what did these bombings accomplish?

  The War Party seems again ascendant. John McCain and Lindsey Graham are happy campers. In Afghanistan, the U.S. commander is calling for thousands more U.S. troops to assist the 8,500 still there, to stabilize an Afghan regime and army that is steadily losing ground to the Taliban.

  Iran is back on the front burner. While Tillerson concedes that Tehran is in compliance with the 2015 nuclear deal, Trump says it is violating “the spirit of the agreement.”

  How so? Says Tillerson, Iran is “destabilizing” the region, and threatening U.S. interests in Syria, Yemen, Iraq and Lebanon.

  But Iran is an ally of Syria and was invited in to help the U.N.-recognized government put down an insurrection that contains elements of al-Qaida and ISIS. It is we, the Turks, Saudis and Gulf Arabs who have been backing the rebels seeking to overthrow the regime.

  In Yemen, Houthi rebels overthrew and expelled a Saudi satrap. The bombing, blockading and intervention with troops is being done by Saudi and Sunni Arabs, assisted by the U.S. Navy and Air Force.

  It is we and the Saudis who are talking of closing the Yemeni port of Hodeida, which could bring on widespread starvation.

  It was not Iran, but the U.S. that invaded Iraq, overthrew the Baghdad regime and occupied the country. It was not Iran that overthrew Col. Gadhafi and created the current disaster in Libya.

  Monday, the USS Mahan fired a flare to warn off an Iranian patrol boat, 1,000 meters away. Supposedly, this was a provocation. But Iranian foreign minister Javad Zarif had a point when he tweeted:

  “Breaking: Our Navy operates in — yes, correct — the Persian Gulf, not the Gulf of Mexico. Question is what US Navy doing 7,500 miles from home.”

  Who is behind the seeming conversion of Trump to hawk?

  The generals, Bibi Netanyahu and the neocons, Congressional hawks with Cold War mindsets, the Saudi royal family and the Gulf Arabs — they are winning the battle for the president’s mind.

  And their agenda for America?

  We are to recognize that our true enemy in the Mideast is not al-Qaida or ISIS, but Shiite Iran and Hezbollah, Assad’s Syria and his patron, Putin. And until Hezbollah is eviscerated, Assad is gone, and Iran is smashed the way we did Afghanistan, Iraq, and Yemen, the flowering of Middle East democracy that we all seek cannot truly begin.

  But before President Trump proceeds along the path laid out for him by his generals, brave and patriotic men that they are, he should discover if any of them opposed any of the idiotic wars of the last 15 years, beginning with that greatest of strategic blunders — George Bush’s invasion of Iraq.

  

  

• Is The Blockchain About To Disrupt This $7 Trillion Industry?

  Authored by Teeka Tiwari via InternationalMan.com,

  

  Recently, I wrote about a small $100,000 trade of cheese and butter.

  Why?

  This one trade changed 400 years of history in just four hours.

  How so? Normally, it would take 10 days to handle the paperwork. But this trade concluded in less than four hours.

  The solution: a blockchain platform that streamlined the entire process.

  While the trade was small, it was big for the $7 trillion trade finance industry.

  What exactly is trade finance?

  It’s when two companies in different countries want to buy and sell from each other. They use a bank to guarantee the transaction…

  For more than 400 years, trade finance hasn’t changed much. It requires a mountain of paperwork. And all the parties involved spend a lot of time proving that they truly own what they say they own.

  But that’s all about to change.

  Today, we show you how the blockchain is changing the inefficient trade finance industry. And we’ll show you how to profit as well.

  How the Blockchain Is Disrupting Trade Finance

  The trend in blockchain and trade finance is accelerating.

  In February 2017, a cargo shipment containing $25 million worth of African crude steamed its way to China.

  The merchants involved sold the oil three times during the trip. Banks, agents, inspectors, and a commodity trading firm were all involved.

  The traditional analogue solution involved hundreds of documents. And it took at least three hours to complete each trade.

  But on this trip, each trade took less than 25 minutes.

  The name of the project that made a 25-minute trade possible is Easy Trading Connect. It’s a partnership between Société Générale and ING.

  And it works by moving the transactions to a private version of the Ethereum blockchain.

  This particular transaction involved ING, Société Générale, and commodity trading house Mercuria.

  

  Saving time wasn’t the only benefit of the trade.

  ING reported that trader efficiency improved by 33%. And Marco Dunand, CEO of Mercuria, stated the blockchain reduced costs by 30%.

  The blockchain is a savior for this manually intensive, paperwork-heavy process.

  Physical documents have always been a problem. It opens up transactions to human error, fraud, and delays.

  With the blockchain, all documents get digitized. That makes documents safer to move around. And it solves a lot of paperwork problems.

  For example, Mercuria sold the oil heading to China three times before it arrived. Because of the blockchain, Mercuria, ING, and Société Générale all had access to real-time data. No one had to go searching for the original source documents.

  Further, they were able to “auto-check” documents on a computer rather than doing it manually. That makes for a smooth process.

  There’s a huge incentive to move to the blockchain. Santander estimates the blockchain will cut trade finance costs up to $20 billion.

  What to Do Next

  Easy Trading Connect proves the blockchain works to conduct business.

  And the benefit of the blockchain in trade finance is obvious.

  This is just getting started. Venture capital firms and financial institutions are pouring millions of investment dollars into the blockchain.

  Right now, over 50 major financial institutions have in-house blockchain projects or relationships with blockchain startups.

  Do you want exposure to the burgeoning blockchain bull market? The simplest way would be to buy a small amount of bitcoin.

  Many new blockchain applications base their network on the bitcoin blockchain. And you need bitcoin to buy most other coins.

  Doug Casey: As you probably know, I've been involved in the investment world going back to the '70s.

  I've been pitched by "experts" on all kinds of investments. But for the most part, I've stuck to what I know best – investing in precious metals and real estate when I see a bubble forming, and getting out before it pops.

  So you may be surprised to hear that I've recently become interested in a new asset class: cryptocurrencies.

  I'm talking about Bitcoin and its offshoots.

  At a recent investor's conference in Miami, I heard a presentation about this little-known market from a former hedge fund manager named Teeka Tiwari.

  Teeka is extremely well-connected in this market, traveling all over the world meeting with experts.

  He explained that over the past year, this market has taken off. Dozens of "cryptos" have shot up 1,000%, 5,000%… even 10,000% or more.

  This got my attention.

  I know a bull market when I see one… It seems to me that a marvelous bubble is building up in this area. And it's one that I would like to take advantage of.

  *  *  *

  Tonight at 8 p.m., Teeka Tiwari will host a free cryptocurrency question-and-answer session. You can submit your questions and watch the Q&A session by clicking here. But you must act soon… Anyone who joins his service by midnight will receive $100 in bitcoin.

  

  

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• Retired Green Beret Warns: "We're At The Threshold Of War…The Choice Is Not Up To Us Anymore"

  Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

  

  As reported Monday, April 25 on almost all mainstream and alternate news sites, Britain’s Defense Minister Michael Fallon has openly declared that his country will carry out a preemptive nuclear strike even if not attacked, as such:

  “In the most extreme circumstances we have made it very clear that you can’t rule out the use of nuclear weapons as a first strike.”

  Michael Fallon, BBC Today, 4-25-17

  This is very serious and no longer simply rhetorical, as the Russians responded to the effect that the UK could be wiped off the face of the globe if they were to provoke the wrong party.  The U.S. now has a submarine in position in South Korea that is carrying Tomahawks armed with nuclear warheads and the American Naval armada continues to sail toward the region.  The North Koreans have been conducting artillery drills, as South Korea and Japan are preparing their citizens for war to break out.  The United States just test-launched an ICBM from California that splashed into the South Pacific.

  In the U.S., President Trump has convened a meeting in the White House for all 100 U.S. senators as reported yesterday throughout the alternative media.  The mainstream media (MSM) is being notoriously silent about the whole matter, although it is plain to see the focal point of the meeting is North Korea, as announced by the White House.

  Deflection has been rendered partially by the MSM by the endless barrage regarding the 9^th Circuit Court trying to sabotage the Executive Order signed by the President to withhold federal funding from “sanctuary” cities trying to circumvent federal law and procedure with the illegal aliens.  The “First 100 Days” of the Trump Administration is the new catch-phrase the MSM is focusing upon, much as they did with the “47 million on food stamps” phrase that virtually stayed the same for more than 3 years.  Underreporting and obfuscation (if not outright lies) are the MSM’s way of keeping the public in the dark nationally and globally.

  In the meantime, the Russians are beginning to redeploy ground troops to Syria.  It appears that the U.S. is going to be pushed into a war in one theater or another by the progressives masquerading as conservatives.  This brings to mind the ratiocination for the initiation of hostilities in either theater.  For North Korea, it is simple: The North Koreans are one of the three nations not involved in the global banking cartel.  In addition, a war will increase U.S. hegemony in the area regardless of what happens to South Korea or Japan in the aftermath.

  Regarding Syria, the Obama administration started a proxy/indirect war with Russia over Syria, with Russia backing Bashar al-Assad and the United States its own “created boogeyman” of ISIS/ISIL.  Obama did not take Russia on directly, and Russia out-maneuvered him by suggesting he fight against his own creation…which he did…and then the Russians bombed the daylights out of them.  Russia then declared the bombing campaign to be over and did a “drawdown,” while still leaving enough of a force to deter Obama, who fizzled out in pusillanimous splendor.

  Syria is still on the table, though, because we don’t have that pipeline running out of Qatar through Northwestern Syria to cut off Gazprom and the Russians from supplying Europe with natural gas.  In addition, the House of Saud wants Assad out of Syria, and in addition to this, the U.S. needs to take Syria if it wants (and it does want) to invade Iran.  The Russians bombing ISIS/ISIL prevented any more oil from being stolen from Northwest Syria and trucked across the border, where it was sold to Erdogan and his brother.

  The Military Industrial Complex (MIC) and their paid-for congressmen and senators (such as McCain, Graham, Ryan, ad infinitum) are the ones who stand to benefit, either in stocks held or in kickbacks to either advance or snafu legislation or policy (depending on which benefits the firms).  They did it with Ukraine, as well, but the threat of directly confronting Russia was as good as an orchiotomy for Obama, and we have a stalemate between the U.S.-created Kiev government of Poroshenko and the separatists of the Eastern Ukrainian provinces.

  The powers that be are intent on having a war, regardless of the consequences and effects on noncombatants.  A war would also be a way to prop up the administration’s flagging ratings.  Domestically we have not emerged from the “soft” police state and liberal “legislative” powers of the Courts to remake Constitutional law and circumvent Congress and the President through selective interpretation of anything and everything: These things are the true “legacy” of Obama.

  Now, where from there?  We are at the threshold of another major war that could erupt in any of these areas.  The choice is not up to us anymore, and it is surely being decided upon at this very moment.

  

  

• Trump Calls Schumer's Bluff: "If There's A Shutdown, There's A Shutdown… Democrats Would Be To Blame"

  With Democrats seemingly unsatisfied with Republicans dropping border wall funding and adjusting on Obamacare-related items, it appears President Trump is calling Schumer's and Pelosi's bluff, proclaiming "If there's a shutdown, there's a shutdown," adding that Democrats would be to blame if the federal government was left unfunded.

  Schumer today:

  • *SCHUMER: TRUMP CONCESSIONS BRING SPENDING DEAL CLOSER TO FINISH
  • *SCHUMER SAYS 'SOME STICKING POINTS' LEFT ON SPENDING BILL TALKS
  • *SCHUMER SAYS REVISED GOP HEALTH CARE BILL 'WORSE' THAN INITIAL
  • *SCHUMER SAYS ISSUE OF POISON PILL RIDERS STILL OUTSTANDING

  Pelosi added:

  • *HOUSE DEMOCRATIC LEADER PELOSI SAYS WALL FUNDING ONE ISSUE
  • *PELOSI: UNCERTAINTY RE OBAMACARE COST-SHARING PAYMT ALSO ISSUE
  • *PELOSI: TYING STOPGAP SPENDING TO HEALTH BILL WOULD BE STUPID

  And so, as Reuters reports, President Donald Trump downplayed the severity of a potential government shutdown, making it clear who will be to blame…

  "We'll see what happens. If there's a shutdown, there's a shutdown," Trump told Reuters in an interview, adding that Democrats would be to blame if the federal government was left unfunded.

   

  Trump added that a shutdown would be a "very negative thing" but that his administration was prepared if it was necessary.

  As part of the budget negotiations, Democrats have called for financial support to prop up Puerto Rico's Medicaid program covering health insurance for the poor, but many Republicans are opposed to the idea. Trump also said it would be unfair to offer a debt bailout to Puerto Rico, a U.S. territory, because it was unfair to people in U.S. states.

  "I don't think that's fair to the people of Iowa, and I don't think it's fair to the people of Wisconsin and Ohio and North Carolina and Pennsylvania that we should be bailing out Puerto Rico for billions and billions of dollars," Trump said. " No I don't think that's fair."

  Notably, while equity markets are whistling complecentlypast the graveyard, USA sovereign risk has surged back to its highest (relative to Germany) since Trump's election as the threat of a government shutdown gets priced into a non-manipulated market…

  

  

  

• Asylum Seekers Fleeing The U.S. For Canada May Find A Frigid Reception In Canadian Courts

  Just over a month ago we highlighted the comments of one recently deported Mexican nationalist who told Reuters that illegally immigrating to the U.S. was over, courtesy of the Trump administration, and that it was “Canada’s turn” to welcome the world’s immigrants with open arms.

  “For those without documents, I think (the United States) is over. Now it’s Canada’s turn.”

  And, with each passing month, new immigration stats from Canada seem to indicate that Reuters’ young border-hopper was a very prescient fellow indeed.  According to stats highlighted by the Financial Times recently, “land border asylum claims” in Canada continue to skyrocket with Quebec crossings up nearly 3x YoY and crossings into Ontario surging as well.

  

   

  And while ‘open borders’ sound super nice in a political speech, the practical reality is that the majority of Canadians, just like Americans, don’t approve of unfettered illegal border crossings that place a massive financial burden on taxpayers and are often accompanied by a surge in crime (see “Half Of Canadians Want Illegal Immigrants Deported“).

  Meanwhile, as Reuters points out today, Migrants who applied for asylum in the United States but then fled north, may have miscalculated in viewing Canadian courts as a more lenient jurisdiction.  That is because their time in the United States could count against them when they apply for asylum in Canada, according to a review of Canadian federal court rulings on asylum seekers and interviews with refugee lawyers.

  But Canadian refugee tribunals are wary of “asylum-shopping” and look askance at people coming from one of the world’s richest countries to file claims, the refugee lawyers said.

   

  “Abandoning a claim in the United States or coming to Canada after a negative decision in the United States, or failing to claim and remaining in the States for a long period of time – those are all big negatives. Big, big negatives,” said Toronto-based legal aid lawyer Anthony Navaneelan, who is representing applicants who came to Canada from the United States in recent months.

   

  The asylum seekers will make their cases before Canada’s refugee tribunals, which rejected 5,000 cases last year. The tribunals’ decisions are not made public, so the reasons are not known. An Immigration and Refugee Board spokeswoman confirmed, however, that an applicant’s time in the United States can be a factor in a tribunal’s decision.

  Those with failed U.S. asylum claims must prove to Canadian tribunals that the U.S. courts were wrong in their assessment, that their circumstances have changed for the worse, or that they qualify in Canada, several lawyers said.  Crucially, all applicants must also show that the often years-old fears that led them to leave their home countries for the United States still exist.

  “The longer they’ve been away (from their country of origin), the more difficult it is to establish that they’re a refugee,” said Winnipeg refugee lawyer Ken Zaifman.

  Frankly, we’re shocked.  First it was just Trump supporters, but now it’s looking increasingly likely that Canada is also filled with a bunch of racist people intent upon protecting their ‘arbitrary’ borders.

  

  

• The Next Trade War: Trump Threatens To Terminate "Horrible" Trade Deal With South Korea

  Two days after launching a trade war with Canada by imposing tariffs on lumber imports, one day after nearly terminating NAFTA (but stopping just shy after an alleged phone call from the leaders of Mexico and Canada), Trump has finally turned his attention to the one nation whose GDP consists of roughly 60% net trade, and which we said several months ago, is far more likely to be punished for trade malpractice than China: South Korea.

  Speaking to Reuters and WaPo, Trump – who earlier also told Reuters that a “major, major” conflict with North Korea is possible – Trump sharply criticized the U.S.-Korea Free Trade Agreement, known as Korus, the latest version of which was ratified in 2011 and said that he will “renegotiate or terminate” the “horrible” free trade deal. Next week marks an anniversary for Korus and triggers a review period to potentially renegotiate or ratify a new version of the agreement.

  “It’s a horrible deal. It was a Hillary Clinton disaster, a deal that should’ve never been made,” Trump said. “It’s a one-way street.”

  “We’ve told them that we’ll either terminate or negotiate,” Trump said. “We may terminate.”

  Trump added: “I will do that unless we make a fair deal. We’re getting destroyed in Korea.”

  On his trip to Asia last week, Vice President Pence said to an audience of business leaders in Seoul that the United States was looking to “reform” the Korus agreement because U.S. businesses “face too many barriers to entry, which tilts the playing field against American workers and American growth.”

  The president explained that the process of termination of Korus is simpler than with the North American Free Trade Agreement. “With NAFTA, we terminate tomorrow; if we did, it ends in six months. With the Korean deal, we terminate and it’s over.”

  * * *

  Trump also said he wants South Korea to pay for the recent $1 billion deployment of the U.S. Terminal High Altitude Area Defense, or THAAD battery, a missile defense system deployed to South Korea to protect against accidental North Korean launches, and to antagonize China.

  Hyundai Motor shares fell as much as 2.4% after Trump’s comments, while the South Korea’s won also dropped on the comments. South Korea’s automakers association said it was concerned about the possible revision of the country’s trade deal with the United States, an official of the industry group said on Friday. 

  “We are worried about the uncertainty of the deal,” Kim Tae-nyen, vice president at the Korea Automobile Manufacturers Association (KAMA), told Reuters by telephone.

  As Reuters followed up, a senior South Korean finance ministry official said the country has not yet received official requests on renegotiation of its free trade pact with the United States.

  “Talk and actual policy are different,” the official told Reuters. “They have not requested anything from us so we’ll have to wait and see.”

  Trump’s aggressive trade stance was unveiled as tensions are rising on the Korean Peninsula and as South Korea’s increasingly more irrational neighbor is proving to be a major source of instability, and thus leverage for any future Trump negotiations.

  

  

• Who Really Controls The Gold Price? (The Answer Is Quite Surprising)

  Via SRSroccoReport.com,

  There’s this notion put forth by the majority in the precious metals community that the Fed and Central Banks control the market price of gold.  I have even heard that some analysts believe the Fed could push the gold price any where they saw fit…. even to zero.  While I agree that the Central Banks do play a role in gold market intervention, they most certainly CANNOT push the price of gold anywhere they want.  This is an absolute falsity…. and I have the data to prove it.

  To understand how the market determines the price of gold, we must first dismiss the economic principle of SUPPLY & DEMAND.  While supply and demand forces are factors in the short-term price movement of gold, they do not really factor all that much over the longer term.

  Here is a chart showing the relationship of the gold and oil price since the 1940’s:

  

  The gold price is in DARK ORANGE while the oil price is in BLACK.  We can plainly see the price of gold and oil have moved in tandem, especially after Nixon dropped the Dollar-Gold peg in 1971.  While the oil-gold price movements are not exact, they parallel each other quite nicely.  Thus, when the oil price skyrocketed during the 1970’s, so did the gold price.  The same thing took place in the 2000’s.

  Interestingly, the same thing took place with the silver price below:

  

  In both of these charts, the volatility in the oil, gold and silver price increased significantly after 1971.  There was an underlying reason for this… and it just wasn’t the dropping of the U.S. Dollar convertibility into gold in 1971.  It was also due to the fact that the United States peaked in domestic cheap oil production in 1970.  This was actually the peak of the U.S. Empire, even though we have continued to dominate the world by exchanging PAPER (U.S. Treasuries) for physical OIL-GOODS.

  So, if we look at these two charts above, we can plainly see the oil price was more the LEADING DRIVER in the gold and silver price than were supply and demand forces.  Again, supply and demand forces add volatility to the gold and silver price over the short-term, but the energy cost (mainly oil) has been the leading driver over the longer term.

  Who Really Controls The Gold Price??

  If the gold price has paralleled the oil price, then who really controls the gold market price??  While I agree that the Fed & Central Banks are intervening in the gold market, they can really only control the UPWARD movement in the price of gold.  Why?  Well, if we look at the chart below, we find our answer:

  

  This chart shows the difference between the total production cost of the top two gold miners, Barrick and Newmont, versus the annual average gold market price.  The chart clearly shows that the production cost is always less than the gold market price.

  In the early 2000’s, the top two gold miners production cost was closer to the market price.  However, after the U.S. Housing and Banking Market collapsed in 2008, the gold market price moved up considerably higher than the cost of production.  My analysis suggests that the gold price was starting to head towards its high-quality STORE OF VALUE properties, rather than its COMMODITY PRICING mechanism.

  NOTE:  I determined Barrick & Newmont’s production cost by using my Net Income & Adjusted Income approach.  This is much different than going by either Cash Costs or All-In-Sustaining Costs.  My estimated total production cost includes more items such as taxes-interest expense and etc, that are not considered in cash costs or all-in-sustaining costs.

  Also, cash costs are a totally bogus metric as they deduct the miners by-product revenue to arrive at a very low cash cost.  They list them as by-product credits —  other metals extracted and produced along with gold in the process.  However, they are not really credits.  These miners need these by-product metal sales to fortify their balance sheets.  Without them, many mining companies would be suffering losses, not profits.

   

  Thus, a credit is something that one does not need… it’s a plus.  In reality, most of these mining companies need their by-product metal sales to remain profitable.

  That being said, here are some examples of the Barrick and Newmont’s cost of production versus the gold market price:

  2000 Production Cost = $276

  2000 Market Gold Price = $279

  2012 Production Cost = $1,272

  2012 Market Gold Price = $1,669

  2016 Production Cost = $1,113

  2016 Market Gold Price = $1,251

  Now, the reason the production cost at Barrick and Newmont has fallen from $1,272 in 2012 to $1,113 in 2016, is mainly due to the 50%+ decline in the price of oil.  It takes a lot of energy to produce an ounce of gold.  Oil was trading over $100 in 2012, but fell to $45 in 2016.  Even though the energy cost has fallen significantly, labor costs have not declined all that much in the gold industry.

  For instance, Barrick’s labor payroll per ounce of gold only declined from $328 in 2012 to $304 in 2015.  This is only a 7% decline in labor cost even though oil price dropped considerably in 2015:

  

  On the other hand, the lower gold price has put more stress on Barrick’s financial bottom line as their payroll accounted for 26% of each gold ounce produced in 2015 compared to only 18% in 2009.  Investors need to realize it takes a massive amount of energy, labor, materials and capital to produce an ounce of gold.

  If we look at the Barrick-Newmont Production Cost vs. Gold Price chart above, we see that the market price was never lower than the production cost.  Which means, the market or Central Banks did not push the gold price below the cost of production.  This is an important factor to understand when you listen to analysts suggesting that the Central Banks can rig the gold price down to whatever level they desire.

  That is total BOLLOCKS…..

  As, I have mentioned, the Fed and Central Banks can intervene in the market to control HOW HIGH the gold price will go.  That is the big difference.  So, those who continue to believe Harry Dent’s forecast that gold will go down to $700 an ounce, aren’t considering the COST OF PRODUCTION.  Harry Dent spends a lot of money advertising to get people to buy his books or newsletters.  Touting a $700 gold price gets people motivated in buying what he sells.

  Unfortunately, Dent, like most analysts, tend to leave out the energy in their forecasts.  This is truly hilarious as energy is the leading driver of our economies… not supply-demand or finance

  The Production Cost Of Gold Is Higher When We Consider Capital Expenditures

  My Net Income & Adjusted Income approach for determining the production cost of gold (and silver) provides a much more realistic metric than the industry’s “cash costs” or “all-in-sustaining costs.”  However, when a mining company releases its income statements, they do not include their capital expenditures (CAPEX).  Their net income (or adjusted income) does not include capital expenditures.  To find out what they paid in CAPEX, we must look at the Cash Flow Statements.

  If we consider what Barrick and Newmont spent on CAPEX and then deducted it from their cash from operations we would arrive at their FREE CASH FLOW:

  

  From 2000 to 2016, these top two gold miners free cash flow was a net $10 billion.  If we compare their free cash flow of $10 billion to the total $220 billion in revenues, it only accounted for 4.5% of their revenues.  Thus, Barrick and Newmont’s free cash flow shows that it cost more to produce gold than was shown in their Annual Income statements.  Which means, these gold miners still enjoyed positive free cash flow during this time.

  NOTE:  In order to consider some unwise capital expenditures during the years when the gold price really surged, I subtracted from each company, their lowest negative free cash flow that year.  Actually, this was about $5 billion when we add them both up.  So, in all reality, the free cash flow of $5 billion (half of the $10 billion shown in the chart above) means that Barrick & Newmont only enjoyed a 2%+ free cash flow margin compared to their total revenues.

  Regardless, the gold market price was still higher than Barrick and Newmont’s small free cash flow margin to total revenue.  Of course, if we include stock dilution as well as dividend payouts, these two gold miners would have an even higher production cost.  But, that would still not change the overall production cost all that much.

  As I have stated in many interviews and articles, the Fed and Central Banks CANNOT push the gold price wherever they see fit.  The algorithms are electronically calculating the gold market price based on its cost of production.  The only way the Fed and Central Banks can control the gold price is on its way UP.  This is by using a massive amount of paper contracts to cap the gold price from moving up too high.

  The majority of Fed and Central Bank intervention is controlling where investors put their money.  By funneling the massive amount of money printing into STOCKS, BONDS and REAL ESTATE, 99% of investors (in the market) remain happy, as well as the governments.  We must remember, local, state and the Federal Govt receive tax revenues are based on high stock, bond and real estate values.  Once their values implode, so do government tax revenues.  This would be a complete disaster.

  Lastly, the present COMMODITY PRICING mechanism of gold will transition to its high quality STORE OF VALUE when the U.S. and Global Oil industry really starts to disintegrate.  This gold value transition will be the first in history.  Why?  Because gold was still valued the same after the Roman Empire collapsed… due to the fact that it was based on human and animal labor.

  Unfortunately, today the gold price is being based on the energy in oil.  However, when the oil industry collapses, there is nothing to replace it.  Thus, the value of most paper assets will plummet.  Gold and silver will become stores of economic energy because the world was brainwashed into believing PAPER ASSETS will always retain their value…. not so.

  

  

• Home Prices Continue To Surge Sparking Fears Of Bubble 2.0

  With each passing day, and each new financial bubble, it becomes more and more difficult to figure out what exactly is “normal.”  That said, we can say with near certainty that home prices are not supposed to behave like this:

  

   

  Home prices in markets that bubbled over back in 2006/2007, like Las Vegas and San Francisco, got cut in half in 2009 but have since doubled again of their lows.  Meanwhile, markets like Denver and Dallas that didn’t participate as much in the 2007 mania are now surging to all-time highs, with Dallas prices up 55% over the past 5 years.

  Even the 20-City Composite Cash-Shiller Index shows that average prices have surged 44% off their lows and are nearly back to their 2007 peak.

  

   

  As the Wall Street Journal points out today, some of the home buying behaviors of consumers, like paying prices well above appraisal values and waiving home inspections, are starting to be eerily reminiscent of 2006.

  In some markets, bidding wars are breaking out. Agents said some buyers are kicking in extra cash when properties don’t appraise for the asking price, and some are waiving their right to home inspections.

   

  “It can’t be sustained,” said David Berson, chief economist at Nationwide Insurance and a former chief economist at mortgage giant Fannie Mae, referring to the frenzied buying. “It can’t go on forever.”

  Per the chart below, homes in a dozen major markets have increased over 50% off their 2012 lows while many have already exceeded their previous bubble peeks.

  

   

  Meanwhile, there are other signs of overexuberance as well including surging levels of licensed Realtors all chasing a quick buck.

  The number of licensed Realtors has jumped by nearly 25% since 2012, hitting a nine-year high in 2016 and sitting just 9% below the peak in 2006, according to real-estate consultant John Burns.

   

  In Denver, homes are selling briskly. The median number of days that homes spent on the market declined to eight in the first three months of the year from 61 in 2012, according to Redfin. Home prices rose 8.5% in Denver over the year ended in February, according to Case-Shiller.

   

  Nicki Thompson, an agent in Denver, said she recently had a listing that was on the market for two weekends at $1.2 million and she received multiple all-cash offers above the listing price.

   

  “It’s just crazy,” she said.

   

  Martin Mata, a Redfin agent in Denver, said his buyers often will commit to kicking in extra cash if the bank’s appraisal comes in lower than the purchase price. “We’ve got to be coming close to a plateau for prices,” he said.

  But perhaps the scariest warning of all comes from the number of economists who were all too eager to reassure the WSJ that all is well.

  With little risk of a supply glut in the near future, economists generally expect prices to continue rising quickly in most markets for a couple more years, if the economy keeps expanding.

   

  They said it is more likely that overheated markets are headed for a long period of flat or slightly declining home prices, especially if mortgage rates rise or job growth slows, but not an outright crash.

   

  The market “is not going to burst, it’s going to contract” with falling sales volume, said Nela Richardson, chief economist at Redfin, a real-estate firm. “You might still see what looks to be a robust market because prices are really strong, but that doesn’t mean it’s a broad market.”

  Alas, we’re sure the economists are right this time around.

  

  

• Germany Braces For Wave Of Migrant-Fueled Terrorism Lawsuits – 200 So Far This Year

  Thanks to the influx of migrants, Germany’s Department of Terrorism Crime is expecting 500 – 600 lawsuits related to Islamic Terrorism in 2017. Last year there were 250 such terrorism-linked cases, up from 68 in 2013, according to general prosecutor Peter Frank.

  The influx of migrants and refugees in recent years is a major cause of this development , said Frank. “There you can see what has come to us, both in the past few years, as well as escaped or has come from all countries to Islamic terrorists.”

  According to this, the proportion of procedures with an Islamic background is explosive: it currently accounts for 85 to 90 per cent, four or five years ago it still lay at 50 to 60 per cent. The rest is attributable to legal or left-wing extremists and nationalists. –T-Online.de (translated)

  Moreover, Germany’s President of the Federal Office for the Protection of the Constitution, Hans-Georg Maaßen said that there are at least 10,000 Salafist extremists roaming around Germany, with at least 1,600 considered at extremely high risk for terrorism. Every day, two to four threats are received by the OPC.

  Violence among extremists has increased. Maaßen complained that the development culminated last year in five terrorist attacks in Germany. Of the perpetrators, however, only the assassin from the Berlin Christmas market had been noticed before, the other assassins did not. Just a lot of young people often radicalized themselves in secret. (Translated)

  Coincidence? Germany’s admission of migrants seeking asylum leads the pack:

  And some are saying Angela Merkel has single handedly destroyed German culture by allowing the greatest number of Islamic migrants of any country in the EU:

  And surprise, surprise – crime is spiking:

  The Telegraph reports that the crime rate in Germany among ‘refugees, asylum-seekers, and illegal immigrants’ rose by more than 50% last year, and had “increased disproportionately” even when the “huge influx” of refugees entering the country under Merkel’s opern-door refugee policy was taken into account.

  “The proportion of foreign suspects, and migrants in particular, is higher than the average for the general population.”

  Also interesting to note:

  While the general crime rate in Germany fell slightly last year, Islamist-inspired crime rose by 13.7 per cent, according to the figures. -Telegraph

  This echoes what Breitbart reported last May – migrants in Germany are committing a vastly disproportionate number of crimes, and account for almost the entirety of the increased crime-rate since 2014.

  The data reveals that without migrants considered, crime rates in Germany would have remained roughly static since 2014. –Breitbart

  It is unclear whether victims in the increasing number of terrorism-related lawsuits are able to sue the German government or just the perpetrators, however the prospect of Germany being held financially accountable for Merkel’s refugee program would add a completely new dimension to the costs of this ill-fated experiment in forced migration.

  And as the United States considers the prospect of resettling Syrian immigrants – which “has to be part of the discussion” per the increasingly influential and effervescent Ivanka Trump’s statements this week, let’s consider the best use of resources per Stefan Molyneux (who hosts insightful and often lengthy “Freedomain Radio” podcasts):
  

  For the cost of resettling 10,000 refugees in the United States – 121,797 can be resettled in the Middle East. #MuslimBan pic.twitter.com/W6WLMaots9

  — Stefan Molyneux (@StefanMolyneux) January 29, 2017

  //platform.twitter.com/widgets.js

  And if you think the spike in German lawsuits over terrorism are bad, just imagine what an influx of migrants would do to the US legal system… Better Call Saul.

  

• Trade War, Round 2: Boeing Accuses Bombardier Of Dumping Jets; Canada Retaliates

  Just days after the US Commerce Department imposed duties averaging 20% on Canadian softwood lumber, accusing Chinese timber companies of getting an unfair government subsidy, on Thursday round two of the trade war between the US and Canada broke out when Boeing asked the U.S. Commerce Department to investigate dumping, subsidies and unfair pricing for Canadian planemaker Bombardier’s new CSeries airplane, a competitor to the Boeing 737, confirming that the trade tensions between the two neighboring countries are set to get far worse.

  Specifically, the Chicago-based aerospace giant has asking the International Trade Commission to rule that it has suffered injury to its business at the hands of Bombardier and to recommend that the Commerce Department impose duties on the Canadian jet builder (amusingly, Boeing also complained about the very existence of Bombardier itself, a company which has been aggressively bailed out by the Canadian government as recently as October 2015, when in exchange for $2.5 billion in taxpayer funds, the company fired 7,000 Canadian workers).

  In its petition, Boeing said that Bombardier, determined to win a key order from Delta Air Lines after losing a competition at United Airlines, had offered its planes to the airline at an “absurdly low” $19.6 million each, well below what it described as the aircraft’s production cost of $33.2 million. “Propelled by massive, supply creating and illegal government subsidies, Bombardier Inc has embarked on an aggressive campaign to dump its CSeries aircraft in the United States,” Boeing said in its ITC complaint.

  A comparable 737-700 model by Boeing has a list price of $83.4 million, with the new 737-MAX 7 priced at $92.2 million. While sales discounts from list prices are typically 40 percent to 50 percent in the industry, another question is just how much of that price is courtesy of the implicit taxpayer subsidy of the Ex-Im bank, but that is a topic for another post.

  The spat between the two companies came to a climax in April 2016, whe Bombardier won the Delta order, its biggest yet, for 75 CS100 jets, worth an estimated $5.6 billion based on the list price of about $71.8 million.  And now that Trump has given the green light to challenge Canadian trade competitors, Boeing is certainly not wasting time.

  In its complaint against Bombardier, Boeing argued that the CSeries program would not exist without hundreds of millions of dollars in launch aid from the governments of Canada, Quebec and Britain, nor the abovementioned $2.5 billion equity infusion from Quebec in 2015.

  Boeing wasn’t finished: the company also took a shot at European rival Airbus, which it accuses of benefiting from similar “unfair” government subsidies in a long-running dispute before the World Trade Organization.

  “Evidently taking a page out of the Airbus strategy book, Bombardier has blatantly and intentionally demonstrated its goal of muscling its way into the U.S. aviation market by offering its heavily subsidized planes at cut-rate pricing,” Boeing said.

  A Commerce Department spokesman told Reuters that the petition would be given “a thorough review” and further comment was premature.

  In recent week, Commerce Secretary Wilbur Ross has taken swift action to protect the U.S. steel and aluminum industries from foreign competition, launching national security investigations that could lead to import restrictions. An investigation could lead to duties on the aircraft to offset any below-cost pricing or any subsidies deemed unfair.

  Shortly after the complaint was filed, the Canadian government issued a statement objecting to Boeing’s allegations and noted that the CSeries has many U.S. suppliers, including for engines, and supports thousands of U.S. jobs. “The Government of Canada will mount a vigorous defense against these allegations and stand up for aerospace jobs on both sides of the border,” it said. Full statement below:

  The Government of Canada today made the following statement regarding the filing of a petition by Boeing Aerospace Corporation with the United States Department of Commerce, alleging the dumping of Bombardier aircraft in the United States market:

   

  “The Government of Canada objects to the allegations made by Boeing. We are confident that our programs are consistent with Canada’s international obligations.       

   

  “The aerospace industries of Canada and the United States are highly integrated and companies on both sides of the border benefit from this close partnership. For example, many C Series suppliers are based in the United States and it is projected that more than 50 percent of the components for the C Series, including the engine, will be supplied by American firms directly contributing to high quality jobs in that country. The C Series is a great example of how the North American industrial base can develop and produce a globally competitive product with industry-leading clean technologies.

   

  Bombardier also has a significant presence in the U.S. across its aerospace and transportation divisions, directly employing more than 7,000 workers. In addition, the company works with more than 2,000 suppliers headquartered in states across the country thereby generating thousands of well-paid, high-tech American jobs.

   

  “The Government of Canada will mount a vigorous defence against these allegations and stand up for aerospace jobs on both sides of the border.”

  Curiously, Bombardier’s chief executive conceded the company had been “aggressive” on pricing in order to win, and sources familiar with the deal pegged the discount closer to two-thirds off the nominal list price. It added that it was reviewing the petition and structures its dealings to ensure compliance with all relevant laws.

  * * *

  In a separate development, Premier Christy Clark of British Columbia, wrote a letter to Canadian Prime Minister Justin Trudeau Wednesday asking him to ban coal shipments from the U.S., sending shares of US coal giant Cloud Peak Energy (among others) tumbling. According to Bloomberg, Clark’s demand was in response to Trump’s lumber tariffs. Trudeau said he would consider the request “carefully and seriously.” Some context: a little over 6 million metric tons of U.S. thermal coal were shipped through the port of Vancouver in 2016.

  Needless to say, it would be especially absurd if as a result of Trump’s Canadian tariffs, it is the US coal mining industry – the one which the president vowed to reincarnate – that suffers the most.

  And now, we sit back and wait for round three in the increasingly hostile trade wars between the US and its peaceful northern neighbor.

  

  

  

• Are Oil Prices To Blame For The Venezuelan Crisis? (Spoiler Alert: Of Course Not!)

  Authored by Daniel via The Mises Institute,

  Many analysts are venturing to link the crisis that plagues the Venezuelan economy with the fall in the price of crude oil. With oil being one of the most important commodity in Venezuelan production and the country’s main export product, it seems that the fall in the price would bring any country with an economic structure similar to Venezuela’s into a crisis. Similarly, many assume that the problems in Ecuador have the same root as those in Venezuela, although less pronounced.

  Certainly, one of the markets that has seen the most movement lately is oil. The price of an oil barrel today is 50% less than what it was in mid-2014. The price increased 47% in 2016.

  

  Venezuela’s Export Importance Put into Context

  We intend to analyze how the fall of oil prices affected its major exporters, among them Venezuela.

  From the viewpoint of exporting importance, it seems that there are many countries with net oil exports higher than Venezuela’s. In fact, Venezuela is the world’s 9^th largest exporter. Russian exports almost triple those of Venezuela and Saudi exports are five times larger.

  

  Source: The World Factbook CIA.

  However, the important factor to analyze the economic impact of the fall of crude oil prices in exporting countries is not absolute exports; but rather it is the measure in terms relative to the size of the economy. If we consider the relative importance of oil exports as a percentage of GDP, Venezuela does not appear among the first places either.

  

  Source: World Bank; The World Factbook CIA.

  In this case, Venezuela ranks 8^th in relative export importance, far from the most important countries. Angola, Kuwait, and Iraq’s exporting importance more than triple that of Venezuela when it comes to oil.

  The economic impact of falling oil prices

  Both 2015 and 2016 have been difficult years for the economies of oil-exporting countries. After the price of oil barrels fell in the last quarter of 2014, economies dependent on black gold have suffered significant declines in economic performance, as was expected.

  

  Source: IMF; St. Louis Federal Reserve.

  The reported economic growth is an unweighted arithmetic mean of the 15 countries analyzed previously.

  Although economic growth fell on average among all major oil-exporting countries, the impact of the fall of crude oil prices has been different in each economy. In theory, those economies more dependent on oil, such as Angola or Kuwait, would suffer the harshest declines in economic performance. However, the data does not support this thesis. Venezuela and, to a lesser extent, Russia have been the most affected.

  

  Source: IMF.

  The graph of economic growth by country shows two trends:

  1)The countries with less exposure to oil prices have less volatile economic growth.

  This trend is expected. Therefore, we see how the left part of the graph—where the countries with less oil exposure are located — show less volatility in economic growth than those countries on the right side of the graph — countries with the highest exposure.Those countries with less than 5% exposure to the oil market have been affected only slightly by the price of oil. The United Kingdom, Mexico, and Canada suffer to a lesser extent the falls in crude oil prices.

  2) Countries with the worst economic performance are not those that have the most exposure to the oil market.

  This trend is not what was expected. In this sense, two countries stand out: Venezuela and Russia. They are the only two countries that were in recession throughout 2015 and 2016; Russia being the 11^th country with relative export importance and Venezuela the 8^th.

  The economic crisis is especially serious in Venezuela. It is the only country from the whole group that was in recession in 2014, 2015, and 2016. Moreover, Venezuela has the most serious recession with a 10% drop in GDP in 2015 (Nigeria fell by 1.7% and Russia only 0.8%).

  If we compare Venezuela’s economic growth with that of other oil-exporting countries we can see the serious divergences that this article points out.

  

  Source: IMF

  The True Cause of Venezuela’s Economic Collapse

  Venezuela is undergoing the typical collapse of a country that has been subject to years of all kinds of political interventions. The fall in oil prices is the external shock that brings to light the embarrassing result of years of price controls, currency controls, nationalizations, uncontrolled monetary creation, and economic dirigisme.

  The economic imbalances that had accumulated over the years were hidden under the influx of dollars that incidentally came from oil revenues that grew in value, and not in volume. Lack of investment and low productivity per worker are the usual trend for Petroleum of Venezuela (PDVSA). The ability to increase production in order to counter the fall in oil prices is zero.

  

  Source: IEA.

  The Venezuelan government, which always lacked funds and didn’t receive any “help” from high oil prices at the time, did not hesitate to monetize all of the public debt necessary to cover its growing public expenditures without increasing taxes. This created hyperinflation in Venezuela. The population has even been forced to resort to bartering. The destruction of money means the destruction of the division of labor. In this environment, an annual fall of 10% GDP is perfectly understandable.

  

  Source: Central Bank of Venezuela; International Monetary Fund

  Price controls have completely depleted the commodities that are subject to such control, just as economic theory predicts. Having to trade food in the black market has radically increased the price of food. In 2015, the increase in food prices was over 130% in real terms (adjusted for inflation). This data only confirms the food emergency that Venezuela suffers.

  

  Source: FAO.

  Nationalized industries have become a disaster, to the extent that when oil prices fall the ability to rebuild Venezuelan industries and increase production in other areas is completely null. An ideal example is found in Venezuela’s steel production: after it was nationalized in 2008, steel production fell by more than 70%.

  

  Source: World Steel Association.

  Venezuela and the Embarrassments of the Socialist Paradise

  In short, the Venezuelan crisis is anything but a crisis caused by the fall in oil prices. Not all oil-exporting countries are undergoing crises, and those countries that do suffer from a crisis do so much less severely than Venezuela.

  The Venezuelan crisis has its roots in 21st century socialism and in the economic dirigisme that the political doctrine preaches. The fall in oil prices is nothing more than the event that uncovered the corpse of what used to be Venezuela’s economy.

   

  

  

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