• North Korea Is A Major Opium Producer (Making It A Prime Target For The CIA)

  Authored by Whitney Webb via TheAntiMedia.org,

  

  When the U.S. overthrew the Taliban in the wake of 9/11 as part of its newly launched “war on terror,” it set the stage for the explosive growth of Afghanistan’s dying opium industry. A few short months before the invasion took place, the Taliban made headlines for having “dramatically ended the country’s massive opium trade” after the leader of the fundamentalist group had declared the substance to be un-Islamic. At the time, Afghanistan’s opium was used to produce 75 percent of the world’s heroin.

  But despite being squashed by the Taliban, the opium market made a dramatic comeback immediately following the U.S. invasion in October 2001. Not only was the opium trade restored, it surged drastically – rising from a production level of 185 tons under the Taliban (before the production ban) to 3,400 tons in 2002.

  Over a decade later, the amount of opium harvested annually continues to rise. Afghanistan’s opium is now used to produce 90 percent of the world’s heroin. This increase has been directly overseen by U.S. forces, who openly guard Afghanistan’s poppy fields. Indeed, during that same time, the U.S. government claims to have spent $8.4 billion on counternarcotic programs within Afghanistan.

  The dramatic increase in opium production in post-invasion Afghanistan has sparked speculation regarding the motives behind the aggressive action that the U.S. has recently taken towards North Korea, which is also a major opium producer.

  While government-sanctioned opium production took a hit after Kim Jong-un assumed power in 2011, things have changed drastically in recent months, largely due to Chinese sanctions that were announced in mid-February. The sanctions, created in response to a North Korean ballistic missile test, led China to refuse imports of North Korean coal. Coal represents 40 percent of North Korea’s exports to China.

  That drastic hit to the North Korean economy has apparently forced Kim Jong-un’s hand, as opium production has once again picked up. Kang Cheol-hwan, a North Korean defector and president of the North Korea Strategy Center, told the Yonhap News Agency that “the North is cultivating poppy fields again for drug smuggling as a way to secure funds to manage its regime.”

  While North Korea’s opium production is small compared to that of post-invasion Afghanistan, it is still significant. North Korea, according to the Chosun Ilbo, produces around 40 tons of opium annually — comparable to Pakistan’s opium industry. Most of its opium is smuggled into and sold in China and cannot be targeted by sanctions, since it is hard to trace on the black market.

  Some have speculated that North Korea’s return to opium production has caught the attention of the CIA, as the intelligence agency has a history of involving itself in opium trade and drug-running in general, as evidenced by its well-documented habit of managing drug supplies from Latin America to Asia.

  In addition, opioid addiction – in the form of both legal opiate painkillers and illegal drugs – is growing out of control in the U.S., with more opium being consumed within America than ever before. The onset of this epidemic coincided with the U.S.’ occupation of Afghanistan as, between 2002 and 2013, U.S. heroin use jumped by 63 percent, reaching a 20-year high. Heroin overdoses quadrupled in the U.S. within that same timeframe.

  The U.S. government’s actions also suggest that it seeks to protect opium production, as has been made clear in its occupation of Afghanistan. For instance, the U.S. vehemently opposes opium legalization efforts and the State Department refuses to acknowledge eradicating opium as a primary goal, despite the billions that have been spent on counternarcotic programs.

  With tension increasing on the Korean Peninsula, the U.S. has put “all options on the table” in order  to prevent further missile tests and “provocations” from the Kim Jong-un regime, including warnings that the U.S. may soon find itself in a “major, major conflict” with North Korea.

  If North Korea finds itself targeted for regime change, history suggests that the U.S. military may end up guarding its poppy fields as well.

  

  

• The Consensus Echo Chamber Take On Trump Firing Comey Is All Wrong

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  

  The unanimous very smart person take on Trump’s firing of James Comey is that it’s a political disaster which will lead to total ruin and possibly his impeachment.

  I disagree.

  The key factor that will determine how this ultimately turns out hinges largely on whether or not there was actual coordination between the Trump campaign and the Russian government to sway the election through hacking or other nefarious means. Personally, I don’t think there was, which is why I don’t expect Donald Trump to be removed from office. The consensus view right now is that Trump’s firing of Comey offers further circumstantial evidence that he’s trying to cover up coordination with Russia in order to end the ongoing investigation. This is certainly a possibility to consider, but it’s definitely not the only possibility, nor is it the most likely explanation.

  First, the optics. The timing of this move looks unquestionably bad, particularly if a story published in today’s New York Times is correct. It reports:

  WASHINGTON — Days before he was fired, James B. Comey, the former F.B.I. director, asked the Justice Department for a significant increase in money and personnel for the bureau’s investigation into Russia’s interference in the presidential election, according to three congressional officials who were briefed on his request.

   

  Mr. Comey asked for the resources last week from Rod J. Rosenstein, the deputy attorney general who wrote the Justice Department’s memo that was used to justify the firing of Mr. Comey this week, the officials said.

   

  Mr. Comey then briefed members of Congress on the meeting in recent days, telling them about his meeting with Mr. Rosenstein, who is the most senior law enforcement official supervising the Russia investigation. Attorney General Jeff Sessions recused himself from that inquiry because of his close ties to the Trump campaign and his undisclosed meetings with the Russian ambassador.

   

  The timing of Mr. Comey’s request is not clear-cut evidence that his firing was related to the Russia investigation. But it is certain to fuel bipartisan criticism that President Trump appeared to be meddling in an investigation that had the potential to damage his presidency.

  If this is accurate, I think it’d be impossible for any honest person to determine that the above played no role in Trump’s firing of Comey. The next conclusion is that this means Trump is afraid of the ongoing Russia investigation — where there’s smoke there’s fire, right?

  While that could be the case, there are other explanations. First, Trump simply may have been sick and tired of Comey, just as most Americans, including myself, are sick and tired of him. Comey isn’t the most popular guy out there. Indeed, high profile Democrats have been incessantly complaining about him, with Hillary Clinton once again publicly blaming him for her election loss as recently as last week. Trump may genuinely think Comey is incompetent (after all he didn’t even look at the hacked DNC servers but let discredited private company CrowdStrike do the work), and Comey’s recent request to expand the Russia investigation may have further called his judgment into question in the eyes of Trump.

  This doesn’t mean Trump is guilty of coordination with Russia. For example, let’s assume for a moment that there was no coordination with Russia to sway the election. If that’s right, Trump and his team could quite legitimately view Comey’s insistence on more funding for the investigation look like incompetence or a personal vendetta. This would frustrate anyone, and it would especially irritate a person accustomed to firing whoever he wants, whenever he wants (after all, he had a show where he became famous for saying “You’re Fired”). As such, the overwhelming impulse for a guy like Trump is to fire Comey irrespective of whether or not there was any Russia conspiracy. This doesn’t make it the right thing to do, but it also doesn’t mean he’s in cahoots with Russia. It could simply be that an impulsive guy who’s accustomed to firing people at will decided to fire a guy who was increasingly getting on his nerves.

  Given what we know about Trump’s personality, I think his choice to fire Comey is consistent with both the scenario where he is guilty of Russia coordination, and one where he isn’t. The consensus narrative which claims Trump firing Comey is proof of his guilt and merely an attempt to cover up a Russia conspiracy, is an emotionally driven and hastily determined conclusion.

  To summarize, Trump’s dismissal of Comey looks bad, but it doesn’t mean he’s hiding anything. To me, it looks like a typical Trumpian move whether or not there’s any shadiness with Russia going on. Let’s now move on the the next part of the post: How does this play out politically in the near-term, and how will it affect his chances for reelection in 2020?

  While Trump often doesn’t seem to understand this, his true power comes from his base. By base, I don’t mean the tens of millions of people who voted for him, rather, I’m referring his hardcore fans who voted for him largely to disrupt the status quo. I’m referring to the dedicated MAGA people who had never really participated in politics before, but became energized by Trump. These people are the key to winning reelection in 2020.

  Despite all the noise made by D.C. “Never Trump” think tankers and pundits, they proved themselves to be irrelevant in 2016, as Trump won despite their vitriol. Trump’s base got him elected and Trump’s base will determine his prospects in 2020. Your average Republican doesn’t really matter. The average GOP voter would vote for a fire hydrant before Hillary Clinton, and these people aren’t going to vote Democratic or stay home in 2020 because Trump fired James Comey. In contrast, if Trump sufficiently pisses off the base, he’s finished.

  Trump’s base is absolutely giddy about the firing of James Comey, and that’s a win for Trump in my opinion. Trump’s base accurately sees the entire Department of Justice (which includes the FBI) as a total joke. An institution that primarily exists to protect elitist criminals. Considering the inability of the DOJ/FBI to jail a single bank executive for the financial crimes committed last decade, this view is entirely appropriate.

  James Comey has been a big part of this racket, so there’s no love lost for him. Comey’s termination is being cheered by Trump’s base, unlike his very unpopulist and oligarch-coddling moves up until this point, such as surrounding himself with Goldman Sachs bankers. If anything, this energizes a base that had become increasingly concerned about the neocon war mongers and financial crooks running rampant throughout his administration. This move plays perfectly into Trump’s base and will be seen as Trump taking it to the deep state.

  Unfortunately, Trump’s not really taking on any deep state, as was fully demonstrated earlier today when he was seen in the Oval Office with one of the deep state’s most notorious war criminals.

  Pool brought into the Oval. It's Trump and … Kissinger. pic.twitter.com/1F1CPO4kQw

  — Jennifer Epstein (@jeneps) May 10, 2017

  //platform.twitter.com/widgets.js

  While I find the above far more offensive than the dismissal of James Comey, the hyperventilation emanating from the corporate media, Democrats and Never Trumpers actually gives Trump more cover to be an even more egregious pawn of the deep state and Wall Street. That’s because the firing of Comey gives him unwarranted street cred amongst the base, and the more the corporate media parrots squawk, the more the base will love it.

  Which brings me to the final and most important part of this piece. The entire Comey firing saga could go in several directions, but an increasingly likely outcome is the one I don’t see being discussed anywhere. First we need to ask ourselves, what’s likely to happen next? Calls for a special prosecutor and independent investigation into Trump-Russia collusion are likely to get louder and louder. Given the timing of the firing, I support this and I think there’s a good chance it’ll happen. I hope it does happen, as we really do need to put an end to all the speculation and hysteria one way or the other, once and for all. But here’s where it gets really interesting…

  If Trump really did coordinate with the Russian government to affect the U.S. election and indisputable evidence emerges, it will be an enormous scandal and he will likely be removed from office. Personally, I don’t think such evidence exists because I don’t think such collusion happened, but I support an independent investigation. On the other hand, what might happen if Trump didn’t collude with Russia?

  Here’s where Trump legitimately has a chance to destroy the Democratic Party once and for all. The Democrats have already been putting all their eggs in the Russia conspiracy theory basket, and this focus on Russia as opposed to jobs, healthcare, student loans, debt slavery etc., has made the American public think the Democratic Party is more out of touch than both Trump and the GOP. Given that’s where things stand today, imagine what’ll happen to the party and its leaders if they start spending 100% of their time pursuing this lead and then nothing comes up? What then?

  I’ll tell you what happens. The Democratic Party, as useless as it is today, will completely evaporate as a serious political opposition force in America. This is because it appears all of its handful of 2020 hopefuls seem to be completely hyperventilating and losing their minds about Comey’s dismissal and asserting that it represents proof Trump colluded with Russia.

  Imagine if Trump is cleared by an independent investigation? These Dems will look like complete imbeciles with horrible judgement who wasted the nation’s time while tens of millions of Americans struggled to make ends meet. This will destroy the party and lead to an easy Trump win in 2020. This is a potentially lethal trap for Democrats and they seem to be falling for it in unison.

  And give me a break on all of this sudden placing of the FBI up on a pedestal. As I remarked to Eric Holder last night on Twitter:

  

   

  To conclude, I think the “expert” pundit take on the Comey affair is completely wrong and missing the bigger picture. Most commentators are merely following their own biases and coming to conclusions based largely on emotions. I’m no fan of Trump and I think he’ll merely prove to be a useful tool of the deep state and Wall Street dressed in populist language. I don’t come to the conclusion in today’s post based on my desire for it to happen. In fact, what I’d really like to see is real and thoughtful opposition to his authoritarian nature and Wall Street ass-kissing, but we know we won’t be getting that from the Dems. Indeed, it’s becoming increasingly likely the entire party may end up falling on the sword that is the Russia conspiracy theory.

  As always, time will tell.

  

  

• Connecticut State Capital Prepares For Bankruptcy Amid Collapse In Hedge Fund Revenue

  The state of Connecticut has been hit hard by the double whammy of a deteriorating local economy, coupled with a plunge in hedge fund profits – as well as hedge fund managers permanently relocating to Florida – leading to a collapse in tax revenues. According to the the latest Connecticut budget released last week, the state is reeling from the consequences of sliding tax revenue from the super-rich, i.e. the state’s hedge fund managers. The latest figures showed that tax revenue from the state’s top 100 highest-paying taxpayers declined 45% from 2015 to 2016. The drop adds up to a $200 million revenue loss for Connecticut.

  In a dramatic, if of questionable credibility, soundbite Department of Revenue Services Commissioner Kevin Sullivan says these wealthy people are “dramatically less wealthy than they were before.” He was referring to annual income, not actual asset holdings, because judging by the all time high in the S&P, the local financial elite have never had a higher net worth.

  “When you look at the top 75, top 50 … this is a group of wealthy people who are dramatically less wealthy than they were before,” said Kevin Sullivan, commissioner of the Connecticut Department of Revenue Services. “These folks, for a number of reasons, are either not realizing as much income or don’t have as much income.”

  Just don’t expect tears from the general public. Sullivan also noted how several international hedge funds have recently failed, resulting in “significant retrenchment” from investors. That drop in tolerance for risk brings smaller margins and ultimately less personal income for the state to tax, he added. It’s fascinating how the Fed’s central planning, superficially meant to restore “confidence” in a rigged, manipulated market is having such proound and adverse 2nd and 3rd order effects on state budgets.

  Sullivan also acknowledged part of revenue decline can also be attributed to “a handful” of wealthy individuals who moved to more tax-friendly states — an issue frequently raised by legislative Republicans, who argue Connecticut’s tax policies encourage the state’s super-rich to move out.

  Of course, for tax purposes it’s the actual income that matters, and as a result the steep decline has exacerbated Connecticut’s budget woes. The projected deficit for the new fiscal year beginning July 1 has now jumped from about $1.7 billion to $2.3 billion, while the deficit predicted for the second year of the state’s two-year budget is now about $2.7 billion.

  According to AP, lawmakers and the governor have already discussed the possibility of making deep cuts throughout state government, including to state colleges and universities and social services. Meanwhile, there’s a threat of about 4,000 layoffs if a $700 million labor concession deal isn’t reached with state employees. Lawmakers say these latest revenue figures make that agreement even more crucial.

  * * *

  Meanwhile, in a stark confirmation just how dire the state’s economic and fiscal situation has rapidly become, the Hartford Courant reports that city leaders in the state’s capital have taken a step toward bankruptcy, soliciting proposals from law firms that specialize in Chapter 9. It adds that the city is reviewing several firms and could hire an attorney as early as this week, sources with knowledge of the plans said.

  Facing a $65 million deficit next year and a $14 million shortfall this year, Mayor Luke Bronin has hinted for months that Hartford could file for bankruptcy, and said during his budget release in April that he was “not in a position to rule anything out.”  Bronin proposed cuts and concessions from the unions, but is still seeking $40 million in additional state aid to close next year’s budget gap. The city resorted to short-term borrowing to cover costs such as payroll payments this year.

  The mayor confirmed Tuesday that the city was looking at firms. “We have not engaged bankruptcy counsel, but we have had initial conversations with firms that have experience in Chapter 9 and municipal restructuring,” Bronin said. “Given the uncertainty of the state budget process and the depth of the state budget crisis, it shouldn’t surprise anyone that we might engage counsel in the near future.”

  Some, such as Council President Thomas Clarke II, who was briefed by Bronin on the prospect of hiring a bankruptcy lawyer, called the move premature. “I was told it was possible that a decision would be made before the end of this week,” Clarke said Tuesday. “It’s premature. We haven’t exhausted every option and every avenue for us to go down this road.”

  Maybe not yet, but time is fast running out.  Meanwhile, reminding the state that “we’re all in it together”, Bronin stressed that the state must be a partner in pulling Hartford “from the brink of financial ruin”, noting that more than half of the city’s properties are tax-exempt and that Hartford has limited options for revenue.

  “We’ve made clear for more than a year that Hartford’s fiscal challenge cannot be responsibly solved at the local level alone with the tools that we have,” Bronin said, “and we continue to push hard to build a new partnership with the state of Connecticut to put our capital city on a path to solvency, stability and growth.”

  However, as noted above, the itself has its own problems, with a more than $2 billion budget gap estimated for next year. It is unclear whether there is support in the General Assembly for bailing out Hartford.

  * * *

  Clarke said that if the city proceeds with legal representation, the council will look to hire its own lawyer. A key question members want answered is whether the mayor must get the council’s approval to file for bankruptcy, the Courant notes. The state statute covering municipal bankruptcy says that a city or town must receive consent from the governor, and that the governor “shall submit a report to the treasurer and the joint standing committee of the general assembly.” It doesn’t specify whether a mayor needs the council’s approval.

  In other words, if Bronin intends to go through with it, Hartfort may be in bankruptcy within weeks, if not days.

  Hartford wouldn’t be the first city in Connecticut to seek Chapter 9 protection. Bridgeport filed for bankruptcy in 1991, but a federal judge dismissed the petition, saying the city was capable of paying its bills. Other cities that have filed include Detroit, Stockton and San Bernardino, Calif., and nearby Central Falls, R.I.

  

  

• Canada, Let's Not Minsky Words

  After tonight's significant downgrade and warning from Moody's about Canadian Banks, the following seems extremely prescient now.

  Authored by George Stockus via BeatlesOnBanking.com,

  Stability breeds instability – this was economist Hyman Minsky‘s lasting contribution to the craft.  The Minsky Moment , popularized during the 07-09 US housing crisis, basically suggests breeding animal spirits too long creates systemic problems.

  Essentially, the ongoing rises in asset prices back then created the sense of a new paradigm, that the elevated activity was safe, and home prices couldn’t fall – they’d never done so.  As the cycle progressed and prices rose, normal course mortgage lending turned to borrowing for speculation and then, ultimately, for ponzi-like leveraged derivative structures that proved unable to withstand volatility.  Turns out, Federal Reserve policy and over-sight engendered it all, and even Bernanke whistled into the then soon-to-be graveyard top of the market.

  There’s no reason Minsky thinking couldn’t apply today.  Central banks have forced years of emergency level interest rates and QE upon the markets with the very intent of manipulating asset prices higher and preached this in the name of stability.  Normal course lending has lead to borrowing for speculation, seen in real estate and margin stock trading accounts everywhere.

  

  As for Canadian real estate, the truth is Minsky instability could’ve been argued, say a year ago for example, and yet despite no real change in fundamental backdrop Toronto real estate prices have still risen by an additional 1/3 since.  The Canadian economy now relies on real estate for stability and growth and is in no position to cool the frenzy with higher interest rates.  Pretty safe to say that policy goals of stability are leading to instability.  So this is Minsky redux,  with a twist.  Central banks have created unstable market monsters that they neither can afford to feed nor fight.

  Pretty scary.

  Another truth is that it’s happened everywhere.  Increasingly, increasing the world’s cost of living to fight a world of too much debt places today’s central bankers in the history books as those who would double down on fighting Minsky’s warnings.

  It’s hard to universally claim Canada is driven by ponzi-like lending, but it’s easy to point out that record consumer debt levels include a record stretch in borrowing to chase these rising home prices.  So Home Capital’s breakdown should be viewed as a warning sign.  In fact, Canada’s big 5 banks came out to support the Equitable Group – maybe this should be viewed as the industry trying to contain cracks in their system?

  

  The stock price action in the big 5 banks seems to convey growing concern too, breaking down on higher volumes.  Is it just the HCG and mortgage market noise or are big picture markets sensing other issues in Canada too?

  

  Other issues?

  Oil.  Loonie.  NAFTA and Trump.  Metals markets.  Softwood lumber.  Seems Trump’s reflation trade could also be fading.  Between new questions over US trade policy and re-emerging China credit concerns buzzing again, the list of things that could unnerve Canadian markets over and above the real estate and consumer debt picture are popping up too.

  

  Maybe the most troubling signs regarding our real estate markets come from the powers that be.  After years of being so sanguine, only now is CMHC issuing concerns over select regional markets.  Finance Minister Morneau suggests there is no link between risk in housing markets in Toronto/Vancouver and HCG.  We’ve had ultra-low rates for several years and Bank of Canada head Poloz actually claimed low interest rates have nothing to do with fuelling speculation!   Is this the height of detachment?  Arrogant deflection?  Has he not studied Minsky? After this last decade, this statement may go down as the most fantastical  I can remember.

  Minsky laid out a salient concept and it was only several years ago that the world was brought to its economic knees experiencing it.  I know those in the position of policy influence are mandated to speak with tone and instil confidence.  Unfortunately recent history shows us that these powers that be, who steered us into the rocks, also end up being the ones who try to manage us out.  That makes me nervous.  That, and of course, the whistling.

  A few select Ben Bernanke quotes from back in the day.

  “House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.” Oct 05

   

  “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.” Feb 06

   

  “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”  Mar 07

   

  “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.  The vast majority of mortgages, including even subprime mortgages, continue to perform well.  Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”  May 07

   

  “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” Oct 07

   

  “The Federal Reserve is not currently forecasting a recession.”  Jan 08

   

  “The financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again.” Aug 10

   

  “One myth that’s out there is that what we’re doing is printing money. We’re not printing money.” Dec 10

   

  “I wish I’d been omniscient and seen the crisis coming.” Dec 10

  Pretty sure Minsky didn’t suggest omniscience was required to avoid repeating our mistakes.

  

  

• China Iron Ore Prices Crash Through Key Support To 6-Month Lows

  After a few short days of respite – suggested by some as indicative that the worst is over – China commodities are crashing again tonight with Dalian Iron ore snapping below 460 to its lowest since before Trump's election…

  

   

  This has erased the entire post-Trump reflation trade hope…

  

  The commodity has sunk on concern mine supplies will go on rising just as China’s mills enter a weaker period for demand and policy makers in Asia’s top economy rein in leverage. Stockpiles at mainland ports are near a record after robust shipments from Australia and Brazil, with miner BHP Billiton Ltd. citing the inventories as among risk factors that may tug prices lower. Citigroup Inc. has said there may have been forced sales by some traders in China.

  With all the industrials now red post-Trump…

  

  As Citi warned over the weekend, "We suspect that a good number of physical traders that are financially leveraged up to five times have been forced to destock due to rising short-term borrowing costs and the recent sharp price corrections."

  Citigroup isn’t alone in saying that some traders may be compelled to sell holdings into a falling market as China tightens. Shanghai Cifco Futures Co. said this week signs are emerging that traders are dumping their holdings.

  

  

• Baltimore Has Become A Rotting, Decaying War Zone Amid Raging Opioid Epidemic

  Authored by Michael Snyder via The Economic Collapse blog,

   

  It is hard to believe that Baltimore was once one of the greatest cities in the entire world.  Unlike nearby Washington D.C., Baltimore is a blue collar city that is home to some of the hardest working people in America.  When I was in high school, my brother and I were huge fans of the Baltimore Orioles, and once in a while our parents would drive us from our home in Virginia all the way up to Baltimore to see them play.  As an adult, I spent a number of years living near D.C., and I would take frequent trips up to Baltimore. 

  

  To say that the city is in a state of decline would be a major understatement.  Everywhere you look there are abandoned buildings and homes, and as you drive through some of the worst areas you can actually see drug addicts just lying in the streets.  Just like so many other communities all over this country, decades of liberal policies have taken a brutal toll, and now the city is just a rotting, decaying shell of the glorious metropolis that it once was.

  There are some sections of Baltimore that you simply do not go into once the sun goes down.  And actually it isn’t a very good idea to go into those areas during the day either.  The crime in the city has gotten so bad that authorities have actually formally requested help from the federal government…

  According to The Baltimore Sun Newspaper, the city has logged in 118 homicides today with the projection of >400 murders for year’s end. It’s so bad here that Baltimore’s Mayor has asked the Federal Government for help in attempt to regain control. Even the police union sounds the alarm of an officer shortage leading to decrease in patrols. All of this is occurring as the Baltimore population declines, nearing a 100-year low, U.S. Census says.

  Through the end of April, Baltimore was on pace for the highest murder rate in the history of the city.

  Yes, you read that correctly.

  The primary factor fueling all of this violence is an opioid epidemic that is completely and totally out of control…

  The opioid epidemic is the quiet killer that has been leaving a trail of bodies on the streets of Baltimore.

   

  “The individuals that are putting these drugs on our street, they’re killing people on our street,” said deputy commissioner Dean Palmere of the Baltimore Police Department.

   

  Drug overdoses is expected to have killed 2,000 people statewide in 2016 and more than 800 in Baltimore alone.

   

  “There are more people dying from overdose here in Baltimore City, than there are dying of homicide,” said Baltimore City health commissioner Dr. Leana Wen in February.

  That last paragraph amazed me when I first read it.

  Even though Baltimore is on pace for the highest murder rate in the city’s history, more people are actually dying from drug overdoses.

  And now police in the city are warning of a new opioid that is reportedly “100 times more potent than heroin”.  It is called Carfentanyl, and it can kill people almost instantly.

  I would like to share with you a short YouTube film put out by Alastair Williamson just a few days ago entitled “The Baltimore Experience”.  No matter how much I write, I could never communicate the devastation in the city quite like this little video does…

  Did you see the part near the end where Williamson stops to offer a bottle of water to a man that is just lying in the street?

  Hopefully that particular man is not on anything, but it is quite common to see people lying around like zombies in cities where an opioid epidemic is raging.  These are very cruel drugs, and they will utterly consume you if you allow them to.

  The more drugs that come in, the worse the violence gets, and within the past 24 hours we have seen four more senseless murders in Baltimore…

  Two men were shot and killed Tuesday morning in west Baltimore, police said. Officers responded at 5:52 a.m. to the shooting on the 2800 block of Lanvale Street.

   

  Police said officers found the victims in and around a vehicle. Both had been shot in the head and were declared dead at the scene, police said.

   

  A 35-year-old man was fatally shot Monday evening in southeast Baltimore, police said.

   

  The victim, identified as Charles Gatuthu, 35, was shot in the head and body at about 7:45 p.m. in the 6100 block of Boston Street. He was taken to Johns Hopkins Bayview Hospital, where he died.

   

  A 25-year-old was shot and killed Monday afternoon in west Baltimore, police said.

  Of course Baltimore is far from alone.  On Monday, I wrote about how Chicago is becoming a gang-infested wasteland, and on Tuesday we got news of Chicago’s 200th homicide so far in 2017.

  And an official bulletin went out to all members of the Chicago police on Monday warning them about the “high-powered weapons” that gangs are now using to kill people…

  Chicago police issued a bulletin Monday warning its officers about gangs armed with high-powered weapons, after three people were shot to death over the weekend – including two attending a memorial for the earlier victim.

   

  Department spokesman Anthony Guglielmi said the three people who were killed in the shootings Sunday were all members of the same street gang.

  Sometimes it is hard to believe that this is still America.

  The precious people that are getting hooked on these drugs and that are committing these murders were once innocent little boys and girls.  Somewhere along the way they were led down the wrong path, and this is happening on a massive scale all over the nation.

  So what should we do?

  What we need are some real solutions.  We need to restore the principles and the values that this nation was founded upon, and we need people that are willing to step forward and take this nation in a different direction. In times of great darkness, light is needed the most, and at this moment in our history we are in desperate need of some lights.

  

  

• Caught On Video: Hockey-Playing Putin Reacts To Comey Termination

  In a rare appearance of the Russian president in his natural sporting habitat, CBS’ caught up with Russian President Putin rink side and asked him about the firing of former Director Comey.  Here is a transcript of the conversation:

  Palmer: How will the firing of James Comey affect US-Russia relations?

  Putin: There will no effect. Your question, please don’t get mad, is silly. We have nothing to do with that. President Trump is acting in according with his competence, and in acordance with his law and constitution. And what about us? Why us? You see I am going to play hockey with the hockey fans. And I invite you to do the same.”

  Our @elizapalmer caught Russian Pres. Putin rink side and asked him about the firing of former. Dir. Comey. pic.twitter.com/3nytJYi0si

  — CBS Evening News (@CBSEveningNews) May 10, 2017

  //platform.twitter.com/widgets.js

  

  

• Trump Tantrum: "Democrats Should Be Ashamed"

  At the end of a long 24-hour news cycle, it’s clear that one thing is still bugging President Trump – the hypocrisy of The Democrats.

  In a terse tweet tonight, Trump exclaimed “The Democrats should be ashamed. This is a disgrace!”  with the attached clip.

  The Democrats should be ashamed. This is a disgrace!#DrainTheSwamp pic.twitter.com/UfbKEECm2V

  — Donald J. Trump (@realDonaldTrump) May 11, 2017

  //platform.twitter.com/widgets.js

  Where is the mainstream media on this? At last check, looking for what the evidence that Comey found that caused Trump to fire him.

  

  

• Trump Named As "Risk Factor" In Company Filings 3x More Than Obama

  According to the research firm Sentieo, which spent hours and hours of time scouring the “Risk Factor” sections of 10-Ks and 10-Qs, Trump has been about 3x more likely to be cited by a publicly traded company in the U.S. as a “Risk Factor” in his first 100 days in office than was Obama.  Courtesy of the Wall Street Journal, here are a couple of histograms that highlight the comparison:

  

   

  Of course, there are multiple factors, some of which are unrelated to worries about a specific candidate’s policies, that go into the crafting of such risk factors.  For example, Trump was way more likely to be cited as a risk factor by healthcare companies in his first 100 days…though we suspect that is only because he’s entering office during a time in which it’s becoming increasingly obvious that Obamacare is an epic failure and needs to be saved from the brink of collapse. 

  Although the mainstream media is certainly trying, it’s pretty difficult for any serious person to blame Obamacare’s failure on the Trump administration.

  

   

  And, in other instances, we suspect Trump actually welcomed the notion of being a “risk factor”…here are just a few examples:

  Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!

  — Donald J. Trump (@realDonaldTrump) December 6, 2016

  //platform.twitter.com/widgets.js

  General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!

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

  //platform.twitter.com/widgets.js

  Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!

  — Donald J. Trump (@realDonaldTrump) December 3, 2016

  //platform.twitter.com/widgets.js

  Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!

  — Donald J. Trump (@realDonaldTrump) December 22, 2016

  //platform.twitter.com/widgets.js

   

  Meanwhile, both candidates were deemed of relatively equal risk by financial companies…Trump for, among other things, going after special tax treatment of carried interests at private equity firms and Obama for regulatory risk coming out of the great recession.

  President Trump expressed support for legislation ending treatment of carried interest as capital gain … we and possibly our unitholders would be required to pay a materially higher amount of taxes, thereby adversely affecting our ability to recruit, retain and motivate our current and future professionals. — Blackstone Group LP filings

   

  Due to the current economic environment and issues facing the financial services industry, as well as the effect of the change from the Bush to the Obama administration, we anticipate new legislative and regulatory initiatives over the next several years, including many focused specifically on banking and other financial services in which we are engaged. These initiatives will be in addition to the actions already taken by Congress and the regulators… — PNC Financial Services Group Inc. filings

  

   

  And while it’s probably not a fair comparison, given that Obama took office right in the midst of the great recession which was more attributable to Bush/Clinton, we would be remiss if we failed to point out that manipulated equity prices of today are far more enamored with Trump than similarly manipulated equity markets of 2008 were with Obama.

  

  

  

Digest powered by RSS Digest

• The Last Living Nuremberg Prosecutor: War Is Not The Answer

  Authored by Carey Wedler via TheAntiMedia.org,

  Only one lawyer who prosecuted the Nuremberg trials is still alive today, and he has an important message for the world: war is not the answer.

  

  60 Minutes recently interviewed Ben Ferencz, a son of Romanian Jewish immigrants who found refuge in the United States. His father worked as a janitor, and Ben was the first person in his family to go to college. After Japan’s attack on Pearl Harbor, he was driven to enlist in the military.

  Due to his short stature, the Air Force rejected him, as did the Marines. He eventually finished his education at Harvard and went on to join the Army, landing at Normandy and fighting in the Battle of the Bulge.

  Because of his legal training, Ferencz was transferred to a new unit in General Patton’s Third Army, where he was tasked with gathering evidence from concentration camps as the U.S. Army liberated them. That information was going to be used to prosecute war crimes.

  He says he is still haunted by what he saw and the stories he heard, remembering the story of a son whose father had hidden bread for him under his arm every night so other prisoners couldn’t steal it.

  Though he returned home to the United States, he has soon summoned again. General Telford Taylor, who was in charge of the Nuremberg trials, requested Ferencz’ legal expertise, sending him multiple binders of top secret documents from the Nazi regime.

  “He gave me a bunch of binders, four binders. And these were daily reports from the Eastern Front — which unit entered which town, how many people they killed. It was classified, so many Jews, so many gypsies, so many others,” he told 60 Minutes.

   

  “Ferencz had stumbled upon reports sent back to headquarters by secret SS units called Einsatzgruppen, or action groups. Their job had been to follow the German army as it invaded the Soviet Union in 1941,” killing communists, gypsies, and Jews, the outlet reported. These murders were independent of concentration camp exterminations and occurred in the victims’ own towns.

   

  “They were 3,000 SS officers trained for the purpose, and directed to kill without pity or remorse, every single Jewish man, woman, and child they could lay their hands on,” Ferencz recounted.

  Ultimately, his findings led him to push for an additional trial, despite the previous ones already being conducted at Nuremberg.

  “When I reached over a million people murdered that way, over a million people, that’s more people than you’ve ever seen in your life, I took a sample. I got on the next plane, flew from Berlin down to Nuremberg, and I said to Taylor, ‘General, we’ve gotta put on a new trial.’“

  Because the prosecutors were already stretched thin and other trials were already underway, Taylor put him in charge of handling the Einsatzgruppen. At age 27, Ferencz prosecuted 22 former commanders, all of whom plead not guilty to their crimes.

  But, as Ferencz proved with written evidence, they had documented their atrocities in cold, plain language. 60 Minutes noted the Nazi reports:

  “Exhibit 111: ‘In the last 10 weeks, we have liquidated around 55,000 Jews.’  Exhibit 179, from Kiev in 1941: ‘The city’s Jews were ordered to present themselves… about 34,000 reported, including women and children. After they had been made to give up their clothing and valuables, all of them were killed, which took several days.’ Exhibit 84, from Einsatzgruppen D in March of 1942: Total number executed so far: 91,678.”

  Otto Ohlendorf, who led Einsatzgruppen D, actually claimed the murders were carried out in self-defense. “He was not ashamed of that. He was proud of that. He was carrying out his government’s instructions,” Ferencz told 60 Minutes.

  Though Ferencz was exposed to some of the worst behavior in human history, he fell short of calling the soldiers “savages,” as the 60 Minutes interviewer referred to them. Rather, he blamed the power of patriotism and soldiers ‘just doing their jobs.’

  “He’s a patriotic human being acting in the interest of his country, in his mind,” he said, speaking of soldiers who commit atrocities.

   

  “Do you think the man who dropped the nuclear bomb on Hiroshima was a savage? Now I will tell you something very profound, which I have learned after many years. War makes murderers out of otherwise decent people. All wars, and all decent people.” [emphasis added]

  Ferencz successfully prosecuted the 22 commanders he put on trial, and four were hanged. He has spent his life trying to deter war crimes and delivered the closing arguments in the first case at the International Criminal Court at the Hague in the Netherlands, which was established in 1988. He has also donated his personal life savings to a Genocide Prevention Initiative at the Holocaust Museum.

  When the interviewer pressed him about his optimism in the face of continued genocide in places like Sudan — asking whether he is simply naive — he maintained his positivity and rejected the claims of those who insist war is necessary:

  “Well, if it’s naive to want peace instead of war, let ’em make sure they say I’m naive. Because I want peace instead of war. If they tell me they want war instead of peace, I don’t say they’re naive, I say they’re stupid. Stupid to an incredible degree to send young people out to kill other young people they don’t even know, who never did anybody any harm, never harmed them. That is the current system. I am naive? That’s insane.”

  Though the interviewer also accused of him being an idealist, he insisted the opposite — that he’s a realist. He also said:

  “People get discouraged. They should remember, from me, it takes courage not to be discouraged.”

  He pointed out that decades ago, freedom for women, gays, and transsexuals was unthinkable, they have now come to pass, insisting it’s also possible to end mass murder and war.

  “[I]t’s a reality today. So the world is changing. And you shouldn’t — you know — be despairing because it’s never happened before. Nothing new ever happened before.”

  

  

• CoMeY THe CLoWN…

  

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

• 'Anonymous' Issues Ominous World War 3 Warning: "The Citizens Will Be The Last To Know"

  Using their signature Guy Fawkes character, the infamous hacktivist group Anonymous has issued an ominous new video – warning people around the world to "prepare" for World War 3 as the US and North Korea continue to move "strategic pieces into place" for battle.

  All the signs of a looming war on the Korean Peninsula are surfacing… we’re watching as each country moves strategic pieces into place… but unlike past world wars… although there will be ground troops the battle is likely to be fierce, brutal and quick.

   

  It will also be globally devastating on the environmental and economic levels.

   

  … This is a real war with real global consequences… With three super powers drawn into the mix… Other nations will be coerced into choosing sides.

   

  … The citizens will be the last to know…

  As The New York Post reports, Anonymous – described online as a global network of hackers, intent on spreading “facts the government doesn’t want you to know” – claims the US and South Korea have been working together to keep the peace in the region, along with China and the Philippines, but their pleas have fallen “on deaf ears.”

  They claim that the Trump administration has been also working closely with the Australians, sending a rotational deployment of more than 1,000 US troops to the country, along with a large fleet of military aircraft. Australia is ultimately considered to be a “strategic location in the Indian ocean,” Anonymous says.

   

  “The citizen will be the last to know, so it is important to understand what the other nations are doing,” the group states, citing China’s warning last week to its people in the North. “The pragmatic Chinese, it seems, are starting to lose their patience.”

   

  Another surefire sign that war is imminent, according to Anonymous, are the recent talks between President Trump and Philippines President Rodrigo Duterte.

  The group concludes the video with an eerie message for those watching around the world.

  “Prepare for what comes next,” they say. “We are Anonymous. We are Legion. We do not forgive. We do not forget.”

  As SHTFplan.com's Mac Slavo points out, both China and Russia are mobilizing troops to the North Korean border, and the United States now has a Naval strike group directly off the coast of the rogue state. With the North threatening to continue testing missiles and weapons of mass destruction, and the Trump administration officially stating that past policies of “patient diplomacy” no longer apply, it appears confrontation is imminent.

  North Korea has responded to President Trump’s deployment of an aircraft carrier, surveillance drones and missile tests by saying that if even a single bullet is fired they will nuke the United States.

  The geo-political strain in the region could lead to any number of potential triggers. The growing concerns have not gone unnoticed in Japan, which recently saw panic buying of emergency shelters and air purifiers skyrocket.

  In the United States, retailers report that the sale of NBC/CBRN gas masks and anti-radiation pills has spiked in recent weeks amid fears of impending global disaster.

  Elite billionaires are building bunkers and long term preparedness plans to survive disaster, while governments around the world are positioning pieces on the grand chessboard.

  All signs point to serious trouble in the very near future.

  The world sits on the brink of a war unlike anything mankind has ever witnessed.

  

  

• Chinese Producer Prices Miss, Slide For Second Month As Burst Commodity Bubble Spills Over

  With the entire world’s focused on the last remaining reflationary dynamo in the world, China, today’s inflation data out of Beijing, fabricated as it may be, was closely watched.  After all, just one month ago, UBS declared China‘s reflationary phase over, and a dark, deflationary era of negative credit impulse-driven deflation would soon be unleashed on the world. Again.

  

  It wasn’t quite so dramatic.

  After surging to almost 8% at the start of 2017, the fastest pace in 9 years, PPI declined for a second consecutive month, slowing to just 6.4% YoY in April, down 0.4% from March, and missing expectation, confirming (as if it was needed) that China’s commodity boom is now in the rearview mirror.  The accelerating producer price plunge has been all too obvious to those who have watched the recent crash (most recently previewed here) in Chinese iron ore and coal prices, which tumbled after rising sharply on a construction boom, or rather bubble, that drove China’s strongest economic growth since 2015.

  At the same time consumer prices rose fractionally more than expected, although CPI remained at just 1.2% YoY, up from 0.9% in March. This was driven entirely by non-food inflation which jumped 2.4%, while food inflation plunged 3.5% from a year ago.

  

  And in the backward logic of the “good is good and bad is great” world, the burst commodity bubble (declining PPI)  and lower purchasing power (rising CPI) allowed the  PBOC to be a little more generous with its liquidity, ending the three drought of no reverse repos, even if the central bank still drained a net of CNY80 billion today, and so Chinese stocks are higher… for now.

  

  

  

• For The First Time, You Can Track Every Dollar The Government Spends

  Despite paying trillions in Federal taxes every year, Americans’ requests for a clear, detailed breakdown of where their money goes every year, have gone unanswered and been ignored by both Republican and Democrat administrations for one simple reason: transparency has an unpleasant way of mutating into accountability, which is the scariest thing imaginable for any career politician.

  Not any more.

  On Tuesday, the US Treasury launched a new website designed to track virtually every dollar – out of roughly $4 trillion – in federal spending. The new website, Beta.USAspending.gov, was created to put data into the hands of taxpayers by empowering them to track how their tax dollars are spent. The site is designed to follow federal agency spending and, for the first time, links spending data to awards distributed by the government.

  

  In the statement, the Treasury said that “the new site provides taxpayers with the ability to track nearly USD in government spending from Washington, DC directly into their communities and cities,” says Treasury Secretary Mnuchin. “Furthermore, greater access to data will drive better decision making and strengthen accountability and transparency – qualities central to the Administration’s focus on a more innovative and effective government.”

  Federal spending flows through hundreds of federal agencies and programs to thousands of companies and nonprofits and millions of individual citizens. Visitors to the site can search by location, federal agency or by keyword for a specific program or type of spending. They can also search for a specific recipient of federal funds, such as a business or university.

   

  Treasury released this new version of the USAspending.gov site in accordance with Digital Accountability and Transparency Act (DATA Act) requirements. The DATA Act was enacted into law in May 2014 to make federal spending data more accessible, searchable, and reliable. The data on Beta.USAspending.gov is compiled by Treasury with the assistance of other federal agencies and will be updated and published on the site quarterly, with the first batch of data published in May 2017. Over the past two years, Treasury conducted extensive user research and stakeholder outreach to develop the new site.

  More than just pretty charts, however, the site will likely serve as a tool for investors following along with Trump Administration proposal debates, and tracking who, where and when is set to receive several billion in excess government generosity.

  The top level website can be found at the following link:

  

  Readers eager to experiment with the website’s search can do so after the jump:

  

  The more detailed spending breakdown by state can be found at the following link: it even lets you find spending by zip code and even recipient name.

  

  

  

• Stockman On The Coming Fiscal Bloodbath: "Sell Stocks, Sell Bonds, Buy Gold"

  Authored by Craig Wilson via The Daily Reckoning blog,

  

  David Stockman joined Greg Hunter of USA Watchdog to discuss what he views as a fiscal bloodbath and the biggest bond market bubble to ever hit the global economy.

  To begin the discussion, the Washington insider was asked about the cash on hand in the United States federal budget and the fiscal conditions that Donald Trump faced where he unloaded, “I think it is a total calamity. They capitulated entirely.”

  While speaking on what cuts Trump proposed Stockman pressed, “He wants to cut $18 billion in order to ‘balance it out’ from domestic programs like the the National Institute of Health (NIH), Public Broadcasting Service (PBS) and a lot of things in between… and that’s just a down payment for the big reduction proposed for the full fiscal year that starts in October. That proposal is looking for $54 billion for defense and other domestic priorities, met with $54 billion of cuts on the domestic side… the problem is, Trump went to the Hill and they got totally fleeced. They ended up with most of the increases they wanted because that is the way Washington works. More money for the defense and border pork barrel.”

  With contrarian style, David Stockman then pointed out, “He ended up with no cuts at all. He now has $30 billion in increases and a statement from Congress, that was on a bipartisan basis, allowed that we’re in control – you can have your defense and other priorities but we’ll march the budget higher together. I think that’s the opening gambit for what’s going to happen in the full year as the Congress struggles to try to pass bills for fiscal year 2018. They’re going to raise defense and all the priorities, they’ll cut nothing domestically…”

  “The whole thing is headed for a real fiscal bloodbath sometime this summer or fall when they run out of debt ceiling (money) and can’t borrow any more to pay for all of this. When they use up the cash on the balance sheet right now… we’re going to be in a huge shutdown mode.”

  Greg Hunter inquired with Stockman over what budget deals he would feel Trump and GOP leadership could make that would signal serious change. The former Reagan Budget Director argued, “First, he would need to rethink making defense great again. It is already far greater than we need. We don’t need that $54 billion for defense. Second, he promised he wouldn’t touch social security or medicare… A lot of people need them, I recognize that, but there are millions of affluent retirees who never earned all of the benefits they’re getting.”

  When asked what his view on a Congressional budget deal is and what it could mean for jobs and the economy Stockman relayed, “There will be panic in the financial markets. This is not priced in. The market isn’t expecting anything. I think it will cause some very difficult times.” The interviewer then asked what his expectations on a government shutdown would look like with Trump.”

  The author noted, “I doubt he’ll go for a shutdown by choice. The leadership is not going to stand for it. They have a false idea that Republicans can govern by keeping the Washington Monument open even if we’re bankrupting the country by piling spending. I don’t think they’re going to elect to have a shutdown. What I think is going to happen instead is they’re going to run out of borrowing authority with the debt ceiling, it is now frozen on March 15. We’re locked in at $19.8 trillion so when they run out of cash in a few months, they’ll need a majority in both houses to vote through a multi-trillion bill in both houses. They won’t have the votes.”

  Stockman sounded the alarm, “This isn’t speculation, this is what is coming down the pipe. I don’t think it is even remotely anticipated by the markets. It is not priced in at all. That’s when you get huge disruptions in the financial markets. When they’re hit by surprise or black swans, that’s where we’re heading in a matter of few months.”

  After the host pushed for clarity over his bubble forecast Stockman urged, “The market is insanely valued right now. They were trying to tag 2,400 points to close out last week. The point is, that represents about 25 times the trailing earnings for 2016 at a point where we’re already into a “recovery” that’s lasted 96 months. Almost the longest in history. What the market is saying is that we’ve reached a point of full employment, forever. [They appear to be behaving] as though there will never be another recession or economic surprise.”

  “The market is pricing itself for perfection for all of eternity. This is crazy. We’ve got headwinds everywhere. The auto industry is now starting to roll over. The red ponzi in China has only a matter of time before it explodes. We now have debt for the household sector above where it was for the 2008 crisis. I think the market could easily drop to 1,300-1,600 by 30% or more once the fantasy ends. The government will show its true colors. We are headed for a fiscal bloodbath.”

  Stockman voiced his concern for clarity remarking, “This crazy notion that there is going to be a Trump tax cut and fiscal stimulus must be put to rest once and for all. It’s not going to happen. They can’t pass a tax cut that big without a budget resolution that incorporates $10 or $15 trillion of debt over the next decade. Week by week, slowly the market is beginning to figure this out. What it means is, all of the corporate insiders are selling stock like there is no tomorrow… where institutional sales of stock have been going up since the election and what we have is the usual end of the cycle. This is the greatest suckers rally we’ve ever seen.”

  When asked what he would recommend to protect yourself he urged, “The main thing is, get out of the markets. These markets are unstable. They’re rigged and unsustainable… there is no reason to own stocks at this point in the game. It is so overvalued that maybe you can get another two or three out but you’re facing a 30% or 40% down. The risk versus reward is horrible. The bond market is one giant bubble because the central bank’s have been buying bonds worldwide. They’re buying trillion and still buying a trillion or so on an annual basis. All of that is coming to a halt.”

  In offering his bond market and central bank analysis he urged, “The Fed has finally run out of dry powder. They’re out of the bond buying business and even talking about initiating shrinking of their balance sheets. The European Central Bank (ECB) is near the end of its money printing spree. Even in Japan, which has gone off the deep end with quantitative easing, is beginning to have second thoughts.”

  “Everywhere in the world, the central banks are finally getting to the end of the road. There isn’t going to be anymore money printing. That’s going to leave a giant mess on the doorstep of the fiscal authority. It is going to make the bond market a particularly dangerous place. Bonds are totally mispriced. If the central banks had not bought $20 trillion worth of government bonds worldwide over the last two decades, the yield on debt everywhere would be much higher.”

  Stockman warned on the bond market environment that, “We have, what is roughly a $100 trillion global bond market (corporate and government) that is the biggest bubble ever seen. The advice is, get out of the bond market and stock market. Buy gold. Not all at once. When the financial system finally unwinds and the monetary authorities are discredited the one hard asset in the world is going to have another day in the sun.”

  He reminded viewers, “The gold market is relatively small in comparison to the size of the equity market or bond markets. The gold markets are only a fraction of that. When the panic comes… the price of gold will rise dramatically.”

  

  

• Odds Of Trump Still Being President In 2019 Tumble

  From a recent high of 75%, the last few hours – since FBI Director Comey was fired – have seen the odds of Donald Trump still being President at the end of 2018 have tumbled…

  

  On relatively high volume, PredictIt's site shows heavy selling (with some trades crossing at 60%).

  Interestingly, President Trump had just reached his highest odds of staying… and this drop is merely a one-month low…

  

  Buy The F**king Comey Dip?

  

  

• Seattle Mayor Wants To Tax Diet Soda To Fight "White Privileged Institutionalized Racism"

  Back in February, Seattle’s Mayor Ed Murray called for a 2 cent per ounce tax on sugary soft drinks in order to “improve Seattle’s educational opportunities for students of color.”  Per Lynx Media, the tax was expected to raise some $16 million per year.

  Of course, when someone on his staff pointed out that a tax on sugary drinks would disproportionately impact the minorities that he was apparently trying to help, Murray knew that something drastic had to happen.  So that’s when he decided to launch a new attack against the most recognizable symbol of “white privileged institutionalized racism” on the planet:  DIET SODA!

  Per the Seattle Times:

  The changes were recommendations that emerged when staff from the mayor’s office and the office of Councilmember Tim Burgess studied disparate impacts the tax could have on people with low incomes and on people of color, according to Murray.

   

  That work involved conversations with community advocates, public-health professionals and business owners, according to the mayor. After Murray’s initial announcement, some suggested the exclusion of beverages with artificial sweeteners would be unfair because affluent white people tend to consume more diet drinks.

  And while we suspect that many of our readers who frequently enjoy diet sodas didn’t realize they were racist, trust Ed Murray when he says that you most certainly are…and he’s going to tax you for it.

  And now that Democrats have found a way to directly tax “white privilege,” we suspect we’re going to see a whole lot more diet soda taxes. 

  Of course, Murray’s staffers may also want to remind him of how well Philadelphia’s soda tax has worked out for their mayor.  When Philadelphia became the first US city to pass a soda tax last summer, city officials were eagerly looking forward to the surplus-tax funded windfall to plug gaping budget deficits (and, since this is Philadelphia, the occasional embezzlement scheme). Then, shortly after the tax went into effect on January 1st we showed the tax applied in practice: a receipt for a 10 pack of flavored water carried a 51% beverage tax. And since  PA has a sales tax of 6% and Philly already charges another 2%, the total sales tax was 8%. In other words, a purchase which until last year came to $6.47 had overnight become $9.75.

  

  What happened next? Precisely what most expected would happen: full blown sticker shock, and a collapse in purchases. According to Philly.com reports, just a couple of months into the city’s sweetened-beverage tax, supermarkets and distributors were reporting a 30% to 50% drop in beverage sales and – adding insult to injury – are now planning for layoffs.

  Then, a month ago, PepsiCo slashed jobs, blaming the soda tax…

  With sales slumping because of the new Philadelphia sweetened beverage tax, Pepsi said that it will lay off 80 to 100 workers at three distribution plants that serve the city.

   

  The company, which employs 423 people in the city, sent out notices and said the layoffs would be spread over the next few months. The layoffs come in response to the  beverage tax, which has cut sales by 40 percent in the city, PepsiCo Inc. spokesman Dave DeCecco said.

   

  “Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” DeCecco said.

   

  Outside of the North Philadelphia plant Wednesday, Ed Langdon, a 40-year employee  who shuttles products between warehouses, said the cuts are the most drastic he’s seen in his time at Pepsi. Langdon said the writing was on the wall: Some colleagues who are paid on commission were seeing drastic cuts in weekly pay. “The trucks are going out and they’re coming back with the soda on it,” he said. “No one’s buying it. It’s just not happening.”

  And just a week ago, as Phily.com reported, Coke did the same…

  Philadelphia’s new sweetened-beverage tax has led to the loss of 40 Coca-Cola jobs and a 32 percent drop in sales, the company said Friday.

   

  Fran McGorry, president and general manager of Philly Coke, the local Coca-Cola bottler, said in a news release that the job losses are due to commission-based employees leaving the company, not layoffs.

   

  “We are not able to replace those positions right now,” he said. “In total, we have fewer people working in the city while more people are now working outside Philadelphia due to increased demand there. We have also made the decision not to hire seasonal employees for the summer months due to the negative impact the tax is having on our business.”

  Of course, if nothing else, Murray’s stupidity at least serves to debunk the notion that ‘soda taxes’ arise from some compassionate attempt on the part of Democrats to eradicate obesity.  And, at a minimum, we can only hope that this embarrassing mishap just might prove to at least a few liberals that these taxes, like Obamacare, are nothing more than just a another money grab from an oppressive government, wrapped in clever packaging to dupe the American public. 

  

  

• James Comey Learned He Was Fired From A TV News Report, Thought It Was A Joke

  According to the NYT’s Michael Schmidt, today’s termination of James Comey was not an impromptu event: the “WH and DOJ had been working on firing Comey since at least last week. Sessions had been working to come up with reasons.” Still, only a handful of people got a heads up: Trump called Senators Lindsey Graham (R) and Diane Feinstein (D) before breaking the news. They are the top Republican and Democrat on the Senate committee running the Russia probe.

  He did not, however, tell Comey, who according to the NYT, learned he was unemployed by hearing it on the TV.

  Comey, who is three years into a 10-year term at the helm of the F.B.I., learned from news reports that he had been fired while addressing bureau employees in Los Angeles. While Mr. Comey spoke, television screens in the background began flashing the news. Shortly after, a letter was delivered to F.B.I. Headquarters in Washington.

  //platform.twitter.com/widgets.js

  Adding to the humiliationin his first reaction, Comey laughed, saying he thought it was a fairly funny prank. Then his staff started scurrying around in the background and told Mr. Comey that he should step into a nearby office.

  Mr. Comey stopped addressing the group. He proceeded to shake hands with the employees he had been speaking to. Then he stepped into a side office, where he confirmed that he had been fired. At that point, he had not heard from the White House.

   

  Mr. Comey’s day had begun in Florida, where he spoke to a group of police officers. He then flew to Los Angeles, where he was also scheduled to speak at a diversity meeting.

  At the same time, Keith Schiller, the director of Oval Office operations at the White House, hand delivered a letter from Trump to Comey informing him of his firing late Tuesday afternoon. But Comey was not there to receive it.

  In his letter, the president said he was dismissing Comey because it was time for a “new beginning” at the nation’s “crown jewel of law enforcement.”

  “While I greatly appreciate you informing me, on three separate occasions, that I am not under investigation, I nevertheless concur with the judgment of the Department of Justice that you are not able to lead the Bureau,” Trump wrote.  The recipient of the letter would be on the other end of the country at that moment.

  Meanwhile, in a separate NBC report, a senior FBI official said they “had no idea this was coming. They are in shock there.”

  .@PeteWilliamsNBC on @MSNBC: Sr. FBI official just told him he “had no idea this was coming. They are in shock there.” pic.twitter.com/3bvISUgKoj

  — Kyle Griffin (@kylegriffin1) May 9, 2017

  //platform.twitter.com/widgets.js

  

  

Digest powered by RSS Digest

• Will Gold or Silver Pay the Higher Interest Rate?

  by Keith Weiner

  This question is no longer moot. As the world moves inexorably towards the use of metallic money, interest on gold and silver will return with it. This raises an important question.

  Which interest rate will be higher?

  The Wrong Approach

  It’s instructive to explore a wrong, but popular, view. I call it the purchasing power paradigm. In this view, the value of money—its purchasing power—is 1/P (where P is the price level). Inflation is the rate of decline of purchasing power.

  This view treats the quantity of goods you can buy as intrinsic to the money itself. This is a mistake, and it leads to a false theory of interest. Before I can present this wrong theory, let me define some terms.

  The Nominal Interest Rate means the rate at which lenders lend and borrowers borrow in the market. The Real Interest Rate is the Nominal Interest Rate – inflation. Notice the switcheroo. The actual rate charged by actual lenders to actual borrowers is dismissed as merely nominal. A fictitious rate which is not used in any transactions is elevated to the status of real. Got that?

  The theory asserts that interest is determined by inflation, that is, real interest> 0. With nominal rates below zero in Europe and elsewhere, this view is tempting and convenient.

  According to this view, which metal has the higher interest rate comes down to which will have a faster-rising purchasing power. Most people would say silver, especially when silver is so cheap compared to gold by a long-term historical perspective.

  Suppose silver’s purchasing power rises at 5% per annum (i.e. deflation) over the long run, then a nominal interest rate of 2% gives a real rate of 7%. If gold’s purchasing power is rising at only 3%, then its nominal rate must be 4%, if both metals have the same real rate.

  First, and it should be obvious that, no one knows how prices will change in the future. Anyone who knew could make billions trading commodities futures. In any case, prices may change, but that is not the measure of the value of money. Consumer prices have many nonmonetary forces pushing them up (such as regulations and taxes) and down (such as improved manufacturing efficiency). At best, prices are a weak proxy for the value of a falling paper currency.

  I don’t take the purchasing power approach.

  Monetary Science

  Instead, to determine which rate will be higher, let’s look at the incentives that encourage action. Everyone who owns metal will face the choice: to hoard it or to lend it.

  In general, we know that if interest is greater than their time preference, people will lend. But that does not help us predict which metal will have the higher rate. For that, we must look at factors that differ between them.

  For example, there is a cost to store precious metals. Since silver is about half as dense as gold, an ounce of silver is almost twice as bulky. And that ounce has about 1/75 as much value as an ounce of gold. This means to hold the same value in silver you need 150 times the volume of gold. An iPhone (the small size) made of gold is worth as much as two and half bread loaves made of silver. No wonder why storing silver is typically more expensive.

  If silver storage costs you 0.75%, and gold is 0.5%, then there is a 0.25% spread in storage costs. Lending silver is a net gain for you, compared to lending gold at the same rate. This is an actionable spread (unlike the so called real rate)—an incentive to lend silver in preference to gold.

  There are other differences between the metals, such as marginal utility. Economists had long struggled with a dilemma. Water is important to human life, but diamonds are not, so why is the price of a diamond much higher? If you are thirsty in a desert, the first gallon of water is worth a high price. The second is worth less. By the third or fourth, you are not willing to pay anything. The reason is that you use the first gallon for drinking. The second is a spare. The third is to wash yourself. The fourth is maybe to wash your clothes. Can you think of what to do with a fifth gallon?

  Economist Carl Menger resolved the dilemma with his discovery of the principle of marginal utility. Marginal utility refers to the value of the next quantity of the good in relation to the previous. Marginal utility declines, because when the higher needs are satisfied, the next unit of the good goes to a lower need.

  Water is so abundant, that at the margin its value is nearly zero. People use water to clean their driveways. Large, high-quality diamonds are not so abundant. They are used only for engagement rings and other important jewelry pieces.

  Each kind of good has a different marginal utility. For food, it’s low because food perishes. For many durable goods, it’s higher because they can be stored until needed.

  Over thousands of years, the market ranked all goods by marginal utility. It determined that the highest marginal utility belongs to gold. Gold is not consumed, and virtually all gold ever mined is still in human hands. Even today, gold mining continues and the market happily absorbs all that can be produced. Silver is second.

  People value the last ounce of gold as much as the first (or nearly as much). Whereas wiith silver, the last ounce matters a bit less. People may be willing to part with some silver more easily. By this assessment, one might expect people to prefer to lend silver, and therefore gold should have the higher interest rate.

  However, there are other factors to consider.

  For the next one, it may be easier by starting with a physical analogy. A metal ball is tied to the left side of frame by a piece of string. You try to pull it to the right with a magnet. Physics teaches us that it will not move, unless the force of the magnet is greater than the strength of the string.

  Applying this analogy to money, the left side is hoarding. Metal is held there by the propensity to hoard. People have hoarded since before recorded history, because they must plan for the future, especially senescence and retirement. They hoard today because they don’t know what a dollar will be worth in 10 or 30 years. The force pulling metal out of hoards is interest. Lending can only occur if Interest is high enough.

  This sounds a lot like our discussion of time preference. Interest must be higher, or else there is no lending. However, time preference is not about a metal, and so it tells us nothing about which will have the higher rate.

  It also sounds a bit like our discussion of marginal utility. If the propensity to hoard were just the effect of marginal utility—if people hoarded simply because they valued the next ounce of gold as much as the previous—then the answer would be simple. Gold would have the higher interest rate, as it has the higher marginal utility.

  However, the propensity to hoard is something else. To understand, we must ask something that few have asked.

  Why are there two monetary metals?

  This is an important question. The answer is not at all obvious. Money has a network effect. The more people who use a form of money, the more value its value increases. Think of eBay. All the sellers go there because that’s where the buyers are. And all the buyers go there because that’s where all the stuff is offered for sale.

  The network effect makes it more puzzling that we have two different monies. In other cases when two different networks compete, one winner eventually emerges. For example, alternating current beat direct current for use in the electric grid. More recently, Internet protocol beat token ring for use in the public data network.

  Yet, over thousands of years, gold has not displaced silver. The reason is that gold and silver do not directly compete. They perform different functions.

  Both are heavy and shiny metals. Both are resistant to tarnish, and they’re good conductors of heat and electricity. But their physical similarity has misdirected attention from their separate roles.

  Gold was selected by traders as the best money to carry large values, especially over long distances. Before gold, they used cattle, because cows move under their own power. Gold does not move itself, but its value density is so high that you can easily carry a fortune in your pocket.

  Today, gold can be moved anywhere in the world in days. The entire globe is effectively the trading region for gold. This means that gold is not subject to local gluts or shortages. Gold supply and demand are quickly smoothed out over the entire world. This helps makes gold the most liquid commodity.

  Silver was chosen by wage-earners, not for carrying large value over distance, but to carry value over long periods of time. Before they used silver, they used salt. Salt is not perishable, and it is accessible to even unskilled laborers. Workers need a way to accumulate small amounts of value every month, and store it until needed to buy groceries in retirement. Gold does not work as well for this purpose. An ounce of gold is far too much for most people to buy weekly or even monthly. In smaller sizes, you pay a high premium which will be lost when you sell. Silver offers a better deal for small savers. Silver is the most hoardable commodity.

  Gold tends to be owned by wealthier people. It is likely that a larger number of people have smaller amounts of silver.

  The wage-earner who has a modest stack of silver coins does not need interest so much as he needs security. Lending and interest are for people who have already covered their need for security. The wealthy, by contrast, will decide to lend their gold purely as a financial decision. To them, it may be no different than running their dollar investments.

  Silver’s greater hoardability suggests that much of this metal is not available for lending, and what is offered will demand a higher interest rate.

  Silver is also the metal of choice for speculators. We might coin the term speculability (not a real word). Speculators are betting on a 25% gain in a few months, or a 2,500% gain in a few years. As a trader, the speculator is ready to sell quickly. While speculators may appreciate interest, they may not want to commit the metal for the time necessary to earn it.

  Silver’s higher speculability, like its hoardabilty, encourages us to think that silver will command the higher interest rate.

  This leads to an opposing factor. The world is inverting now. For many decades, there had been interest on paper currencies, but not on money. But now, interest in paper is vanishing, while it emerges in money.

  Some investors will be drawn to metal solely for the interest. If they can buy either gold or silver to earn interest, most will choose gold. It’s the senior metal, less volatile, and less ambiguous between industrial consumption and monetary uses.

  So far, we have looked at lender supply of metal. What of borrower demand? I think it’s premature to try to predict this. A business should borrow the money which it earns as revenue. For example, a gold mine should borrow gold to expand and a silver mine should borrow silver. The question of which metal will have higher demand for borrowing is simply which metal will be more used as a medium of exchange.

  Circulation is itself a function of interest rate. At zero interest, metal cannot circulate. It is for hoarding only. Interest draws it out of hoards. This is a feedback loop, a non-linear system.

  Finally, let’s look at some data which may help inform our analysis. Today, under paper currency, there is a market for what is called leasing (I have written three papers discussing this market—the links to Part I, Part II and Part III are here—arguing why one should be careful not to conclude too much from it, especially Part II).

  Here is a graph showing the gold and silver lease rates (six-month maturity). It runs from July 26, 1999 through November 2, 2012, or 3,356 days, the period when the London Bullion Market Association quoted the silver lease rate.
  
  Source: London Bullion Market Association

  The silver lease rate is higher most of the time. Here is a graph of the spread, to show this more clearly.
  

  The silver lease rate was higher than the gold lease rate on 71% of trading days. And when the silver rate was higher, it was about 0.9% higher on average, whereas when gold was higher, it was only about 0.3% higher.

  It is worth noting that the silver lease rate is much more volatile than that of gold. This is due to several reasons, but the most important is that silver is less liquid.

  My Opinion

  The above is my framework for thinking about this topic. I welcome criticism of any errors I may have made. But errors aside, what I tried to present above is not opinion but science.

  However, an article like this demands that I offer my opinion. So here it goes, I will stick my neck out.

  I believe that silver will have the higher interest rate.

  The primary reason is that silver is more hoardable, and hence it will require greater compensation to incentivize people to give up their silver. I must also say that I already see dollar investors buying metal just to earn interest. They are buying gold.

  Let me take this opportunity to add one sobering thought. While I believe that my study of monetary science qualifies me more than most people to predict the interest rate, central planning always fails. One reason is that no one—no matter how qualified—knows what everyone wants.

  I would never want to be put in a position to dictate what interest rates people must lend gold, silver, or anything. I would refuse, as John Galt did in Atlas Shrugged, the job of Economic Dictator. It takes a market with many buyers and sellers, to set the price of anything. Including the price of borrowing money.

  The Crowdsourced Experiment

  Which metal should offer the higher rate—and what those rates should be—is the most important economic question of our era.

  The paper currencies are now in the terminal stage of failure, with some already dead (Zimbabwe), some in their death throes (Venezuela), and some showing advanced signs of cancer (Switzerland and Japan). The dollar is the least ill paper currency in hospice.

  My company is conducting an experiment. We are crowdsourcing the answer to these questions, and publishing our findings.

  We just closed a gold deal. Here is the graph showing the interest rates offered by the investors (horizontal axis), and amount of gold offered (vertical).

  

  The market is nascent. However, notice that there was a pretty tight grouping of offers from 3% to 3.5%, with significant additional gold offered at 4%.

  We may find that I am correct in predicting that silver will have the higher rate. We may find I am totally wrong. Maybe both metals will even have the same rate (though I doubt that, it would be like finding two ropes from different manufacturers had the same strength).

  Whether I am right or wrong about the gold-silver interest rate spread doesn’t matter. What matters is that this is the moment of a monetary renaissance. It’s an exciting time.

  I encourage everyone to tune in, and follow our results as they emerge.

  

• "Brexit Is A Time Bomb…" UBS Chairman Warns "Europe's Not Out Of The Woods With Macron Win"

  It appears the chairmen of UBS have plenty to say on Europe.Following former UBS chairman Peter Kurer's comments that "to the elites, the EU is a means to get rich quickly and export their problems," UBS current chairman Axel Weber has warned bankers that Europe is not "out of the woods" from its political risks even after Emmanuel Macron’s reassuring victory in the French presidential election.

  Peter Kurer recently remarked on the end of the Euro…

  Following an unfortunate combination of wrong decisions at the top and the uncontrolled flourishing of a self-serving bureaucracy, the union has moved in a direction where it has become a prisoner of its own constructed reality.

   

  The EU was a great idea but it has been ridden to death. Back in 1992, almost half of Swiss voted to join the European Economic Area, including the traveller. If there was a vote today on joining the union, the latest polls say just 15 per cent would vote yes.

   

  The EU had its chances. It squandered them, and maybe it will come to an end in the foreseeable future under the weight of its burdens: La messa è finita, andate in pace.

  And over the weekend speaking in Tokyo, as The FT reports,  UBS Chairman Axel Weber said that political risk in Europe remained “actually quite high” even though “we’ve seen the centre hold in France” with Macron’s victory over far-right candidate Marine Le Pen, and even though all the signs were that the centre will also hold in the upcoming German location elections.

  “That doesn’t mean Europe is out of the woods,” he told the International Institute of Finance’s spring meeting. “There is still Italy where it is very unclear that the centre will hold. And there is still Greece.”

   

  He continued: “Where you find some bright side….there are (also) some downside risks that are not really priced into the market but could derail (Europe).”

   

  “Brexit is a time bomb… and the countdown is on. It will be two years from now,” Mr Weber said. He added that “if the British really do leave the customs union and single market there could be a lot of volatility which could impact on the global economy”.

  This is not the first time Weber has dared to comment against the global elites' party-line…  Speaking on the sidelines of their annual meetings of the IMF and World Bank last year, Weber warned that monetary intervention is causing international spillovers and major disturbances in global markets.

  "They (central banks) have taken on massive interventions in the market, you could almost say that central banks are now the central counterparties in many markets. They are the ultimate buyer,"

   

  "Investors have been driven into investments where they have very little capability for dealing with what is on their plate and I think that is a sure reminder of where we were in a different asset class in 2007," he said.

   

  "So I think the central bankers need to be very careful that they do not continue to produce disturbances in the markets, which they acknowledge – it's a known side effect – but the perception that the underlying impact of monetary policy outweighs the potential side effect in my view is starting to be wrong," he added.

   

  Since the global financial crash of 2008, central bank policy has focused on buying up bonds in large quantities and cutting interest rates to record lows. The Federal Reserve has since looked to unwind its own policy which focused on the Treasury market and the yield curve, but the Bank of Japan and the ECB's large-scale bond-buying programs continue.

   

  "I don't think a single trader can tell you what the appropriate price of an asset he buys is, if you take out all this central bank intervention," Weber warned, adding that it often meant investors were making bad choices with where to put their money.

  UBS Chairman Axel Weber is a former policymaker at The ECB and was the president of Germany's Bundesbank.

  

  

  

• When Might The Pillaging End?

  Authored by Jeff Thomas via InternationalMan.com,

  Recently, I published the comment that, when the present debt bubble eventually pops, “governments will lose the economic power to continue their advance against economic freedom.”

  The immediate reaction from one reader was, “What could we expect next?… The governments and Deep State aren’t going to ‘just go away.’”

  An excellent question—one which deserves an answer.

  We won’t need a crystal ball to find the answer; we can look at history. After all, this isn’t the first time a government has engaged in overreach. In fact, it’s the norm. Political leaders tend to expand countries if they can, then build them into empires, becoming increasingly oppressive along the way, then causing the collapse of the empire—generally through welfare and warfare.

  The dominant empire of the world today could be said to be the US and its allies, but the hub of the wheel is the US itself, so that’s where we’ll focus. The US is so powerful that it can demand that its citizens pay tax, no matter where they may live in the world. The level of US debt has made the government so flushed with money that it could create a money-collection system that’s beyond any the world has seen.

  At some point, however, debt always generates a major crash. What we can expect next will be that the governments will no longer be able to pay for all of their programmes, so they'll have to cut back. How much will they cut back? That will depend on the severity of the collapse. In my estimation, one of the first indicators will be a stock market collapse. Will it drop by 20%? If so, that will only be a correction, and nothing will change significantly. Will it drop 40%? That's an amount I consider very likely and would be an indicator that the economy in general will soon be taking a significant hit, with a knock-on effect as to government coffers. Will it drop 60%? That's quite possible and would be catastrophic. The economy would then go full-on into the Greater Depression.

  Unlike the Depression of the 1930s, the country will not be the largely agrarian, highly-productive country of (generally) hard-working people. It will be a society of entitlement-conscious people, who will fail to rise to the occasion. An unproductive society contributes little to its government. In addition, the worldwide credit bubble will pop and the petrodollar will be no more. That will serve to eliminate the false income that the government now relies on. The heroin syringe will be removed suddenly and the government will find itself severely strapped for cash.

  So, the government will cut back dramatically—because it has no choice.

  So, here’s where you get to picture yourself as the government. What areas do you maintain as sacrosanct and what others do you cut back on? It would make sense to hang on to those programmes that bring in the most revenue and cut the others, but the big-ticket items are welfare and warfare. You no longer have enough money to maintain those in full. You’ll have to cut back on them, but they’re the programmes that allow you to continue in office. Without them, you not only won’t survive the next election, you might face revolts. So, you do what you have to. You dismantle every other department as much as is possible and hope for the best. After all, your primary concern is not the survival of your country’s economy. Your primary concern is your own retention of power.

  Historically, what you end up with is fewer departments surviving the cut, with each of the surviving departments operating on a skeleton crew, resulting in all of them being less effective. A good example today is Argentina. It was once the tenth most productive country in the world, but, in the 1950s, the Peróns collapsed the economy through socialism. It’s never recovered. Argentina today passes laws as regularly as any other country, but they’re considered a joke by Argentines. Especially in the outer areas, the laws are largely ignored. Whatever little the government does do is extremely inefficient.

  The US has, in recent years, gone way over the top with regard to the economic enslavement of its people, but it has funded the programme through massive heroin (debt) injections. When that debt collapses, the US government will drop dramatically in terms of its ability to control its people in every way, but its main focus will then be on riot and revolt control. That aspect will be fully funded—more so than at present.

  At that point, the investor who has a bit of gold or an account in Switzerland will be too costly to go after. Political leaders will be scrambling to save themselves, and there will be far more important priorities to fund.

  As a holder of wealth (no matter how small), your objective is to bridge the period from now until then. Diversify yourself as much as you can and then sit tight. The primary objective is to still have your skin on after the dust has settled.

  *  *  *

  Today, the US is driving itself straight into a debt-fueled economic crash. This historic financial meltdown will dwarf the Great Depression and 2008 financial crisis. It will wipe out countless investors, including many who thought they were prepared. Don’t let yourself be one of them… New York Times ­best-selling author Doug Casey and his team recently released a video with Doug’s strategy for what you can do to protect yourself. Click here to watch it.

  

  

• A Graduation Message For A Tyrannical Age

  Authored by John Whitehead via The Rutherford Institute,

  “When the rivers and air are polluted, when families and nations are at war, when homeless wanderers fill the highways, these are the traditional signs of a dark age.” – Pema Chodron, When Things Fall Apart

  Those coming of age today will face some of the greatest obstacles ever encountered by young people.

  They will find themselves overtaxed, burdened with excessive college debt, and struggling to find worthwhile employment in a debt-ridden economy on the brink of implosion. Their privacy will be eviscerated by the surveillance state. They will be the subjects of a military empire constantly waging war against shadowy enemies and government agents armed to the teeth ready and able to lock down the country at a moment’s notice.

  As such, they will find themselves forced to march in lockstep with a government that no longer exists to serve the people but which demands they be obedient slaves or suffer the consequences.

  It’s a dismal prospect, isn’t it?

  Unfortunately, we who should have known better failed to guard against such a future.

  Worse, we neglected to maintain our freedoms or provide our young people with the tools necessary to survive, let alone succeed, in the impersonal jungle that is modern America.

  We brought them into homes fractured by divorce, distracted by mindless entertainment, and obsessed with the pursuit of materialism. We institutionalized them in daycares and afterschool programs, substituting time with teachers and childcare workers for parental involvement. We turned them into test-takers instead of thinkers and automatons instead of activists.

  We allowed them to languish in schools which not only look like prisons but function like prisons, as well—where conformity is the rule and freedom is the exception. We made them easy prey for our corporate overlords, while instilling in them the values of a celebrity-obsessed, technology-driven culture devoid of any true spirituality. And we taught them to believe that the pursuit of their own personal happiness trumped all other virtues, including any empathy whatsoever for their fellow human beings.

  No, we haven’t done this generation any favors.

  Based on the current political climate, things could very well get much worse before they ever take a turn for the better. Here are a few pieces of advice that will hopefully help those coming of age today survive the perils of the journey that awaits:

  Be an individual. For all of its claims to champion the individual, American culture advocates a stark conformity which, as John F. Kennedy warned, is “the jailer of freedom, and the enemy of growth.” Worry less about fitting in with the rest of the world and instead, as Henry David Thoreau urged, become “a Columbus to whole new continents and worlds within you, opening new channels, not of trade, but of thought.”

  Learn your rights. We’re losing our freedoms for one simple reason: most of us don’t know anything about our freedoms. At a minimum, anyone who has graduated from high school, let alone college, should know the Bill of Rights backwards and forwards. However, the average young person, let alone citizen, has very little knowledge of their rights for the simple reason that the schools no longer teach them. So grab a copy of the Constitution and the Bill of Rights, and study them at home. And when the time comes, stand up for your rights before it’s too late.

  Speak truth to power. Don’t be naive about those in positions of authority. As James Madison, who wrote our Bill of Rights, observed, “All men having power ought to be distrusted.” We must learn the lessons of history. People in power, more often than not, abuse that power. To maintain our freedoms, this will mean challenging government officials whenever they exceed the bounds of their office.

  Resist all things that numb you. Don’t measure your worth by what you own or earn. Likewise, don’t become mindless consumers unaware of the world around you. Resist all things that numb you, put you to sleep or help you “cope” with so-called reality. Those who establish the rules and laws that govern society’s actions desire compliant subjects. However, as George Orwell warned, “Until they become conscious, they will never rebel, and until after they rebelled, they cannot become conscious.” It is these conscious individuals who change the world for the better.

  Don’t let technology turn you into zombies. Technology anesthetizes us to the all-too-real tragedies that surround us. Techno-gadgets are merely distractions from what’s really going on in America and around the world. As a result, we’ve begun mimicking the inhuman technology that surrounds us and have lost our humanity. We’ve become sleepwalkers. If you’re going to make a difference in the world, you’re going to have to pull the earbuds out, turn off the cell phones and spend much less time viewing screens. 

  Help others. We all have a calling in life. And I believe it boils down to one thing: You are here on this planet to help other people. In fact, none of us can exist very long without help from others. If we’re going to see any positive change for freedom, then we must change our view of what it means to be human and regain a sense of what it means to love and help one another. That will mean gaining the courage to stand up for the oppressed.

  Give voice to moral outrage. As Martin Luther King Jr. said, “Our lives begin to end the day we become silent about the things that matter.” There is no shortage of issues on which to take a stand. For instance, on any given night, over half a million people in the U.S. are homeless, and half of them are elderly. There are 46 million Americans living at or below the poverty line, and 16 million children living in households without adequate access to food. Congress creates, on average, more than 50 new criminal laws each year. With more than 2 million Americans in prison, and close to 7 million adults in correctional care, the United States has the largest prison population in the world. At least 2.7 million children in the United States have at least one parent in prison. At least 400 to 500 innocent people are killed by police officers every year. Americans are now eight times more likely to die in a police confrontation than they are to be killed by a terrorist. On an average day in America, over 100 Americans have their homes raided by SWAT teams. It costs the American taxpayer $52.6 billion every year to be spied on by the government intelligence agencies tasked with surveillance, data collection, counterintelligence and covert activities. All the while, since 9/11, the U.S. has spent more than $1.6 trillion to wage wars in Afghanistan and Iraq and police the rest of the world. This is an egregious affront to anyone who believes in freedom.

  Cultivate spirituality, reject materialism and put people first. When the things that matter most have been subordinated to materialism, we have lost our moral compass. We must change our values to reflect something more meaningful than technology, materialism and politics. Standing at the pulpit of the Riverside Church in New York City in April 1967, Martin Luther King Jr. urged his listeners:

  [W]e as a nation must undergo a radical revolution of values. We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motive and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.

  Pitch in and do your part to make the world a better place. Don’t rely on someone else to do the heavy lifting for you. Don’t wait around for someone else to fix what ails you, your community or nation. As Gandhi urged: “Be the change you wish to see in the world.”

  Say no to war. Addressing the graduates at Binghampton Central High School in 1968, at a time when the country was waging war “on different fields, on different levels, and with different weapons,” Twilight Zone creator Rod Serling declared:

  Too many wars are fought almost as if by rote. Too many wars are fought out of sloganry, out of battle hymns, out of aged, musty appeals to patriotism that went out with knighthood and moats. Love your country because it is eminently worthy of your affection. Respect it because it deserves your respect. Be loyal to it because it cannot survive without your loyalty. But do not accept the shedding of blood as a natural function or a prescribed way of history—even if history points this up by its repetition. That men die for causes does not necessarily sanctify that cause. And that men are maimed and torn to pieces every fifteen and twenty years does not immortalize or deify the act of war… find another means that does not come with the killing of your fellow-man.

  Finally, prepare yourselves for what lies ahead. The demons of our age—some of whom disguise themselves as politicians—delight in fomenting violence, sowing distrust and prejudice, and persuading the public to support tyranny disguised as patriotism. Overcoming the evils of our age will require more than intellect and activism. It will require decency, morality, goodness, truth and toughness. As Serling concluded in his remarks to the graduating class of 1968:

  “Toughness is the singular quality most required of you… we have left you a world far more botched than the one that was left to us… Part of your challenge is to seek out truth, to come up with a point of view not dictated to you by anyone, be he a congressman, even a minister… Are you tough enough to take the divisiveness of this land of ours, the fact that everything is polarized, black and white, this or that, absolutely right or absolutely wrong. This is one of the challenges. Be prepared to seek out the middle ground … that wondrous and very difficult-to-find Valhalla where man can look to both sides and see the errant truths that exist on both sides. If you must swing left or you must swing right—respect the other side. Honor the motives that come from the other side. Argue, debate, rebut—but don't close those wondrous minds of yours to opposition. In their eyes, you're the opposition. And ultimately … ultimately—you end divisiveness by compromise. And so long as men walk and breathe—there must be compromise…

   

  Are you tough enough to face one of the uglier stains upon the fabric of our democracy—prejudice? It's the basic root of most evil. It's a part of the sickness of man. And it's a part of man's admission, his constant sick admission, that to exist he must find a scapegoat. To explain away his own deficiencies—he must try to find someone who he believes more deficient… Make your judgment of your fellow-man on what he says and what he believes and the way he acts. Be tough enough, please, to live with prejudice and give battle to it. It warps, it poisons, it distorts and it is self-destructive. It has fallout worse than a bomb … and worst of all it cheapens and demeans anyone who permits himself the luxury of hating.”

  As I make clear in my book Battlefield America: The War on the American People, the only way we’ll ever achieve change in this country is for the American people to finally say “enough is enough” and fight for the things that truly matter. 

  It doesn’t matter how old you are or what your political ideology is. If you have something to say, speak up. Get active, and if need be, pick up a picket sign and get in the streets. And when civil liberties are violated, don’t remain silent about it.

  Wake up, stand up, and make your activism count for something more than politics.

  You are the true guardians of the galaxy.

  

  

• Trump Set To Nominate A Slate Of 10 New Federal Court Judges

  Having been dealt a number of legal defeats at the hands of Obama-appointed judges in the early days of his administration, Trump is preparing to fill roughly 120 vacancies on lower federal courts around the country.  The first of those new appointments will come later today in the first slate of 10 nominees, which will be followed by “monthly waves of nominations” according to a White House official quoted by the New York Times.

  One is Justice Joan L. Larsen, a former law clerk to Justice Antonin Scalia and law professor at the University of Michigan, who now serves on the Michigan Supreme Court. She will be nominated to the United States Court of Appeals for the Sixth Circuit, in Cincinnati.

   

  The other is Justice David R. Stras, a former law clerk to Justice Clarence Thomas and law professor at the University of Minnesota, who now serves on the Minnesota Supreme Court. He will be nominated to the Eighth Circuit, in St. Louis.

   

  The announcement on Monday will include three other nominees for federal appeals courts: Amy Coney Barrett, a law professor at Notre Dame and former law clerk to Justice Scalia, to the Seventh Circuit in Chicago; John K. Bush, a lawyer in Louisville, Ky., to the Sixth Circuit; and Kevin C. Newsom, a lawyer in Birmingham, Ala., who served as the state’s solicitor general and as a law clerk to Justice David H. Souter, to the 11th Circuit in Atlanta.

  

   

  Many of the new appointments are expected to be pulled from the list of 21 “potential Supreme Court Justice picks” that Trump released back in September….so far, 3 of the 21 picks have been nominated for new positions.

  1. Keith Blackwell

  2. Charles Canady

  3. Steven Colloton

  4. Allison Eid

  5. Neil Gorsuch

  6. Raymond Gruender

  7. Thomas Hardiman

  8. Raymond Kethledge

  9. Joan Larsen

  10. Mike Lee

  11. Thomas Lee

  12. Edward Mansfield

  13. Federico Moreno

  14. William Pryor

  15. Margaret A. Ryan

  16. Amul Thapar

  17. Timothy Tymkovich

  18. David Stras

  19. Diane Sykes

  20. Don Willett

  21. Robert Young

  Of course, Democrats have called on the Senate to obstruct all new appointments from the Trump administration to the greatest extent possible.

  But liberal groups expressed alarm at the prospect of a federal bench filled with Mr. Trump’s appointees. “The Trump administration has made clear its intention to benefit from Republican obstructionism and to pack the federal courts with ultraconservatives given a stamp of approval by the Federalist Society,” said Nan Aron, the president of the Alliance for Justice, referring to the conservative legal group. “We’ll be scrutinizing the records of these nominees very carefully.”

   

  Ms. Aron said Democrats should be wary of Mr. Trump’s nominees. “Given the critical importance of the circuit courts,” she said, “it is incumbent upon the Senate to treat its duty to provide advice and consent very seriously.”

  That said, with Republicans controlling a majority in the Senate and the “nuclear option” barrier already breached, we suspect there is very little they can do other than appear on CNN every 15 minutes to complain about Republicans doing all the same things that Obama did for 8 years.

  

  

• Mining CEO Explains Why Silver Could Reach Over $136

  Authored by Simon Black via SovereignMan.com,

  

  His remarks started off like dozens of presentations that I had heard so many times before. . .

  “Without silver,” began the speaker, “our entire society would go back to the Stone Age.”

  The speaker was the CEO of one of the largest silver mining companies in the world, and he was a special keynote at the annual closed-door meeting of the Atlas 400.

  CEOs of mining companies almost always start their presentations talking about how important their mineral is.

  “If we didn’t have cobalt we would all be cave men again. . .” or “Without molybdenum our modern technology would cease to exist.”

  It sounds impressive, but the same story applies to just about every industrial commodity in the world, from copper to lumber to recycled steel.

  It’s hardly an original argument and doesn’t impress me enough to be bullish on their mineral.

  The real investment thesis about silver is that it’s a precious metal that has industrial qualities and a long-standing tradition of value.

  Like gold, silver was an ancient form of money. And for good reason.

  Out of the 118 known elements that exist on the periodic table, gold and silver share certain chemical properties that made them ideal as a medium of exchange to our ancestors.

  Gold and silver are solid at normal temperatures (as opposed to Helium). They’re not radioactive (like Plutonium).

  They’re not explosive when they come into contact with water (like Cesium), nor do they rust when they get wet (like Iron).

  Most importantly, gold and silver are rare enough to be valuable, but not so rare that it would be almost impossible to mine more.

  Between the two, gold is obviously more rare… hence the higher price.

  There’s an old estimate from the US Geological Survey from the late 1960s suggesting that the ratio of silver to gold in the earth’s crust is about 21:1.

  (So assuming that’s true, the theoretical price ratio between the two should be around 21:1)

  And in ancient times the price ratio between the two metals was frequently in the range of about 15:1, i.e. one ounce of gold was worth 15 ounces of silver.

  Today the ratio is about 75, based on a gold price of about $1230 per ounce, and a silver price of $16.35.

  This is fairly high even by modern standards as the long-term average over the past several decades is about 50.

  This would suggest that silver should in increase in price relative to gold in order for the ratio to return to its historic average.

  (A ratio of 50:1 would imply a silver price of $24.60 based on a gold price of $1230.)

  Now, all of this is an argument that many of us have heard before.

  But I did learn something over the weekend from the mining CEO; he told us that the current mining production ratio between the two metals is about 9:1.

  This means that 9 ounces of silver are mined for every 1 ounce of gold that’s mined.

  This is very interesting from a supply/demand perspective.

  According to the Silver Institute, demand for silver hit an all-time high in 2016.

  But the price of silver, at least relative to gold, is hovering near a multi-year low at 75:1. (Again, the historic average is around 50:1).

  

  Moreover, even though the price is 75:1, the new supply of silver is only 9:1.

  In theory if the new metal supply is 9:1, then the price should be 9:1 (which would be a silver price of $136.67).

  Obviously that’s a purely academic postulate; reality rarely conforms to theory. And the mining CEO wasn’t projecting a $136+ silver price.

  But it seemed clear to him that there’s an unsustainably wide gulf between the gold/silver price ratio versus the gold/silver supply ratio, especially when silver demand is at an all-time high.

  Commodity prices tend to move dramatically when the market realizes there’s a serious supply/demand mismatch.

  That seems to be the case with silver right now.

  And while it would be silly to expect $100+ silver, there are certainly credible reasons why the ratio should close the gap and move MUCH lower.

  Do you have a Plan B?

  

  

• Kushner Companies Seen Hawking Shady US-Visa-Buying-Residency Program To Wealthy Chinese

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  

  When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.

   

  – Frédéric Bastiat

  I’ve written about the EB-5 visa program previously, something I consider a total racket that allows wealthy foreigners to buy their way into U.S. residency while funding real estate catering to, you guessed it, wealthy Americans. It’s more or less a system by which really rich people abuse a government program simply to help out other really rich people. What a country.

  This wasn’t always the case. In fact the EB-5 visa program was originally meant to connect wealthy foreigns with projects to help the less fortunate here at home. Naturally, the entire thing has been completely corrupted.

  As I noted in the 2015 post, More American Cronyism – U.S. Government Selling Visas to Fund Luxury Apartment Buildings:

  Merging, on paper, the affluent midtown neighborhood and the struggling one uptown placed Hudson Yards in a community with an overall high unemployment rate, positioning developer Related Cos. to gain low-cost financing from foreigners seeking green cards.

   

  The program through which that happens, known as EB-5, enables foreign nationals to obtain U.S. permanent-resident status by putting up money for new business ventures that create American jobs. It gives ventures in high-unemployment and rural areas a special status to encourage investment. But as the program’s popularity has soared in recent years, the bulk of immigrant investment is going to projects that are located, like $20 billion Hudson Yards, in prosperous urban neighborhoods.

   

  At least 80% of EB-5 money is going to projects that wouldn’t qualify as being in Targeted Employment Areas without “some form of gerrymandering,” estimates Michael Gibson, managing director of USAdvisors.org, which evaluates projects for foreign investors.

   

  Increasingly, the money appears to be flowing to the flashiest projects, which the investors often see as safest, EB-5 professionals say. Among those getting EB-5 money are an office building set to host Facebook Inc. near Amazon.com Inc.’s Seattle headquarters, a boutique hotel in high-end Miami Beach, and a slim Four Seasons condo-hotel in lower Manhattan that sports a penthouse with an asking price above $60 million. In all of them, geographic districts were crafted to include higher-unemployment areas. 

  The Kushner Companies have been taking advantage of this program for years, and continue to do so despite Donald Trump being the current U.S. President.

  As reported by The Washington Post:

  Over several hours of slide shows and presentations, representatives from the Kushner family business urged Chinese citizens gathered at a Ritz-Carlton hotel to consider investing hundreds of thousands of dollars in a New Jersey luxury apartment complex that would help them secure what’s known as an investor visa.

   

  The tagline on a brochure for the event: “Invest $500,000 and immigrate to the United States.”

   

  And the highlight of the afternoon was Meyer, a principal for the company, who was introduced in promotional materials as Jared’s sister.

   

  The event underscores the extent to which Kushner’s private business interests have the potential to collide with his powerful role as a top official in his father-in-law’s White House, particularly when it comes to China, where Kushner has become a crucial diplomatic channel between Beijing and the new administration.

   

  The EB-5 immigrant investor visa program that Meyer discussed Saturday allows rich foreign investors who are willing to plunk down large investments in U.S. projects that create jobs to apply to immigrate to the United States.

   

  Bloomberg News reported in March 2016 that the program has been used to the benefit both the Trump and Kushner family businesses. Before joining the White House, as chief executive of his family’s real estate company, Jared Kushner raised $50 millionfrom Chinese EB-5 applicants for a Trump-branded apartment building in Jersey City, according to the report.

   

  The EB-5 program has been criticized by members of Congress from both parties who have said the program in essence sells visas to the wealthiest foreigners.

   

  The program has been extremely popular among rich Chinese, who call it the “golden visa” and are eager to get their families — and their wealth — out of the country. The fact that some use it to move their money out illegally, however, has made the program unpopular with the Chinese authorities.

   

  The program was launched with the goal of securing investment and creating jobs. But instead, in recent years, many real estate developers have used the program as a source of cheap financing by using foreign investors, especially from China, for flashy projects in Manhattan and other city centers.

   

  A Government Accountability Office report in 2015 found the EB-5 program carried a high risk of fraud, was rife with counterfeit documentation and had “no reliable method to verify the source of the funds of petitioners.”

   

  The program, however, is especially popular in China, with estimates in recent years showing that more than 80 percent of EB-5 visas were issued to Chinese investors.

   

  Saturday’s event in Beijing was hosted by the Chinese company Qiaowai, which connects U.S. companies with Chinese investors. Qiaowai is working with the Kushner company to secure funding for Kushner 1, the New Jersey project presented to investors, also known as One Journal Square. Promotional materials tout the buildings’ proximity to Manhattan and note that the project will create more than 6,000 jobs.

   

  At Saturday’s event, attendee Wang Yun, a Chinese investor, said the Kushner family’s ties to Trump were an obvious part of the project’s appeal.

   

  “Even though this is the project of the son-in-law’s family, of course it is still affiliated,” Wang said.

   

  Although the event was publicly advertised in Beijing, the hosts were exceptionally anxious about the presence of reporters.

   

  At one point, organizers grabbed a reporter’s phone and backpack to try to force that person to leave. Later, as investors started leaving the ballroom, organizers physically surrounded attendees to prevent them from giving interviews.

  The day after the above described Beijing event, the Kushner Companies held another in Shanghai.

  The New York Times reported:

  Kushner Companies’ China roadshow, promoting $500,000 investments in New Jersey real estate as the path to a residency card in the United States, moved to Shanghai on Sunday after a similar pitch on Saturday in Beijing. Security was tighter in Shanghai than it had been in Beijing, where reporters for The New York Times and The Washington Post briefly attended the event before being kicked out.

   

  At the event in Beijing, Mr. Kushner’s sister, Nicole Meyer, cited her brother’s service to the company, which he led as chief executive until January. She said the project in Jersey City “means a lot to me and my entire family.”

   

  But some who attended described an investor pitch similar to the one in Beijing, and Mr. Trump’s political power was palpable at the Shanghai event even if his name went unsaid. As on Saturday in Beijing, one slide that was presented to the Shanghai audience, describing who will decide the future of the visa program for foreign investors, included a photograph of Mr. Trump, as shown by a snapshot taken by an audience member.

   

  Although the program was created as a way to finance projects in economically troubled neighborhoods, it has instead turned into a form of cheap financing for luxury real estate developers. Applicants are primarily seeking the visa, so they typically do not seek a significant return on their investment.

   

  The United States Government Accountability Office, the investigative branch of Congress, has criticized the visa program for its lax safeguards against illicit sources of money.

   

  Many people in China worry that the window for obtaining an EB-5 visa may be closing. Although Mr. Trump has softened his language considerably in recent weeks, he was a vociferous critic of China during his presidential campaign. He has said he will take a tough line on immigration, although he did not take aim at investors in real estate projects.

   

  The Kushner project promoted to Chinese investors, called Kushner 1, includes two towers and nearly 1,500 luxury apartments, with construction to begin early next year.

  Like so much else in this fake economy, the EB-5 visa program is an unethical racket that uses a government program originally designed to help struggling communities to further help the already wealthy by funneling cheap financing to luxury property development. It’s just another example of how screwed up our incentives are as a nation, and how completely corrupt the American Banana Republic has become.

  For more on the topic, see the following article published by Bloomberg earlier this year: Rich Chinese Race to Apply for a U.S. Golden Visa.

  

  

• Some Chinese Banks Suspend "Interbank Business" As Regulator Demands That Collateral "Actually Exists"

  With “risk” in most of the developed world seemingly a long forgotten four-letter word, as seen by today’s plunge in the VIX to a level not seen in 34 years, traders hoping for some “risk event” have been confined to the recent turmoil in China, where overnight not only did trade data disappoint, with both imports and exports missing, but bond yields jumped to the highest level since 2015, dragging stocks lower even as the local commodity crash slammed iron ore and copper to new YTD lows.

  

  While largely a “controlled” tightening, meant to contain China’s out-of-control shadow banking system, the recent gyrations in Chinese capital markets are starting to have a profound impact on local funding, resulting in a collapse in new bond issuance, and according to FT calculations, in April the number of aborted issues rose to 154, up from 94 in March, 32 in February and 31 in January. 

  

  As DB added, “local bond markets are practically shut for corporates. In fact, YTD issuance is down 40%+ yoy and net issuance has been negative in three out of the first four months this year. A number of issuers are being forced to cancel bond issuances (over RMB100 billion YTD) and there were reports (Bloomberg) of even CDB halting issuance (though subsequently denied). Some AA corporates are now issuing at north of 7%.”

  These signs of mounting stress in China’s $9.3 trillion bond market come less than a month after the country’s banking regulator, Guo Shuqing, was quoted as supporting a campaign to sort out chaotic practices, and threatening to resign if the banking system became “a complete mess”.

  Overnight, Deutsche Bank’s China analyst Harsh Agarwal noticed the “gyrations” in the bond market, and compared the current selloff in onshore bonds to the similar episode one year ago, saying “this time, it’s sharper and longer – AAA yield & spreads are almost 200bp and 100bp wider respectively in the past 6 months or so – because of China’s focus away from growth to deleveraging. This is far from over in our view. Every day we see headlines on new regulations trying to control leverage in different parts of the system – WMPs, insurance companies, banks, etc. Having said this, we do believe in China’s ability to make a U-turn quickly if the situation goes beyond control, and see these changes as a long term positive, hence we are not overly worried as of now.”

  Maybe not as of now, but Agarwal is surely getting more concerned with every incremental negative news out of China, even as the PBOC refuses to inject more liquidity, as it just did moments ago when for the third day in a row, the central bank skipped open market operations.

  Meanwhile, confirming that Beijing is clearly concerned about developments behind the scene, potentially culminating in the worst possible case for China’s banking system – a shadow bank run -China Banking Regulatory Commission said in guidelines on banks’ collateral management posted on its website.

  Commercial banks should carry out pressure tests on collaterals at least once a year, China Banking Regulatory Commission (CBRC) posted new guidelines on banks’ collateral management, among which that banks should revalue collateral at least once a year; and that banks are being urged to prevent risks in the collateral business. Of course, since this is the country where due to “infinite rehypothecation” of collateral, thousands of tons of copper and aluminum were “found” to be missing at China’s Qingdao Port, urging Chinese banks to engage in collateral “quality control” seems like a lost cause.

  In fact, the banking regulator itself appears to be in on the joke, because as Bloomberg’s Tom Orlik points out, the CBRC requires that collateral accepted by banks must actually exist, as explicitly stated in Chapter 3 on “Risk Mangement” in the just released Collateral Guidelines:

  Article 15 The collateral received by a commercial bank shall meet the following basic conditions:

  • the collateral is real;
  • the relationship between the collateral is clear, the mortgage (pledged) has the right to dispose of the collateral;
  • the collateral conforms to the laws and regulations or the national policy requirements;
  • the collateral has a good ability to achieve liquidity.

  That’s not all.

  In a subsequent notice posted in the Securities Times, the Chinese outlet reports that some Chinese rural banks have suspended their interbank businesses including negotiable certificates of deposit (or NCDs) “temporarily” while regulators conduct spot checks. It further adds that at the end of March total interbank liabilities of 25 banks listed in China’s stock market dropped by 1.54t yuan from end-2016, report says, citing Wind Info data, suggesting a sharp contraction in shadow funding.

  While it was not immediately clear what the underlying catalyst for the unexpected move was, recall that at the end of March, Deutsche Bank reported that in the most recent troubling trend involving Chinese banks, numerous smaller banks had become acutely reliant on such shadow banking funding mechanism as Certificates of Deposit, which had become the primary source of short-term funding for many of China’s banks mid-size and smaller banks.

  

  As DB further explained, the banks most exposed to a shut down in this “shadow funding” pathway are medium-sized and small banks, for whome as of 1H16, wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

  

  As Deutsche reflected just over a month ago, “we view banks that are more reliant on CDs as more vulnerable to rising rates and tighter regulations.”

  Reflecting tighter liquidity, the interbank CD rate has rallied
  strongly, with the 6-month CD pricing at 4.6% on average. Some CDs
  issued by smaller rural commercial banks have been priced close to 5%
  recently. This would have pushed up the funding cost and notably for
  smaller banks. If banks invest in low-risk assets such as mortgages,
  discounted bills and treasury bonds, this would lead to a negative
  spread. Alternatively, banks can lengthen asset duration, increase the
  risk appetite, add leverage or slow down asset growth. Among these
  alternatives, we believe a slowdown in asset growth is the most likely.

  

  And while it is tangential, here is a list of the banks most exposed to a sudden cardiac arrest involving CDs: INDB, SPDB and PAB are among the most exposed to interbank CDs.

  

  We would not be surprised if these are among the banks that as of this evening have “suspended their interbank businesses.”

  Which again brings us to the most important question: “Are we close to a “tipping point” in China?” For those who missed the answer the first time, here is Deutsche Bank’s conclusion as of mid-March. Note: since then the liquidity situation in China has gotten far more precarious.  Here’s Deutsche:

  For now, probably not, especially in a year of leadership transition. In our view, the risk of an uncontrollable liquidity event is low, as the PBOC will do whatever it takes to inject liquidity if needed. In the domestic liquidity market, the PBOC exerts strong influence in both the volume and pricing of liquidity. With 90%+ of financial institutions directly or indirectly controlled by the government, PBOC will likely continue to give liquidity support. In 2H15, the central bank established an interest rate corridor to contain interbank rates within a narrow range and pledged to inject unlimited liquidity to support banks with funding needs.

   

  

   

  However, continuing liquidity injections do not come without a cost. A bigger asset bubble, persistent capital outflow pressure and a lower yield curve over the longer term are side effects that China will have to bear. At the same time, the execution risk of PBOC itself is rising.

  In other words, whether or not China keels over and has a hard (or worse) landing, will depend on the PBOC; when (not if) the central bank gets involved, will depend on how soon China’s banks and various CD-funded financial institutions run out of collateral (whether it exists or not) to sell, such as iron ore, copper, precious metals, bonds and even stocks. This will hardly come as a surprise. As we showed last month, the only reason the Chinese banking system hasn’t imploded, is due to nearly CNY 10 trillion in central bank liquidity support for the local banks, just under 100% of China’s GDP.

   

  

  One thing, however, is certain: with western central banks refusing to let the market clear on its own, or deflate the $14 trillion liquidity bubble which has suppressed price formation for the past 8 years, the PBOC is merely doing what all of its “civilized” peers have been doing for years – kicking the can, and praying.

  Until then, however, things may be about to get a whole lot worse for China’s capital and commodity markets.

  

  

• 'Hate Speech' Hypocrisy

  Presented with no comment…

   

  

  Source: Townhall.com

  

  

Digest powered by RSS Digest

• The One Thing We Can't Forget About North Korea (And Everywhere Else)

  Authored by James Holbrooks via TheAntiMedia.org,

  “It was easy enough to spot my cheerleader: She was the only person shouting in a crowd of quiet, curious, shy supporters. Her visage dug with deep wrinkles, but she was full of energy and smiles. When I saw her, I merged to the right and gave her a high-five. When I did, a group of women started to cheer me, (‘Bali! Bali!’), and a bunch of kids ran toward me to get their own high-fives. The ice was broken.”

  Nick Busca was a foreigner running a marathon, and up until that point, as he describes in an enlightening Quartz piece that ran Friday, the host country’s citizens had been standoffish. But as Busca would later explain, once the connection was made on the human level, everything else fell away.

  Considering this first-hand account — particularly within the context of the current mainstream news headlines — it may surprise readers to know that the host nation Busca is describing is North Korea.

  

  The marathoner opens his story with pain, explaining how his training had been inadequate for the Southeast Asia climate. Busca was in “all sorts of trouble,” he writes, when he heard his cheerleader’s words.

  “Bali! Bali!,” incidentally, means “Quicker! Quicker!”

  Busca explains that while he was still in physical agony, the simple human gestures were enough to bring his mind back into focus:

  “However, those few words of encouragement were able to distract me temporarily from the pain and bring me back to (sur)reality: I was running the North Korea Marathon.”

  This wasn’t the first time Nick Busca had run the Mangyongdae Prize International Marathon, which is held annually in the North Korean capital city of Pyongyang. He’s been running the 42-kilometer race for the past three years and says the positive feedback he got from locals this year is by no means atypical.

  “It wasn’t the first time I had bonded with fellow amateur athletes in North Korea,” he writes for Quartz. “In 2014, I found myself talking to an engineering student on a chairlift at the Masik Pass Ski Resort; on the flight there from Beijing, I also chatted with a few members of a women’s soccer team who were coming back from a tournament in Asia.”

  Continuing:

  “The day after this year’s marathon, with our legs begging for mercy, my tour group visited a soccer academy and played with six- and seven-year-old children. In all of these occasions, when the language barrier kept our cultures apart, sports functioned as a catalyst for social interaction.”

  Busca points out that the Olympic charter, which the marathoner notes is held up as “the pinnacle of how we value sports,” promotes a “peaceful society, the preservation of human dignity, and the celebration of friendship as its main values.”

  He also reminds readers that even among bitter enemies, sports can act as a vehicle to find common ground as negative, even violent tendencies among participants are being expressed in “a war with the bloodshed of real conflicts.”

  But perhaps the most deeply penetrating part of Busca’s narrative comes when he’s addressing the problems with the isolated country.

  Acknowledging the demonization of the Kim Jong-un regime in the press and admitting that sure, a lot of what’s being said may be true, the runner says it’s difficult to consider all the negativity when encountering the actual people of North Korea — and that if you do choose to condemn, then you should direct that condemnation toward those who actually deserve it.

  “It is hard to travel there without having these kinds of reports in my mind,” Busca writes of the Hermit Kingdom, “but through my journey, I learned that even when we legitimately condemn a regime, we must keep the top of its political pyramid separated from the bottom.”

  Then, in moments of almost stunning clarity — sad commentary on an age where reports of drone strikes killing civilians barely register a response from the public — Busca states what would be common sense in a sane world:

  “A country’s people may be subjugated to the decisions of their government, but they have their own lives and values — and deserve more than being held to the same ethical judgments we hold their leaders.”

  It must be noted here that the same logic should apply to the people of any and all nations.

  If you truly believe Bashar al-Assad is an evil dictator who gasses his own civilians, then hate him – but don’t let that hatred spill down to the women and children who are being blown apart by bomb-dropping robots in Syria.

  If you truly believe Saddam Hussein was a ruthless authoritarian who deserved to be ousted and eventually hanged, then run with that. But don’t for a second believe that the people in the streets of Baghdad had anything to do with the atrocities you associate with their country’s leader.

  Even in the United States, where Congress’ popularity stands somewhere between cockroaches and herpes — and the sitting president is the most unfavorable of all time — the public feels detached and in disagreement with the government on many issues.

  And if you choose to believe that North Korea is a nuclear threat to its surrounding neighbors, terrific. But try your best to not forget this one thing: The human beings living under Kim Jong-un’s rule play no part in the decision-making.

  I’ll close here with one of Busca’s lines that echoes the feeling he started the piece off with: pain.

  Because for many of us, the drone strikes do register. The innocent dead are felt. We didn’t know them, but we know they didn’t deserve to die. And so, their pain, and the pain of the loved ones left behind becomes ours. Or, as Nick Busca so truthfully states:

  “By the 30km mark, it doesn’t matter what country you’re from or what kind of life you live: You just want it to stop.”

  

  

• War And Empire: The American Way Of Life

  Authored by Paul Atwood via The Strategic Culture Foundation,

  A few months ago I received a message from a professor at the Khomeini Institute for Education and  Research in Tehran, Iran, informing me that my 2010 book “War and Empire: The American Way of Life” (London, Pluto Press) had been translated into Farsi. He requested that I write an Introduction for Iranian readers. What follows is that Introduction. Two years ago the Xinhua Peoples’ Press in Beijing, China also published a translation in Mandarin.

  In the aftermath of Saddam Hussein’s 1991 attempt to annex Kuwait the U.S. deliberately destroyed much of Iraq’s water and sewer infrastructure. The Pentagon even admitted on its website that these acts would lead to mass outbreaks of disease. These were certifiable war crimes under international law. After Saddam’s defeat the U.S. also imposed widespread sanctions on his regime that included preventing necessary medicines from reaching Iraq. Hundreds of thousands of Iraqi citizens perished as a result. In an infamous interview in 1996 Madeleine Albright, then the Secretary of State, was asked to justify the deaths of 500,000 children. She defended these atrocities by saying “I think this is a very hard choice but we think the price is worth it.” Twenty-one years have elapsed since Albright uttered her rationalization of this vicious barbarity and it has been virtually “disappeared” from the collective memory of Americans. But it is far from being the only one.

  Today much the same is being visited upon the children of Mosul, Syria and Yemen. Fifty thousand more marines are slated for deployment to Afghanistan and the new Defense Secretary’s bellicose rhetoric threatens Iran.

  When I undertook to write this book I could not imagine that it would ever be translated into Farsi or Mandarin Chinese. Over the course of my teaching career I had become increasingly concerned about the vacancy of knowledge about their nation’s past on the part of my students and by extension many millions of my fellow American citizens. This condition of ignorance is the effect of the incomplete and, too often, dishonest orthodoxy in required school texts and by the distortion of the real past by popular culture, Hollywood films and corporate controlled network television, especially the purported “news.” George Orwell was correct. “Who controls the present controls the past.” What the majority of Americans are conditioned to think they know about their past (and that of many other peoples) is myth, and too often, sheer illusion. Misdirection and manipulation about proclaimed threats from abroad since 1945 has led directly into wars and unjust armed interventions and coups in many other nations. The results are always tragic on a colossal scale.

  None of this is accidental or new. Since the end of World War II the U.S. ruling elites have set forth an agenda claimed to foster what they call a “liberal world order” in which democracy and human rights for all are the declared goals. But little about real U.S. actions in the world supports these claims. Washington has overthrown elected governments and waged catastrophic war upon helpless civilians in many nations since 1945. The public is told that national security and “vital interests” are at stake and the corporate controlled media ensure that key realities are omitted, or distorted. It is no secret that today much of the human species is living in existential crisis-whether from war, economic exploitation or dire effects of climate change- and  the profound ignorance about how the past shapes the present is a major factor in our failure to fashion a more peaceful and beneficial future. This volume is simply an attempt to illuminate much of the hidden history of the United States in the hope that more citizens in the United States will realize that we cannot continue on this destructive path and must find a way to cooperate with other nations instead of seeking to dominate them or outcompete them in a self-defeating contest for diminishing resources. Many American officials pay lip service to international cooperation but they really mean collaboration with the overarching American agenda.

  The words of those who have formulated the grand strategy for American global dominance since the U.S. emerged as the most militarily dominant nation after WWII must be taken seriously but desires for global dominance were evident long before. Consider the oft-quoted language of George F. Kennan, the U.S. State Department’s architect of the Cold War with the Soviet Union immediately after World War II. In a top secret document circulated only to other key officials he took notice of the fact that the American population was (in 1948) only 6.3% of the world’s but that the U.S. effectively controlled about 50% of the world’s resources. The object of U.S. policy, he declared, should be to maintain that disparity and employ “straight power tactics” to enforce this global inequality, while avoiding all rhetoric about commitment to human rights, raising other peoples’ living standards, democratization and the like. Kennan’s vision, coupled with the U.S. creation of the World Bank and International Monetary fund, anticipated a globalized economy under firm control by American and allied European banks and industries, and backed by American firepower.

  Much closer in time to the present is the comprehensive plan for complete American dominance of the planet projected in brutally frank and exacting detail by former national security chief Zbigniev Brzezinsky in his book, The Grand Chessboard: American Primacy and Its Geo-strategic Imperatives.

  Eurasia is the globe’s largest continent and is geopolitically axial. A power that dominates Asia would dominate two of the three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa’s subordination…About 75 percent of the world’s people live in Eurasia and most of the world’s wealth is there as well…Eurasia accounts for about three-fourths of the world’s energy resources.

  Upon assuming the presidency of the U.S. in 2001 George W. Bush filled his administration with so called Neo-Conservatives, members of the Project for a New American Century, who, with their allies in the Pentagon, called for nothing less than “full spectrum dominance” of planet Earth. Exploiting the hysteria mounted in the U.S. after the events of September 11, 2001 Bush II then proceeded to call for all-out war against what he termed the “axis of evil.” General Wesley Clark, a 2004 Democratic Party candidate for president, later revealed that the Bush, Cheney, Rumsfeld Administration had secret plans all along to overthrow the governments of Libya, Syria, Lebanon, Somalia and Sudan, and “finish off” Iran. All that was needed was a “new Pearl Harbor” and the events of September 11, 2001 provided that pretext, launching a state of permanent war primarily against the Muslim world.

  Citizens of the U.S., like myself, who have long studied these matters and have opposed our nation’s imperial policies know that what these men, and many others like them, have proposed is exactly what they accused Nazi Germany and Communist Russia of attempting. Of course, proponents of what the first Bush deemed the “New World Order” in 1991 allege that this American imperium will constitute a radical departure from past empires and will instead usher in and guarantee a new age of democracy and human rights for all humanity. They assert this even as their bombs and those of their allies shatter the lives literally of millions in the Islamic world.

  The U.S. began its history as a colony of the early British Empire and an outpost of nascent capitalism though this essential fact is de-emphasized in standard accounts in favor of the claim that the primary incentive for the colonial project was “freedom of religion.” The earliest British colonies in North America, Virginia and Massachusetts, were established as joint-stock companies, precursors of the modern corporation, to return profits to the mother country from resources of fish, game, furs, lumber and later, tobacco, cotton and the industries that followed. Acquisition of these valued assets required the conquest, displacement or extermination of the native populations already living here. The name, Massachusetts, for example, the state where I live, is all that remains of the people who once inhabited the area of what is now Boston. Later, the profits derived from forcible acquisition of the land, and the slave labor to cultivate it underwrote the industrial revolution and this catapulted the United States into position as the richest nation on earth and soon the militarily most powerful.

  Only a century after breaking away from British rule the United States itself leapt upon the stage of empire to compete with other Europeans for dominance in the world, taking the former Spanish colonies of Cuba, Puerto Rico, the Philippines, and Guam by force, and annexing Hawaii. Brooks Adams, the descendant of two presidents, exulted that “this war is the first gun in the battle for ownership of the world.” In the Senate Albert Beveridge proclaimed that “The power that rules the Pacific rules the world.”

  U.S. entry into both World Wars and all subsequent armed interventions is almost always mystified and characterized as a defense of democracy and human rights. In no case was American national security remotely threatened if by that we mean the vulnerability to invasion and military defeat.

  Since the end of World War II the United States has waged numerous full scale wars and many smaller conflicts in the name of national security and claims of principle and high ideals. Americans are unremittingly habituated to believe  Madeleine Albright’s all-encompassing contention that the United States is “the indispensable nation.” The end result of our actions has been many millions dead, maimed, reduced to penury, and desolated with grief. Americans are encouraged to see ourselves as humanitarians yet the widespread denial of our collective responsibility for the raw misery for those on the receiving end of our military firepower is nothing less than indefensible.

  Until WWII the U.S. was perceived, if not exactly as a benevolent friend of Muslim peoples, at least it was not yet seen as one more imperial power set upon exploiting the greater Middle East. This positive estimation changed virtually the moment that war ended and the regional shift toward virulent anti-Americanism originated in Iran.

  During World War II Iran had been co-occupied by Soviet, British and American troops. The Allies violated Iran’s declared neutrality because they thought that the country’s ruler, Reza Shah, was too friendly with Nazi Germany and they wished to use Iranian territory to transship supplies from the Persian Gulf to the USSR. The British owned Anglo-Iranian Oil Company (now British Petroleum) had virtually monopolized production and profits from the industry and the Allies also wanted to prevent the country’s oil reserves from potential access by Germany. The three nations had agreed to withdraw from Iran within six months after the war’s end. In March of 1946 Soviet troops had still not withdrawn and Washington claimed that this was evidence of Stalin’s desire to expand communism and threaten the entire region. The reality was that the Soviet Union had suffered immense damage from the war and needed energy supplies to rebuild. Russians wanted some guarantee from Iran that they could purchase a certain quota of Iranian oil for this purpose and sought to gain an oil concession in the Azerbaijani region of Iran, which bordered the Soviet Republic of Azerbaijan. Washington and the Iranian government feared that the Soviets might act to annex the territory when Iranian Azerbaijanis declared a separate republic. President Truman later claimed that he threatened the USSR with American military intervention. The U.S. State Department advised the Iranian prime minister, Ahmad Qavam, to negotiate and when Iran accepted the oil concession the Red Army withdrew. However, the Iranian parliament, the Majlis, later disavowed the agreement.

  These actions undertaken by Washington constituted the first direct American intervention in the Middle East as well as the first skirmish of the post-WWII Cold War. Anti-Soviet rhetoric claimed that the Soviet Union was bent on “world conquest” and pointed to the occupation of Eastern Europe by the Red Army. Omitted was all mention of the fact that as Nazi Germany had marched through the nations of Eastern Europe it had subjected their governments and made them allies. Then many waged war themselves against the USSR. Thus, the Red Army was occupying those nations for the same reason the United States and Britain were occupying Germany, Austria and Italy. American elites had plans for the reconstruction of Europe that would reintegrate the entire region into a revived capitalist order under American authority and communist Russia’s occupation of Eastern Europe was seen to obstruct those goals. No consideration was given to the very real security concerns that the Soviets had, especially about their eastern borders from whence twice in the early 20th Century they had been invaded.

  In fact, Russian non-actions at the time, not only with respect to Iran, indicated exactly the opposite of what Washington wanted the world to believe. The Red Army could easily have re-entered Iranian territory after the Majlis reneged on the oil concession and there was nothing, short of the atomic bomb that could have dislodged them. But it did not. Within a few years Soviet troops also withdrew from Austria and Manchuria quite in contradiction to the American assertion that they were intent on global conquest. There was no evidence whatever of Soviet designs to expand beyond what it declared to be its security zone in Eastern Europe. The U.S. had committed itself to an adversarial relationship with its former ally, in the absence of which the Nazis would never have been defeated, and it had initiated its long-term intervention into the internal affairs of Iran and many other nations, which, of course, continue to this day.

  When the Shah was overthrown in 1979 few Americans had any sense of why this occurred, especially because most journalists supinely omitted any reportage of crimes committed by the “king of kings” against the Iranian people. The public had been conditioned to believe for decades that Mohammed Reza Shah Pahlavi was a benevolent sovereign, beloved by his people, a staunch ally of the United States, and a pillar of stability in the region. Most had no sense that the Shah was installed by the Central Intelligence Agency when it conspired with other Iranians to topple the elected government of Prime Minister Mohammed Mossadegh in 1953 because he had the temerity to insist that the oil resources of his nation were the birthright of the Iranian people rather than the property of western oil companies. The public had no understanding of how brutal the Shah’s dictatorship was in fact and no comprehension of the role Washington had played in enabling his feared secret police, the SAVAK, to terrorize all Iranians who objected to his policies. To the extent that the general public took any notice at all of Iran they accepted the claim that the Shah was America’s “policeman in the Gulf,” aiding the United States in its efforts to “contain” the threat of the Soviet Union.

  The real menace to the interests of American corporate elites emanated from the upsurge in nationalism among all peoples around the globe who had been victims of western colonialism. World War II effectively finished Europe’s empires and nations from Indonesia, Vietnam, India, to  Kenya, Congo, Guatemala, Cuba, Chile and many others were rising in the post-war period to obtain independence, and who, like Iran in the early 1950s, sought to nationalize their resources. From the perspective of the would-be American overlords this was their cardinal sin. Such appropriations of national reserves like Vietnam’s independence movement, Egypt’s nationalization of the Suez Canal, Mossadegh’s actions, or Qassim’s appropriations of oil in Iraq in 1956, if successfully carried out and allowed to stand, would have thwarted the grand strategy of the U.S. to exert American corporate control over such assets, markets and cheaper foreign labor and the immense profits that would acrue to American industrial and banking giants. Since communist ideology also promoted national independence for western colonies intense government and media propaganda convinced the American citizenry that resistance to the American agenda and global turmoil was all the work of the Soviet devil.

  Even before WWII ended key members of the ruling elite sought preventive measures against a return to depression and mass unemployment. Sixteen million veterans were returning to civilian life. Would they face renewed unemployment and soup kitchens as so many had in the Great Depression of the 1930s? The director of war production, who had formerly been chief executive officer of the General Electric Company, a giant in what President Dwight Eisenhower would later designate the “Military-Industrial Complex,” argued that the U.S. needed a “permanent war economy.” Many of the massive corporations that now dominate the American political economy either grew exponentially during WWII or got their start as a result of government contracts financed by new taxation and borrowing. Only such massive government intervention put citizens back to work or in the military regiments. Given the nature of capitalism few among elite decision makers in the postwar could imagine restructuring such production to meet purely domestic purposes primarily because there was less profit to be made. War or the manufactured threat of war is the lifeblood of the military corporations and their financiers.

  Thus the ally that had been indispensable in the defeat of Nazism overnight became the new menace to American national security, despite the fact that the USSR had suffered upwards of 30 million deaths and its principal cities lay in ruins. From that moment on the “Cold War” became the ideological organizing touchstone of American society. Even then many citizens resisted the new precepts. Henry Wallace, who had been vice president under Roosevelt, led the popular movement for cooperation between the two post-war giants but he was reviled by the high priests of political orthodoxy as a “fellow traveler” of the communists, as were any who dissented from the new agenda.

  Inside the inner sanctum of the new “National Security State” a top secret document, NSC-68, specified a comprehensive blueprint to militarize American society, called for a tripling of taxation to expand the military budget and achieve nuclear supremacy by creating the hydrogen bomb. Even so the populace resisted until in the words of Secretary of State Dean Acheson “Thank God Korea came along.” Though Acheson himself had declared that Korea was outside of America’s “defensive perimeter,” warhawks in Washington and on Wall Street declared that the civil war between Korean factions on the other side of the planet imperiled the “free world.” What actually was at risk was the new militarized superstate, and the tax guaranteed profits to the corporations embedded in the war economy. The war that followed left 3 million Koreans and 37,000 US soldiers dead, threatened China with nuclear destruction, leading the Chinese to deploy their own nukes in short order.

  To cite only some cases, from 1947 to the present the United States has intervened politically or violently in Iran, China, Ukraine, Italy, Greece, Egypt, Vietnam, Guatemala, Indonesia, Congo, Cuba, Brazil, Dominican Republic, Cambodia, Laos, Chile, Nicaragua, El Salvador, Honduras, and most recently has intruded brutally in Afghanistan, Iraq, Libya, Yemen, Somalia and Syria. Though internal domestic opposition to American interventions and wars has always surfaced the majority of the public historically succumbs to the incessant propaganda projected by U.S. governments of either party and their corporate allies and the media that military action is necessary for reasons of national security or to protect favored allies.

  Recently “humanitarian intervention” has surfaced as justification for American deployments in Muslim countries. The doctrine’s principal exponent, former UN ambassador Samantha Power, was instrumental in toppling the Libyan regime of Muammar Qaddafi, with catastrophic results for innumerable civilians. Along with her boss Hillary Clinton, and National Security adviser Susan Rice, these “gentle” women also encouraged the Obama administration to support and arm the rebellion against the Assad regime in Syria leading to today’s incessantly violent chaos, uncountable deaths, the outflow of hundreds of thousands of refugees and the destabilization of numerous nations from Africa to Europe.

  In 1991 the pretext of the communist menace disappeared with the dissolution of the Soviet Union. That brief window of peaceful cooperation closed rapidly and Russia was soon demonized again as the principal menace to “liberal order.” The Trump Administration won election in great part because it promised a more cooperative relationship with Russia, one of the only ray’s of light in that dismal campaign. But what is now termed the American “deep state” is fostering a renewed condition of militarized tension with that nation. Trump also promised millions that he would renew the American economy and bring back jobs for millions who feel betrayed and impoverished by the flight of investment capital overseas in search of cheaper labor and the robotization of such industries that remain. “America First” is Trump’s watchword. Yet he has turned management of the U.S. economy over to the very bankers who orchestrated the swindles that led to the near collapse of the world economy in 2008.

  As I write these words Trump has launched missiles at a Syrian airfield, employed the U.S.’s deadliest weapon short of nukes in Afghanistan, bombed Yemen, and sent troops to Somalia. His Secretary of Defense, former General James Mattis, affectionately called “mad dog” by his troops, threatens Iran, falsely accusing it of violations of the recently signed agreement on nuclear proliferation. Trump is recklessly threatening North Korea, potentially creating an extreme risk of a nuclear event that would certainly also engage China. He has called for an increase in military spending that by itself is almost larger than the entire military budget of any other country. Despite promises of prosperity for all the taxes to fund all this will fall on the shoulders of the broad American middle class and generations to come, not on the giant corporations that are all but tax exempt– as it appears Trump himself has been for decades. Rather than sanely reducing the risk of war as he promised his presidency looks increasingly worrying. As his foreign policies take shape they are indistinguishable from those of his Democratic Party opponents and the global dominance doctrines of Bush’s neo-conservatives. They are all fated to fail and unless derailed ensure yet more widespread war and suffering.

  

  

• Iran Threatens To Destroy Saudi Arabia After Saudi Prince Warns Of "Moving Battle To Iran"

  An unexpected war of words erupted between two sworn Middle-Eastern rivals over the weekend, when Saudi Arabia and Iran threatened each other with military action, if not outright destruction.

  It started on Tuesday, when in “unusually blunt comments” delivered during a nationally-televised interview Saudi Deputy Crown Prince Mohammed bin Salman – the man who is now effectively in charge of Saudi oil policy – ruled out any dialogue with Iran and pledged to protect his conservative kingdom from what he called “Tehran’s efforts to dominate the Muslim world.”

  “We know that we are a main goal for the Iranian regime,” he said. “We will not wait until the battle comes to Saudi Arabia but we will work to have the battle in Iran rather than in Saudi Arabia.”

  Iran, never one to leave a lingering belligerent comment by its Saudi nemesis unanswered, responded when its defense minister said on Sunday that Iran would hit back at most of Saudi Arabia with the exception of Islam’s holiest places if the kingdom does anything “ignorant” according to Reuters.

  “If the Saudis do anything ignorant, we will leave no area untouched except Mecca and Medina,” Defence Minister Hossein Dehghan was quoted by the semi-official Tasnim news agency as saying. Taking a jab at the Saudi war in Yemen, the iranian said that “they think they can do something because they have an air force,” referring to Saudi attacks on Iran-aligned Houthi forces in control of the capital Sanaa.

  Dehghan, speaking to Arabic-language Al-Manar TV, was commenting on remarks by Saudi Deputy Crown Prince Mohammed bin Salman, who said on Tuesday any contest for influence between the Sunni Muslim kingdom and the revolutionary Shi’ite theocracy ought to take place “inside Iran, not in Saudi Arabia”.

  Was this just more “run off the mill” jawboning and theatrics, or a prelude to a more serious escalation between the two nations which periodically trade verbal barbs even if neither has been willing to test overt military action against its counerpart? The answer will be revealed in the upcoming OPEC negotiation on production cut extensions, and specifically whether the Saudis will grant Iran – which has been steadily gaining market share at Saudis’ expense during 2017 – another waiver from participation in the mandatory output cuts. Because when it comes to Saudi Arabia, while nationalistic verbal pyrotechnics are for popular consumption, when it comes to oil, and associated revenues – especially ahead of the critical Aramco IPO – nothing could be more serious.

  

  

• Is This WalMart 'Free-For-All' A Taste Of Things To Come?

  by Stefan Stanford via AllNewsPipeline.com,

  In the new story over at Survival Dan called “During The Collapse: Where To Go And What Places To Avoid”, he reports that when IT hits the fan, America’s ‘population hubs’ will likely explode with violence, looting and the total breakdown of law and order as resources become next to impossible to get and the masses suddenly realize the government isn’t coming to save them.

  Whether that be via total collapse, WW3 coming home to roost upon US soil or a ‘grid event’ that leaves tens to hundreds of millions either without power or access to the money in their bank accounts, the video directly below from a WalMart in Mexico gives us a very small taste of what that world without law and order can quickly devolve into.

  Showing what happens when suddenly ‘lawless people’ realize that there aren’t enough security guards in a Wal Mart store to stop them, we witness the kind of all-out ‘free for all’ that we’ll likely see in a collapse event, though the smart people would be carrying out food, toilet paper and other necessities instead of flat screen TV’s. And in an all-out SHTF event, we’d expect that the people will likely be fighting with each other for the few remaining resources as they are now in Venezuela where children are literally starving to death.

  Following Alt Market’s Brandon Smith warning that ‘a full spectrum crisis is about to take place’ a Wal Mart in Mexico gives us a small glimpse of what might happen here once it all comes crashing down amid more signs that what we’re witnessing in Venezuela may be coming to America.

  As commenters on the live leak video clearly point out, we’ve already witnessed events in America similar to what happened in the video above with packs of roving gangs showing up in malls and convenience stores ‘en masse’, taking whatever they want and parading out as if laws don’t matter to them. Knowing such events are already taking place in 2017 America, how much worse might things get when SHTF? As Susan Duclos reported this morning on ANP, parts of America are already a boiling cauldron read to boil over. How many Americans are the frogs in the simmering water?

  In this December 2016 story on ANP called “Map Shows Us Where We Don’t Want To Be When It All Turns Ugly”, we reported that nearly 50% of Americans live in very small geographical locations. According to this story from the Daily Mail, half of the US population live within 146 counties while the other 157 million are scattered across the other 3,000+.

  The map seen directly below gives us a visual representation of what that looks like with the counties seen below in blue making up approx. 50% of the US population while the remaining 50% of Americans live across the rest of the country in counties seen in gray. When SHTF, does anyone want to be in the blue areas?

  

  As we also reported back in December, the map seen above showing the US counties with the biggest populations coincides quite eerily with the map of US counties won by Hillary Clinton during the last election seen below.

  

  The next map below from James Wesley Rawles’ Survival Blog shows US cities with approx. 100,000 population in yellow circles with the shaded areas surrounding them indicating the distances from those cities with each shaded increment representing approx 40 miles. Showing that most of the East coast and eastern half of the US are within 120 miles of big cities, it’s easy to understand why videographer The Prepared Mind selects some of the areas seen in the final video below as his ‘go to’ areas for when SHTF.

  As M.D. Creekmore over at the Survivalist Blog has previously brought to the attention of preppers, getting out of the cities may not be possible for some who are tied to their jobs when SHTF and many of the same areas mentioned in that videohave such low populations for a very good reason – a major lack of jobs in areas long ago hit by the globalists economy that has decimated much of America.

  

  According to Brandon Smith in this recent story over at Alt Market, “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.“

  Smith’s warnings echo the warnings given by Doug Casey who recently stated “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….”

  

  

• Emmanuel Macron Elected Youngest Ever President Of France With 65% Of The Vote

  Update: As Emmanuel Macron arrived in the courtyard of Paris’s Louvre museum to deliver his victory speech to thousands of supporters, the European Union’s anthem “Ode to Joy” played in the background.

  “Tonight, France won,” he said to rapturous crowds, adding that “Europe and the world are watching us.” Macron said, cited by the Telegraph, that France is facing an “immense task” to rebuild European unity, fix the economy and ensure security against extremist threats.

  “Our task is huge and it will require the courage of truth” he repeated. Speaking to thousands of supporters from the Louvre Museum’s courtyard, Macron said that Europe and the world are “watching us” and “waiting for us to defend the spirit of the Enlightenment, threatened in so many places.”

  “We have the force, the will… we will not give into fear, into lies… to the love of decline and defeat”

  Macron said  “everyone said it was impossible. But they didn’t know France!” and promised to work to unify France after a bruising presidential campaign and serve the country “with love.”

  He also vowed to the French public: “I will protect you in the fact of threats” and said “I will respect what everyone thinks and believes, because I want the unity of our country. I will serve you with humility, strength and in line with our motto: liberty, equality, fraternity… I will serve you with love.”

  His wife Brigitte then came up on stage with him, and she kissed his hand and waved to the crowd.

  Watch: French President-elect Macron addresses Le Pen supporters, vows to “protect” the country in acceptance speech https://t.co/ieXe16OjJZ

  — NBC News (@NBCNews) May 7, 2017

  * * *

  Live Feed from France 24:

  After an extraordinary election campaign full of twists and turns, Emmanuel Macron won a dramatic victory over Marine Le Pen in the French presidential election, taking 65% of the vote, with Le Pen collecting just over a third according to estimates from four separate French pollsters. Macron, 39, will become the youngest president of France’s Fifth Republic.

  As BBG notes, the firms sampled real votes as they were being counted and weighted their results to reflect the composition of the French electorate. Their projections were all within 1 percentage point. Indeed, all early polls all show Macron with at least 65% of the vote:

  • Elabe: 65.9%
  • Ifop: 65.5%
  • Ipsos: 65.1%
  • Kantar: 65.0%

  #Presidentielle2017 Estimation @IpsosFrance / @SopraSteria_fr du vainqueur à la Présidentielle :
  E. MACRON : 65,1% – M. LE PEN : 34,9% pic.twitter.com/k8p8W5lEFx

  — Ipsos France (@IpsosFrance) May 7, 2017

  

  Abstention in Sunday’s election was expected to hit 26%, the highest rate since 1969, reflecting a lack of enthusiasm among many voters for the choice on offer.

  Highest level of 2nd round abstention since 1969 #Presidentielle2017 pic.twitter.com/XQw3aqhPMA

  — AFP news agency (@AFP) May 7, 2017

  Macron was grateful and generous in his victory speech:

  “Thank you from the bottom of my heart to all those who voted for me,” begins Mr Macron in his victory speech. 

   

  “I salute my adversary Ms Le Pen, I know why people chose to vote for an extreme party. I know the doubt, the fear they expressed.

   

  “And it is my responsibility to take on those concerns and guarantee our unity and responsibility for our country.

   

  “From tomorrow we will modernise politics, recognise pluralism, revitalise democracy. This will be my first mission, respecting everyone.”

  Althought there was one small glitch…

   

  Moments after the results were announced, Le Pen conceded to Macron in a phone call and vowed to become major force of opposition,

  “The French have elected a new president and opted for continuity,” Le Pen told supporters just outside Paris. “I wish him success in the face of great challenges,” she said.

  

  The AFP reports that it has spoken to Macron since the election results. France’s president-elect says “a new page has turned, that of hope and of restored confidence”. 

  The reactions to Macron’s win are coming in fast and hard: French President François Hollande, former Prime Minister Manuel Valls, German Chancellor Angela Merkel, British PM Theresa May are just some of the major political figures and leaders who have been congratulating modern France’s youngest president-elect over the past few minutes.

  • BELGIUM’S CHARLES MICHEL SAYS ‘BRAVO EMMANUEL MACRON’ON TWITTER
  • GERMANY’S SIGMAR GABRIEL CONGRATULATES EMMANUEL MACRON
  • MACRON WIN STRONG SIGN FOR UNIFIED EUROPE: GERMANY’S SEIBERT
  • MACRON WIN A ‘SIGN OF HOPE’ FOR EUROPE, MOSCOVICI TWEETS

  .@sigmargabriel: Félicitations @EmmanuelMacron! Allemagne sera aux côtés du nouveau Président de la République! Vive la France,vive l’Europe pic.twitter.com/kqi3aLBOT5

  — Auswärtiges Amt (@AuswaertigesAmt) May 7, 2017

  European leaders hailed Macron’s victory as a vote for European unity and a blow to political forces that had sought to build on last year’s Brexit vote to tear apart the European Union.   

  “Your victory is a victory for a strong united Europe and for German-French friendship,” German Chancellor Angela Merkel’s spokesman Steffen Seibert tweeted to Macron shortly after the election results were published.

  Donald Tusk, the former Polish prime minister who chairs summits of European leaders, tweeted: “Congratulations to French people for choosing Liberty, Equality and Fraternity over tyranny of fake news” – an apparent reference to misleading stories about Macron that were spread on social media in the run-up to the vote.

  In a tweet from her spokesperson, British Prime Minister Theresa May warmly congratulated Macron. “France is one of our closest allies and we look forward to working with the new President on a wide range of shared priorities,” she said.

  Italian Prime Minister Paolo Gentiloni tweeted: “Hurrah Macron President! There is hope for Europe!”

  Even President Trump endorsed Le Pen in the election, but just fired off this conciliatory tweet:

  Congratulations to Emmanuel Macron on his big win today as the next President of France. I look very much forward to working with him!

  — Donald J. Trump (@realDonaldTrump) May 7, 2017

  

  Geert Wilders, who stood as a Right-wing populist in the Dutch elections but lost out to Mark Rutte, has offered his commiserations to Ms Le Pen. He went on to predict both of them would win in the next election.

  As Reuters adds, Europe’s political establishment limped into 2017 fearful that the Trump and Brexit votes, fueled by anger over immigration and rising economic inequality, could be replicated on the European continent in a mega-election year in which the Dutch and Germans were also voting. As a result, the election in France, the second largest economy in the euro zone after Germany, was always seen as the litmus test for European politics. Had Le Pen won, many European officials acknowledged, it may have been the beginning of the end of the EU, Europe’s 60-year-old experiment in closer integration which delivered peace and prosperity for decades before succumbing to a series of crises over the past decade.

  As the FT put it. Macron’s victory is a “phenomenal achievement” for the 39-year-old former Rothschild banker, who has never before held elected office and whose political movement En Marche! was set up barely a year ago. He becomes the youngest ever French president.

  As for, Le Pen, she fell short of the 45% that she was projected to win at one point earlier in the year. But her score of 34.9% is almost twice the 18% won by her father Jean-Marie Le Pen in 2002, and points to a depth of disaffection and anger towards France’s political elite that could nourish the far-right for years to come, especially if President Macron fails to deliver on his promises.

  • LE PEN CONCEDES DEFEAT OVER MACRON IN FRENCH PRESIDENTIAL VOTE
  • LE PEN SAYS SHE THANKS THE 11M FRENCH VOTERS WHO SUPPORTED HER
    
  • LE PEN SAYS TRADITIONAL PARTIES HAVE FAILED TO REPRESENT FRENCH
  • LE PEN CALLS FOR ‘ALL PATRIOTS’ TO JOIN HER FOR COMING VOTE

  Macron, a former government adviser and economy minister in the Hollande administration, will now turn his attention to elections for the National Assembly on June 11 and 18. He needs to build a stable majority from a party that as yet has no MPs. On Friday, he said he already had in mind his nominee for prime minister, a choice that could help him build alliances with MPs from other parties.

  Shortly after the results were announced, BuzzFeed reported that LePen’s Front National is going to re-brand, and change its name after the election result. Le Pen said that “The National Front … must deeply renew itself in order to rise to the historic opportunity and meet the French people’s expectations. I will propose to start this deep transformation of our movement in order to make a new political force.”

  Sur @TF1, Florian Philippot annonce que le #FN va changer de nom #Presidentielle2017 pic.twitter.com/gdMkXjW6qF

  — BuzzFeed Politique (@BuzzFeedFRpol) May 7, 2017

  Meanwhile, the Leave EU campaign, which presumably preferred a Le Pen victory over Macron, has just tweeted the following picture and message:

  RIP France pic.twitter.com/h7i0z7qgUf

  — LEAVE.EU ???????? (@LeaveEUOfficial) May 7, 2017

  * * *

  MARKET REACTION

  Macron’s victory is in line with expectations, which according to several banks carries a “sell the news” risk, especially in EURUSD.

  In a note released earlier on Sunday, Barclays’ Giovanni Paci writes that “a Macron victory, in line with current polls, in the second round of the French Presidential election, carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning.” On the other hand, “this outcome would also likely bring temporary relief and a further reduction in volatility.” Because a VIX of 10 is high?

  Some further details below:

  Macron victory in line with polls carries risk of a “buy the rumor, sell the fact” downside move in EURUSD, given the current long EUR pre-positioning. The EUR political-risk premium was reduced significantly by the “benign” first round outcome, which supported a c.2% EUR NEER appreciation. EURUSD should depreciate mildly over the remainder of this year, as monetary policy divergence and some residual political-risk premia weigh on the common currency.

   

  With market attention to the ‘Politics of Rage’ likely to fade after the French election, and no other clear themes visible, we see risk of a significant decline in market volatility. Implied volatility is low across asset classes (Figure 1) and, for most major currencies, realized and implied volatility measures are well below their yearly averages (Figure 2). Although we do not believe the Politics of Rage has yet crested, the outcome of the Dutch elections and the expected victory of Emmanuel Macron in France, are likely to assuage market fear of radical political change, at least for the near term, as no other clear risk events are visible. Risk-taking began to deteriorate earlier this year as ambiguity brought about by the ‘Politics of Rage’ dampened strategic risk taking. However, the resolution of near-term risks, with no other clear themes or major risk events to trade tactically, is likely to take activity and volatility further down.

   

  

   

  … the election of Mr. Macron as president, combined with a potential hung parliament would leave in place long-held concern about reform, but remove acute risks that provided shorter-term trading opportunities. As long as short-term events bring about temporary relief and long-term risks, volatility is likely to remain depressed, but prone to sudden bursts.

  * * *

  Deutsche Bank’s director of FX strategy, Sebastien Galy, has chimed in with a similar tak saying that while EUR/USD will likely gap higher, looking to clean out the stop losses,  before eventually consolidating lower. He adds that equity flows are likely to increase into the euro zone,‎ but that will take time as much is already priced in.

  * * *

  Expect more sellside commentary as analysts react to the initial results.

  Here is another live feed, this time from the Telegraph:

  

  

• April Was Cruel… To The US Treasury

  Submitted by Nicholas Colas of Convergex

  April Was Cruel… To the US Tre
  

  Our monthly review of tax data from the US Treasury’s Daily Statement shows three important points.  First, overall employment and wage trends in the US are still on a solid footing.  Individual tax/withholding payments from salaried/hourly workers rose 4.5% year over year in April and are up 3.7% on a three month rolling average basis.  Second, April tax season was a bit of a bust for Treasury, with receipts down 5.7% from last year and at the lowest levels in 5 years. We attribute that to the delayed realization of capital gains in 2016, with asset owners deferring sales ahead of anticipated tax changes this year. That also explains a bit of the slow US equity trading volume and low volatility of 2017 – those asset owners still don’t know what the new tax code may bring and may be continuing to defer sales.  Lastly, “Gig economy” tax receipts (not withheld, but paid directly by the worker) show this post-Financial Crisis labor market phenomenon is on the wane, down 5.5% in Q1 2017 after a 4.8% decline in Q4 2016.

  April is to the US Treasury what Christmas is to retailers: the busiest and most profitable time of the year.  In 2016, for example, the Treasury’s Internal Revenue Service took in $193 billion in payments from individuals as a result of the usual April deadline for filing personal taxes.  By comparison the IRS took in only $15 billion in the month before and $12 billion the month after from taxpayers sending their remittances to the US government.

  Last month, however, was not so good to the US Treasury. “Individual Income and Employment Taxes, Not Withheld” (the Treasury line item for receipts outside the customary withholding process) were down 5.7% year over year to $182 billion. Moreover, this is the lowest April haul since 2012. The April tax receipts of 2013 to 2016 ran between $193 billion (2014) to $219 billion (2015). This year’s receipt totals are far from those.

  

  That should seem strange to you.  After all, virtually all asset prices have risen in the past 5 years.  Stocks, bonds, real estate… Everything is higher.  And when individuals sell those assets, they need to pay the capital gains tax as part of their annual April true-up with the US Government.

  My explanation: asset owners are deferring sales while they wait for the details of Washington’s new tax plans. Why sell an asset (unless you have to) if you think the tax code might change in your favor?  Better to wait – especially if asset prices are in an uptrend – and see what develops.

  I have been writing a lot about US equity market volatility this week, and it strikes me that this phenomenon might have a role in creating the current low-vol environment.  Since the details of the President’s proposals to change the tax code are still not public, asset owners may be continuing to defer sales in the hopes of better tax treatment down the road.  It is a sort of “Sellers’ strike”, where individuals with capital gains in equities are waiting for a new (and hopefully more capital-friendly) tax code before selling stock.

  On the plus side of things, the same report we use for the tax receipt analysis (Treasury’s Daily Statement, https://www.fms.treas.gov/dts/index.html) shows that the US labor market is still humming along.  Looking at “Withheld Income and Employment Taxes” – the amounts deducted from employee paychecks every cycle – we see that April receipts were up 4.5% from last year and +3.7% on a three month rolling average.

  

  Withheld tax receipts are a function of the number of people employed and wage levels, so a positive comparison shows underlying strength in the labor market.  Yes, there is a mix issue here.  The top 10% of wage earners may be taking most of the wage gains and therefore paying those to Treasury in their regular withholding.  Even still, the annual increases in withholding to Treasury have been remarkably stable (see attached charts in the PDF link above) at +4-10% since 2013, mirroring the growth in overall US employment.

  Even as the overall US labor market has improved over the last year, one group seems to be left behind: those individuals who work in the “Gig economy”.  These workers pay Social Security/Medicare taxes just like those “Employed” by companies, but their remittances to Treasury tell a different story from the withholding data we described in the prior point.

  For the first quarter of 2017, tax payments by self-employed/contract workers to Treasury were down 5.5%.  In Q4 2016, they were down 4.8%. Compare that to the growth in withholding/tax payments for payroll workers, and you see the problem.  One group is seeing growth in total wages (people employed times wages earned); the other is not.

  Now, it could be that as the US economy has strengthened in the last year those previously in the “Gig” workforce have transitioned to traditional employment.  A few points here:

  • The Bureau of Labor Statistics has not done a study on “Gig economy” workers since 2005, so they are not much help in understanding the possible migration of workers between formal and “Gig” employment. Their work at that time showed “Contingent workers” represented 2-4% of the US labor force.  In addition, about 7% were “independent contractors”.  The BLS plans to update their findings with a study to take place this month.  Read the BLS piece here: https://www.bls.gov/careeroutlook/2016/article/what-is-the-gig-economy.h…
  • If workers are transitioning from “Gig” to traditional employment, they may still do occasional outside work as a means to augment their income and preserve their options; this trend should be visible in the BLS data. In fact, the number of Americans who report holding multiple jobs has started to rise in the last year. As of March 2017, 5.3% of the US workforce has more than one job, up from 5.0% a year ago. That is the highest reading since before the Financial Crisis.
  • Interest in typical “Gig Economy” jobs seems to be on the wane. Looking at the data from Google Trends, US searches for “Gig jobs”, “Uber driver”, “Delivery driver”, “Freelance work”, and “Online job” are all either flat or slightly down over the past year.
  • The one area of incremental interest: searches for “Work from home” were up 50% in 2016 from 2015.
  • McKinsey did an excellent study, published in October 2016, about the Gig economy in the US and Europe if that is a topic of interest for you: http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy.

  In summary, the tax data we’ve reviewed sheds some useful light on a few critical capital markets questions.  First, the US labor market is still strong. It is proving strong enough, in fact, to pull “Gig” workers back into the salaried labor force. Second, lower April tax payments highlight the possibility that asset owners are reluctant to sell appreciated assets such as stocks until they know the details of any revision to the tax code.  This will likely continue until either equities become more volatile or changes in the tax code are clearly on their way to becoming law.

  While the tax data we’ve reviewed here is not typically part of the econometric toolbox used to analyze the US economy, it does provide an independent take on key issues. Who says there’s nothing good about taxes?

  

  

• "Sell The News"

  After initial kneejerks higher in the euro and equity futures, it appears Macron’s victory is now a “sell the news” event as EURUSD has dropped 60 pips from post-election highs…

  

   

  S&P Futures are fading…

  

   

  And gold has bounced back to Friday’s highs…

  

  

  

• Doug Casey On The Plague Of Cultural Marxists

  Authored by Nick Giambruno via InternationalMan.com,

  

  Nick Giambruno: What exactly are Cultural Marxists, and how are they, and political correctness, contributing to the decline of Western Civilization?

  Doug Casey: Economic Marxism was intellectually debunked decades ago. With the collapse of the USSR, and radical changes in China, the man in the street became aware that the “intellectuals” were fools. And that is reinforced by the ongoing disasters in Cuba, North Korea, and Venezuela. So, since they recognize that there’s nothing to steal if they implement Marxian economic policies, most “intellectuals” no longer talk about them.

  Cultural Marxism, however, is just as destructive. It divides people not into economic classes, but cultural classes. You’re no longer an individual—you’re part of a gender, or a race, or some other group. Undoubtedly one being discriminated against by white males who—not just coincidentally—are largely responsible for Western Civilization.

  I despise the wave of “politically correct” thought that’s washed over the world like a tidal wave of raw sewage. I remember when I first heard the term used. I believe it was on Saturday Night Live in the early 80’s. At the time I thought it was a joke…

  A word Cultural Marxists use a lot lately is diversity. “We’ve got to have diversity.” No, we don’t have to have diversity. There’s zero logical or moral reason why every room should have a quota of blacks, Hispanics, LGBT’s, women, or whatever. It’s extremely stupid to have people qualify for something based upon accidental characteristics. It encourages them to view themselves not as individuals, but members of a group. So it actually foments class warfare.

  I occasionally like to go to a men’s club. It’s odd that men are never invited to ladies’ functions – and I don’t care. Everyone should associate with whomever they like. People who use the State to impose their opinions on others, or approve of it, are essentially criminal personalities. I avoid them at all costs.

  In fact, birds of a feather usually flock together. This is perfectly natural. You don’t need diversity; it’s not a necessarily positive value, it’s a neutral preference. If you want it in your club, fine. But freedom of association is far, far more important.

  I form my friendships based upon neither diversity nor a lack of diversity, although there’s a natural, genetically based tendency to associate with people like yourself. I form my friendships based upon the character and the beliefs that a person has. The attributes that create diversity are stupid accidentals. The fact that diversity is emphasized draws attention to incidentals like race, sex, and gender, and diverts it from important things like character and beliefs. Diversity has become destructive. Cultural Marxists love “diversity” because, in fact, they actually hate people. And themselves. They want to cause conflicts that work to destroy Western Civilization—which they also hate.

  Nick Giambruno: How does the migrant crisis in Europe relate to all of this?

  Doug Casey: First, let me say that I’m all for immigration and completely open borders to enable opportunity seekers from anyplace to move anyplace else. With two big, critically important, caveats: 1) there can be no welfare or free government services, so everyone has to pay his own way, and no freeloaders are attracted 2) all property is privately owned, to minimize the possibility of squatter camps full of beggars.

  In the absence of welfare benefits, immigrants are usually the best of people because you get mobile, aggressive, and opportunity-seeking people that want to leave a dead old culture for a vibrant new one. The millions of immigrants who came to the US in the late 19th and early 20th centuries had zero in the way of state support.

  But what is going on in Europe today is entirely different. The migrants coming to Europe aren’t being attracted by opportunity in the new land so much as the welfare benefits and the soft life. When they arrive, they expect free food, shelter, clothing, and entertainment—totally unlike past immigrants. For the most part they are unskilled and poorly educated. And 99% of them will stay that way, because it takes generations to change cultural attitudes. Few of them will ever become self-supporting.

  What we’re talking about here is the migration of millions of people of different language, different race, different religion, different culture, different mode of living. If you're an alien and you're 1 out of 10,000, or 1,000, or 100, you're a curiosity, an interesting outsider. But an influx of millions of migrants is only going to destroy the old culture, and guarantee antagonism—especially when the locals have to pay for it. In many ways, what’s happening now isn’t just comparable to what happened 2,000 years ago with the migration of barbarians into the Roman Empire. It’s potentially much more serious.

  Nick Giambruno: What’s the welfare state’s role in all this?

  Doug Casey: The State now pays for food, housing, schooling, and even cell phones for the “disadvantaged.” The next step will likely be some type of guaranteed income. All these things only serve to relieve the “disadvantaged” of personal responsibility for their own lives, which acts to cement them to the bottom of society—while slowly bankrupting the country as a whole.

  The welfare state must be abolished, pulled out by its roots, and debunked intellectually and psychologically. If you want to help a deserving individual on your own, great. But to make it part of the State is idiotic—except, of course, for politicians that need votes.

  Nick Giambruno: I recently read an article by arch-neocon Charles Krauthammer. He claimed that the failure of the US to more forcefully interfere in Syria is an indication of the West’s decline. What’s your take?

  Doug Casey: I despise Krauthammer, and his ilk. But, that said, I believe he dislikes me much more than I do him. He’s one of those creatures who thrive within the swamp circled by the Washington Beltway. His prescriptions are almost universally wrong-headed. Which is to be expected from a neocon, a fan of both the warfare state and the welfare state.

  I’ve debated Charles on three separate occasions. He has a high IQ, but his ideas are quite stupid—if we define stupidity as an unwitting tendency to self-destruction. I recently discovered that he is also a leading bioethicist—which I didn’t know when I did an essay on that pernicious group of busybodies.

  Nick Giambruno: Webster’s defines bioethics as “a discipline dealing with the ethical implications of biological research and applications especially in medicine.” What’s so pernicious about that?

  Doug Casey: Bioethics is a phony science, recently concocted by people working for pharmaceutical companies, governments, and medical institutions looking for excuses to justify what they have already decided to do.

  A bioethicist is someone who's supposed to determine the right and wrong of these things. I consider them self-appointed censors pandering to dimwits apparently incapable of thinking out psychological/ethical/economic dilemmas on their own.

  That’s dangerous enough, but these are not just fools sowing confusion, they are mostly of a particular mindset—that is to say, they are a bunch of collectivists and statists—who pretend to be objective. Worse, they espouse policies with wide-reaching implications, almost universally wrong-headed and disastrous, which are a reeking part of the rotting fabric of what was once American society.

  But what really gets me about these bioethicists is that they are not technical experts contributing to debates among scientists—they're just a bunch of busybodies who want to tell everyone else what to do, based on their own opinions of morality and notions of political correctness. This is especially dangerous, because people make decisions and act based on their ideas of what is right and wrong—on moral grounds. By setting themselves up as the great determiners of what is ethically correct, these supposed experts become a sort of new secular priesthood to guide us all. They're worse than run-of-the-mill busybodies, however; they want to play the role of Gríma Wormtongue in counseling rulers. They are generally sociopaths who want us to accept their statist, collectivist ethics, and thereby exert control over the direction of society, taking it down paths they deem best.

  These so-called ethical experts insinuate themselves into the bureaucratic machinery of the State, into the flow of intellectual and academic debate, into the course material taught at universities, and they exert influence.

  It’s especially dangerous because when people read about a consensus of Ph.D.s agreeing that X or Y is ethical, they may be seduced into letting these others do their ethical thinking for them, instead of holding on to the vital responsibility of thinking through ethical matters for themselves.

  From the beginning of the Dark Ages up until the early 1500s, the Church of Rome was the arbiter of morality in the West; that was highly problematical, because it substituted the judgment of some priest for that of each individual. It's one reason that the medieval era was so backward.

  Individual responsibility to understand ethics and act accordingly is a cornerstone of Western Civilization, going all the way back to the Greeks. It's what the play Antigone is all about. This is one reason that Islamic countries are basket cases—they’re at the same stage of philosophical evolution as the West was in the medieval era.

  Anyway, the decline of religion in the West over the last century—a trend I applaud for many reasons, but won’t go into now—has left something of a moral vacuum. It’s been partially filled by secular religions like Marxism, but Marxism has been debunked everywhere but on college campuses… so the bioethicists are the latest fad trying to fill the space.

  Individual responsibility, rather than diffuse responsibility among classes of people, is a major reason for the individual accomplishments and innovations that led the West to global eminence. Bioethicists are trying to set themselves up as a new priesthood. If they succeed, it would reverse an essential element of Western thought. Bioethicists are irksome because they’re a visible cutting edge of the knife destroying the foundations of Western Civilization, and yet they are given unearned respect and material prosperity.

  Nick Giambruno: Can President Trump, or anyone, for that matter, reverse the decline of Western Civilization?

  Doug Casey: Once an empire starts falling apart, trying to stop it is like trying to stop a tree from falling once its roots have rotted. It can’t be done, and it’s best not to be around when it happens.

  The Cultural Marxists and other enemies of Western Civilization are in total control of the education system, so the next several generations of young people are corrupted. They control the media, so they control the prevailing intellectual climate. They control the NGOs, and the “think tanks” that infest DC and other major capitals. They control the Deep State.

  So, no, Trump can’t reverse it. Among other reasons because he himself doesn’t have a philosophical or ethical core. He’s just a businessman; his object is just to make things more efficient. Like Mussolini, to make the trains run on time, as it were. He’s a good influence in that he hates the Cultural Marxists, and they hate him. But it’s not like he can offer a positive alternative for people to believe in.

  Nick Giambruno: What’s the bottom line here?

  Doug Casey: I always like to try to turn a lemon into lemonade. But it’s impossible if someone drops a 500-pound bomb on your kitchen, and follows it up with a poison gas attack. That said, I like to do what I can. Not because I expect success, but because it’s the right thing to do. And that is as important, from a personal viewpoint, as anything in the world.

  Nick Giambruno: Thanks, Doug, until next time.

  Doug Casey: Thanks, Nick.

  *  *  *

  There’s major turmoil ahead for Western Civilization… and it could be catastrophic for global currency and stock markets. 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.

  

  

• Which Jobs Have The Most Suicides?

  According to an ONS analysis commissioned by Public Health England, suicides are less common among women than men with the rate also varying considerably by occupation.

  

  You will find more statistics at Statista

  Between 2011 and 2015, workers employed in skilled construction and building trades were found to have had the most suicides, followed by elementary administation and service occupations.

  

  

Digest powered by RSS Digest

• 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.

  

  

Digest powered by RSS Digest

• "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

  ————————————–

  Liked this article? Don’t miss our future missives and podcasts, and

  get access to free subscriber-only content here.

  ————————————–

  

• 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.

  

  

Digest powered by RSS Digest

• 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.

  

  

Digest powered by RSS Digest

• 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.

  

  

  

Digest powered by RSS Digest

• 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.

  

  

Digest powered by RSS Digest

• 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.

  

  

Digest powered by RSS Digest