• Austria Presidential Election Take II: Nice, Turkey Should Help Anti-Immigration Hofer On October 2

  Submitted by Michael Shedlock via MishTalk.com,

  Austria presidential election take II is coming up on October 2.

  It’s a rematch of the May 22 runoff that pitted anti-immigration candidate Norbert Hofer of the FPÖ party against Alexander Van der Bellen of the Greens.

  In Austria, the top two candidates go to round two of the elections if no one wins a clear majority in round one.

  Round two of the election was the first since World War II in which both the center-right and center-left candidates were knocked out in the first round.

  Hofer vs. Van der Bellen Replay

  

  Election evening, Hofer appeared to have won the election, but after mail-in votes were counted the next day, Van der Bellen was declared the winner.

  On 1 July, the results of the second round of voting were annulled after the Constitutional Court of Austria found that electoral rules (as stipulated in federal election law) had been disregarded in 14 out of 20 contested administrative districts (from a total of 117), resulting in over 77,900 absentee votes being improperly counted, however without any indication of votes having been fraudulently manipulated.

  Events Favor Hofer

  Events in Nice and Turkey should help anti-immigration candidate Norbert Hofer. If so, the election will be another hair-raising event for Brussels.

  The role of president is largely symbolic, with real power being held by the chancellor. However, the president can call for new national elections and it’s possible Hofer would do just that.

  

  

• If Trump Tries To Remove ISIS, Will He Be Removed?

  Via The Daily Bell,

  Donald Trump accused his Democratic rival Hillary Clinton of enabling Islamic State’s emergence with “her stupid policies” in a joint interview with running mate Gov. Mike Pence, while pledging to “declare a war” on the terror group. “Hillary Clinton invented ISIS with her stupid policies. She is responsible for ISIS,” Trump said launching a scathing attack on Clinton’s legacy as US Secretary of State while speaking to CBS’s “60 Minutes” show host Lesley Stahl in an interview aired on Sunday.  -RT

  Saying that Hillary Clinton enabled ISIS, is an almost incomprehensible statement.

  Doesn’t Donald Trump realize that Hillary is not alone?

  She represents the most massive military and monetary forces available on this planet.

  Does he not realize they can crush him?

  Is he somehow doing their bidding?

  We know what to think of Hillary based on her associates and history. As we wrote here, she represents corporatism and militarism – the coming technocracy, in other words.

  We are less certain about Trump.

  He may have decided to run for president on his own and thus opened up possibilities for personal and political manipulation.

  But when Trump speaks bluntly about Hillary’s role in creating ISIS, he is basically making statements rarely heard in large – mainstream – venues before.

  Mitt Romney never said anything like this.

  GOP leaders, despite their supposed antagonism to Democrats, have never made such statements.

  Many GOP-ers are pro-war. Any war. Just like Hillary.

  Congressman Ron Paul was anti-war, and as a result he was eventually marginalized as a presidential candidate.

  Some of Trump’s statements have Ron Paul-like resonances.

  True, in this interview he said he would “declare a full-blown war on the group.” On the other hand, he clarified his statement.

  “I am going to have very few troops on the ground. We’re going to have unbelievable intelligence, which we need; which, right now, we don’t have,” he said.

  Trump also said negative things about NATO, as he has in the past, stating that the organization had an overly prominent role in the “war on terror” and that other nations should do more.

  If Trump really does try to wipe ISIS out – or drastically reduce the power of NATO – will he be risking his own health and well-being?

  The US is run by corporatist and military entities. Will they hesitate to intimidate or remove Trump if he tries to end ISIS?

  Western war-interests always need an enemy after all.

  When Russia began to bomb ISIS, its officials said that the Pentagon had been lying about its attacks on ISIS. Officials maintained that the US bombing was really aimed at Syrian infrastructure and thus at destroying the current regime rather than terrorist groups.

  Russian officials also said there were no moderate “terrorists” in Syria and that the Pentagon had just made it up to justify a lack of aggression in certain areas.

  This is certainly possible. After all, from what we can tell,  ISIS (and Al Qaeda before it) were essentially CIA inventions, created with the help of others: London’s City, Israel and Saudi Arabia, etc.

  At the center of the current horrible Islamic extremism is Wahhabism, jointly advanced by the US and Saudi Arabia.

  We’ve written about that here: The Internet Just Debunked the NY Post’s War on Terror.

  You can see another article here: Globalists Created Wahhabi Terrorism to Destroy Islam and Justify a Global State. We don’t endorse the article but find it interesting.

  Trump is currently attacking the West’s modern foundation. It is a combination of technocracy and authoritarianism and enormously profitable for those in control.

  Conclusion: In blaming Hillary, Trump did not fully explain how ISIS came to be. But by blaming her (when coupled with his other statements) he is opening up a “Pandora’s box” of issues relating to Western warfare. This is dangerous to those who stand behind “endless wars for endless peace.” It might be dangerous to Donald, too, if he pursues the issue to its logical conclusion.

  

  

• 'Pokemon Go' Bubble Bursts: Nintendo Tumbles As Indonesia Issues "National Security Threat"

  Indonesian officials have warned that 'Pokemon Go' is a "national security threat," and military headquarters have banned personnel from playing the game while on duty, according to Jakarta Post. It appears the 'Pokemon Go' bubble is bursting, after surging 120% in 8 days, Nintendo is down over 12% today (as the bubble passes over to McDonalds Japan, which is up 12%, after reports of sponsoring 'Pokemon Go' in Japan).

  As Bloomberg reports,

  Indonesian Military headquarter has banned personnel from playing ‘Pokemon Go’ game while on duty, Jakarta Post reports, citing spokesman for Indonesian Armed Force, or TNI, Tatang Sulaiman.

   

  TNI says cautious as app could encourage gamers to go to restricted military facilities, record activities and post details online.

  And the bubble is bursting… tumbling 12% after doubling in 8 days…

  

  As UBS warns the rally is "hard to explain"…

  Nintendo’s market cap. expansion to more than 2t yen is “hard to explain” even when “substantial” billing rev. and reasonable vol. for Nintendo Plus is factored in, writes UBS analyst Sumito Takeda (sell) in note earlier.

   

  Estimates Pokémon Go Plus toy may generate direct earnings when released in future.

   

  Some expectations Nintendo may shift from hardware to software after seeing other cos. are using Nintendo IP to create popular games; believes co. should continue to invest in hardware.

   

  Maintains sell rating, 12-month price target 15,000 yen.

  But McDonalds Japan is surging…

  

  This follows reports from The Wall Street Journal that the company will be a sponsor of Pokemon Go in Japan, participating in the game’s release in the country and making its restaurants key locations for game players.
   

  

  

• Terrorism Death Count Since 2015: The West 658 – 28,031 The Rest Of The World

  And the 'winner' is…

  Since the beginning of 2015, the Middle East, Africa and Asia have seen nearly 50 times more deaths from terrorism than Europe and the Americas.

  

  As The Washington Post reports, The Middle East and northern Africa account for over two-thirds of terrorism deaths since January 2015, with multiple attacks occurring daily, each claiming on average at least a dozen lives.
  

  Outside large attacks in France and Belgium, attacks in eastern Ukraine account for most terrorism casualties in Europe, according to Jane’s Terrorism and Insurgency Center. In the Americas, recent Islamic-State-inspired mass shootings make up the lion’s share of the terrorism-related deaths. Aside from that, a few scattered attacks from guerrilla groups in Colombia and Peru and some scattered violence in the Caribbean caused a handful of deaths.

  

  Simply put, the death tolls of attacks in Western countries pale in comparison to daily attacks in other parts of the world.

  Read more here…

  

  

• Who Really Won The Oil Price War?

  Authored by Global Risk Insights via OilPrice.com,

  The rise in oil prices over the past six months has come as a blessing for the battered U.S. shale producers. Oil prices have risen more than 50 percent since January, giving a glimmer of hope to the U.S. oil industry that the worst of the oil crisis might finally be behind them. Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency.

  According to data publicized by Reuters, the decline rates of oil wells in the most productive fields in the U.S. – the Permian and Bakken Basins – were almost halved over the past several years. In practice, this means that shale people will get more bang for their buck; due to slower decline of the wells, they will have to drill fewer new wells to sustain output and therefore lower their capital demands.

  After months of consecutive falls, the number of rigs has been increasing since May and companies expect additional growth if oil prices remain at $50 levels. In addition, Norwegian energy consultancy Rystad Energy’s newest estimates reveal that the U.S. holds more recoverable oil reserves than Russia or Saudi Arabia. More than 50 percent of reserves belong to unconventional shale oil.

  Low oil price has been both a blessing and a curse for the shale industry

  The key for the survival of the U.S. shale industry currently lies in its ability to raise money to finance its renewed activity. One of the shale’s weak spots was always its dependency on capital inflow and high level of debt. In the world of high oil prices and lax capital markets this did not matter so much. However, since the oil price crashed two years ago, financing has become the industry’s central problem. Bond sales of U.S. independent energy companies is currently at its lowest level in more than a decade, and the markets are still not convinced enough to devote fresh capital to new energy projects, despite the brighter outlook that came with higher prices of oil.

  A breath of fresh air could come from another side though. After the slump in prices, many oil giants such as Exxon and Chevron mothballed expensive offshore and Arctic projects and turned their attention towards cheaper and more feasible shale projects in the United States.

  No clear winner of the oil price war

  So who has won in this war of oil giants after all? It is probably a tie.

  Although the Saudis caused damage to the U.S. shale, they also hit to global oil industry hard, while they managed to preserve their market share, they paid a heavy price in terms of oil revenues. The real question however, is not whether the House of Saud is able to keep oil prices (and consequently U.S. shale production) subdued for a prolonged period of time, but how long they can do it without endangering fiscal and social stability of the Desert Kingdom and other OPEC members. Despite its ambitious Vision 2030 programme, Saudi Arabia will stay dependent on oil income to subsidize its social programmes for many years to come. Achieving restructuring at $50-60 price levels without swift and potentially painful reforms would prove a real challenge to the Saudi regime.

  On the other hand, Riyadh has done a huge favor to the U.S. shale industry by forcing it to adapt and change its business philosophy. OPEC will remain an important, and hopefully responsible, factor in oil markets, but it will have to accept the fact that the circumstances have changed over the past five years. Both the ascent of shale oil, and initiatives to reduce global carbon footprint will impose an enormous strain on the Cartel and its members, which are still a long way from having diversified economies.

  

  

• Obama Administration Explains Its Own "Plagiarism" Was Merely "Inspiration"

  With the 'p' word being lobbed around by Republican and Democrat today as Melania and Michelle battled to the death over who is the plagiarizer-est, we are reminded that it wasn't too long ago that the media turned a blind eye when President Barack Obama was busted plagiarizing from Deval Patrick… and today The White House press secretary explained "Obama didn't plagiarize… he was 'inspired by'" the former Massachusetts Governor.

  As Fox News' Hannity reminds…

  In 2008, then-candidate Obama was found to have plagiarized the speeches of former Massachusetts Governor Deval Patrick on a number of occasions.

  "I am not asking anyone to take a chance on me, I'm asking you to take a chance on your own aspirations," Patrick said in a speech delivered in June of 2006. Obama repeated the line verbatim in a speech in South Carolina in November of 2007.

   

  In addition, Obama's famous refrain of "just words" in a 2008 speech was lifted directly from a speech Governor Patrick delivered in October of 2006.

  When the Clinton campaign cried foul, The New York Times reported:

  With the next round of voters set to weigh in on the Democratic presidential race, Senator Hillary Rodham Clinton’s campaign on Monday accused Senator Barack Obama of committing plagiarism in a weekend speech. Mr. Obama dismissed the charge as absurd and desperate.

  Mr. Obama told reporters he should have credited Gov. Deval Patrick of Massachusetts, a friend, for a passage in a speech he delivered on Saturday in Milwaukee. But Mr. Obama said his rival was "carrying it too far."

  While the Obama campaign might have been dismissive of the charges, the video evidence made it absolutely clear that the then-Illinois Senator did indeed lift passages directly from Governor Patrick. Take a look for yourself:

  Perhaps the left should heed the advice that those in glass houses should refrain from throwing stones.

  But, it appears, given today's Melania-Michelle melee, the media is suddenly interested again…

  And White House Press Secretary Josh Earnest explained to the great unwashed and ignorant masses that "the president was in fact inspired by Governor Patrick's words."

  In other words, when we do it, it's "inspired thought," when you do it "it's blatant plagiarism."

  

  

• We Need More Borders And More States

  Submitted by Ryan McMaken via The Mises Institute,

  In the context of trade and immigration, borders are often discussed as a means of excluding foreign workers and foreign goods. In one way of thinking, borders provide an opportunity for states to exclude private actors such as workers, merchants, and entrepreneurs. On the other hand, borders can also serve a far more endearing function, and this is found in the fact that borders represent the limits of a state's power. That is, while borders may exclude goods and people, a state's borders also often exclude other states. 

  For example, East Germany's border with West Germany represented the limits of the East German police state, beyond which the power of the Stasi to kidnap, torture, and imprison peaceful people was far more limited than it was within its native jurisdiction. The West German border acted to contain the East German state. 

  Similarly, the borders of Saudi Arabia delineate a limit to the Saudi regime's ability to behead people for sorcery or for making critical remarks about the blood-soaked dictators known as the House of Saud. 

  Even within a single nation-state, borders can illustrate the benefits of decentralization, as in the case of the Colorado-Nebraska border. On one side of the border (i.e., Nebraska) state police will arrest you and imprison you for possessing marijuana. They may kill you if you resist. On the other side of the border, the state's constitution prohibits police from prosecuting marijuana users. The Colorado border contains Nebraska's war on drugs. 

  Certainly, there are ways for regimes to extend their power even beyond their borders. This can be done by cozying up with the regimes of neighboring countries (or intimidating them), or through the organs of international quasi-state organizations. Or, as in the case of the US and EU, imposing broader policies upon a number of supposedly sovereign states. 

  Nevertheless, thanks to the competitive nature of states, many states will often find it difficult to project their power into neighboring states, and thus borders represent a very-real impediment to a state's power. This can then open the door to greater freedom, and even save lives as certain states impoverish or make war on their own citizens. 

  The Case of Venezuela 

  This principle was illustrated yet again this week as the Venezuelan regime opened its border with Colombia to allow Venezuelans the opportunity to purchase food and other supplies on the Colombian side of the border. The Colombian regime is by no means perfect, for all its problems, the Colombian regime has not reduced the country's population to desperate poverty amidst collapsing economic and social institutions. 

  Thus, it is rather easy to buy food and provisions in Colombia while store shelves sit empty in Venezuela. 

  Fortunately for Venezuelans, Venezuela is contained by the borders of the surrounding nation states, and the ability of the Venezuelan regime to arrest small-time entrepreneurs and and shopkeepers for being "class traitors" ends where Colombian territory begins. 

  Perhaps not surprisingly, the Venezuelan border with Colombia has been closed for some time. Apparently, the Venezuelan state felt there was too much freedom going on in the borderlands — where smugglers and black-market operators were able to use the frontier with Colombia to get around Venezuela's harsh anti-market policies. The closed border, of course, has only meant that law abiding citizens are excluded from free movement between the countries. Violent criminals, however, function freely in the area, making the Colombia-Venezuela border region especially hazardous. 

  In spite of all of this, the Colombian border has become a lifeline for Venezuelans now that it has become a source for basic supplies and food, and a partial escape from a life of deprivation forced on the population by the socialist policies of Nicolás Maduro and Hugo Chávez. 

  Fortunately for the people of South America (and the world), Venezuela is only a medium-sized state, with a total area one-third larger than Texas. One can only imagine how much greater misery could be inflicted on a larger population were Venezuela the size of Brazil or Russia or — worst of all — were it a world government. 

  The fact that Venezuela is physically limited in size and scope brings relief to those who are able to benefit form the proximity of the border, and those who might trade with foreigners and black-market merchants. 

  As the AP notes, though, one's "proximity" to the border can be defined according to the desperation that one endures, as illustrated by the fact that some people have traveled ten hours to the border in order to buy food. 

  The Benefits of Decentralization and Secession

  The physical realities of size and distance once again show us the benefits of political secession and decentralization: those who live a mere two hours from the border will have more opportunities to purchase food than those who live ten hours away. Those who live close to the border might also enjoy more opportunities to physically escape from Venezuelan territory were the need to arise. 

  This situation would be improved were even more decentralization realized and the western provinces of Venezuela were to secede from Venezuela, effectively moving the border eastward. 

  Imagine, for example, if the state of Zulia in western Venezuela were to expel the Venezuelan military and fully open the border with Colombia. Goods and services would immediately begin to flow into the newly liberated Zulia territory and goods would become far more plentiful. 

  But this wouldn't just benefit the people of Zulia. The new reality would also mean that the Venezuelan border would stop at Zulia's eastern border making the freedom of the border areas now more accessible to the neighboring states of Trujillo and Mérida, as well. Residents of Trujillo state, who might have been many hours from an external border before, may be now a mere hour from the border, thus allowing more people the ability to travel to the border or make more extensive use of black markets or even legal markets outside the reach of the Venezuela regime. 

  Ludwig von Mises understood the benefits of this type of piecemeal secession, noting with approval the possibility of allowing provinces and villages the opportunity to secede from one state and join another, or remain independent. The larger a state is, the more resources it controls, and the greater is its ability to impose higher costs on those who might seek to emigrate or escape the central state's rule.

  Writing on "self determination," Mises wrote that nations do not have a right to self-determination, but people do, and Mises supported "the right of the inhabitants of every territory to decide on the state to which they wish to belong." In practice, Mises reminds us, this often means breaking up states into smaller pieces: 

  Whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, but wish either to form an independent state or to attach themselves to some other state, their wishes are to be respected and complied with. This is the only feasible and effective way of preventing revolutions and civil and international wars.

  Certainly, adopting Mises's plan in this respect would bring nearly immediate relief to many communities currently on the wrong side of the Venezuelan border. Unfortunately, the Venezuelan central government — like most national governments — has rarely shown much hesitation when it comes to brutally repressing "dissidents." Unless a significant ideological change takes place in Venezuela, it's unlikely any such local movement toward "self determination" is likely to be respected. 

  More States = More Choice 

  In practice, if we favor free choice, free movement, and the opportunity to escape from overbearing regimes, the answer lies in the creation of more borders and more states. While borders can often work to inhibit the movement of goods and human beings, they can also offer opportunities for greater freedom by limiting the power and reach of existing states.

  Moreover, since smaller states have greater trouble regulating markets and peoples beyond their borders, smaller states are more likely to have to rely on open commerce with other states in order to survive and thrive.

  Were Venezuela smaller and with more international neighbors, the people of Venezuela would have more opportunities for interacting with areas outside the control of the Venezuelan regime while facing greater opportunities in emigration and trade. In other words, the monopoly enjoyed by the Venezuelan state would be weaker, and the residents there would have more freedom of choice. 

  The answer really does lie in decentralization which leads to more choice, and thus more freedom: 

  [T]he practical answer to any current lack of choice (i.e., lack of "self-determination") lies not in the immediate abolition of all states (as no one has ever convincingly described how this might be done) but in the breaking down of existing states into smaller and smaller states…

   

  What Mises describes above refers to formal votes and declarations of independence, but the same effects, in practice, can be obtained through the methods of local nullification and separation as suggested by Hans-Hermann Hoppe here. And, of course, de facto secession, for practical reasons may often be preferable.

   

  The claim is often made by some doctrinaire and impractical anarchists that secession is a bad thing because it "creates a new state." This is a rather simplistic view, however, given the realities of geography on planet earth. Unless one is forming a new state completely in international waters or in Antarctica or outer space, the creation of any new state will have to come at the expense of some existing state. Thus, the creation of a new state, in say, Sardinia, would come at the expense of the existing state known as "Italy." Deprived by secession of tax revenues and the military advantages of territory, the state that loses territory would be necessarily weakened.

   

  In addition to weakening states, the advantage from the perspective of the individual, then, is that he or she now has two states to choose from where only one existed before. The individual now has more options from which to choose a place to live that best suits his or her personal lifestyle, ideology, religion, ethnic group, and more.

   

  With each additional successful act of secession, the choices from which each person has to choose grow larger and larger…

  If there's anything the people of Venezuela need right now, it's more choices.

  

  

• Prominent Gold Skeptic Willem Buiter Says "Gold Looks Pretty Good"

  Back in November 2014, Willem Buiter, who has so far been wrong in his recent gloomier forecasts about the fallout from the Eurozone mess, or his predictions about a global economy, decided to become a commodity expert and announced that “Gold Is A 6,000 Year Old Bubble.” The irony is that while virtually every other asset class in the span of these 6,000 years has risen, risen more, in many cases indeed formed a bubble, burst, fallen, and ultimately turned to dust and forgotten, gold remains and furthermore has seen its value in recent years soar.

  What is interesting is that almost two years later, Buiter may have realized just that, and in an interview with the Epoch Times’ Valentin Schmid, the Citi strategist admits that he “would hold gold” due to the global tidal wave of negative interest rates:

  “I will never argue with a six thousand-year-old bubble. So gold, in times of uncertainty and especially in days of uncertainty laced with negative rates looks pretty good.”

  Looks like we have another post-conversion Alan Greenspan on our hands. Here is his full interview, courtesy of the Epoch Times.

  * * *

  Citigroup’s Willem Buiter Says ‘Would Hold Gold’

  Famous gold skeptic says gold wins against fiat currencies in negative rate environment

  In the books of most gold lovers, Citigroup’s chief economist Willem Buiter is noted down as the man who thinks gold is a “6,000 year bubble.”

  However, in a recent interview with Epoch Times [Skip to 38:00 in the video], he presented a much more nuanced position and said he would even own gold as part of a diversified portfolio of currencies. 

  “It competes with other fiat currencies, the dollar, the yen, the euro. And if these currencies now yield negative interest rates or are at risk of negative yields in the U.K. and the United States, then the currency that at least has a zero interest rate, looks better.”

  Gold, in times of uncertainty and especially in days of uncertainty laced with negative rates, looks pretty good.

  He still maintains that gold is a fiat commodity that has limited intrinsic value because it doesn’t have many industrial uses, and only has value because people say so. But he admits this is true of all paper currencies and bitcoin as well and gold may even have an advantage right now.

  “I will never argue with a six thousand-year-old bubble. So gold, in times of uncertainty and especially in days of uncertainty laced with negative rates looks pretty good,” he said.

  Bubbles are the essence of fiat money economies.

  His definition of a bubble is also interesting and he again includes all fiat currencies in this category.

  

  Citigroup Chief Economist Willem Buiter at an interview with Epoch Times

  “The fundamental value of an intrinsically valueless good is zero. For every fiat currency if it’s value is positive,  it’s a bubble. There are good bubbles when they are stable. There are bad bubbles when they are exploding upwards and downwards.”

  And he says there is some positive value to having fiat money or gold for transactional purposes.

  “There is nothing wrong with a bubble. Fiat money as a positive value is a very beneficial bubble. It’s much more efficient of course to produce paper money without cost if it can be managed well, rather than the costly way to extract and store gold. But bubbles are the essence of fiat money economies.”

  Maybe what Buiter means is exactly what Scottish economist John Law explained in his work “Money and Trade Considered” in 1705.

  Instead of calling gold, paper money, or silver a “beneficial bubble” Law simply stated that precious metals (in this case silver) have value because they are the best at being money, not because they are used as a metal in industrial processes.  

  “The additional use [as] money silver was apply’d [sic] to would add to its value, because as money it remedied the disadvantages and inconveniences of barter, and consequently the demand for Silver encreasing [sic], it received an additional value equal to the greater demand its use as money occasioned,” writes Law.

  This is true of gold and paper money as well with the notable difference that paper money gains superior value as money by government decree (fiat) and because people are forced to use it.  Gold and silver have been in use as money because of their natural properties (scarcity, malleability, divisibility, and durability).

  Out of the 118 elements in the periodic table, gold and silver win as monetary instruments according to University College London chemistry professor Andrea Sella. The have just the right degree of scarcity and a low enough melting point to make them into coins he told the BBC.

  Another advantage: “Gold is unbelievably beautiful.”

  Willem Buiter agrees: “You can’t increase [the supply], maybe an advantage for those who like it … It is costly to store and all that but yes, you can put it in your nose and that makes it good.”

  

  

• It's Official – Donald Trump Clinches Republican Nomination For President

  Millions of voices cried out in terror and were suddenly silenced…

  The Hill reports, The Republican Party officially nominated Donald Trump for president on Tuesday, capping his remarkable rise from political outsider to the standard-bearer of the GOP.

  Trump officially secured the 1,237 delegates needed to clinch the nomination after his home state of New York cast 89 delegates for the businessman.

  

  Trump’s adult children joined the New York delegation to cast the decisive vote that put Trump over the top. Donald Trump, Jr. was given the honor of making the announcement, and he promised his father would put the Empire State in play in November.

   

  .@DonaldJTrumpJr puts his dad, @realDonaldTrump, “over the top” to secure GOP nomination https://t.co/3hKBjSDPSf https://t.co/7DC04aLkgY

  — CBS News (@CBSNews) July 19, 2016

   

   

  Alabama Sen. Jeff Sessions officially offered Trump’s name into consideration for president to huge rounds of applause.

  Sessions, who is Trump’s top ally on Capitol Hill, lauded the billionaire as a disrupter who has tapped into the unease felt by Americans across the country.

   

  “The American voters heard this message and they rewarded his courage and leadership with a huge victory in our primaries,” Sessions said. “He dispensed with one talented candidate after another, momentum started and a movement started. Democrats and Independents responded. He received far more primary votes than any Republican candidate in history.

   

  “Mr. Speaker, it is my distinct honor and great pleasure to nominate Donald J. Trump for the office of president of the United States,” he said.

   

  The Quicken Loans Arena exploded into cheers and chants of “Trump.”

  And finally…

  Out: Speculation about Never Trump stealing nomination from Trump at convention

  In: Speculation about Trump turning down nomination

  — Aaron Blake (@AaronBlake) July 19, 2016

  

  

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• Europe's Impossible Refugee Math: Brexit Was Mathematical Certainty Eventually

  Submitted by Michael Shedlock via MishTalk.com,

  In a recent GMO commentary on Immigration and Brexit, founder Jeremy Grantham laid out precise reasons why Brexit was a mathematical certainty eventually.

  Curiously, Grantham thinks Brexit was a bad idea.

  On the second sentence, I disagree strongly.

  The following snips, including bullet points are from Grantham. Subtitles are mine, not his.

  Europe’s Impossible Refugee Math

  • The truth about immigration to the EU, in my view, is bitter. As covered in earlier quarterlies, I believe Africa and parts of the Near East are beginning to fail as civilized states.
  • They are failing under the pressure of populations that have multiplied by 5 to 10 times since I was born; climate for growing food that is deteriorating at an accelerating rate; degraded soils; insufficient unpolluted water; bad governance; and lack of infrastructure. Country after country is tilting into rolling failure.
  • This is producing in these failing states increasing numbers of desperate people, mainly young men, willing to risk money and their lives to attempt an entry into the EU.
  • For the best example of the non-compute intractability of this problem, consider Nigeria. It had 21 million people when I was born and now has 187 million. In a recent poll, 40% of Nigerians (75 million) said they would like to emigrate, mostly to the UK (population 64 million). Difficult. But the official UN estimate for Nigeria’s population in 2100 is over 800 million! (They still have a fertility rate of six children per woman.) Without discussing the likelihood of ever reaching 800 million, I suspect you will understand the problem at hand. Impossible.
  • I wrote two years ago that this immigration pressure would stress Europe and that the first victim would be Western Europe’s liberal traditions. Well, this is happening in real time as they say, far faster than I expected. It will only get worse as hundreds of thousands of refugees become millions.
  • The EU and Europe may support a few years of increasing numbers of these failing state refugees, but that is all. They will fairly quickly have to refuse to take even legitimately distressed refugees. The alternative – to take all comers – would likely be not just a failed EU, but a failing Europe.

  Brexit Unnecessary?

  • Calling for an utterly unnecessary referendum by the Prime Minister for superficial and short-term political gain. He could have muddled through anyway. Referenda are dangerous. They allow for the true will of the people to be voiced, informed or ill-informed, manipulated or not. Dangerous. As Churchill said (now much quoted), “The best argument against democracy is a five-minute conversation with the average voter.” He might also have commented about the willful laziness of the one-third who never vote.
  • The UK press, the most egregiously editorialized in the developed world. The broad circulation papers goaded and badgered their readers toward Brexit.
  • As for the politicians, forget it. Whimsical theories, back-stabbing disloyalties, a glaring lack of planning and foresight. Above all, completely ignoring the precautionary principle, playing with fire like children. Now those Brexiters that haven’t run away can reap what they have sown, as unfortunately will the whole UK. If you will, the pack of dogs can now try to work out what to do with that darned car.

  Mish Comments

  In absence of prior knowledge, I would suspect few would think the same person wrote both snips.

  Given the math laid out in the first snip, and given the total stubbornness of chancellor Merkel, it was both a mathematical necessity and pragmatic result for the UK to leave the EU.

  Politicians are Dangerous

  Grantham’s statement that “Referenda are dangerous” is no different that saying “elections are dangerous“.

  Since when are politicians guaranteed to be saviors?

  A few dangerous leaders come to mind. George Bush and his ludicrous war in Iraq is a prime example. Lyndon B. Johnson and his idiotic war in Vietnam is another.

  Questions for Grantham

  1. Given a referendum on the idea of a war in Iraq, and a genuine estimate of its true cost, would US citizens have voted for war in Iraq?
  2. Would the UK have voted to follow Bush in a “coalition of the willing”?
  3. Would US citizens have voted to carpet bomb Vietnam?
  4. Would European voters approved a pact with Erdogan to allow visa-free access to the rest of Europe to 80 million Turks?

  Politicians are and their pet goals are far more dangerous than referendums. Chancellor Merkel and her inane, mathematically impossible, open arms welcome of refugees was the #1 Reason UK Voted Leave the EU.

  Let’s not blame the voters or the referendum itself.

  For more on this subject, please see Dear chancellor Merkel: When does Turkey join the EU? When do 80 million Turks have visa-free travel?

  

  

• There Will Be No Second American Revolution: The Futility Of An Armed Revolt

  Submitted by John Whitehead via The Rutherford Institute,

  “A standing military force, with an overgrown Executive will not long be safe companions to liberty.” – James Madison

  America is a ticking time bomb.

  All that remains to be seen is who – or what – will set fire to the fuse.

  We are poised at what seems to be the pinnacle of a manufactured breakdown, with police shooting unarmed citizens, snipers shooting police, global and domestic violence rising, and a political showdown between two presidential candidates equally matched in unpopularity.

  The preparations for the Republican and Democratic national conventions taking place in Cleveland and Philadelphia—augmented by a $50 million federal security grant for each city—provide a foretaste of how the government plans to deal with any individual or group that steps out of line: they will be censored, silenced, spied on, caged, intimidated, interrogated, investigated, recorded, tracked, labeled, held at gunpoint, detained, restrained, arrested, tried and found guilty.

  For instance, anticipating civil unrest and mass demonstrations in connection with the Republican Party convention, Cleveland officials set up makeshift prisons, extra courtrooms to handle protesters, and shut down a local university in order to house 1,700 riot police and their weapons. The city’s courts are preparing to process up to 1,000 people a day. Additionally, the FBI has also been conducting “interviews” with activists in advance of the conventions to discourage them from engaging in protests.

  Make no mistake, the government is ready for a civil uprising.

  Indeed, the government has been preparing for this moment for years.

  A 2008 Army War College report revealed that “widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.” The 44-page report goes on to warn that potential causes for such civil unrest could include another terrorist attack, “unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

  Subsequent reports by the Department of Homeland Security to identify, monitor and label right-wing and left-wing activists and military veterans as extremists (a.k.a. terrorists) have manifested into full-fledged pre-crime surveillance programs. Almost a decade later, after locking down the nation and spending billions to fight terrorism, the DHS has concluded that the greater threat is not ISIS but domestic right-wing extremism.

  Meanwhile, the government has been amassing an arsenal of military weapons for use domestically and equipping and training their “troops” for war. Even government agencies with largely administrative functions such as the Food and Drug Administration, Department of Veterans Affairs, and the Smithsonian have been acquiring body armor, riot helmets and shields, cannon launchers and police firearms and ammunition. In fact, there are now at least 120,000 armed federal agents carrying such weapons who possess the power to arrest.

  Rounding out this profit-driven campaign to turn American citizens into enemy combatants (and America into a battlefield) is a technology sector that is colluding with the government to create a Big Brother that is all-knowing, all-seeing and inescapable. It’s not just the drones, fusion centers, license plate readers, stingray devices and the NSA that you have to worry about. You’re also being tracked by the black boxes in your cars, your cell phone, smart devices in your home, grocery loyalty cards, social media accounts, credit cards, streaming services such as Netflix, Amazon, and e-book reader accounts.

  All of this has taken place right under our noses, funded with our taxpayer dollars and carried out in broad daylight without so much as a general outcry from the citizenry.

  It’s astounding how convenient we’ve made it for the government to lock down the nation.

  We’ve even allowed ourselves to be acclimated to the occasional lockdown of government buildings, Jade Helm military drills in small towns so that special operations forces can get “realistic military training” in “hostile” territory, and  Live Active Shooter Drill training exercises, carried out at schools, in shopping malls, and on public transit, which can and do fool law enforcement officials, students, teachers and bystanders into thinking it’s a real crisis.

  The events of recent years—the invasive surveillance, the extremism reports, the civil unrest, the protests, the shootings, the bombings, the military exercises and active shooter drills, the color-coded alerts and threat assessments, the fusion centers, the transformation of local police into extensions of the military, the distribution of military equipment and weapons to local police forces, the government databases containing the names of dissidents and potential troublemakers—have all conjoined to create an environment in which “we the people” are more distrustful and fearful of each other and more reliant on the government to keep us safe.

  Of course, that’s the point.

  The powers-that-be want us to feel vulnerable.

  They want us to fear each other and trust the government’s hired gunmen to keep us safe from terrorists, extremists, jihadists, psychopaths, etc.

  Most of all, the powers-that-be want us to feel powerless to protect ourselves and reliant on and grateful for the dubious protection provided by the American police state.

  Their strategy is working.

  The tree of liberty is dying.

  There will be no second American Revolution.

  There is no place in our nation for the kind of armed revolution our forefathers mounted against a tyrannical Great Britain. Such an act would be futile and tragic. We are no longer dealing with a distant, imperial king but with a tyrant of our own making: a militarized, technologized, heavily-financed bureaucratic machine that operates beyond the reach of the law.

  The message being sent to the citizenry is clear: there will be no revolution, armed or otherwise.

  Anyone who believes that they can wage—and win—an armed revolt against the American police state has not been paying attention. Those who wage violence against the government and their fellow citizens are playing right into the government’s hands. Violence cannot and will not be the answer to what ails America.

  Whether instigated by the government or the citizenry, violence will only lead to more violence. It does not matter how much firepower you have. The government has more firepower.

  It does not matter how long you think you can hold out by relying on survivalist skills, guerilla tactics and sheer grit. The government has the resources to outwait, out-starve, outman, outgun and generally overpower you.

  This government of wolves will not be overtaken by force.

  Unfortunately, we waited too long to wake up to the government’s schemes.

  We did not anticipate that “we the people” would become the enemy. For years, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.

  What the government failed to explain was that the domestic terrorists would be of the government’s own making, whether intentional or not.

  By waging endless wars abroad, by bringing the instruments of war home, by transforming police into extensions of the military, by turning a free society into a suspect society, by treating American citizens like enemy combatants, by discouraging and criminalizing a free exchange of ideas, by making violence its calling card through SWAT team raids and militarized police, by fomenting division and strife among the citizenry, by acclimating the citizenry to the sights and sounds of war, and by generally making peaceful revolution all but impossible, the government has engineered an environment in which domestic violence has become inevitable.

  What we are now experiencing is a civil war, devised and instigated in part by the U.S. government.

  The outcome for this particular conflict is already foregone: the police state wins.

  The objective: compliance and control.

  The strategy: destabilize the economy through endless wars, escalate racial tensions, polarize the populace, heighten tensions through a show of force, intensify the use of violence, and then, when all hell breaks loose, clamp down on the nation for the good of the people and the security of the nation.

  So where does that leave us?

  Despite the fact that communities across the country are, for all intents and purposes, being held hostage by a government that is armed to the teeth and more than willing to use force in order to “maintain order,” most Americans seem relatively unconcerned. Worse, we have become so fragmented as a nation, so hostile to those with whom we might disagree, so distrustful of those who are different from us, that we are easily divided and conquered.

  We have been desensitized to violence, acclimated to a military presence in our communities and persuaded that there is nothing we can do to alter the seemingly hopeless trajectory of the nation. In this way, the floundering economy, the blowback arising from military occupations abroad, police shootings, the nation’s deteriorating infrastructure and all of the other mounting concerns have become non-issues to a populace that is easily entertained, distracted, manipulated and controlled.

  The sight of police clad in body armor and gas masks, wielding semiautomatic rifles and escorting an armored vehicle through a crowded street, a scene likened to “a military patrol through a hostile city,” no longer causes alarm among the general populace.

  We are fast becoming an anemic, weak, pathetically diluted offspring of our revolutionary forebears incapable of mounting a national uprising against a tyrannical regime.

  If there is to be any hope of reclaiming our government and restoring our freedoms, it will require a different kind of coup: nonviolent, strategic and grassroots, starting locally and trickling upwards. Such revolutions are slow and painstaking. They are political, in part, but not through any established parties or politicians.

  Most of all, as I make clear in my book Battlefield America: The War on the American People, for any chance of success, such a revolution will require more than a change of politics: it will require a change of heart among the American people, a reawakening of the American spirit, and a citizenry that cares more about their freedoms than their fantasy games.

  

  

• Did "China" Just Buy The Most Important Company In The World?

  In the aftermath of last night stunning announcement that Japan’s Internet giant SoftBank would acquire UK-based ARM Holdings, a company which makes chips present in virtually every mobile and “connected” device, for $32 billion, sending the semiconductor sector surging, questions emerged why the company is doing this.

  On one hand, even the founder of ARM Holdings himself, Hermann Hauser said, told the BBC he believes its imminent sale to Japanese technology giant Softbank is “a sad day for technology in Britain”. Hauser said the result of the Softbank deal meant the “determination of what comes next for technology will not be decided in Britain any more, but in Japan”.

  

  On the other, the stock of SoftBank has tumbled now that the Japanese market has reopened after a one-day holiday.

  Bloomberg gave the trivial answer first thing this morning in a piece titled ‘Why SoftBank Is Spending $32 Billion on U.K. Chip Designer ARM“, which concluded the following: “Softbank Chairman Masayoshi Son sees ARM’s future in being inside the legion of products that are becoming internet-connected, from street lamps to air conditioners, washing machines to drones — so-called “internet of things” devices.”

  Perhaps. However, a more provocative explanation has emerged courtesy of SouthBay Research, which when looking at the same deal, asks if China (yes China) “just acquired the most important company in the world? “

  Here is SouthBay‘s explanation why:

  ARM Holdings (ARMH) holds the keys to the future of electronics  That’s not hyberbole.

  Not only does ARMH dominate the world of mobile devices, it is rapidly penetrating all electronics: from consumer electronics to the computer network.

  ARMH designs and licenses semiconductors.  Their designs are the core of the critical components of consumer electronics: smartphones, tablets, TVs, and so on.  For example, most of today’s tablets and phones run on Qualcomm chips: they did $26B in sales last year.  These chips re-package ARMH designs.

  As electronics continue to penetrate everything from cars to refrigerators, they use ARM designs.  The Internet of Things (IOT) uses ARMH technology.

  Like a spider in the web, ARMH sits firmly at the heart of the future of all electronics.

  I have reviewed ARMH two different times.

  First, as the life preserver to save Intel.  Intel is unable to survive in the post-PC world and ARMH was a way to buy their way back in.  Unfortunately, anti-trust was probably a factor in preventing the buy.

  Another time I mentioned ARMH was when discussing the future of China’s semiconductor efforts.

  After airplanes, semiconductors are a major capital outflow.  The South Korean and Taiwanese economies are driven by semiconductors.  Beyond economics, semiconductor strength enables national security strength (super computers).   For this and other reasons, the Chinese government has made a domestic semiconductor industry a major strategic goal.  Even going so far as to earmark $10B for intellectual property development.

  The fastest path is acquisition, and ARMH embodies the future.  For China that presents two problems: price (ARMH was $19B last week) and politics (China buying the crown jewels of the internet touches some nerves in the Western world).

  Today Softbank announced an offer to buy ARM Holdings.

  Softbank = China

  Softbank is a Japanese company best known for owning Yahoo Japan and Sprint.
  With their background in telecommunications and the internet, why would they want to buy a major semiconductor company?  And why, with $89B in debt, is Softbank adding another $31B?

  The answer: Softbank is not what they appear.  What isn’t as well known is that Softbank is actually a major player in China’s internet economy.
  For starters, they bankrolled Alibaba.  They control 32% of Alibaba, and through Alibaba, they dominate the Chinese internet economy because Alibaba has invested in the top internet companies in China: Weibo, for example.

  Although based in Japan, Softbank is very much a Chinese company.

  The fact remains that, despite the $10B budget, China has yet to land any major companies.

  Perhaps Softbank on its own is front-running a bigger China budget.

  Or perhaps Softbank was tapped to be the buyer, but not the ultimate buyer.  After all, who is lending them to $31B to close the deal?  And Softbank will earn a lot of political credits for doing a favor for the

  Chinese government effort to ramp-up a semiconductor company.

  Don’t be surprised if we see an announcement in a year or two that ARMH is up for sale and the buyer is a major Chinese company.

  This was a brilliant move.

  

  

• Top Turkish Official In Charge Of Campaign Against ISIS Found Dead, Shot In The Neck

  By now only the most naive believe the official narrative behind Turkey’s Friday coup.

  We say that for two reasons: first, as even the EU commissioner dealing with Turkey’s membership bid, Johannes Hahn, said when discussing the unprecedented arrest purge in Turkey, “it looks at least as if something has been prepared. The lists are available, which indicates it was prepared and to be used at a certain stage. I’m very concerned. It is exactly what we feared.”  He did not exlaborate what exactly he had feared, but one can infer; second, as we caught Turkey’s press openly changing the narrative, Erdogan was not even able to figure out who to blame for the “coup attempt” until this afternoon, first accusing the US, then the former Turkish air force chief, before finally deciding on accusing the 77-year-old Pennsylvania resident, Fethullah Gulen, of being the frail mastermind behind it all.

  To be sure, the western media was happy to glance over these “changeovers” and to spoonfeed a false story to the masses just to maintain the illusion of the official Turkish narrative.

  An example of this is when Erdogan told CNN earlier today that “he escaped death by only a few minutes before coup plotters stormed the resort in southwest Turkey where he was vacationing last weekend. Erdogan’s interview was broadcast late Monday. He told CNN that soldiers supporting the coup killed two of his bodyguards when they stormed the resort early Saturday. “Had I stayed 10, 15 additional minutes, I would have been killed or I would have been taken,” he told CNN through a translator provided by the presidency.”

  And yet, less than a day earlier we wrote that even though “Coup Pilots Had Erdogan’s Plane In Their Sights” they did nothing, prompting a former military officer “with knowledge of the events” to ask “why they didn’t fire is a mystery.” So just hours before two F-16 had radar lock on Erdogan and decided not to kill the dictator, troops from the same alleged “coup” were scrambling to get to Erdogan – many hours after the so-called coup had already started – in his resort hotel, and where they would have killed him… had he stayed “10, 15 additional minutes.”

  We can see why not even the Europeans believe this any more.

  Then another example of the media forced – and false – narrative came from the Guardian which earlier today published a piece titled “Military coup was well planned and very nearly succeeded, say Turkish officials” which contains pearls, such as the following:

  It was midnight in the Turkish capital, just two and a half hours into the attempted coup, and the group of nine senior ministers who were gathered in a conference room at the prime ministry were convinced that they were all about to meet their end. “They probably will be successful and we will die tonight,” said one of the ministers, according to an official who was present at the meeting. “Let us be ready to die. We will all be martyred in this fight.”

  Such drama… makes you feel like you were almost there.

  Not surprisingly, the bulk of the piece by Kareem Shaheen is poor on facts but heavy on florid descriptions, interpretations, hearsay and all those other literary techniques that make for a good piece of fiction. Some more examples:

  But as Turkey picks up the pieces after the failed coup, new details are emerging of how it unfolded, and just how close the military intervention came to succeeding. Many observers have labelled the attempt amateurish, but accounts by officials contradict this characterisation, describing it as well organised and very nearly successful.

   

  In Ankara on Friday, the day of the coup, the interior minister had been invited, along with other top officials, to a high-level security meeting in military headquarters that was supposed to take place after 5pm, a ploy that turned out to be intended as a pretext to detain him. He did not go because he was too busy, and later when the coup unfolded he was stuck in Ankara’s Esenbo?a airport, setting up a crisis cell there to manage the fallout, protected by crowds that had gathered to oppose the coup.

  Again, zero actual facts. Not surprisingly, the author himself catches this tangent of his “story:

  Stories emerged of those crucial hours, between the president’s address and the successful quelling of the coup by 4am, that are sure to pass into the official mythology of the events. At 1am, officials say the police chief the city of Bursa arrested the local army commander, who possessed a 6-page list that included the names of designated judges and military officials who were to be appointed to various positions in the bureaucracy in the aftermath of the coup. Other pro-coup soldiers possessed lists of secure telephone lines to receive orders.

  Why he would give himself up knowing he would most likely face death if i) the coup was real and ii) Erdogan remained in power… well, let’s not worry about that.

  But then, painfully, we finally stumbled on something which could be factually disproven, i.e. a precious fact. And it may shine a far different light on what happened during the chaos of the staged coup. It was the following:

  The top counter-terrorism official responsible for Turkey’s campaign against Islamic State did go to a “meeting” at the presidential palace in Ankara. He was later found with his hands tied behind his back, shot in the neck, according to a senior official.

  And suddenly so many pieces of the Turkish “puzzle” fall into place, because while the rest of the narrative about the coup is so glaringly fabricated and literally made up on the spot, the death of Turkey’s chief anti-ISIS counter-terrorism official being quietly killed, makes so much sense sense for a country where as we first presented back in November, “The Man Who Funds ISIS is Bilal Erdogan, The Son Of Turkey’s President” followed by “ISIS Oil Trade Full Frontal: “Raqqa’s Rockefellers”, Bilal Erdogan, KRG Crude, And The Israel Connection“, and of course, “Erdogan Says Will Resign If Oil Purchases From ISIS Proven After Putin Says Has “More Proof.”

  Having arrested 20,000 people already, Erdogan’s witch hunts are just starting. However, it appears he had some very loose ends he had to take care of already on Friday night. One such loose end was the man who fought ISIS on behalf of Turkey, the same Turkey which – incidentally – funded and armed ISIS.

  We eagerly look forward to finding out what else will emerge as the fascinating story of Erdogan’s getting rid of all loose ends, is finally revealed.

  

  

• RNC Day 1: Make America Safe Again – Live Feed

  After four months of primaries and barely 12 months after Donald Trump first announced his candidacy for president of the United States, the Republican National Committee’s convention has officially kicked off today in Cleveland with the theme – Make America Great Again. While the 'main event' is not until Thursday; Day 1 of the Republican National Convention's sub-theme is "Make America Safe Again" with Melania Trump headlining (introduced by her husband) along with Duck Dynasty's Willie Robertson, 'Lone Survivor' Marcus Luttrell, Governor Rick Perry, outspoken Milwaukee Sheriff David Clark, and Mark Geist & John Tiegen (Benghazi security team members).

  *  *  *

  Some highlights from earlier in the day include:

  Gingrich Slams Bushes…

  Newt Gingrich says the Bush family is behaving "childishly" for skipping this week's Republican National Convention.

   

  In a Monday morning interview with ABC's "Good Morning America" at the RNC site in Cleveland, the former GOP House speaker said "the Republican party has been awfully good to the Bushes and they're showing remarkably little gratitude."

   

  He says the family needs to "get over" former Florida Governor Jeb Bush's loss to presumptive GOP nominee Donald Trump in the primary race.

   

  Gingrich also says he's not disappointed that he was passed over by Trump for the vice presidential slot on the Republican ticket in favor of Indiana Governor Mike Pence. He says if the job is to court support from "regular Republicans," then Pence "will do a much better job."

  Dissidents…

  A group of dissident conservatives says it's gathered the signatures needed to force a showdown vote over Republican rules on the GOP national convention's first day.

   

  Party leaders have been trying to avert the clash in hopes of projecting an image of a united party as delegates gather to formally nominate Donald Trump to be president. They've been lobbying to try to head off the clash, and expect to win if such a vote occurs.

   

  But just after the convention was gaveled into session on Monday, a dissident group called Delegates Unbound said in an email that it had gathered statements calling for a roll call by a majority of delegates from 10 states. Under GOP rules, a roll call can be demanded if most delegates from seven states sign such a statement.

  *  *  *

  Live Feed (main event due to start at 1950ET):

  *  *  *

  Conventions give candidates a second chance to make a first impression, even candidates who have been covered by the media as obsessively as Donald Trump. The Republican convention in Cleveland gives Trump that chance. NPR details six things to watch this week…

  1. Will the Cleveland convention stick to a script?

  Successful conventions drive home a message relentlessly, with every speech, video and testimonial designed to highlight the strengths of the candidate and minimize his weaknesses. Trump has shown that he is allergic to this kind of discipline. Even the rollout of his vice presidential pick was shambolic and off message. Reince Priebus, the Republican National Committee chairman, told the Washington Post that one goal of the convention is to make Trump more "likable." After all, electing a president is more about "Like" Q than IQ.

  Trump has promised to add some "showbiz" to what he says is the usual boring convention formula. He'll have a lot of eyeballs this week. Most analysts predict record audiences, and viewers are expecting something pretty fantastic from the king of reality TV. A boring convention packed with B-list celebrities could drive voters away, or motivate Trump to do or say something even more outrageous to keep their attention.

  2. Does Trump expand his message?

  Trump has shown time and time again that he's more comfortable with a spontaneous stream of consciousness rant than reading a speech from a teleprompter. And he's been phenomenally successful at capturing the emotions of people upset about a way of life they feel is being eroded by wage stagnation, demographic change and terrorist attacks.

  The convention gives him a chance to lay out an actual agenda, to explain with specificity what he would do to improve their lives. The Trump campaign sees its path to the White House running through the Rust Belt — boosting turnout of white-working class men to historic levels. But the message for those voters may clash with what Trump needs to do to attract swing-state voters, suburban women and minorities. The convention will give us a good idea of whether Trump feels he has to modify his message to reach both his base and beyond — or not.

  3. Breakout stars?

  Conventions can give a rising star a chance to break out. That's what happened in 2004 when Barack Obama electrified the Democratic convention in Boston. The absence of so many leading Republicans in Cleveland may give others a chance to shine. We're watching to see if there is a 2004 Obama in the GOP lineup — maybe Ivanka Trump? Tom Cotton, the Arkansas senator? Pro-golfer Natalie Gulbis?

  4. Will Mrs. Trump connect?

  Wives are the best validators a candidate has. They can humanize a politician — the way Ann Romney and Michelle Obama both did in 2012. Melania Trump, with her unusual background as a supermodel, could come across as affecting or too exotic.

  5. Unity — will it happen or not?

  "Never Trump" is nevermore, but there is still less enthusiasm about the nominee than at any modern presidential convention. Trump himself has been ambivalent about whether he really needs a unified party, but he has acknowledged that he doesn't have it yet. And he has admitted that party unity was the reason he chose Mike Pence as his running mate.

  Polls show that Trump is getting the support of only about three-quarters of Republicans, a very low number. Conventions are often derided as four-day infomercials, but they serve an important purpose — getting an entire political party fired up behind the nominee. Will Cleveland do that for Trump?

  6. Will Trump get a bump?

  The average convention poll bounce for Democrats since 1964 is 6.8 percent; for Republicans, it has been 5.3 percent, according to Gallup. Sometimes a candidate gets no bounce at all. Romney didn't in 2012.

  Trump is currently running a few points behind his Democratic opponent, Hillary Clinton. Cleveland gives him a chance to close that gap.

  

  *  *  *

  Full Republican National Convention Schedule:

  

  

• How Aristocracies Benefit Both From Racism And From Anti-Racism

  Submitted by Eric Zuesse via Strategic-Culture.org,

  A good example of the way in which aristocracies benefit both from racism and from anti-racism, is Hillary Clinton’s campaign for the US Presidency, which is heavily backed by America’s aristocracy, and which is fueled not only by their money but also by the widespread racism in American culture, and especially by the equally widespread repudiation by many Americans against racism.

  Her opponent in the Democratic Party primaries, Bernie Sanders, was loathed by America’s aristocracy, because he was accusing them of destroying the country and was proposing policies to restore democracy to America, by means of various governmental interventions to reverse the existing undemocratic government’s wealth-transfers «from the masses to the classes». Sanders was publicly acknowledging that any government is a societal-prioritizing instrument, and that it therefore transfers wealth from some to others, via taxes and other essential policies, and so the wealth-distribution needs to be an independent focus of governmental policies – not simply ignored by government and subsumed within the «economic growth» concern.

  Here is how Hillary Clinton won the Democratic nomination in the primaries: She won 84% of the Black vote in the crucial South Carolina primary, where 61% of the voters, in that Democratic primary, were Blacks. Sanders won 58% of Whites voting there. Clinton won, of the total SC primary vote, 73% to Sanders’s 26%, a crushing 47% margin of victory. And then in the later southern primaries, her margins of victory among the overwhelmingly high proportion of Blacks in the Democratic Parties those states, were similar, which fact (her numerous primaries crushing him, especially on Super Tuesday) cemented Sanders’s loss, and her win, of the Democratic nomination.

  Whereas both of the primaries that preceded South Carolina (the caucus in Iowa, and the election in New Hampshire) were in overwhelmingly White northern states, which had been little shaped by the legacy of slavery, the racial situation was much more tense in SC, and also in the other southern states, where the culture of slavery still persists, more than a century after the Civil War that was fought over slavery.

  Sanders’s message, that economic inequality is the linchpin of America’s increasing inequality of economic opportunity, was a colossal flop among southern Blacks, for whom the pervasive anti-Black racism amongst their local non-Blacks, seemed to be far more the cause of Blacks’ suppressed economic opportunities than did the existing economic inequality itself. To them, Sanders’s argument (that economic inequality is self-perpetuating, and thus needs specific governmental policies to address) seemed false (because the racism there is so intense). They couldn’t understand rich-versus-poor, because what they saw around them every day was Black-versus-White. As Hillary and Bill Clinton’s, and Barack Obama’s, friend and chief economic advisor, Lawrence Summers, taught to his students at Harvard, «I think we can accept, I think we should accept inequality of results, recognizing that those who earn more are in a better position to contribute more to support society».

   It’s standard aristocratic propaganda, that economic inequality doesn’t result from economic inequality. The aristocracy want the public to believe the lie that inequality of the wealth-distribution isn’t self-perpetuating and thus doesn’t need governmental policy-changes in order to be reduced – wealth-redistribution by means of conscious targeted governmental policy in order to redistribute it. The aristocracy, and their agents, at Harvard and elsewhere, hide from the public (and from students) the fact that wealth-redistribution doesn’t occur on its own and can’t be addressed by policies that also help aristocrats (such as «more spending on infrastructure» etc. – the standard liberal growth-oriented policies, which don’t also really affect the wealth-distribution, which the aristocracy want to remain tilted in their favor). This lie – that economic inequality doesn’t itself stunt the economic opportunity for the public in the future – also caused Sanders’s support to be less among people who had PhD’s and other post-college degrees, than among mere college-graduates. Clinton won biggest among people with no education beyond high school, and with PhD’s and other post-college degrees. Upper-level education is strongly dependent upon funding from the aristocracy, so the more of it one had, the less progressive and more authoritarian one tended to be, and this showed in the vote. Clinton’s high support also among the low-educated mass of Democrats (ones with no exposure to college) resulted from the primacy there of two other stanchions of conservatism: religion and family (including ancestry, which brings in also clan and tribe). Furthermore, those voters are usually working so hard just to stay alive; they haven’t the time to be able to see politics beyond the mass-media, which of course are owned by the aristocrats and thus slanted toward Clinton, against Sanders.

  Clinton also benefited (though only to a lesser extent) from the fact that most of the voters in the South Carolina Democratic primary were women, to whom she was likewise targeting an anti-bigotry pitch: in that case, anti-sexist.

  By «racism» in the title here, is meant also any discrimination against a racial, ethnic, gender, religious, or any other non-economically-defined segment of the population; so, it includes also gender-discrimination and other forms of discrimination. In other words: all forms of bigotry, and of opposition to bigotry, distract from the oppression of the public by the aristocrats (the billionaires and centi-millionaires and their agents), and focus the attention instead against bigotry (or in favor of a particular type of bigotry, against a particular group); and, thus, bigotry and anti-bigotry benefit the aristocracy.

  Clinton’s basic message is that America’s inequality of economic opportunity isn’t a class-phenomenon, but a bigotry-phenomenon, such as discrimination against Blacks, against women, against gays, etc. This message won among the Democratic Party’s many minority-groups (Blacks, Hispanics, etc.), even though the economic inequality that her financial backers foster (and which here policies advance) has produced these people’s rotten education, inability to get out of debt, high assessed interest-rates, high rates of illness, etc. These conceptual connections as blockages against economic opportunity are abstract, whereas the incidences of bigotry against these people are concrete, blatant blockages.

  Clinton’s contest against the other Party’s nominee, the Republican Party’s Donald Trump, is against an aristocratic candidate who has largely been pitching to bigots for his votes – especially to bigots against Muslims, and against Hispanics. He now is faced with two contradictory demands: he can either focus more on the economic-class divide (hoping to draw off some of the Sanders voters), and thereby antagonize America’s aristocracy even more than he already has (by his opposition against Clinton’s record as a war-monger, and against her blatant lying and corruption, things that are mainstays in any aristocracy and thus insult aristocrats including himself), or else he can continue to focus on bigots; but, if he does the latter, then the contest will largely become one between bigots (voting for him) and anti-bigots (voting for Clinton), in which case there will continue to be many aristocrats who (unlike the aristocrat Trump himself) flee from any public association with any form of bigotry (almost all aristocrats pretend to be opposed to it, just as the Clintons and Obama so prominently do) and so (in addition to Hillary’s being an ideal nominee for aristocrats) they’ll starve Trump’s campaign of cash, and he’ll then almost certainly lose – or, at least, that’s the scenario.

  This is not a prediction that he will lose. The current US Presidential contest has no clear historical precedent, although the strategic realities in it are the standard ones in political contests. Trump is an extremely formidable campaigner, who has beaten all of his opponents so far and also every one of the ‘experts’ or pundits. (I’m actually expecting him to win; but that’s neither here nor there.)

  The irony is that what the current contest displays with especially stark clarity is the historically well-established reality, that aristocracies benefit both from racism and from anti-racism. It has hardly been clearer than it is here, despite the other, highly unusual, aspects of the current US Presidential contest.

  One thing that rather directly displays the undemocratic reality of today’s American politics is that both Trump and Clinton have (and throughout the contest did have) exceptionally high net-disapproval ratings from the American public, and that the only two candidates, of either Party, who had net-positive approval-ratings, were Bernie Sanders, and (the Republican candidate) John Kasich. If this country had been a democracy, then those were clearly the most-preferred candidates, and so the final contest would have been between those two, but neither of them even made it to the final round. This fact is yet another example showing that, at the present stage in American history, the US is a dictatorship by its aristocracy (who disliked both of the nation’s most-preferred candidates).

  In theocratic Iran, the clergy determine what final choices the public will have; in aristocratic-dictatorial US, the aristocracy do. Bigotry, and its natural response – anti-bigotry – both advance the cause of the aristocracy, anywhere. It’s not just divide-and-conquer. It’s also redirect-and-distract.

  

  

• The Hamptons Housing Market Has Crashed: Luxury Home Sales Drop By Half As Prices Plunge

  It is not looking good for the US housing market.

  One week ago, when we reported that “On Manhattan’s “Billionaire’s Row”, A Death Knell Just Tolled For Luxury Real Estate“, we documented the sudden trapdoor that opened beneath the ultra-luxury segment in the Manhattan housing market. Then several days later, we observed that it is not just the luxury NYC market that is in trouble, but the broader market across all of the US, when we noted three “Red Flags” that the broader US housing market was starting to roll over, among which i) a surge in inexperienced, third-party “mom and pop” auction buyers who were arriving just as institutional investors are starting to flee the auction market, ii) a collapse in retail purchases for home goods and furniture – traditionally a coincident or slightly lagging indicator of home purchasing activity, and iii) a plunge in housing buyer traffic according to the Credit Suisse real-estate agent survey.

  Then this afternoon, another flashing red flag emerged when we learned that overall sales in the Hamptons plunged by half and home prices fell sharply in the second quarter in the toniest enclaves of the Hamptons, New York’s weekend haunt for the wealthy. Reuters blamed this on “stock market jitters earlier in the year” which  damped the appetite to buy, however one can also blame the halt of offshore money laundering, a slowing global economy, the collapse of the petrodollar, and the drastic drop in Wall Street bonuses. In short: a sudden loss of confidence that a greater fool may emerge just around the corner, which in turn has frozen buyer interest.

  And frozen it has.

  According to realtor Town & Country Real Estate, total sales volume in East Hampton fell 53% from a year ago to $44.7 million as the median sale price fell 54% to $2.38 million. In fact, a drop this steep has not been observed since the financial crisis. 

  

  A beachfront residence is seen in East Hampton, New York, March 16, 2016.

  In Southampton, total sales fell 48% from the second quarter of 2015 to $45.3 million, with the median sale price falling 21 percent to $1.65 million, data showed.

  In East Hampton, only 12 homes were sold and 17 in larger Southampton, due to a lack of inventory and because sales typically lag when the stock market underperforms, said Judi Desiderio, chief executive at Town & Country.

  “This is just a shift of the needle that I expected because 2014 was a high cycle for the high end,” said Desiderio, who says luxury home sales in the Hamptons run in seven-year cycles. The stock market surged 30 percent in 2013, with record sales in excess of $100 million set the following year.

  In the 12 submarkets that make up the Hamptons, sales volume slipped 18 percent from a year ago, with the median price falling to $999,000 from $1.1 million, Town & Country data showed.

  Sales in the Hampton submarkets of Shelter Island and Sag Harbor surged after several years of poor performance. The median sale price in Sag Harbor jumped 37 percent to $1.43 million, and 27 percent to $950,000 in Shelter Island.

  Despite the clear crash, local tealtors remain hopeful: third-quarter sales should pick up, in part because Wall Street touched record highs the past week and because the summer months are usually better, Desiderio said.  Then again, if they don’t, what is merely a trickle of selling now will become an all out liquidation as the greater fool bid is now officially dead.

  

  

• It Is A Smoking Gun – Prince Bandar And Other Saudis Financed The 9/11 Terrorists

  Submitted by Justin Raimondo via Anti-War.com,

  News reports about the recently released 28 pages of the Joint Inquiry into the 9/11 attacks are typically dismissive: this is nothing new, it’s just circumstantial evidence, and there’s no “smoking gun.” Yet given what the report actually says – and these news accounts are remarkably sparse when it comes to verbatim quotes – it’s hard to fathom what would constitute a smoking gun.

  To begin with, let’s start with what’s not in these pages: there are numerous redactions. And they are rather odd. When one expects to read the words “CIA” or “FBI,” instead we get a blacked-out word. Entire paragraphs are redacted – often at crucial points. So it’s reasonable to assume that, if there is a smoking gun, it’s contained in the portions we’re not allowed to see. Presumably the members of Congress with access to the document prior to its release who have been telling us that it changes their entire conception of the 9/11 attacks – and our relationship with the Saudis – read the unredacted version. Which points to the conclusion that the omissions left out crucial information – perhaps including the vaunted smoking gun.

  In any case, what we have access to makes more than just a substantial case: it shows that the Saudi government – including top officials, such as then Saudi ambassador to the US, Prince Bandar bin Sultan, and other members of the royal family – financed and actively aided the hijackers prior to September 11, 2001.

  Support for at least two of the hijackers when they arrived in the US was extended by three key individuals:

  • Omar al-Bayoumi – Bayoumi was clearly a Saudi intelligence agent: the FBI all but identifies him as such. His salary was paid for by companies directly owned and operated by the Saudi government, although he apparently rarely showed up for “work.” He was directly subsidized by the wife of then Saudi ambassador Prince Bandar, and these subsidies were substantially increased when the hijackers arrived in the US. It was Bayoumi who hovered over two of the hijackers – Nawaf al-Hamzi and Khalid al-Midhar – as soon as they arrived in the United States. He got them an apartment, co-signed the rental agreement, chauffeured them around – and helped them obtain information on flight schools.

  • Osama Bassnan – This individual, who, according to the report, has “many ties to the Saudi government,” boasted to an informant that he did more for the two hijackers than Bayoumi. He was certainly in a position to do so, since he lived directly across the street from them in San Diego. The FBI characterized him as “an extremist and supporter of Osama bin Laden”: like Bayoumi, his longtime associate – with whom he was in constant communication at the time of the hijackers’ American sojourn – Bassnan was subsidized by the Saudi royal family, and specifically Prince Bandar and his wife. A search of Basnan’s apartment turned up indications that he had cashiers checks amounting to $74,000. Bandar’s wife’s account had a standing arrangement to send monthly checks to Basan’s wife for “nursing services.” There is no evidence that such services were ever performed. The suppressed 28 pages cite direct payments from Prince Bandar to Basnan:

    “On at least one occasion, Bassnan received a check directly from Prince Bandar’s account. Accordion to the FBI, on May 14, 1998, Bassnan cashed a check from Bandar in the amount of $15,000. Bassnan’s wife also received at least one check directly from Bandar She also received one additional check froth Bandar’s wife, which she cashed on January 8, 1998 for 10,000.”

  • Shayk Fahah al-Thumairy – He was a diplomat at the Saudi consulate in Los Angeles and imam of the King Fahad mosque, which is a focal point of Muslim-Saudi activity in the area. US intelligence avers that “initial indications are that al-Thumairy may have had a physical or financial connection to al-Hamzi and al-Midhar.” Both attended the King Fahad mosque. Thumairy was interviewed by US law enforcement after fleeing to Saudi Arabia, and denied having any contact with the two hijackers – in spite of evidence that he was in telephonic contact with them. This, he asserted, was an attempt to “smear” him.

  The two hijackers had extensive contacts with Saudi naval officers in the United States, according to telephone records. And when Abu Zubaydah, one of the accused 9/11 conspirators, was captured in Pakistan, they found the phone number of a Colorado company that managed “the affairs of the Colorado residence of the Saudi Ambassador.” Prince Bandar is practically the star of the suppressed 28 pages – no wonder the Bush administration, which had close ties to him, fought so hard to keep this secret.

  The 28 pages also reveal that an individual – name redacted – associated with al-Qaeda and the hijackers sneaked into the US, avoiding Customs agents and the INS due to the fact that he was traveling with a member of the Saudi royal family. We are also told that “Another Saudi national with close ties to the Saudi Royal Family, [redacted], is the subject of FBI counterterrorism investigations and reportedly was checking security at the United States’ southwest border in 1999 and discussing the possibility of infiltrating individuals into the United States.”

  The Saudi government’s financial and operational ties to at least two of the 9/11 hijackers are myriad, and largely substantiated. Furthermore, although some of these links as detailed in the 28 pages are tentative, it’s important to remember that this report was written in 2002, and that the intelligence community was strongly admonished to follow up because lawmakers deemed the lack of investigation into the Saudi connection “unacceptable.” So what did they find out in the fourteen years after that admonition was delivered? Inquiring minds want to know….

  Prince Bandar went on to become head of Saudi intelligence: his personal relationship with the Bush family is well-known, and his access to US government officials – and his powerful influence in Washington – makes his starring role in the nurturing of the two hijackers into a gun that, while not quite smoking, is exuding vapors of a highly suggestive nature.

  “Circumstantial evidence”? Perhaps – but people have been convicted of murder on the basis of such evidence, and, in this case, there is such a preponderance of evidence that a guilty verdict is unavoidable.

  It would not be stretching the evidence to bluntly state that the suppressed 28 pages of the Joint Inquiry report on the 9/11 terrorist attacks places agents of the Saudi government at the epicenter of the plot. In short, there’s no two ways about it: the Saudis did 9/11.

  Why did our government cover up this shocking evidence for so long?

  The reason is because they had no desire to retaliate against the real perpetrators of 9/11. Instead, as we now know, they were determined to pin the blame on Saddam Hussein: indeed, the Bush administration pressed this talking point relentlessly, until it was forced to backtrack. We attacked Iraq, in the words of neocon grise eminence and top Bush administration official Paul Wolfowitz, because it was “doable.” A years long neoconservative campaign to target Iraq gained new impetus in the wake of 9/11, and the administration and its journalistic camarilla pushed the lie that Iraq was behind the attack. The evidence that the Saudis were involved had to be suppressed – because the Bush administration’s war plans depended on it.

  Now that we know the truth, what do we do about it?

  To begin with, if any other government had connections to a terrorist attack on the US of this nature, their capital would’ve been a smoking ruin. I’m not suggesting we do that, but at the very least the Saudis must be made to pay a high price for their complicity, starting with a moratorium on all US aid and arms sales to the Kingdom. We imposed trade sanctions on Russia for far less. Cutting off the Saudis from the US banking system should put a crimp in their extensive international network of terror-financing and money-laundering. And I know it’s too much to expect a public statement from our President pointing out that a US “ally” aided and abetted those who murdered over 3,000 people on 9/11, but I can dream, can’t I?

  The Saudis aren’t our allies: as the 28 pages make all too clear, they are our deadly enemies. And they ought to be treated as such.

  

  

• Millennials Face An Existential Crisis: "It Won't Be A Short Period Of Difficulty"

  Authored by John  Mauldin, originally posted at MauldinEconomics.com,

  Psychologists from Sigmund Freud forward have generally agreed: our core attitudes about life are largely locked in by age five or so. Changing those attitudes requires intense effort.

  Neil Howe and William Strauss took this obvious truth and drew an obvious conclusion: if our attitudes form in early childhood, then the point in history at which we live our childhood must play a large part in shaping our attitudes.

  It’s not only early childhood, however, that forms us. Howe and Strauss think we go through a second formative period in early adulthood. The challenges we face as we become independent adults determine our approach to life.

  These insights mean we can divide the population into generational cohorts, each spanning roughly 20 years. Each generation consists of people who were born and came of age at the same point in history.

  These generations had similar experiences and thus gravitated toward similar attitudes.

  At this year’s Strategic Investment Conference, Howe illustrated the point with this cartoon. (I think we should now add an illustration of a couple texting on their phones, saying “Let’s tell our friends online first.”)

  

  Amusing, yes, but true. Young love, a universal experience, took different forms for Americans who grew up in the 1950s vs. the 1970s vs. the 1990s. Ditto for many other aspects of life.

  Four generational archetypes: Heroes, Artists, Prophets, & Nomads

  In their book The Fourth Turning, Howe and Strauss identified four generational archetypes: Hero, Artist, Prophet, and Nomad. Each consists of people born in a roughly 20-year period. As each archetypal generation reaches the end of its 80-year lifespan, the cycle repeats.

  Each archetypal generation goes through the normal phases of life: childhood, young adulthood, mature adulthood, and old age. Each tends to dominate society during middle age (40–60 years old) then begins dying off as the next generation takes the helm.

  This change of control from one generation to the next is called a “turning” in the Strauss/Howe scheme. The cycle repeats on a “fourth turning” as a new hero generation comes of age and replaces the nomads. Each fourth turning, however, is a great crisis.

  (The turnings have their own characteristics, which I describe in detail in this article. Today’s economic and political landscape, unfortunately, makes it clear we are about halfway through the fourth turning.)

  Now, let’s get back to the archetypes and see how they match the generations alive today.

  

  The characteristics of each archetype aren’t neatly divided by the calendar; they are better seen as evolving along a continuum. (This is a very important point. It’s why we get trends and changes, not abrupt turnarounds. Thankfully.) People born toward the beginning or end of a generation share some aspects of the previous or following one.

  Hero generations are usually raised by protective parents. Heroes come of age during a time of great crisis. Howe calls them heroes because they resolve that crisis, an accomplishment that then defines the rest of their lives.

   

  Following the crisis, heroes become institutionally powerful in midlife and remain focused on meeting great challenges. In old age, they tend to have a spiritual awakening as they watch younger generations work through cultural upheaval.

   

  The G.I. Generation that fought World War II is the most recent example of the hero archetype. They built the US into an economic powerhouse in the postwar years and then confronted youthful rebellion in the 1960s.

   

  Further back, the generation of Thomas Jefferson and James Madison, heroes of the American Revolution, experienced the religious “Great Awakening” in their twilight years.

   

  Artists are the children of heroes, born before and during the crisis. They are, however, not old enough to be an active part of the solution. Highly protected during childhood, Artists are risk-averse young adults in the post-crisis years.

   

  They see conformity as the best path to success. They develop and refine the innovations forged in the crisis. Artists experience the same cultural awakening as heroes but from the perspective of mid-adulthood.

   

  Today’s older retirees are mostly artists, part of the “Silent Generation” that may remember World War II but were too young to participate. They married early and moved into gleaming new 1950s suburbs.

   

  The Silent Generation went through its own midlife crisis in the 1970s and 1980s before entering a historically affluent, active, gated-community retirement.

   

  Prophet generations experience childhood in a period of post-crisis affluence. Having not seen a real crisis, they often create cultural upheaval during their young adult years. In midlife, they become moralistic, values-obsessed leaders and parents. As they enter old age, prophets lay the groundwork for the next crisis.

   

  The postwar Baby Boomers are the latest prophet generation. They grew up in generally comfortable times with the US at the height of its global power. They expanded their consciousness when they came of age in the “Awakening” period of the 1960s. They defined the 1970s/1980s “yuppie” lifestyle and are now entering old age, having shaped the culture by virtue of sheer numbers.

   

  Nomads are the fourth and final archetype. They are children during the “Awakening” periods of cultural chaos. Unlike the overly indulged and protected prophets, nomads go through childhood with minimal supervision and guidance. They learn early in life not to trust society’s basic institutions. They come of age as individualistic pragmatists.

   

  The most recent nomads are Generation X, born in the 1960s and 1970s. Their earliest memories are of faraway war, urban protests, no-fault divorce, and broken homes.

   

  Now entering midlife, Generation X is trying to give its own children a better experience. They find success elusive because they distrust large institutions and have no strong connections to public life. They prefer to stay out of the spotlight and trust only themselves. Their story is still unfolding today.

  Millennials are a new hero generation

  After the nomad archetype, the cycle repeats with another hero generation: the Millennials (born from 1982 through about 2004) are beginning to take root in American culture.

  They are a large generation numerically, filling schools and colleges and propelling new technology into the mainstream. If the pattern holds, they will face a great crisis. It will influence the rest of their lives… just as World War II shaped the G.I. Generation heroes.

  It’s not going to be a short period of difficulty. It will be an existential crisis, one in which society’s strongest institutions collapse (or are severely challenged and stressed) and national survival is in serious doubt. The Crisis can be economic, cultural, religious, military, or all the above.

  Using Neil Howe’s timeline, we are currently about halfway through the fourth turning. We may have another decade to go. Maybe not. We’ll figure this out soon.

  

  

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• Why Hillary Clinton's Email Case Is Still Not Closed

  Authored by Eric Zuesse, originally posted at Strategic-Culture.org,

  Normally, when the head of the FBI under one President says something like «no reasonable prosecutor would bring such a case», as the FBI reported regarding Hillary Clinton's emails, that would be the end of the matter; but Clinton actually still isn’t off the prosecutorial hook of this criminal case, unless and until she becomes President herself.

  The decision as to whether or not to prosecute her on this matter is not made by the FBI Director, but by the Attorney General. The current one, Loretta Lynch, was appointed by (and holds her job at the discretion of) the man who has endorsed Ms Clinton to become his own successor: the current US President, Barack Obama. If Clinton doesn’t become the next President, the next Attorney General won’t be appointed by Clinton, and that person will then be making any decision as to whether or not to present the Clinton emails case to a grand jury; and, if an indictment results, then to present it to a trial jury.

  Even the Obama appointee to be the FBI’s chief, Mr Comey, introduced his statement there, by acknowledging that «there is evidence of potential violations of the statutes regarding the handling of classified information». As regards his opinion that «no reasonable prosecutor would bring such a case», reasonable prosecutors already have brought such cases, and they have won convictions on these cases. So, just based on that record, Mr Comey clearly lied there.

  The independent journalist who goes by the pseudonym 'Tyler Durden' headlined, only a day after Mr Comey on July 5^th exonerated Ms Clinton, «Meet Bryan Nishimura, Found Guilty For ‘Removal And Retention Of Classified Materials’», and that conviction was won on the same statute for which Comey as Clinton’s would-be policeman, jury, and judge, has peremptorily exonerated her (exonerated his own next boss if she becomes President). «Durden», at his famous Zero Hedge site, noted: «Here is the FBI itself, less than a year ago, charging one Bryan H. Nishimura, 50, of Folsom [California], who pleaded guilty to ‘unauthorized removal and retention of classified materials’ without malicious intent, in other words precisely what the FBI alleges Hillary did (h/t@DavidSirota)». He linked to this case. If that’s not the spitting-image of what Clinton was investigated by the FBI for, then nothing is – but Nishimura did far less of that crime than Clinton did – and yet he was sentenced «to two years of probation, a $7,500 fine, and forfeiture of personal media containing classified materials. Nishimura was further ordered to surrender any currently held security clearance and to never again seek such a clearance». As America’s President, Ms Clinton wouldn’t even qualify to receive the CIA’s daily national security brief. But, according to Mr Comey, «no reasonable prosecutor would bring such a case». He simply lied.

  Furthermore, even before Comey had announced Clinton’s exoneration, Josh Gersten at Politico had already headlined on 27 May 2016, «Sub sailor’s photo case draws comparisons to Clinton emails», and he reported that, «A Navy sailor entered a guilty plea Friday in a classified information mishandling case that critics charge illustrates a double standard between the treatment of low-ranking government employees and top officials like former Secretary of State Hillary Clinton and ex-CIA Director David Petraeus … To some, the comparison to Clinton’s case may appear strained. Clinton has said none of the information on her server was marked classified at the time. In many cases, it was marked as unclassified when sent to her by people in the State Department more familiar with the issues involved».

  However, even Mr Comey noted in his statement of exoneration of Ms Clinton, that, among the tens of thousands of Clinton’s emails that were able to be recovered after she had tried to destroy them all, were the following: «Eight of those [email]chains contained information that was Top Secret at the time they were sent; 36 chains contained Secret information at the time; and eight contained Confidential information, which is the lowest level of classification. Separate from those, about 2,000 additional e-mails were 'up-classified’ [by the State Department during its reconstruction of her email record] to make them Confidential; the information in those had not been classified at the time the e-mails were sent». Some of the emails that Clinton had tried to destroy had, in fact, been marked «Confidential», «Secret», and even «Top Secret».

  Consequently, when Politico’s reporter, Mr Gersten, exonerated Clinton by saying (and leaving it at that), «Clinton has said none of the information on her server was marked classified at the time. In many cases, it was marked as unclassified when sent to her by people in the State Department more familiar with the issues involved», he was quoting (without even challenging) a liar. That standard (Hillary’s having been sending and receiving information that was classified at the time) was reported by Mr Comey to have actually been met, for her prosecution – Comey simply chose to deny that reality, by then saying, «no reasonable prosecutor would bring such a case». He undeniably lied.

  On July 6^th (the same day as the report from «Tyler Durden»), the Hillary Clinton propaganda-site Slate headlined, from their Fred Kaplan, «The Hillary Clinton Email Scandal Was Totally Overblown: We learned nothing new from the investigation or James Comey’s statement». He wrote: «Did she commit a crime? Would anyone else – a lower-ranking official, someone who’s not a presidential candidate, someone who’s not named Clinton – have been charged with a crime? Absolutely not. And Comey said as much. ‘Our judgment,’ he said, ‘is that no reasonable prosecutor would bring such a case.’ In the annals of the Justice Department’s history, he went on, ‘we cannot find a case that would support bringing criminal charges on these facts’». That type of ‘reporting’ is called stenographic ‘journalism’: it’s exactly what America’s press did with regard to ‘Saddam’s WMD,’ for which fabricated reason we invaded Iraq in 2003. Stenographic ‘journalism’ is still the US norm. The American press hasn’t changed since then.

  On July 9^th, Salon bannered «DOJ veterans weigh in on FBI Director James Comey’s handling of Clinton email probe», and reported many serious irregularities – and false assertions by Comey – in the FBI Director’s handling of this matter.

  However, the huge scandal of the FBI’s handling of this matter goes far deeper than any of this, because the real mega-scandal here is that the FBI were extremely selective in regards to what federal criminal laws they would investigate her for having possibly broken. There are at least six federal criminal laws which accurately and unquestionably describe even what Ms Clinton has now publicly admitted having done by her privatized email system, and intent isn’t even mentioned in most of them nor necessary in order for her to be convicted – the actions themselves convict her, and the only relevance that intent might have, regarding any of these laws, would be in determining how long her prison sentence would be.

  I have already presented the texts of these six laws (and you can see the sentences for each one, right there), and any reader can easily recognize that each one of them describes, without any doubt, what she now admits having done. Most of these crimes don’t require any intent in order to convict (and the ones that do require intent are only «knowingly… conceals», or else «with the intent to impair the object’s … use in an official proceeding», both of which «intents» would be easy to prove on the basis of what has already been made public – but others of these laws don’t require even that); and none of them requires any classified information to have been involved, at all. It’s just not an issue in these laws. Thus, conviction under them is far easier. If a prosecutor is really seeking to convict someone, he’ll be aiming to get indictments on the easiest-to-prove charges, first. That also presents for the prosecutor the strongest position in the event of an eventual plea-bargain. As Alan Dershowitz said, commenting on one famous prosecution: «They also wanted a slam-dunk case. They wanted the strongest possible case». Comey didn’t. His presentation was simply a brazen hoax by him. That’s all.

  That’s the real scandal, and nobody (other than I) has been writing about it as what it is – a hoax. But what it shows is that maybe the only way that Clinton will be able to avoid going to prison is by her going to the White House. Either she gets a term in the White House, or else she gets a (much longer) term in prison – or else our government is so thoroughly corrupt that she remains free as a private citizen and still above the law, even though not serving as a federal official.

  If Donald Trump doesn’t soon start talking about each one of those six laws, then his supporters should be asking him whether he himself is hiding something, because those six laws make crystal-clear that Hillary Clinton committed serious crimes, such that, even if she is convicted only on these six slam-dunk statutes (and on none other, including not on the ones that Comey was referring to), she could be sentenced to a maximum of 73 years in prison (73=5+5+20+20+3+10+10). Add on others she might also have committed (such as the ones that Comey was referring to, all of which pertain only to the handling of classified information), and her term in prison might be lengthier still.

  Motive is important in Ms Clinton’s email case, because motive tells us why she was trying to hide from historians and from the public her operations as the US Secretary of State: was it because she didn’t want them to know that she was selling to the Sauds and her other friends the US State Department’s policies in return for their million-dollar-plus donations to the Clinton Foundation, and maybe even selling to them (and/or their cronies) US government contracts, or why? However, those are questions regarding other crimes that she might have been perpetrating while in public office, not the crimes of her privatized email operation itself; and those other crimes (whatever they might have been) would have been explored only after an indictment on the slam-dunks, and for further possible prosecutions, if President Obama’s people were serious about investigating her. They weren’t. Clearly, this is selective ‘justice’.

  So, the basic question here is: Is this a democracy, at all? Or, are some people just brazenly above the law?

  

   

  The character and content of this country are at stake here. This issue is important not only as substance, but as symbolism. Of course, that’s also true with any criminal conviction or refusal even to prosecute; but, in Clinton’s email case, the symbolism is simply enormous: it’s a bold statement, to the entire world, about today’s America, and about whether this government’s routine pontifications, regarding other nations’ not being «democratic», are little – if at all – more than a very black pot deriding some kettle for not being sufficiently white. A crony-capitalist country is in no moral position to dictate anything to the rest of the world. Hiding what it is (a foul oligarchy), only makes what it is, even worse, and more dangerous. Its allies – in NATO, the EU, and elsewhere – are then members of an international gang, which has no justifiable reason even to exist, and which is incredibly harmful not only to their own people, but to all nations. And, if the next US President refuses to prosecute this case, then the continuation of hiding it, the continuation of that cover-up, will not only be blatant; it will show, to the entire world, that nothing short of a revolution can rectify the situation in America. If this country is that crooked at the top, what can it be down below?

   

  

  

• A Message To Pokemaniacs: "Think About Your Life Choices"

  Now that a Google april fools’ joke appears to have spawned the zombie apocalypse, one local landlord has finally had enough.

  

  h/t @StigAbell

  Then again, where else will the non-Pokemummified part of the population apply all those anti-zombie skills acquired while watching the Walking Dead…

  

  

• Baton Rouge Killer Was Racist Member Of "Nation Of Islam", Railed Against 'Crackers' On YouTube

  The 29 year old ex-marine, Gavin Eugene Long, who ambushed and killed three unsuspecting Baton Rouge police officers on Sunday morning, hated those who did not share his skin-tone and harbored a particular hatred for the police. As revealed in the hours after the shootings, a Youtube account operated by Long under the handle I Am Cosmo where the alleged killer posted dozens of clips, provides insight into what motivated the young man to kill three police officers and wound  three more on his 29th birthday.

  In the Youtube videos, Long rants against “crackers, and makes multiple references to the July 5th killing of Alton Sterling at the hands of police officers only five miles away from Sunday’s attack. The videos also detail that Long is a member of the Nation of Islam, labelled a hate group by the Southern Poverty Law Center for its black supremacist and racist views towards Jews, Asians, and whites which the group’s leaders argue have “sucked the blood from and exploited the black community.

  As Daily Caller details, the 29-year-old was a native of Kansas City, Missouri and was honorably discharged from the Marines in 2010 after reaching the rank of E-5. He preferred to go by the name Cosmo Ausar Setepenra rather than Gavin Eugene Long.

  In a video published on Thursday, the racist shooter says that “If I would have been there with Alton – Clap” before promoting a book that he wrote that discusses black liberation ideology. “I wrote it for my dark-skinned brothers,” said Long. “If you look at all the rebels like Black Panthers, Huey P. Newton, Malcolm X, and Elijah Muhammad, they was light-skinned. But we know how hard y’all got it.”

  Phone numbers on buildings in the video show that it was filmed in Baton Rouge. Calls placed to the numbers were not answered because they were out of service.

  “I just got here I’m not really into the protesting. I do education because that’s our real freedom,” he is heard telling two men in the video. He called protesting “emotional” and “for the women.”

  In another video recorded while Long was in Dallas after the police shooting, he laid out his thoughts on protesting, oppresion and how to deal with bullies. Nothing too earthshattering there.

   

  Long, who operated a self-motivation website called “Convos with Cosmo,” also appears to have tweeted hours before the attack unfolded. In one video posted in recent weeks, Long left a cryptic message that may have foretold Sunday’s attack. And though he said he was once a member of the Nation of Islam, the radical sect led by Louis Farrakhan, Long also said that he had no affiliations with outside groups.

   

  “I thought my own thoughts. I made my own decisions. I’m the one who’s got to listen the judgement. That’s it. And my heart is pure,” he said.

  “If anything happens with me, because I’m an alpha male, I stand up, I stand firm, I stand for mine, until the end,” he said. “Yeah, I also was a Nation of Islam member. Don’t affiliate me with it. Don’t affiliate me with anything.”

  Just 4 days ago on his Twitter account (under the handle @ConvosWithCosmo), Long wrote that violence is not the answer but “at what point do you stand” up so your people dont become extinct. Four days later he answered his own question.

  Violence is not THE answer (its a answer), but at what point do you stand up so that your people dont become the Native Americans…EXTINCT?

  — Convos With Cosmo (@ConvosWithCosmo) July 13, 2016

  Another time he tweeted “have u ever seen white people march for the things they needed”?

  Have u ever seen white people march for the things they needed?

  — Convos With Cosmo (@ConvosWithCosmo) July 11, 2016

  The assailant also suggested that the black community should buy only from black-owned businesses rather than “working for the white people.”

  In one video Long is heard lamented “working for the white people.” He encouraged one man riding in his vehicle as he filmed using a body camera to shop only at black-owned businesses. He brought up a hypothetical scenario in which a family member who wanted to buy carpet was forced to buy from non-black business owners saying – “Who’s she going to f— with? The cracker, the Arab, the Chinese?”

  “These Arabs, these Indians, they don’t give two fucks about us,” said the shooter.

  Come to think of it, he may have a point.

  

  

• America Wastes Half The Food It Produces While Hunger Runs Rampant Around The Globe

  Submitted by Michael Snyder via The Economic Collapse blog,

  Is the United States the most wasteful nation on the entire planet?  We are all certainly guilty of wasting food.  Whether it is that little bit that you don’t want to eat at the end of a meal, or that produce that you forgot about in the back of the refrigerator that went moldy, the truth is that we could all do better at making sure that good food does not get wasted.  It can be tempting to think that wasting food is not a big deal because we have so much of it, but an increasing number of people around the world are really hurting these days.  In fact, it has been estimated that there are more than a billion hungry people around the globe right now.  So as a society we need to figure out how to waste a whole lot less food and how to get it into the mouths of those that really need it.

  According to the U.S. Department of Agriculture, close to a third of all food in the United States gets wasted after it gets to the store.  This is commonly referred to as “downstream” waste.  When you add all of this “downstream” waste up, it comes to a grand total of 133 billion pounds of food each year…

  Nearly a third of the 430 billion pounds of food produced for Americans to eat is wasted, a potential catastrophe for landfills and a wake-up call to officials scrambling to feed the hungry, according to a stunning new report from the Department of Agriculture.

   

  The just-issued report revealed that in 2010, 31 percent, or 133 billion pounds, of food produced for Americans to eat was wasted, either molded or improperly cooked, suffered “natural shrinkage” due to moisture loss, or because people became disinterested in what they purchased.

  How many people do you think we could feed with 133 billion pounds of food?

  But that isn’t all of the food that we waste.  In addition to “downstream” waste, we also have to add “upstream” waste to the equation.  Massive amounts of food are wasted each year because American consumers don’t want to eat fruits and vegetables that are “imperfect”.  The following comes from the Guardian…

  Americans throw away almost as much food as they eat because of a “cult of perfection”, deepening hunger and poverty, and inflicting a heavy toll on the environment.

   

  Vast quantities of fresh produce grown in the US are left in the field to rot, fed to livestock or hauled directly from the field to landfill, because of unrealistic and unyielding cosmetic standards, according to official data and interviews with dozens of farmers, packers, truckers, researchers, campaigners and government officials.

  And I know that as a consumer I am guilty of this.  Just yesterday, I was picking through the apricots at the grocery store looking for the prettiest ones that I could find.  Of course they were all good to eat, but most of us are in the habit of wanting produce that looks as “perfect” as possible.

  As a result, a lot of perfectly good food that may look a little ratty ends of being wasted…

  “Sunburnt” or darker-hued cauliflower was ploughed over in the field. Table grapes that did not conform to a wedge shape were dumped. Entire crates of pre-cut orange wedges were directed to landfill. In June, Kirschenman wound up feeding a significant share of his watermelon crop to cows.

  As the Guardian article quoted above noted, when you add “downstream” waste and “upstream” waste together, we end up wasting about half our food.

  This is tragic, because there are a whole lot of people in our own country that could use this food.  According to one estimate, there are 49 million Americans dealing with food insecurity.  But if we didn’t waste nearly half our food, we could likely feed just about everyone sufficiently.

  Globally, about one-third of all food is wasted. That is better than the U.S. number, but it is still way too high.

  At this point, we just don’t have a lot of resources to waste.  So many people are suffering these days, and this includes an explosion of crushing poverty in the country that is hosting the Olympics this summer.  Just yards away from the primary stadium that will be used by the Olympic games, people actually have raw sewage running through their homes…

  In the Mangueira ‘favelas’ no more than 750m away from the Maracana stadium in Rio de Janeiro, which will host the Rio 2016 Olympic Games, young families are living in makeshift houses with no sanitation.

   

  The stadium will stage both the opening and closing ceremonies for the Olympics in August, and as global superstars such as Usain Bolt, Mo Farah, Jessica Ennis-Hill and Justin Gatlin take to the track, the favela residents will be dealing with raw sewage running through their homes.

  It has been estimated that more than 20 percent of the population of Rio lives in “favelas”.  But instead of doing something for those people, the government of Brazil has spent hundreds of millions of dollars hosting the World Cup and the Olympics.

  What is wrong with that picture?

  Meanwhile, things continue to get even worse elsewhere in South America.  In Venezuela, 47 percent of the country can no longer provide three meals a day for their families, and the lack of toilet paper has become a national crisis…

  Venezuela’s government said it occupied Kimberly-Clark Corp.’s local plant, days after the company had halted operations because of shortages of raw materials in the socialist crisis-stricken country.

   

  “Kimberly-Clark will continue producing for all Venezuelans and is now in the hands of the workers,” Labor Minister Oswaldo Vera said Monday in a televised address from the company’s plant in central Aragua state, before signing an order to take it over, according to WSJ. The labor ministry claims Kimberly-Clark had violated Venezuelan law by firing more than 900 workers without consulting the government.

   

  “It doesn’t matter who’s running the factory,” said Henkel Garcia, director of the Caracas business consultancy Econometrica told WSJ. “The bottom line is that there are no raw materials that anyone can afford to import.”

  As the global economy continues to deteriorate, the need to waste less food and less resources will become even more acute.  Over the past several decades, we have grown accustomed to not even thinking twice about wasting food.  In fact, I rarely come across parents that insist that their children finish everything on their plates these days.

  But in the not too distant future, things are going to completely change.  Even in the United States, we will eventually get to the point where every scrap of food is considered to be precious.

  We are moving into a time when wasting nearly half our food will no longer be an option, and so we should start coming up with better ways of doing things as soon as we can.

  

  

• PoCa-HYPoCRiTe, PACToNS and $HiTTiNG BuLL…

  

  

• "Not A White Problem"

  Submitted by Jim Quinn via The Burning Platform blog,

  The statistics in the chart below are representative of every Democrat controlled urban shithole city in America. Obama and his anti-gun activist minions are peddling a false narrative about guns because they understand most Americans are dumber than a sack of hammers and easily manipulated by propaganda. Obama uses every high profile shooting to blame guns, in order to deflect people from seeing the truth. And the truth is guns are not a problem in white America.

  It’s only a problem in the urban ghettos with the toughest gun laws run by Democrat mayors and city councils. Chicago is a perfect example of Obama ignoring the real problem. Fifty years of welfare programs and treating black people like victims has created a dysfunctional system leading to hopelessness, crime, and perpetual poverty. Chicago is 32% white, but they commit only 3.5% of the murders. Over 96% of the murders are committed by non-whites. Essentially, it is young black men murdering other black men. White people are not in the equation and are not part of the problem. It’s a black problem framed as a gun problem by Obama and his lying apparatchiks.

  

   

  There are approximately 8,000 gun related homicides annually in the U.S. The vast majority occur in the urban ghettos and are committed by blacks and hispanics against other blacks and hispanics. They use illegally acquired guns, so more gun laws will do nothing. Their lawless culture, requiring no personal responsibility by those who father children, creates the dysfunction and crime. The urban ghetto kill zones all have the same thing in common – run by liberal Democrats for decades, with poverty created by their welfare policies, dreadful public schools, and a black population who don’t work and take no personal responsibility for their lives or their children.

  Here are the murders by city for a sampling of these shitholes:

  • Los Angeles – 587
  • Chicago – 508
  • NYC – 333
  • Detroit – 316
  • Phila – 248
  • Baltimore – 233
  • New Orleans – 150
  • Indianapolis – 129
  • Memphis – 124
  • St. Louis – 120
  • Newark -112
  • Milwaukee – 104
  • Washington DC – 103

  There are dozens of other shitholes like Camden, Kansas City, Atlanta, Oakland, Pittsburgh, and Miami with extremely high murder rates, and in every case more than 90% are committed by non-whites. Why don’t you hear Obama giving speeches about black communities policing themselves and taking responsibility for the crime, drugs and murder in their neighborhoods? He has no problem with proclamations about white people clinging to their guns in middle America where there are virtually no murders.

  The entire gun narrative peddled by liberals is false. The crime rate has been falling for 25 years. There were 24,703 murders in 1991 when the population was 253 million. Murders in 2014 totaled 14,249 with a population of 317 million. The willfully ignorant American public completely buys the falsehoods presented by Obama and believes murders and crime are skyrocketing.

  Today, the national crime rate is about half of what it was at its height in 1991. Violent crime has fallen by 51 percent since 1991, and property crime by 43 percent. In 2013 the violent crime rate was the lowest since 1970. And this holds true for unreported crimes as well. According to the National Crime Victimization Survey, since 1993 the rate of violent crime has declined from 79.8 to 23.2 victimizations per 1,000 people.

  

  So, with homicides at a 25 year low and completely confined to the urban ghettos where young black men kill other young black men, we need new gun laws to restrict what white people can own? It makes you wonder. Why has the government militarized local police forces across the country in white communities when crime and murder is virtually non-existent in those communities? Why is Obama and his liberal nazi hordes trying to ban any gun capable of providing defense against a tyrannical government? Why has this become a war on whites when it is solely a black problem? It’s almost as if the government is treating working class whites with guns as the enemy. I wonder.

  

  

• 29-Year-Old Black Male Dead After Killing 3 Cops, Wounding 3 More In Baton Rouge "Cowardly" Ambush

  Summary:

  • Three police officers were shot to death Sunday and three others wounded in Baton Rouge, the same city where Alton Sterling was killed two weeks ago, after they responded to a call of shots fired when they were attacked by at least one gunman, Baton Rouge Mayor Kip Holden said. The three officers had died in what he described as "an ambush-style deal."
  • The gunman, who has been killed, has been identified as 29 year old, black male named Gavin Eugene Long of Kansas City, Missouri. CBS News reports the suspect gunned down three Baton Rouge police officers on his birthday. He was born July 17, 1987.
  • According to CBS News, Long was honorably discharged from the Marines in 2010.
  • Authorities initially believed that two other assailants might be at large, but hours later said the dead gunman was the only person who fired at the officers. However, a state police spokesman said investigators were unsure whether he had some kind of help from others. “We are not ready to say he acted alone,” Major Doug Cain said.
  • President Barack Obama condemned the "attack on law enforcement in Baton Rouge" and vowed that justice would be done. "We may not yet know the motives for this attack, but I want to be clear: There is no justification for violence against law enforcement. None. These attacks are the work of cowards who speak for no one," Obama said in a statement.
  • Sen. Bill Cassidy told CNN “there’s a war right now on police.”

  A timeline of today's events:

  • About 9 a.m.: Less than one mile from police headquarters, shots fired at police officers from the Baton Rouge Police Department and the East Baton Rouge Sheriff's Office. Five officers are rushed to Our Lady of the Lake Hospital. Three are dead on arrival, one is in serious condition and another in fair condition. One gunman is killed while two other possible suspects are at large. The scene of the shooting remains active as police continue their search of the area. State SWAT officers arrive, and a robot is sent in to scan for explosive devices.  A witness told television station WAFB that he saw a masked man in black shorts and shirt running from the scene where the three officers were killed.
  • 12:06 p.m.: Louisiana Gov. John Bel Edwards tweets a statement calling the act "unspeakable" and "unjustified."
  • 12:30 p.m.: Dallas police chief David Brown, whose department lost five officers last week in their own ambush of police, tweets support to Baton Rouge.

  Live Feed:

   

  Update 18: Hillary Clinton condemned the attack on law enforcement in Baton Rouge. In a statement on Sunday afternoon the Democratic presidential nominee said, "There is no justification for violence, for hate, for attacks on men and women who put their lives on the line every day in service of our families and communities."

  * * *

  Update 17: A spokesman for the Louisiana state police says they believe the gunman who killed three officers in Baton Rouge was the only shooter but that officials are unsure whether he had accomplices.

  Major Doug Cain said Sunday, "we are not ready to say he acted alone." Cain says two people had been detained in another town called Addis, which is near Baton Rouge, and called them "persons of interests."

  * * *

  Update 16: Baton Rouge gunman identified as 29 year old, black male named Gavin Eugene Long of Kansas City, Missouri.

  * *  *

  Update 15:   The governor of Louisiana says the attack on law enforcement in Baton Rouge was unjustified. Gov. John Bell Edwards told media Sunday afternoon that the gunman committed, "an absolutely unspeakable, heinous attack."  Edward says the hatred has got to stop.Three officers are confirmed dead in the attack outside a store in Baton Rouge about a mile from police headquarters early Sunday morning. Three others are injured. The gunman was fatally shot.

  Police added there is no active shooter in Baton Rouge where three police officers were killed Sunday morning. Col. Mike Edmonson told media, "We believe that the person who shot and killed our officers that he was the person that was shot and killed at the scene.

  * * *

  Update 14 –  Attorney General Loretta Lynch, responding to the police shootings Sunday in Baton Rouge, Louisiana, says there is no place in the United States for such appalling violence.

  In a statement issued Sunday, Lynch says she condemns the shooting deaths of three officers and the wounding of several others "in the strongest possible terms." She also is pledging the full support of the Justice Department as the investigation unfolds. The attorney general says Agents from the FBI and Alcohol, Tobacco and Firearms are on the scene, and Justice Department will make available victim services and federal funding support, and provide investigative assistance to the fullest extent possible.

  Lynch says everyone's hearts and prayers are with the fallen and wounded officers, their families and the entire Baton Rouge community in "this extraordinarily difficult time."

  * * *

  Update 13 – The White House releases a statement proclaiming "There is no justification for violence against law enforcement. None."

  

  *  *  *

  Update 12 – Confirmation of multiple suspects:

  A sheriff's spokesman in Baton Rouge said earlier that one suspect is dead and two others are believed to be at large.

  *  *  *

  Update 11 – Louisiana GOP delegation issues statement from Cleveland on BatonRouge: "We will stand united and prayerful against evil"

  

  *  *  *

  Update 10 – Donald Trump respons to Baton Rouge police shootings… (via Facebook)

  We grieve for the officers killed in Baton Rouge today.

   

  How many law enforcement and people have to die because of a lack of leadership in our country?

   

  We demand law and order.

  *  *  *

  Update 9 – It just got serious – President Obama has been made aware of the murders…

  The White House says President Barack Obama has been briefed on the shooting of police officers in Baton Rouge, Louisiana, and has asked to be updated throughout the day as more details become available.

   

  The White House has been in contact with local officials in Baton Rouge and offered any assistance necessary.

   

  Obama spent most of last week focused on trying to reduce tensions and helping build trust between police and the communities they serve.

  It's not working!

  *  *  *

  Update 8 – Police in Louisiana say they are using a specialized robot to check for explosives near the body of a suspect who was shot and killed in Baton Rouge early Sunday.
   

  VIDEO: Footage shows the moment suspect(s) open fire at police in Baton Rouge.- @CBSNews/@WAFB pic.twitter.com/EMiI7PIFSn

  — Conflict News (@Conflicts) July 17, 2016

   

  The suspect is believed to have been involved in the shooting of law enforcement officers in the Louisiana city early Sunday. Three officers are dead and three are hospitalized with injuries. The shooting occurred less than 1 mile from police headquarters

  *  *  *

  Update 7 – Reports of shots fired at Cortana Mall in Baton Rouge

  *  *  *

  Update 6 – BATON ROUGE OFFICERS ARE IN AN ARMED STANDOFF WITH ONE OF THE SUSPECT via @pzf

  * * *

  Update 5 – CBS adds that while 1 suspect is dead, 2 other suspects may still be at large.

  

  * * *

  Update 4 – the East Baton Rouge Sheriff's office reports that while the scene is still active, it is now "contained"

  JUST IN: East Baton Rouge Sheriff: Scene 'Still Active, But Contained'https://t.co/Ot5An1XmiG pic.twitter.com/gmtm44d9Ez

  — Breaking911 (@Breaking911) July 17, 2016

  Update 3 – BREAKING NEWS: BATON ROUGE POLICE CONFIRM THREE SHOOTERS INVOLVED. ONLY 1 DETAINED – BREAKING NEWS FEED

  * * *

  Update 2 – AT LEAST 8 POLICE OFFICERS SHOT IN BATON ROUGE – WAFB

  

  Update 1 – CNN is reporting

  

  Three officers are feared dead after a shooting in Baton Rouge, Louisiana, officials said.

  Kip Holden, the mayor-president of East Baton Rouge Parish, said authorities were still trying to get a handle on the situation, but added, "The count is three officers dead possibly."

  The victims may include police officers and sheriff's deputies.

  "There is still an active scene. They are investigating," he said. "Right now we are trying to get our arms around everything."

  *  *  *

  As we detailed earlier, police have closed streets between Baton Rouge Police Headquarters and I-12 where at least three law enforcement officers have been shot. According to local media WBRZ, shots were fired around 9 a.m. Sunday morning kicking off a manhunt for the shooter or shooters. There is an active shooter situation in the area of Airline and Old Hammond Highways according to The Advocate. A police spokesperson was not ready to release specifics as of yet.

  Obviously, police-community relations in Baton Rouge have been especially tense since the killing of 37-year-old Alton Sterling, a black man killed by white officers earlier this month after a scuffle at a convenience store.

  A witness told WBRZ News 2, a man was dressed in black with his face covered shooting indiscriminately when he walked out between a convenience store and car wash across from Hammond Air Plaza.

  “The scene seems to be contained right now,” said Sgt. Don Coppola, Baton Rouge Police Department. “We’re asking everyone to stay out of the area.”

  * * *

  While we hope it is unrelated, it is notable that ovenright WBRZ reported that Baton Rouge residents gathered Saturday afternoon to form the newest chapter of the New Black Panther Party.  The New Black Panthers arrived in Baton Rouge last Saturday to protest the officer-involved shooting death of 37-year-old Alton Sterling. Two videos of the shooting sparked national outcry and protests across Baton Rouge.

  Jerald Justice said the group was approached by local residents like Edwin Smith to help establish a Baton Rouge chapter. 

   

  “It is time for new leadership and a new organization to step forward in Baton Rouge,” Smith said. “I feel like the New Black Panther Party is the organization that can bring new leadership to Baton Rouge.”

   

  Founders met Saturday to formally establish the chapter as well as gather names for new members. WBRZ News 2’s Earl Phelps was able to briefly attend the event on the condition that he does not reveal the meeting’s location.

   

  “With the help of the New Black Panther Party, these members should be able to handle any or everything in their city,” Justice said.

   

  Over the course of five days, authorities arrested 185 protesters in Baton Rouge. Friday, District Attorney Hillar Moore said that his office will not prosecute 100 protesters who were only charged with misdemeanor crimes.

   

  Justice said that the Black Panthers were involved in the protests, but none of their members were arrested or were carrying guns during the demonstrations.

  * * *

  Live Feed:

  *  *  *

  

  SWAT now on scene…

  State Police SWAT now on scene pic.twitter.com/r3Eni4aODL

  — Michael Vinsanau (@MVinsanau) July 17, 2016

   

  

  Multiple police ????….on Air Line Hwy. Right now. #BatonRouge pic.twitter.com/vhdR3N9r1H

  — Biko Misabiko (@BikoTheGreat) July 17, 2016

   

  

  

• U.S. Warships Surround Disputed Chinese Waters, Prepared For War: "WWIII At Stake"

  Submitted by Mac Slavo via SHTFPlan.com,

  

  Territorial disputes are a delicate thing… and potentially deadly as well.

  That’s why the U.S. is backing up its positions with an ever-increasing presence of warships  in the South China Sea.

  China is very touchy about these territories, and unwilling to give up what they perceive as their waters, even as a UN tribunal just denied their claims and strengthened the U.S. hand.

  Indeed, the entire situation is combustible and very dangerous.

  As James Holbrooks of the Underground Reporter noted:

  In a congressional hearing on Wednesday, former Director of National Intelligence and retired Navy admiral Dennis Blair told the panel that the United States should be prepared to use military force to oppose Chinese aggression in the South China Sea.

   

  “I think we need to have some specific lines and then encourage China to compromise on some of its objectives,” Blair, who headed the U.S. Pacific Command while in the Navy, said at the hearing.

   

  The admiral’s recommendation came the day after a United Nations tribunal invalidated China’s claim of territorial rights to nearly all of the waters in the South China Sea.

   

  The U.S., citing the territorial dispute and security concerns raised by its allies in the region, have for months been sending warships into the South China Sea as a check against Chinese hostility.

   

  Beijing, acutely aware of the military buildup off its coast, has publicly warned the U.S. it’s more than ready to defend against provocations. “China hopes disputes can be resolved by talks… but it must be prepared for any military confrontation.”

  It seems that the situation is being deliberately stoked into conflict, and that tensions are programmed to reach a boiling over point. If true, there is no indication of where the point of no return would be.

  The U.S. has the excuse of protecting its ally, and former territory, the Philippines, and thus has a pretext to play policeman in the region.

  But in turn, that is only a thinly-veiled ruse to amplify the military pressure, and let bloated speech and menacing saber-rattling episodes set the tone for ‘diplomacy’ with the Red Dragon.

  Now, there is not only an escalation, but an acknowledgement on both sides of the Pacific that things are headed towards war – and it is being openly discussed in those stark terms:

  “If our security is being threatened, of course we have the right to demarcate a zone,” Vice Foreign Minister Liu Zhenmin said Wednesday at a briefing in Beijing. “We hope that other countries will not take this opportunity to threaten China and work with China to protect the peace and stability of the South China Sea, and not let it become the origin of a war.”

   

  And war, it appears, is becoming increasingly likely by the day — with other countries in Southeast Asia beginning to take sides.

   

  […]

   

  So, with the U.S. demanding compromise from a China who refuses to bow down — and forcing local powers to choose sides in the process — it seems the stage is being set for a potential military conflict in the South China Sea that could engulf the entire region.

  Are we really to expect a looming world war from China, who has played the parts of villain, ally, trade partner and rival all at the same time?

  No one can say, but there is plenty of worry that war could really happen. Even billionaire George Soros warned that the potential danger of WWIII breaking out with China was ‘not an exaggeration’:

  The US government has little to gain and much to lose by treating the relationship with China as a zero-sum game. In other words it has little bargaining power. It could, of course, obstruct China’s progress, but that would be very dangerous. President Xi Jinping has taken personal responsibility for the economy and national security. If his market-oriented reforms fail, he may foster some external conflicts to keep the country united and maintain himself in power. This could lead China to align itself with Russia not only financially but also politically and militarily. In that case, should the external conflict escalate into a military confrontation with an ally of the United States such as Japan, it is not an exaggeration to say that we would be on the threshold of a third world war.

  And yet, President Obama and numerous other U.S. officials have been deliberately stoking the tension and adding fuel to the fire with provocation in the disputed waters.

  As Michael Snyder wrote several months ago:

  Barack Obama sent a guided missile destroyer into disputed waters in the South China Sea to see if the Chinese would start shooting at it. Yes, this is what he actually did. Fortunately for us, the Chinese backed down and did not follow through on their threats to take military action. Instead, the Chinese have chosen to respond with very angry words. The Chinese ambassador to the United States, Cui Tiankai, says that what Obama did was “a very serious provocation, politically and militarily.” And as you will see below, a state-run newspaper stated that China “is not frightened to fight a war with the US in the region”. So why in the world would Obama provoke the Chinese like this? Yes, the Chinese claims in the South China Sea are questionable. But there are other ways to resolve things like this.

   

  Most Americans assume that an actual shooting war between the United States and China is not even within the realm of possibility, but many of our leaders see things very differently. For instance, just check out what CIA Deputy Director Michael Morell thinks…

   

  The current posturing in the area has led to heightened tensions between the world’s preeminent military powers, and in May Former CIA Deputy Director Michael Morell told CNN that the confrontation indicates there is “absolutely” a risk of the U.S. and China going to war sometime in the future.

  Not long ago, the U.S. also demonstrated ballistic missiles – armed with nuclear warheads – over the coast of California in an apparent demonstration towards China regarding the readiness and seriousness of their clash.

  Though it isn’t on the front burner right now amid other sensational headlines, keep an eye to the fact that World War III is slowly being brewed on the back burner. Someday, it could ignite into a full blown nightmare. Stay vigilant. Hope for peace, prepare for war.

  

  

• The Struggling Norwegian Economy Illustrated in Charts

  Submitted by Alexander Grover in Oslo, Norway

  The Norwegian Economy Illustrated in Charts
  

  Norges Bank continues to hold rates at .5%, signaling an upward bias but willing to cut if needed, depending on unforeseen external shocks like BREXIT. In my opinion, they really don’t know what to do while the country heads for stagflation (simultaneous rising unemployment and inflation).  They are in a “damned if they do and damned if they don’t situation.”

  As the currency weakens, import prices rise.  If they raise rates to quell inflation, they will slow down an already lethargic economy and may burn down the housing market in the process. If they cut, inflation will continue to accelerate.  Staying put appears to be the best option, waiting for the oil sector continues to recover.  However, then they are betting against the engineering profession, determined to drive down extraction costs or make oil irrelevant. Rising rig counts in America and the return of Iran and Libya to the marketplace further dim hope for North Sea oil.

  Siv Jensen (Finance Minister) stated that the Norwegian economy is “Rock Solid.”  Instead, it is more like ice (in reverse): solid only under specific (temperature and pressure) conditions and wobbly otherwise, unable to support a meaningful load.   Above the $70/barrel threshold, the Norwegian economy is invincible, able to support generous social programs while making deposits to sovereign wealth fund (referred to as The Fund). Below $70, “the ice melts;” the rate of which depends on the ambient temperature above freezing.  If the oil is only slightly below $70, The Fund could cover budget gaps indefinitely, replenishing the drawdown with capital gains, interest and dividend payments.  Perhaps they could levy some new taxes as well.  However, when substantially below the key threshold, the melting accelerates, drawing down the fund quicker than it can be restored.  

  Although, The Fund holds over $800 billion, covering near-term budget gaps with ease. Waiting for $70/barrel is like waiting for hell to freeze over or the Americans to join the EU.  Also, The Fund carries various risks, investing mostly in US and European based assets.  The big question is when will Norwegian housing prices peak and reverse course. That day is impossible to predict.

  The goal of this article is to give normal hardworking people insight into what is happening around them, which is difficult to comprehend. The following charts and commentary examine the underlying economy:

  Real Interest Rates:

  
  Sources: Norges Bank (The Norwegian Central Bank) and SSB.no (Norwegian Statistics Bureau)

  
  Sources: US Federal Reserve and Bureau of Labor Statistics

  The real interest rate, which subtracts inflation from the nominal one, is already negative, meaning that saving is losing. The weakening currency also makes Norwegian companies susceptible to foreign takeover, sending the profits abroad. Real interest rates should be at least zero and ideally positive, enticing people to put their money into the bank.  Compared to the USA, which is also facing headwinds, Norway’s negative rate situation is accelerating.  Negative rates make it difficult to sell bonds and the public starts to lose trust in the currency. People generally want to be rewarded for parting with their cash during a given period.  Moreover, negative rates cause the public to question their government.  Central banks and Governments can normalize rates to zero either by either raising rates or quelling demand, which brings down inflation, using various methods: allowing unemployment to rise, raising taxes or “open mouth operations.” Central bankers often posture, talking a lot, attempting to maintain the delicate balancing act without actually touching anything.

  In Layman’s terms: I would never lend money to any person or entity, knowing that I will get back less in the future, even if guaranteed or “risk-free.” I would prefer to invest in whiskey, cigarettes or keep my money in the mattress.  

  Negative interest rates, combined with digitalized currency (most transactions in Norway are cashless), raises an important question: What is a “bank?” In the past, it was a place with a secure vault where people could deposit their cash. The banks would lend this money, after doing extensive due diligence, to those who needed to buy a home or wanted to start a business. Since there were many banks, they had to entice depositors by paying interest. If the currency is digital, potentially storable on a USB stick, on iTunes or in my Dropbox account, and bank interest rates are negative, charged to store your money, then what is the bank’s purpose? Perhaps lending? However, with peer to peer lending platforms like Viventor, an investor can lend directly to a borrower, authenticated and verified during the signup process. The investor and borrower can work out interest rates and collateral agreements between themselves or with a lawyer, arranged by the platform, signing documents at the notary or even online, using Altinn and electronic signatures.  The investor can be an individual with some “bits” socked away on a USB stick, hidden in the attic, or a cash-rich company, like Leroy Seafood Group.  So, once again, ask yourself, “what is a bank?” 

  It is worth noting that it’s better to pay the one-time 2% fee (1% in and 1% out and no storage fees) with the new BitGold platform than it is to deposit money in a bank or buy bonds. (this is not a paid endorsement nor advice but a simple observation. It remains to be seen if BitGold is legitimate or another Mt.Gox). 

  Real Economic Growth

  
  

  Sources: Norges Bank and SSB.no

  Even with negative interest rates, supposedly encouraging people to withdraw their money from the bank and spend, the economy continues to decline when accounting for inflation. Stating economic growth, without considering inflation, is a common parlor trick. Although goods and services production increased, it is discounted by the cost of inputs rising faster. 

  In Layman’s terms, one gets a pay raise for 200 NOK per month, but rent goes up by 210 per month.  You may feel richer, but you are falling behind. 

  Oil Prices

  

  

  Source: Baker Hughs and EIA

  

  Source: Rystad Energy via CNN

  As oil approaches $50/barrel, American rig counts (mainly fracking) started to recover.  The idle rigs are portable and able to be restarted with ease. The other 1400 may either end up in Ukraine or Poland or moved to new locations. This scenario is plausible since the US now has more untapped oil than Saudi Arabia or Russia. Therefore, Øystein Olsen’s (Head of Norges Bank) prediction last year, oil recovering to $65, may be another case of misplaced optimism. Although oil has recovered, it seems to be having difficulty in the high $40’s. Recently there was a surprise inventory build in the US, supporting the thesis that betting against innovation is risky at best.     

  
  Source: Government.no and Statsbudsjettet.no  

  70% of lottery winners end up bankrupt: Sudden wealth creates a sense of euphoria, making the lottery winner think they are invincible and powerful, like Batman. They often give away too much money to friends and family. They start expecting more and more, becoming difficult to turn off the spigot and reverse course. New millionaires often neglect to seek help, managing their fortune for the long term. Norway won the lottery back in 1969. Initially, they managed responsibly, creating a The Fund, adding surpluses on the back of consistently strong oil prices.

  Perhaps, to get elected or appointed, politicians told voters that they could sit back and collect the dividends when the oil is gone.  They assumed that stocks, bonds and real estate, in financial centers, are constants or absolutes and not variables, subject to natures whims.  Life in paradise would go on. Economic diversification would take care of itself.  Selling apps to iPhone users would be the new economy, replacing petroleum. There was nothing to worry about. After all, “even when it rains in Norway, the sun is still shining!” Nevertheless, the budget is more or less the same, ticking up, while tax revenues decline, falling $3 billion (25 BNOK) year-over-year, and The Fund’s holdings are at risk.  Let’s hope that Norway does not go the way of most lottery winners.   

  Unemployment, Oil Prices & Inflation:

  

  Sources: EIA (Energy Institute of America) and SSB.no

  The Norwegian economy mostly depends on oil and therefore unemployment rises as oil falls.  Normally, rising unemployment mitigates inflation, cooling demand, causing prices to fall. However, this inflation is from the supply side and not demand driven.  The cost of imported inputs, priced in foreign currencies, are rising regardless of demand.

  Consumer Debt:

  
  Source: SSB.no

  All the while, consumer debt keeps rising, mostly driven by lending for apartments. Debt levels are higher now than they were during the 2007-2008 financial crisis. If Norges Bank were forced to raise interest rates by ca. 3%, getting real rates to zero, safeguarding the Krone, it would be catastrophic to the average person. Their loan payments would skyrocket. We can expect debts to rise since many have “Champaign taste but only beer money.” There may be other troubles ahead for indebted consumers. DnB, Norway’s largest bank, reported huge and unexpected loan losses, attributed to the struggling oil sector. DnB and other banks may be forced to make this up by raising consumer rates and fees.

  Trade Balance

  
  Source: Google Finance

  
  Sources: SSB.no and EIA

  
  Sources: Norges Bank and SSB.no

  Declining currency theoretically boost exports. That has not been the case for Norway. Although fish and knit sweaters have seen the benefit, the overall balance is down because no one needs expensive oil (the leading export). These charts indicate that there is an urgent need for new and substantial export related industries.

  Conclusions & Thoughts:

  Norges Bank, although seeming reluctant to cut rates, may have to do so, trying to stimulate the economy and postpone housing’s day of reckoning (defined as the price when real rates are zero). To correct the current imbalances, either productivity will have to grow by leaps and bounds, getting more done with less or interest rates will have to jump, guarding the Krone against people like Kyle Bass and George Soros (currency shorts).  Norges Bank has already joined the BREXIT bailout party, injecting $2.73 billion into the banks and readying rate cuts, indicating that going negative to support GDP growth is an option.  

  We are also seeing the introduction of socialist solutions applied to free market problems, predicted last year.  The Oslo Municipality purchased 154 properties for ca. $60 million (514 MNOK), mostly in the more affluent west side of the city, to house refugees. The total 2016 budget for this programs is ca. $105 million (885 MNOK).  The European/Bernie Sanders approach, giving people free stuff without responsibility and incentive, does nothing to empower them. Being unemployed in a good neighborhood, where everyone knows the government pays or subsidizes the rent, could make things worse for both the refugees and society as a whole.  Consider that there are 24 hours in a day.  Eight are for sleep; two are for getting ready and meals and another two for fitness and transportation. What are the consequences of idling people for the remaining twelve hours? Let’s be honest. At the micro (personal) level, Norwegian (in general) society is not that open or welcoming.  Winters are long and brutal, further making contact difficult. Isolation, alienation, combined with not much to do in a culture that generally discourages achievement, being the best you can (Janteloven), can’t lead to anything good. Only a person with incredible will power and a strong “compass” can overcome such barriers.  If Norway is going to continue with their ideological approach, saving the world, perhaps they need to re-examine their culture at the individual level. People need the pursuit or hunt when obtaining income. It is rewarding, building confidence. The culture may need an adjustment, embracing merit, defining character through hard work and encouraging upward mobility, encouraging immigrants to get in the game and excel. The current welfare society model only works when there is money growing on trees (North Sea Oil).

  In my opinion, the better approach, mimicking the US Homestead Act, would be to settle them in areas where there are labor shortages, giving them an opportunity to earn their way. Northern Norway (Nordland and Finnmark) needs thousands of people as of May 2016.  America takes refugees. In fact, it’s the top country for resettlement.  However, I never heard of refugees being settled in Midtown Manhattan – all expenses paid.  If this happened, I am sure many Americans would toss their identification, quit their jobs and line up at the refugee center, claiming to be from somewhere else.

  When I was in college, I had an Afghan roommate. His parents settled as refugees in central Kansas, taking a job at a meat packing factory.  The saved their money and eventually started their own business. Through the process of work, dealing with adversity, and moving forward, day by day, they became an integral part of the community, paying taxes and adding to the economy. The process of struggle and advancement made them stronger, self-assured and, eventually, affluent. Hence, a proper integration strategy, matching economic needs and limitations, needs to be developed.

  Øystein Olsen stated, in September 2015, that he has no problem with inflation hitting 3.5% and saw it moderating to 3%. He is also predicted better times in 2017 with unemployment peaking at 3.4%. It is already H2-2016, and the latest inflation print (June 2016) is 3.7%.  As of June 2016, unemployment hit 4.6%, still considered full employment. Nevertheless, the rate of increase is worrisome.   If unemployment continues to rise, the national and local governments may have to buy more apartments, supporting housing while tax and oil revenues decline. That will further stress the budget, resulting in withdrawals from The Fund.

  Skepticism is very much ingrained into the Norwegian psyche. Hence, I remain skeptical that the Norwegian Government and Central Bank can deal with the coming crisis in a way where the people, who did honest work but were tricked into “drinking the Kool-Aid,” are least affected, and those responsible take the brunt of the damage. I suspect that they will tell the public to sacrifice for the greater good (banks and large corporations) without telling the whole story. 

  Bankruptcy means that those who fail in business or banking must liquidate their assets, selling to those who were saving and living modestly, to get their debts forgiven. Those who got them in debt may also be at risk for irresponsible lending. They attempt to build an enterprise with a better business model at lower cost, catering to current needs. In the case of a bank failure and housing. The failed bank would liquidate their loan portfolio at a discount, passing on the benefit to borrowers. For example, the buyer of this paper acquires a loan with a 4 MNOK obligation, paying 3% interest, for a distressed price. Let’s say 2 MNOK. They could then settle with the struggling homeowner, offering a revised loan of 2.2 MNOK at 4% interest. Both sides win while asset prices move to sustainable levels. (It’s the same things as when a pizzeria in New Jersey goes bankrupt, selling their equipment for pennies on the dollar to an aspiring entrepreneur. The new guy gets into the game, starting a new business at lower cost, and life goes on. Often, he will hire failed entrepreneur because he still knows how to make a good pizza but not allow him near the cash register.) 

  Oil prices (Brent on EIA.gov) averaged $77/barrel from the beginning of 2007 to the end of 2009 whereas they are hovering under $50 per barrel today – well under the $70/barrel threshold.  Therefore, managing that crisis compared to the coming one is the difference between misplacing your wallet, finding it a few hours later with $50 missing, versus losing your job at middle age to robot automation while having a huge mortgage and spoiled kids enrolled in a private college.  Sounding an alarm, Tine Choi, Nordea analyst, located in Denmark, warned about negative interest rates leading to hyper-inflation (article in Danish). She warns that we are in uncharted territory. She warns that a massive bond sell-off would spike inflation, causing interest rates could explode. Hence, the concern is extending past those of us seen as “wearing tin foil hats.” 

  I still do not foresee Norges Bank buying gold to hedge against unprecedented times or working with Stortinget (parliament) to engineer a soft landing, bringing us back to balance.  I do not see the Cultural Ministry acknowledging that the current Bernie Sander’s like approach to society lacks the necessary mathematical foundation for long-term sustainability. I only see a lot more inflation than forecast.  

  So what to do?

  Start by aiming your skepticism towards the government instead of those wearing tin foil hats or living in bunkers. Contact your politicians and voice concerns about the banks, potentially having a monopoly to store your digital money, at a forced loss (real negative interest rates). Also push for gold and silver to get status as money instead of as an asset, ensuring personal inflation protection. That is possible in a democracy. The British did BREXIT, and the predicted fallout appears to have been hyped. Already, Americans, Chinese and Indians are “lining up” to make agreements. The GBP is already moving back up; The Bank of England did not panic.  Moreover, don’t forget that the Icelanders voted in a new government after a major banking scandal. I have faith that Norwegians will start waking up and using their democracy, preserving the way of life.

  Description	4-Jan-16	15-Jul-16	Change
  GOLD in NOK (per ounce)	9,536	11,345	19%
  Oslo Børs (Stock Exchange)	601	622	4%
  Oslo Apartments (NOK/sqm)*	60,606	68,883	14%
  Oslo Apartments (USD/sqm – calculated)	6,846	8,226	20%
  Oslo Apartments (Oz Gold/sqm – calculated)	6.36	6.07	-4%
  USDNOK	8.8525	8.3737	-5%
  * SSB.no Table 05963 Freeholder – average apartment price per sqm. Price from 2015 Q4 (YE) to 2016 Q2

  Source: See Links – There are alternatives to dollars, housing, and stocks.

  
  Source: BitGold.com – When you buy gold, you are ”buying the inflation” and then some.  

  

  

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• Surging "Intercommunity Confrontations" In France Mean "Civil War Is Inevitable"

  Submitted by Yves Mamou via The Gatestone Institute,

  • For French President François Hollande, the enemy is an abstraction: "terrorism" or "fanatics".

  • Instead, the French president reaffirms his determination to military actions abroad: "We are going to reinforce our actions in Syria and Iraq," the president said after the Nice attack.

  • So confronted with this failure of our elite who were elected to guide the country across nationals and internationals dangers, how astonishing is it if paramilitary groups are organizing themselves to retaliate?

  • In France, the global elites made a choice. They decided that the "bad" voters in France were unreasonable people too stupid to see the beauties of a society open to people who often who do not want to assimilate, who want you to assimilate to them, and who threaten to kill you if you do not. The elite took the side against their own old and poor because those people did not want to vote for them any longer. They also made a choice not to fight Islamism because Muslims vote collectively for this global elite.

  "We are on the verge of a civil war." That quote did not come from a fanatic or a lunatic. No, it came from head of France's homeland security, the DGSI (Direction générale de la sécurité intérieure), Patrick Calvar. He has, in fact, spoken of the risk of a civil war many times. On July 12^th, he warned a commission of members of parliament, in charge of a survey about the terrorist attacks of 2015, about it.

  French police shoot dead a Tunisian-born Islamist terrorist who murdered 84 people in Nice, France, July 14, 2016. (Image source: Sky News video screenshot)

  In May 2016, he delivered almost the same message to another commission of members of parliament, this time in charge of national defense. "Europe," he said, "is in danger. Extremism is on the rise everywhere, and we are now turning our attention to some far-right movements who are preparing a confrontation".

  What kind of confrontation? "Intercommunity confrontations," he said — polite for "a war against Muslims." "One or two more terrorist attacks," he added, "and we may well see a civil war."

  In February 2016, in front of a senate commission in charge of intelligence information, he said again: " We are looking now at far-right extremists who are just waiting for more terrorist attacks to engage in violent confrontation".

  No one knows if the truck terrorist, who plowed into the July 14^th Bastille Day crowd in Nice and killed more than 80 people, will be the trigger for a French civil war, but it might help to look at what creates the risk of one in France and other countries, such as Germany or Sweden.

  The main reason is the failure of the state.

  1. France is at War but the Enemy is Never Named.

  France is the main target of repeated Islamist attacks; the more important Islamist terrorist bloodbaths took place at the magazine Charlie Hebdo and the Hypercacher supermarket of Vincennes (2015); the Bataclan Theater, its nearby restaurants and the Stade de France stadium, (2015); the failed attack on the Thalys train; the beheading of Hervé Cornara (2015); the assassination of two policemen in Magnanville in June (2016), and now the truck-ramming in Nice, on the day commemorating the French Revolution of 1789.

  Most of those attacks were committed by French Muslims: citizens on their way back from Syria (the Kouachi brothers at Charlie Hebdo), or by French Islamists (Larossi Abballa who killed a police family in Magnanville last June) who later claimed their allegiance to Islamic State (ISIS). The truck killer in Nice was Tunisian but married to a French woman, whith whom he had three children together, and lived quietly in Nice until he decided to murder more than 80 people and wound dozens more.

  After each of these tragic episodes President François Hollande refused to name the enemy, refused to name Islamism — and especially refused to name French Islamists — as the enemy of French citizens.

  For Hollande, the enemy is an abstraction: "terrorism" or "fanatics". Even when the president does dare to name "Islamism" the enemy, he refuses to say he will close all Salafist mosques, prohibit the Muslim Brotherhood and Salafist organizations in France, or ban veils for women in the street and at university. No, instead, the French president reaffirms his determination for military actions abroad: "We are going to reinforce our actions in Syria and Iraq," the president said after the Nice attack.

  For France's president, the deployment of soldiers in the homeland is for defensive actions only: a deterrent policy, not an offensive rearmament of the Republic against an internal enemy.

  So confronted with this failure by our elite — who were elected to guide the country through national and international dangers — how astonishing is it if paramilitary groups are organizing themselves to retaliate?

  As Mathieu Bock-Côté, a sociologist in France and Canada, says in Le Figaro:

  "Western elites, with a suicidal obstinacy, oppose naming the enemy. Confronted by attacks in Brussels or Paris, they prefer to imagine a philosophical fight between democracy and terrorism, between an open society and fanaticism, between civilization and barbarism".

  2. The Civil War Has Already Begun and Nobody Wants to Name It.

  The civil war began sixteen years ago, with the second Intifada. When Palestinians executed suicide attacks in Tel Aviv and Jerusalem, French Muslims began to terrorize Jews living peacefully in France. For sixteen years, Jews — in France — were slaughtered, attacked, tortured and stabbed by French Muslim citizens, supposedly to avenge Palestinian people in the West Bank.

  When a group of French citizens who are Muslims declares war on another group of French citizens who are Jews, what do you call it? For the French establishment, it is not a civil war, just a regrettable misunderstanding between two "ethnic" communities.

  Until now, no one wanted to establish a connection between these attacks and the murderous attack in Nice against people who were not necessarily Jews — and name it as it should be named: a civil war.

  For the very politically correct French establishment, the danger of a civil war will begin only if anyone retaliates against French Muslims; if everyone just submits to their demands, everything is all right. Until now, no one thought that the terrorist attacks against Jews by French Muslims; against Charlie Hebdo's journalists by French Muslims; against an entrepreneur who was beheaded a year ago by a French Muslim; against young Ilan Halimi by a group of Muslims; against schoolchildren in Toulouse by a French Muslim; against the passengers on the Thalys train by a French Muslim, against the innocent people in Nice by an almost French Muslim were the symptoms of a civil war. These bloodbaths remain seen, to this day, as something like a tragic misunderstanding.

  3. The French Establishment Considers the Enemy the Poor, the Old and the Disappointed

  In France, who most complains about Muslim immigration? Who most suffers from local Islamism? Who most likes to drink a glass of wine or eat a ham-and-butter sandwich? The poor and the old who live close to Muslim communities, because they do not have the money to move someplace else.

  Today, as a result, millions of the poor and the old in France are ready to elect Marine Le Pen, president of the righ-wing Front National, as the next president of the Republic, for the simple reason that the only party that wants to fight illegal immigration is the Front National.

  Because, however, these French old and poor want to vote for the Front National, they have become the enemy of the French establishment, right and left. What is the Front National saying to these people? "We are going to restore France as a nation of French people". And the poor and the old believe it — because they have no choice.

  Similarly, the poor and the old in Britain had no choice but to vote for Brexit. They took the first tool given them to express their disappointment at living in a society they did not like anymore. They did not vote to say, "Kill these Muslims who are transforming my country, stealing my job and soaking up my taxes". They were just protesting a society that a global elite had begun to transform without their consent.

  In France, the global elites made a choice. They decided that the "bad" voters in France were unreasonable people too stupid, too racist to see the beauties of a society open to people who often do not want to assimilate, who want you to assimilate to them, and who threaten to kill you if you do not.

  The global elites made another choice: they took the side against their own old and poor because those people did not want to vote for them any longer. The global elites also chose not to fight Islamism, because Muslims vote globally for the global elite. Muslims in Europe also offer a big "carrot" to the global elite: they vote collectively.

  In France, 93% of Muslims voted for the current president, François Hollande, in 2012. In Sweden, the Social Democrats reported that 75% of Swedish Muslims voted for them in the general election of 2006; and studies show that the "red-green" bloc gets 80-90% of the Muslim vote.

  4. Is the Civil War Inevitable? Yes!

  If the establishment does not want to see that civil war was already declared by extremist Muslims first — if they do not want to see that the enemy is not the Front National in France, the AfD in Germany, or the Sweden Democrats — but Islamism in France, in Belgium, in Great Britain, in Sweden — then a civil war will happen.

  France, like Germany and Sweden, has a military and police strong enough to fight against an internal Islamist enemy. But first, they have to name it and take measures against it. If they do not — if they leave their native citizens in despair, with no other means than to arm themselves and retaliate — yes, civil war is inevitable.

  

  

• Friday Night Lights – Another Brexit moment for FX

  It seems that such events are always planned for the weekend.  News of the attempted Turkish coup reached FX investors just hours before the close.  

  Turkey’s currency is an exotic currency, commonly traded against USD, EUR, and JPY.  Near the close, a huge spike in USD/TRY:

  

  Just as FX traders were worried about not having another Brexit moment for a few more years, only weeks later here’s another.  But this time it happened just before Friday’s close at 5pm NYT so we’ll see how the market opens Sunday night.  

  EUR/USD sold off on the news as well, but only reached its channel lows.

  From CNBC: 

  The U.S. dollar gained as much as 5.5 percent against the Turkish lira after a group within Turkey’s military apparently attempted to overthrow the government on Friday.

  The dollar was last up 4.72 percent against the lira.

  It seems this FX event is a sign, that Europe is going to be full of “Brexit” moments in the coming years, and that FX is going to be the market defining this next epoch of investing.  

  For those who don’t understand Forex, the above chart represents the US Dollar against the Turkish Lira, that means when you see a spike UP, it means US Dollar going UP and Turkish Lira going DOWN.  

  So, here’s another boost to the good ol’ USD, who is now being accused of the coup itself.

  FX traders patiently wait for markets to open, 24 hours from now.

  To learn more about Forex, checkout Splitting Pennies – Understanding Forex the book. 

  

  

• Erdogan's Arch-Enemy Accuses Turkish President Of Staging Coup, Compares Him To Hitler

  Long before Turkey’s president Recep Tayyip Erdogan accused Fethullah Gulen, a Turkish cleric who lives in self-imposed exile on 1857, Mt.Eaton Road in  Saylorsburg, Pennsylvania, last night and again today of being the “terrorist” mastermind behind Friday’s failed coup attempt and demanding – unofficially, on prime time TV but not via diplomatic channels – that the US extradite the 77 year old, he was doing precisely that. For years, Erdogan had used the cleric as a scapegoat punching bag, who had somehow managed to create an entire “parallel state” in Turkey which was just waiting for its opportunity to pounce and snatch Turkey from Erdogan. Hence the perpetual (fake) fear of coups. Hence the public displays of (fake) paranoia. Hence the relentless – and all too real – concentration of power.

  And as many expected, Erdogan once again accused Gulen of being responsible for the Friday coup, no matter how ridiculous such an allegation sounded. This time Turkey went so far as accusing the US of being “behind the coup” for harboring Gulen.  “Today, after this coup attempt, I’m once again calling on you, I’m saying: Extradite this man in Pennsylvania to Turkey now,” Erdogan said on Saturday in televised remarks from Istanbul in a personal appeal to President Barack Obama. Turkey’s secretary of labor, Suleyman Soylu, went one better and told TV channel Haberturk: “The US is behind this coup.”

  As for Gulen’s position, he had denied as recently as yesterday, the accusations and said Saturday morning in an emailed statement through a spokeswoman that he denounced the overnight coup attempt. In a video released by the New York Times, a man appearing to be a doctor measured Mr. Gulen’s blood pressure, possibly to point out the cleric’s ailing health. 

  Gulen in rare interview was assisted by his doctors due to his poor health pic.twitter.com/sNHCpe99gS

  — James FontanellaKhan (@JFK_America) July 16, 2016

  “I don’t know if they are my followers, but because of all things that have taken place (in Turkey) they may have been sympathetic…But honestly, I don’t know any of them,” Mr. Gulen said in the video, shown apparently sitting on a couch in his Pennsylvania home.

  However, for the best explanation of Gulen’s position, one which incidentally also is accurate in describing what happened in Turkey on Friday night, we go to the FT, which was granted a rare interview from Gulen’s residence in rural Pennsylvania and where a “frail Mr Gulen” said accusations by Mr Erdogan that he had masterminded the uprising were absolutely groundless.

  Behind this gate resides Gulen, the man Erdogan accused of plotting the Turkish coup pic.twitter.com/nSEFyqB3rZ

  — James FontanellaKhan (@JFK_America) July 16, 2016

  In fact, as the FT reports, Gulen “has tried to turn the accusation against his political rival by suggesting that Mr Erdogan’s ruling AKP party had staged the uprising.“

  “I don’t believe that the world takes the accusations made by president Erdogan [against me] seriously,” the moderate Islamic preacher said from a room inside his home at the Golden Generation Worship and Retreat Center, nestled in the rolling hills of the Pocono Mountains..

  

  An aerial view of Gulen’s Golden Generation Worship and Retreat Center in rural PA.

  “There is a possibility that it could be a staged coup [by Mr Erdogan’s AKP] and it could be meant for further accusations” against Gulenists and the military, he said.

  Gulen: “There is a possibility that it could be a staged coup (by Mr Erdogan’s AKP) ” pic.twitter.com/s0x4ZQ4PTG

  — James FontanellaKhan (@JFK_America) July 16, 2016

  Considering just how poorly executed the coup was, and how much Erdogan stood to gain by crushing it with the help of a Skyped conversation as he “heroically” flew back to Istanbul, to be followed shortly thereafter by the arrest of nearly 3000 judges and prosecutors, we have a feeling Gulen is spot on in which assessment.

  Gulen then said that he was not worried about being deported from America despite Turkey putting further pressure on the US government to extradite him in the aftermath of Friday’s coup attempt. He said Erdogan’s calls for his extradition were just his latest bluff, as he compared the Turkish president’s political tactics to those of Adolf Hitler’s Nazis in 1940s Germany.“

  It is very clear that there is intolerance among the leadership of the ruling party and the president,” Mr Gulen said, speaking in Turkish and communicating with reporters through a translator.

  “They have confiscated properties and media organisations, broken doors and harassed people in a fashion similar to Hitler’s SS forces,” Mr Gulen said, as he described how his followers in Turkey had been mistreated over recent years by Mr Erdogan’s party.

  Come to think of it…

  

  Then again, maybe Erdogan will get his witch after all.

  The FT adds that in a sign of the rising tension around Mr Gulen, about a dozen people started assembling outside his compound around noon on Saturday, shattering the rural calm that usually surrounds the residence. “The US should stop protecting him,” screamed a woman wearing a headscarf and waving a Turkish flag in her right hand and a flag portraying Mr Erdogan in the other. “Gulen is a criminal,” she shouted as protesters gathered outside the Imam’s residence.

  Watch: A report from Fethullah Gulen’s US compound, where he denied charges of orchestrating Turkey’s military coup.https://t.co/fzzOYab1ID

  — Financial Times (@FT) July 16, 2016

  Meanwhile, Pennsylvania state troopers and a small group of armed private security forces hired by Mr Gulen’s centre were keeping the protests at bay. Gulen told reporters that he had not received any communications from the US government about a potential extradition.

  Here Alp Aslandogan, a media adviser to Mr Gulen, repeated precisely what we said earlier today: Erdogan wants “the best of both worlds, accusing him of being a puppet for the US and also asking the US to extradite him,” Mr Aslandogan said.

  Gulen, who is aged 77, was visibly weak. He suffers from diabetes and heart disease, according to his doctor. The preacher, who has been living in self imposed exile in Pennsylvania since 1999, lives in modest conditions despite the vast expanse of the complex. The FT was able to access his bedroom and praying areas, which were ornately decorated with Islamic art and several Turkish flags.

  Despite accusing Mr Erdogan’s ruling party of having put democracy at risk in Turkey, Gulen said that he was against all kinds of military coups, as he had been a victim of such uprises in the past.

  * * *

  Meanwhile, Erdogan lives in a brand new palace which cost more than $600 million to build, with 1.6 million square feet of floorspace, 1,000 – yes, really – rooms, features thousands of trees imported from Italy at a cost of up to $10,000 each; the taxpayer-footed electricity bill from the palace will run $313K/month.

  

  

• 'Black Lives Matter' Organizer "Triggered" By White People, Demands Money For Being A "Fat, Black Bitch"

  Authored by Paul Joseph Watson, originally posted at InfoWars.com,

  According to ‘Black Lives Matter’ organizer Ashleigh Shackelford, white people aren’t welcome at Black Lives Matter rallies and instead should just hand over “reparations” to black people so that they can purchase new cellphones and laptops.

  In an article for ‘Wear Your Voice’, an “intersectional feminist media” outlet, Shackelford says that she finds the presence of white people at Black Lives Matter rallies “triggering,” and that black people are “frightened” by whites, adding that their roles should be confined to acting as human “buffers against the police”.

  “Why are you going to a protest when you’re the oppressor?” asks Shackelford, adding, “WHITE PEOPLE ARE KILLING US. So when I see white people show up to rally excited and smiling, ready to march like it’s a hobby — I’m disgusted and absolutely fucking livid….I’m ready to fight.”

   

  Decrying the fact that white people are promoting a message of love and unity in the spirit of Martin Luther King, Shackelford complains that, “White people are 400 years too fucking late for a round of applause for a damn tweet with a hashtag, or for showing up to a damn rally.”

  She then pushes the demented dogma that white people living today owe blacks “reparations” for slavery (only 1.4 percent of white Americans owned black slaves at the height of slavery).

  “Nothing you have is yours. Let me be clear: Nothing you have is yours. Also, Let me be see through: Reparations are not donations, because we are not your charity, tax write off, or good deed for the day. You are living off of stolen resources, stolen land, exploited labor, appropriated culture and the murder of our people. Nothing you have is yours,” writes Shackelford.

  

  “Y’all spent hundreds of years selling, mutilating, raping and beating our bodies and labor but you think money doesn’t matter to our freedom and liberation? Cute. Write me a check for this shade because it comes with 400 years of trauma,” she adds.

  Shackelford wants white people to give blacks money so that they can buy cellphones, laptops and land, asserting, “Be ready to write checks and give up your car keys.”

  She then includes a link to her personal Paypal account at the end of the article asking people to send money to support her “emotional and intellectual labor.”

  “Whiteness operates in a way that means that using your privilege “for good” often requires Black folks to still be a position to be “saved” or “in need.” We don’t need white saviorism. We don’t need white people to speak for us. We don’t even really need white people to show up to rallies. We need our reparations, we need intentional disruption that involves high risk and we need y’all to stop playing,” concludes Shackelford, while also straying into extremist rhetoric by asking whites, “Are you willing to kill for us?”

  Shackelford describes herself as a “queer, nonbinary Black fat femme writer, artist, and cultural producer,” because of course she does.

  In some of her other articles, she chastises black men for dating white women, whines about the “backlash” she gets for being “fat and visible” and complains about the “body positivity” movement being too “white”.

  

  In an article entitled Fuck You, Pay Me: Reparations for Fat Black Bitches and Everything We Provide, Shackelford demands that she should be paid money for being a ‘fat black bitch’.

  “FUCK YOU. PAY ME. Pay me a check, pay me consistently, provide me safe housing, offer me a job with benefits, run me those Beyonce tickets, finance my clothes and wigs and aesthetics, cultivate accessibility to spaces and provide seats that fit me, see and validate my humanity,” she demands.

  Shackleford’s role as a ‘Black Lives Matter’ organizer comes as no surprise whatsoever given how divisive the group has become, even to the point of pushing segregation by banning white people from BLM events and rallies.

  Instead of promoting a message of unity and understanding, BLM is appealing to extremist, fringe elements of the far-left and has been completely taken over by social justice warriors like Shackleford, whose absurd and irrational drivel will thankfully ensure the entire movement’s eventual disappearance into obscurity.

  

  

• "This Is Going To Get Very Ugly" – Former Top CIA Officer Says "Obama Has Lost Control Of The Middle East"

  With Thursday’s tragic mass killing by a resclusive, truck-driving Tunisian maniac in Nice having been violently drowned out by the frentic late Friday news of a failed (and perhaps staged) coup in Turkey, the news cycle has once again shifted its attention away from a far greater threat to the global economy than whether Erdogan can concentrate even more power in his grasp. Namely, both lone-wolf and organized terrorism in Europe (and elsewhere). And according to at least one CIA field commander, Gary Bernsten, it is all Obama’s fault.

  As the Hill reports, the decorated former CIA career officer who served in the Directorate of Operations between October 1982 and June 2005, said on Friday that Obama has lost control of the Middle East following attacks in France that left at least 84 dead.  “This is going to get very, very ugly,” Gary Bernsten said on Fox & Friends Friday.

  “The president of the United States, as Newt Gingrich has stated, has failed in his responsibilities to defend the United States. He has lost control of the Middle East. It is in flames, and that is what he will leave when he leaves office.”  One can also make the argument that it is not so much Obama, as his first secretary of state, the person who in less than 4 months may be America’s next president.

  We wonder what Bernsten would add after last night’s even more disturbing events in Turkey. As we just witnessed over the past 24 hours, the Middle East is indeed in flames, and what’s worse, the US has zero control. As Ali Watkins reported overnight,  US officials were caught completely off guard by Friday’s attempted Turkish coup.

  The State Department scrambled to alert citizens in Turkey, urging them to shelter in place and check in with family members in the U.S. The White House said President Obama had spoken with Secretary of State John Kerry, and both urged “all parties” in Turkey to support the democratically elected government of President Recep Tayyip Erdogan and “avoid violence or bloodshed,” but the statement avoided using the word “coup.” 

   

  Across Washington, it was clear that responses were purely reactionary — it took more than two hours after first reports emerged of the violence for the White House to make any public statement. In the hours immediately following the attempted overthrow, officials across the White House, State Department and Pentagon simply said they were monitoring as the situation unfolded. If the U.S. was indeed blindsided by the attempted overthrow Friday afternoon, it will have to take a long, hard look at why such a consequential event — with a NATO ally, no less— took them by such surprise.

   

  As of Friday night, the attempted coup had “no impact” on the U.S.’s military operations in the country, a U.S. official told BuzzFeed News. “[U.S.] air ops have continued from Incirlik. Literally birds in the sky.”

  As of Saturday morning, however, things are very different.

  Ironically, this time Obama lucked out on a major change in the geopolitical arena (perhaps because the entire coup attempt was staged or simply because it was very disorganized); but what happens when this – or another-  key US ally and NATO member undergoes a military coup. Will the US once again have no response? As of this moment, the CIA officer’s assessment is absolutely spot on.

  Former CIA Gary Bernsten: President Obama has failed in his responsibilities to defend the United States.https://t.co/z1ULLuLFUl

  — FOX & Friends (@foxandfriends) July 15, 2016

  He had some parting thoughts about “eliminating” the ISIS threat: “We can take care of these ISIS thugs in about a month.” One still wonders why that hasn’t happened…

  thrilled 2 be back- stunned I left a terror in Turkey & came back 2 another in France we need 2 lead a world counterattack @foxandfriends

  — Brian Kilmeade (@kilmeade) July 15, 2016

  

  

• C.I.A. – Controlling It All

  Via The Daily Bell,

  How the CIA Hoodwinked Hollywood… Since its inception, the agency has wooed filmmakers, producers, and actors in order to present a rosy portrait of its operations to the American public.

   

  –Atlantic

  This is a good article by the Atlantic, a neo-con publication that aspires to be a “thought publication.”

  This article rehashes the history of the CIA in Hollywood and, in fact, is fairly comprehensive and touches on a number of compelling points.

  More;

  The CIA has a long history of “spooking the news,” dating back to its earliest days when the legendary spymaster Allen Dulles and his top staff drank and dined regularly with the press elite of New York and Washington, and the agency boasted hundreds of U.S. and foreign journalists as paid and unpaid assets.

   

  In 1977, after this systematic media manipulation was publicly exposed by congressional investigations, the CIA created an Office of Public Affairs that was tasked with guiding press coverage of intelligence matters in a more transparent fashion.

   

  The agency insists that it no longer maintains a stable of friendly American journalists, and that its efforts to influence the press are much more above board. But, in truth, the intelligence empire’s efforts to manufacture the truth and mold public opinion are more vast and varied than ever before. One of its foremost assets? Hollywood.

  This is an honest appraisal so far as it goes. As is the article’s conclusion:

  With few exceptions, Hollywood has long functioned as a propaganda factory, churning out jingoistic revenge-fantasy films in which American audiences are allowed to exorcise their post-9/11 demons by watching the satisfying slaughter of countless onscreen jihadis.

   

  This never-ending parade of square-jawed secret agents and bearded, pumped-up commandos pitted against swarthy Muslim madmen straight out of central casting has been aided and abetted by a newly emboldened CIA all too happy to offer its “services” to Hollywood.

  The article, thousands of words long, still managed to miss some important points, however.

  It doesn’t provide us with much in the way of a frame of reference. The control that the CIA exercises over Hollywood is multiplied many times by the control the CIA exercises over the communications industry generally.

  At the top of the CIA, executives are responsive to the City of London. Intelligences agencies were manufactured by banking families initially.

  Only later on, were their functions laid off onto governments. Now the cash flow comes from tax dollars, but the agencies themselves are still controlled out of the City.

  This goes for other countries as well, including Israel, which was created by the City, which still runs it.

  It is probably not too much of an exaggeration to say that its spooks run both Facebook and Google – especially given that the CIA invested in both companies when they were just beginning.

  Basically, the Atlantic article makes it sound as if the CIA’s control over Hollywood is evolutionary and even voluntary. This is to misstate the way the CIA works.

  Surreptitious intel operations have doubtless been in charge of Hollywood since its inception. If anyone doubts that, simply take a look at the movies Hollywood produced in the 1930s and especially in the 1940s.

  These days, Hollywood movies have staked their main franchise on superhero movies.

  These superheroes fly high in the sky fighting “bad guys” and determining whether or not the world will be safe and function properly.

  They are above the law and gratitude is always due to them for their exploits.

  The resemblance to the coming implementation of technocracy is undeniable.

  In the world, as it is to be, technocrats running vast corporations will make decisions affecting millions. In fact, they already do.

  Conclusion: This sort of organization and its privileges will not seem unusual to those regarding them. The parallels to today’s movies will already have desensitized people to what is occurring. This is the fundamental paradigm of modern Hollywood, the basic assertion of control.

  

  

• Saturday Humor: Ten Years Later

  Presented with no comment, since we could not have said it any better…

   

  

  Source: @KirkDBorne

  

  

• "Janet Yellen Sounds Like A Fumbling Idiot No Matter What She Does"

  Via FinancialRepressionAuthority.com,

  FRA Co-Founder Gordon T.Long and Jeffrey Snider, Head of Global Investment Research at Alhambra Investment Partners discuss earnings, the Chinese Yuan, Japanese Yen and the falling credibility of central banks.

   

  EARNINGS

  

  “It is no doubt that earnings have been under-performing.”

  What’s even more concerning is that not even is the top line falling off, but the cash flow is falling dramatically and this impacts credit along with everything else. With no earnings and no cash flow it puts us in a high risk environment. The only thing that has been holding up the market has been excessive corporate buybacks which has come out of cash flow, and to a lesser degree, borrowing. But to borrow is tough when you don’t have the cash flow to justify the credit ratings.

  “How long can buybacks continue to support a market which is standing on a fundamentally flawed premise?”

  

   

  We have had 4 to 5 quarters of falling revenue but the US market seems to ignore it. At some point reality has got to set in. But it is also important to note that trade problems are a systemic factor to the decline in earnings. China’s imports are down 17% year over year, but these imports are coming from basically the emerging markets and commodity markets. They have also borrowed upwards of 9 trillion USD in the last 7 years that has suddenly gotten very expensive for them, I think there is more pain to come.

  CHINESE YUAN

  “The health of the Yuan is tied into the global economy and the fact that the global economy is stumbling.”

  

  Less growth in China combined with less growth around the world again increases financial risk which fuels more reluctance to funnel dollars into China; it has become a vicious cycle. The Chinese have no choice but to continue going in one direction, they are in a rock in a hard place. As the Chinese Yuan has been falling, the Yen has been rising in strength. This has become a huge issue for Japan to add to their already lost list of issues to deal with. A fracture is likely around the corner, China and Japan cannot go long without devaluing the Yen.

  The markets are reassessing what central banks can actually do. And what markets found was that central banks aren’t actually as powerful as everyone believes them to be and Japan is a perfect example of that. No matter what the BOJ does that Yen continues to move on up. It fits into the paradigm of the economy, the financial risk, everyone reevaluating what central banks are capable of etc. The markets are reevaluating central banks because they see that a tight money environment despite efforts from central banks to fuel stimulation.

  

  “Some major European bank stocks are indicative of an incoming banking crisis. We see already low interest rates around the world getting lower with each passing day; this is indicative of tight money conditions. Low rates are not stimulating.”

  TROUBLING MATTERS OF DEBATE

  “Most troubling thing to me currently is that there are not many answers available.”

  What I see is an unstable global currency regime which we are completely unprepared for. There is no solution that has been presented that would allow for a stable currency to take over Euro dollars which clearly doesn’t work. Generally the central banks can fix liquidity problems, but they cannot fix solvency problems. We see that the credit cycle has turned from non-performing loans so on and so forth.

  The idea behind QE for Japan, America and Europe was to kick start a robust recovery. Now that central banks has lost credibility as well as support.  Then you have all the unintended consequences that come with almost zero money. We have nearly zero price discoveries and risk is greatly mispriced.

  “Policy makers and economists have simply run out of ideas.”

  Desperation is a big role of why markets are reevaluating central banks. If we go back 20 years where Alan Greenspan was a genius and he didn’t even do anything, all he did was talk and he made a career out of not talking. No matter what he did he was taken as a genius. Whereas 20 years later, Janet Yellen sounds like a fumbling idiot no matter what she does. All her actions come across as desperate because the credibility has been blown away. The Fed has been forced into action and by being forced into action it has only highlighted what the Fed can’t do.

  “Resource allocation is the main benefit of price discovery; it is the life blood of the economy. The more we damage price discovery the more fatal situations will become.”

  We need to look at this as an opportunity in the long run. Now that the power of central banks has come to surface and credibility has been shot, it in turn opens the door to credible solutions. The fact of the matter is that the economy is nothing like what it should be and people know that something is wrong and change is needed.

  

  

• How A Google April Fools' Joke Unleashed The Zombie Apocalypse

  Remember the “Google Maps Pokemon Challenge”? Probably not. It was a one time event that took place on April Fools day in 2014.

  This is how Google explained it.

  Dozens of wild Pokémon have taken up residence on streets, amidst forests and atop mountains throughout Google Maps.

   

  To catch ’em all, grab your Poké Ball and the newest version of Google Maps for iPhone or Android. Then tap the search bar, “press start,” and begin your quest.

   

  And, follow Google Maps on Google+, Facebook or Twitter for hints and tips for the most dedicated trainers.

  The ad in question:

   

  Many laughed and quickly brushed it aside… but not Niantic Labs, a software development company founded in 2010 incidentally as one of Google’s own internal startups. Niantic – which all the way back in 2012 was developing location-based mobile games – was spun off as an independent entity in September 2015 and less than a year later released Pokemon Go together with Ninentdo (quickly resulting in Nintendo becoming the most-traded stock in Japanese history).

  And while we are delighted that Niantic CEO John Hanke has been unquestionably successful with his adaptation of an “April Fools” joke in the form of Pokemon Go, we are a little concerned that he has also unleashed the Zombie Apocalypse.

  Dont believe us? This is what USA Today wrote today, when the sighting of a rare Pokemon made hundreds of New Yorkers into Central Park-stomping zombies.

  On the one hand, this might be video evidence of people officially going insane. But, on the other hand, it’s also a Vaporeon, which are super rare Pokemon.

   

  First, some quick Pokemon background: Eevees are cute little fox-type Pokemon that, unlike other Pokemon, can evolve in eight different directions. They only evolve once, and after they do, they can’t evolve any more.

   

  What that means is that if you want to catch all the Pokemon, you have to either catch eight different Eevees and evolve them all in different ways — which is really tough to do — or you have to catch the other, rare evolutions when they do appear.

   

  And, well, one appeared in Central Park late on Saturday night. A Vaporeon. Here’s what that one looks like…

  

  And here’s what it looks like when a bunch of Pokemon addicts actually see one.

   

  It’s not just the Vaporeon. This is what happened when something called a Charizard appeared.

  In retrospect, if ISIS had really wanted to destroy western civilization it should have skipped all the suicide bombers and “made in the San Fernando Valley” decapitation videos, and just hired a few good programmers…

  

  

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• India's 'Gold Shirt Man' Stoned-And-Sickled To Death By Mob

  Datta Phuge took the interwebs by storm three years ago when we introduced the $250,000 22-karat-gold-shirt-wearing 32-year-old Indian who proclaimed "I know I am not the best looking man but surely no woman could fail to be dazzled by this shirt?" showing the world that gold is much more than a barbarous relic. Sadly, as The BBC reports, "the gold man" was murdered overnight – found stoned-and-sickled to death near his home in Dighi, India.

  
  
  As ABP Live reports, millionaire money-lender, Datta D. Phuge, famous as ‘Pimpri Goldman’ was found clobbered to death near Dighi here on early Friday morning, police said.

  The high-profile businessman’s vehicle was accosted by some unknown persons on the outskirts of the city late on Thursday night.

   

  They reportedly dragged him out, attacked him with a sickle and then pounded him to death with huge stones before fleeing from the spot.

   

  Phuge usually moved around with armed private bodyguards, but it is not clear where they were at the time of the incident.

   

  

   

  Officials later came across a much-mangled head and body of the 35-year old ‘gold man’, whose wife is Seema is an ex-municipal corporator.

  The motive behind the killing is not known, but police preliminary suspect it may be linked to some business rivalries and are investigating all angles.

  

  The Pune Police have launched a manhunt to nab the assailants, roadblocks erected at all exit points and within the city limits as well as district boundaries.

  The police have recovered the sickle used in the crime and have sent Phuge’s body for an autopsy.

  Besides his primary business of lending money, he ran the Vakratund Chit Fund Pvt. Ltd. along with his wife and there were complaints of financial misappropriation against him in recent times.

  

  

• US Government Releases Redacted "28 Pages" Missing From 9/11 Report

  Unleash the revisionist history. Congress released on Friday a long-classified report exploring the alleged ties of the Saudi Arabian government to the 9/11 hijackers.

  The missing 28 pages from the 9/11 report begins as follows:
  

  “While in the United States, some of the September 11 hijackers were in contact with, and received support from, individuals who may be connected to the Saudi Government…”

  The “28 pages,” the secret document was part of a 2002 congressional investigation of the Sept. 11 attacks and has been classified since the report’s completion. As CNN reports, former Sen. Bob Graham, who chaired the committee that carried out the investigation and has been pushing the White House to release the pages, said Thursday he was “very pleased” that the documents would be released.

  The pages, sent to Congress by the Obama administration, have been the subject of much speculation over what they might reveal about the Saudi government’s involvement in the attacks masterminded by terrorist Osama bin Laden when he led al-Qaeda.The pages were used by the 9/11 Commission as part of its investigation into the intelligence failures leading up to the attacks.

  A telephone number found in the phone book of al-Qaeda operative Abu Zubaida, who was captured in Pakistan in March 2002, was for an Aspen, Colo., corporation that managed the “affairs of the Colorado residence of the Saudi Ambassador Bandar,” the documents show.

  Osama Bassnan, who the documents identify as a financial supporter of two of the 9/11 hijackers in San Diego, received money from Bandar, and Bassnan’s wife also got money from Bandar’s wife. “One at least one occasion,” the documents show, “Bassnan received a check directly from Prince Bandar’s account. According to the FBI, on May 14, 1998, Bassnan cashed a check from Bandar in the amount of $15,000. Bassnan’s wife also received at least one check directly from Bandar.”

  The top two members of the House Intelligence Committee cautioned that much of the information in the newly released pages were not “vetted conclusions.”

  “It’s important to note that this section does not put forward vetted conclusions, but rather unverified leads that were later fully investigated by the Intelligence Community,” said Rep. Devin Nunes, R-Calif. and the committee chairman, in a statement. “Many of the Intelligence Community’s findings were included in the 9/11 Commission report as well as in a newly declassified executive summary of a CIA-FBI joint assessment that will soon be released by the Director of National Intelligence.”

  Rep. Adam Schiff of California, the panel’s senior Democrat, said he hopes the newly released pages will reduce the continued speculation over Saudi involvement. “I hope that the release of these pages, with appropriate redactions necessary to protect our nation’s intelligence sources and methods, will diminish speculation that they contain proof of official Saudi Government or senior Saudi official involvement in the 9/11 attacks,” Schiff said in a statement. “The Intelligence Community and the 9/11 Commission…investigated the questions they raised and was never able to find sufficient evidence to support them.  I know that the release of these pages will not end debate over the issue, but it will quiet rumors over their contents — as is often the case, the reality is less damaging than the uncertainty.”

  Actually, a quick skim of the report indicates precisely the opposite.

  The 9/11 Commission did not actually write the newly released pages. Instead, the pages were part of the material the panel reviewed. The commission’s chairmen have described the pages in the past as information based almost entirely on raw, unvetted material received by the FBI and handed over to House and Senate intelligence committees in 2002 as part of an earlier investigation of 9/11.

  Current and former members of Congress have been calling for the pages to be declassified and released for more than a decade.

  The 9/11 Commission concluded in its report that senior Saudi officials did not knowingly support the terrorist plot to attack the United States. The panel also found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” al-Qaeda.While the 9/11 Commission found no evidence that senior Saudi officials were involved in the 9/11 attack, the report did criticize the Saudi government for tolerating and sometimes fanning the flames of radical Islam by funding schools and mosques around the world that spread extreme ideology. The report also noted that some rich Saudis gave money to charities with terrorist links.

  To be sure, what the report does provide is much circumstantial evidence that the Saudis were most certainly involved in 9/11, sufficient to convince any rational man, but perhaps not enough to launch a lawsuit against, say, the King.

  The Saudi government itself has repeated called for the pages to be made public so that it can respond to any allegations, which it has long called unfounded.

  “We’ve been saying since 2003 that the pages should be released,” said Nail Al-Jubeir, director of communications for the Saudi Embassy, ahead of Friday’s developments. “They will show everyone that there is no there there.”

  Moments after the release, Saudi Arabia has already issued its prepared press release:

  

  * * *
  

  Here are some real-time annotations of the report:

  9/11 report: Saudi ambassador’s company’s phone # in phone book of senior al-Qaeda operative captured in Pakistan pic.twitter.com/IVw1ZzOjaI

  — Kia Makarechi (@Kia_Mak) July 15, 2016

  Suspected “dry run” for 9/11 carried out by men flying to party at Saudi embassy, on tickets paid for by Saudi gov’t pic.twitter.com/68mUlrNqkR

  — Kia Makarechi (@Kia_Mak) July 15, 2016

  Man with ties to Saudi government (suspected of being spy) welcomed hijackers, paid their rent, found flight schools pic.twitter.com/7XJ2L73DlP

  — Kia Makarechi (@Kia_Mak) July 15, 2016

  Man tied to 9/11 hijackers received money directly from Prince Bandar, Saudi Amb. to US pic.twitter.com/snEyOVMZhu

  — Kia Makarechi (@Kia_Mak) July 15, 2016

  The Saudis didn’t give the US any info on Osama bin Laden after 1996 cos of what he’d tell them if caught #28pages pic.twitter.com/p1oAKZ0HuT

  — John Horne (@JohnHorneUK) July 15, 2016

   

  The infamous Prince Bandar is also named:

  Bandar. pic.twitter.com/7RfdG6t912

  — emptywheel (@emptywheel) July 15, 2016

  While we have yet to read the full document, one section caught our eye – the use of Saudi “charitable organizations” to finance terorrism:

  
  

  And then this:

  

  That names sounded familiar, and then we remembered this WMD article:

  The lawmakers noted Huma Abedin “has three family members – her late father, mother and her brother – connected to Muslim Brotherhood operatives and/or organizations. Her position affords her routine access to the secretary and to policymaking.” Last week, Republican Speaker of the House John Boehner, who admitted he hadn’t read the letters, defended Abedin, and Sen. John McCain, R-Ariz., called the accusations “sinister” and “nothing less than an unwarranted and unfounded attack on an honorable woman, a dedicated American and a loyal public servant.”

   

  * * *

  Now it has emerged that Huma [Abedin] served on the Journal of Muslim Minority Affairs’s editorial board from 2002 to 2008. Documents obtained by author Walid Shoebat reveal that Naseef served on the board with Huma from at least December 2002 to December 2003.

   

  Naseef’s sudden departure from the board in December 2003 coincides with the time at which various charities led by Naseef’s Muslim World League were declared illegal terrorism fronts worldwide, including by the U.S. and U.N.

   

  The MWL, founded in Mecca in 1962, bills itself as one of the largest Islamic non-governmental organizations. But according to U.S. government documents and testimony from the charity’s own officials, it is heavily financed by the Saudi government.

   

  The MWL has been accused of terrorist ties, as have its various offshoots, including the International Islamic Relief Organization, or IIRO, and Al Haramain, which was declared by the U.S. and U.N. as a terror financing front.

   

  Indeed, the Treasury Department, in a September 2004 press release, alleged Al Haramain had “direct links” with Osama bin Laden. The group is now banned worldwide by United Nations Security Council Committee 1267.

   

  The MWL in 1988 founded the Al Haramain Islamic Foundation, developing chapters in about 50 countries, including for a time in Oregon until it was designated a terrorist organization.

   

  In the early 1990s, evidence began to grow that the foundation was funding Islamist militants in Somalia and Bosnia, and a 1996 CIA report detailed its Bosnian militant ties.

   

  The U.S. Treasury designated Al Haramain’s offices in Kenya and Tanzania as sponsors of terrorism for their role in planning and funding the 1998 bombings of two American embassies in East Africa. The Comoros Islands office was also designated because it “was used as a staging area and exfiltration route for the perpetrators of the 1998 bombings.”

   

  The New York Times reported in 2003 that Al Haramain had provided funds to the Indonesian terrorist group Jemaah Islamiyah, which was responsible for the 2002 Bali bombings that killed 202 people. The Indonesia office was later designated a terrorist entity by the Treasury.

   

  In February 2004, the U.S. Treasury Department froze all Al Haramain’s financial assets pending an investigation, leading the Saudi government to disband the charity and fold it into another group, the Saudi National Commission for Relief and Charity Work Abroad.

   

  In September 2004, the U.S. designated Al-Haramain a terrorist organization. In June 2008, the Treasury Department applied the terrorist designation to the entire Al-Haramain organization worldwide

  In other words, the US government knew about this terrorist front all the way back in 2001, even as Hillary’s right hand (wo)man was working for an affiliated entity for years later?

  We hope to find out more after reading the full document shortly, although sadly we are convinced the important sections will be fully redacted.

  * * *

  Full 28 pages (redacted) below (link)

  

  

• The Global Plague Of Terrorism

  Authored by Gulam Asgar Mitha via The Oriental Review,

  Pakistan, a nation of 200 million, is witnessing a plethora of oppression, injustice, tyranny, religious exploitation and blatant lying. A majority of the population live in either various forms of poverty as victims or in fear of targeted killings and kidnappings for ransom by workers of the major political parties and religious terrorists. The perpetrators – politicians and judiciary (the legal system including the upholders of law) as well as the clergy (known as ulema or mullah) are corrupt to the very hilt and this has filtered deep into the fabric of the nation’s national character. The brunt of this is being felt among the people living in villages and ghettos who’re being exploited mainly by the clergy while 6-10% of the rich and upper middle class who live in large cities continue to eat the fruits sowed with the seeds of corruption in every government heirarchy.

  Pakistan is a nation in chaos as are many other Muslim countries whose citizens are victims of terrorism, tyranny, corruption, oppression and injustice. These will be illustrated as several epitomes in the following paragraphs.

  I was going to omit reference to the corruption in the military but after receiving a rather interesting email, I decided to include the contents after investigating the authenticity of the email. In brief, during his regime, General Zia-ul-Haq of Pakistan was en route to USA on an official visit with his wife. Several gifts were loaded on the plane for distribution and among them were some marble lamps. Due to last minute plan changes, the marble lamps were not loaded in the cargo section. The Federal Investigation Agency (FIA) found the lamps left behind and after failing to trace the owner(s), broke the lamps and found them stuffed with heroin. After several arrests, the track led to Zia’s ADC Captain Qamar Zaman, the “adopted son” of the general. I traced an article in Pakistan Tribune newspaper of 11 October, 2011 as well as the book “Profiles of Intelligence” by Brigadier A.I. Tirmizi. Fascinatingly, Qamar Zaman was appointed Chairman of Pakistan’s National Accountability Board (NAB) the very authority charged to investigate corruption. Details of Qamar Zaman’s corruption are noted on the referenced article.

   

  On 9 July 2016 a noble and humble Pakistani philanthropist, Abdul Suttar Edhi, died at the age of 88 in Karachi serving humanity, the very essence of Islam. In a blog EDHI: A LIFE LESS ORDINARY in the newspaper The Dawn , filmmaker and journalist Hassan Zaidi wrote In fact, if anything made him (Edhi)  bitter it was how some mullahs (clergy) had perverted the spirit of religion with literal interpretations. He would rail many times about how the clergy only created problems for other people, never helped those in need. In another anonymous blog, Edhi’s wife Bilquis stated that “What we are doing (charity) should be done by the government and should be appreciated, but instead we are blamed.” I remember an Italian saying ‘the fish smells from the head’ – true enough.

  The corruption, tyranny, oppression, religious intolerance, terrorism and injustice in Pakistan are representative across the entire Muslim world. Muslims are fleeing from their own countries and seeking sanctuary anywhere where they can escape the horrific crimes being perpetrated against innocent men, women and children by their leaders and extremist groups like Al-Qaeda, Islamic State and Taliban.

  Ask Muslims about the roots of terrorism and they’re quick to point the fingers at the USA or Israel. They’re not thinking. They’re not thinking inwardly. The plague of terrorism is homemade, not foreign. The western countries however prop up the Muslim perpetrators with bribes and political protection so that they can extract economic benefits from the mayhem. Why not exploit the homegrown situation?

  

  Terrorism was born predominantly in Saudi Arabia and Pakistan as a tool to expel Soviets from Afghanistan in 1980s. The other day I was asked about these three countries. The official descriptions of Pakistan and Afghanistan are THE ISLAMIC REPUBLIC OF PAKISTAN and ISLAMIC REPUBLIC OF AFGHANISTAN. I posed a question to several Muslims: are these two countries Islamic or republics or democracies as their leaders and politicians claim? The answers were unanimously ‘no’ in each case. They are hypocrisies and mirror reflections of Saudi Arabian monarchy in every respect. These countries are namesake Islamic only, not in principle or in spirit. The blame also lies with the clergy who mislead Muslims and appease the political leaders for personal gains and power sharing.

  The current Prime Minister Nawaz Sharif owes much to the Saudi monarchy as it had granted him sanctuary during his 9 year exile from Pakistan in 1999 following a military coup. Saudi Arabia has granted sanctuary to other heads of Muslim countries known for their extremities of corruption, oppression, tyranny, murder, mayhem and injustice against their peoples. A case is that of Idi Amin President of Uganda from 1971-1979, an incredibly disturbed psychotic who is on record to have killed half million citizens. Another corrupt tyrant-dictator who was granted sanctuary in Saudi Arabia was the former President of Tunisia Zain El-Abedin bin Ali (1987-2011). He fled with his notorious wife Leila bin Ali and nearly 1.5 tons of gold valued at $75 million. Why has the Saudi monarchy granted sanctuary to such tyrants? One can only surmise that “birds of a feather flock together”.

  The plague of terrorism was born and nurtured in Afghanistan and Pakistan in prayer houses (mosques) of God under control of fundamentalist clergies trained and funded by the same country that has supported and granted sanctuary to tyrants, dictators, political criminals, unjust rulers, oppressors and murderers. One of them was President Zia-ul-Haq of Pakistan, a religious zealot, who together with Saudi Arabia aspired to promote Wahhabism- an extremist belief far removed from mainstream Islam which preaches humanity and tolerance – across the Muslim world. Fortunately his aspirations died with him in a military airplane crash in 1988 but the monarchy and Wahhabism continues to survive and grow like a cancerous plague of radicalism, terrorism and terrorists.

  The plague spans not only the Muslim countries but even the USA and European nations. The only Muslim country which has successfully prevented terrorism within its borders is Iran. Whether they belong to Al-Qaeda, Taliban or the Islamic State (IS), these bearded terrorists are products of extremism and religious fundamentalism, brainwashed in mosques by the Saudi trained clergy to indiscriminately kill men, women and children. Then they vanish in the crowds and find sanctuary in the mosques. They call themselves Muslims who believe that God has chosen them to do His bidding and that they’ll be rewarded in Paradise.

  Let us now consider in a couple of paragraphs how to eliminate the global plague. The US and European NATO partners have a grand plan for Saudi Arabia, a nation that cannot defend itself but would willingly pay other Muslim countries to do its dirty job. It has hopes that Pakistan, Afghanistan, other Arab monarchies would send regular army troops to defend the country and the two holy sites in Mecca and Medina. It has thus formed a coalition of Sunni Muslims including Al-Qaeda, IS and Taliban to counter the growing influence of Shia axis (Iran, Iraq, Syria and Hezbollah) in the Middle East. The grand plan is to start a civil war between Shias and Sunnis (both Muslims) and thus contain the plague in US and EU while Muslims will be engaged in throat cutting.

  As to the timing of the civil war, it might just well be in less than two years following the US elections. Donald Trump, the Republican Party presidential nominee, is the circus clown who has been thrown into the ring to gauge the sentiments of the Americans towards Muslims while the “terrorists” unleash chaos in the US. Behind the scenes is the juggler, Hillary Clinton (endorsed as the Democratic Party presidential nominee), as she spins a web that will lead to the Shia-Sunni civil war in the Middle East. Iran’s Supreme leader Khamenei warned his nuclear negotiators that under the N-deal is a “half nuclear bowl” suggesting caution that the US-EU has an ulterior motive. Now that the sanctions are gradually being lifted, Iran is economically and militarily preparing towards the eventuality of the civil war that it has foreseen in the “half nuclear bowl”. I perceive that the civil war will be a major regional conflict that will prolong many years till terrorism and fundamentalism will be defeated and peace will prevail but the human toll among Muslims will be massive.

  

  

• French Government Forced To Admit It "Suppressed News Of Gruesome Torture" At Bataclan Massacre

  Authored by Louise Mensch, originally posted at HeatStreet.com,

  A French government committee has heard testimony, suppressed by the French government at the time and not published online until this week, that the killers in the Bataclan appear to have tortured their victims on the second floor of the club.

  The chief police witness in Parliament testified that on the night of the attacks, an investigating officer, tears streaming down his face, rushed out of the Bataclan and vomited in front of him just after seeing the disfigured bodies.

  The 14-hour testimony about the November attacks took place March 21st.

  According to this testimony, Wahhabist killers reportedly gouged out eyes, castrated victims, and shoved their testicles in their mouths. They may also have disemboweled some poor souls. Women were reportedly stabbed in the genitals – and the torture was, victims told police, filmed for Daesh or Islamic State propaganda. For that reason, medics did not release the bodies of torture victims to the families, investigators said.

  But prosecutors at the hearing claimed these reports of torture were “a rumor” on the grounds that sharp knives were not found at the scene. They also claimed that maybe shrapnel had caused the injuries.

  Q. For the information of the Commission of Inquiry….can you tell us how you learned that there had been acts of barbarism within the Bataclan: beheadings, evisceration, eyes gouged out …?

   

  Investigator: After the assault, we were with colleagues at the passage Saint-Pierre Amelot when I saw weeping from one of our colleagues who came outside  to vomit. He told us what he had seen.

   

  Q. Acts of torture happened on the second floor?

  Further on the investigator described how this was kept from relatives:

  A. Bodies have not been presented to families because there were beheaded people there, the murdered people, people who have been disemboweled . There are women who had their genitals stabbed.

   

  Q. All this would have been videotaped for Daesh !

   

  A. I believe so. Survivors have said so.

  Elsewhere, the investigator says, women were sexually tortured, stabbed in the genitals, and their eyes were plucked out. People were decapitated.

  The clerk of the inquiry (or “rapporteur”) pressed the chief of committee for clarity on whether victims were decapitated or mutilated. The committee chief replied that the authorities had given out conflicting information that said victims were merely shot or blown up. He then added this damning statement about one victim’s father discovering the gruesome truth in the morgue:

  Mr. President Georges Fenech Indeed, the Committee is troubled by this information which has appeared nowhere [in the media]. Thus, the father of one of the victims sent me a copy of a letter he sent to the investigating judge, which I quote in summary: “On the causes of the death of my son A., at the forensic institute in Paris, I was told, and what a shock it was for me at that moment, they had cut off his testicles, had put them in his mouth, and he was disemboweled. When I saw him behind glass, lying on a table, a white shroud covering it up to the neck, a psychologist was with me. He said: This is “the only presentable part, your son’s left profile.” I found that he had no right eye. I made the remark; I was informed that they had punctured his eye and  sliced down the right side of his face, where there was a very large hematoma that we could all see. ”

   

  This particular witness could corroborate the statements that we heard from one of the BAC officials, that one of his investigators vomited immediately on leaving the Bataclan after finding a decapitation and evisceration. Are you aware of such facts?

  A prosecutor appearing before the inquiry replied lamely that no sharp knife had been found at the scene that could have been used for torture. Perhaps shrapnel had caused the mutilation, he said. The head of the committee asked if an explosion would have placed testicles in a victim’s mouth:

  Prosecutor: I specify, for the sake of clarity: some of the bodies found at the Bataclan were extremely mutilated by the explosions and weapons, to the point that it was sometimes difficult to reconstruct the dismembered bodies. In other words, injuries described this father may also have been caused by automatic weapons, by explosions or projections of nails and bolts that have resulted.

   

  Q. Would those have put a man’s balls in in his own mouth?

   

  Prosecutor: I do not have that information.

  The news follows reports that German police sat on the huge number of sexual assaults committed by Islamist migrants in Cologne, which a secret report estimated at thousands, not hundreds.

  * * *

  What is there to add? Why suppress it? Is this just more disgusting appeasement, pandering, and suppression to ensure some fear-based control.. but not total economically-crushing terror? Tell The Truth!!

  

  

• Friday Humor? Obama's 11-Point Response To The French Tragedy

  Authored by Yojimbo via The Burning Platform blog,

  1. No one needs a commercial truck this large.

  2. The Founding Fathers never envisioned large commercial trucks, and did not intend for people to drive them.

  3. These “assault trucks” are designed for killing large numbers of people quickly, and that is their only use.

  4. We need a “no truck” list immediately, one that does not require due process to get on or off.

  5. No where in the Constitution does it mention the freedom to own these killing devices called trucks.

  6. Large commercial trucks should only be owned by the police, military, or politicians, NOT normal citizens, who can use horses.

  7. We already have licensing, registration, titles, inspection, and multiple taxes on large commercial vehicles, and STILL they are used for mass killing. Enough is enough. We must ban them entirely.

  8. We must follow Australia’s example – we must have a massive government buy-back of all trucks currently owned by American citizens, then, they must be destroyed.

  9. We must empower the police and military to go door-to-door to forcibly remove these “assault trucks”. Deadly force is reasonable when “disarming” people of these killing devices.

  10. If it will save the life of even a single child, we must rid our society of trucks.

  11. And lastly, we must continue to resettle enormous numbers of Muslims throughout the United States, primarily in rural, white, Christian areas.

  *  *  *

  Ironically, this is exactly what Newt Gingrich expected from The President: "Will Obama Call for New Truck Regulations After Nice Terror?"

   

  

  

• UK Luxury Property Sales Collapse Post-Brexit

  Things just went to '11' on the Spinal Tap amplifier of Britain's property market. Having detailed the numerous 'dominoes' that have begun to fall, and the start of forced real asset liquidations, the hard data from Britain's Royal Institute of Chartered Surveyors suggests Brexit just killed the British housing market… and even more crucially, as Bloomberg reports, a measure of London (luxury) home-price changes crashed to its weakest since the financial crisis as the U.K.’s vote to leave the EU sent shock waves across the nation.

  Having previously shown the following chart as an example of the 'liquidity gap' between fund-level liquidations and the exuberant UK real estate market, warning that things could get ugly very quickly…

  

   

  Bloomberg reports, they just did! The index by the Royal Institution of Chartered Surveyors dropped to minus 46 in June from minus 35 the previous month, showing that more real-estate agents are recording lower prices in the capital than higher ones. The reading was the weakest since early 2009. All responses were received after the EU referendum on June 23.

  A separate report from Acadata Ltd. and LSL Property Services Plc showed home values in the capital were already being hurt ahead of the vote, with prices decreasing 1.4 percent in May, the biggest monthly fall since June 2011.

  

   

  RICS’s survey provides the first insight into the impact the decision to leave the EU is having on the housing market. It shows nationwide demand falling to its lowest level since the middle of 2008, while the number of properties put up for sale plunged to a record low. A gauge of sales expectations for the next three months was at its weakest in 28 years.

  “It was always likely we were going to see a bit of a fallout from the EU referendum,”  Simon Rubinsohn, RICS’s chief economist, said in an interview on Bloomberg Television with Guy Johnson and Caroline Hyde.

   

  “It’s also part of a trend that emerged at the start of the second quarter, particularly the London data.”

  The Brexit vote has “clearly unnerved many buyers and sellers, and it is evident that some are reevaluating what they do and/or are attempting to renegotiate the price,” they said.

  

  

• Pokemania: Nintendo Just Became The Most-Traded Stock In Japanese History

  Thanks to the fad-tastic launch of Pokemon GO – more popular than porn – Nintendo stock has exploded over 93% in the last 7 days (the most ever) to 6 years highs. But the Pokemania was really in the trading volume where 476 billion yen changed hands for the highest daily turnover on the Tokyo Stock Exchange this century…

   

  

  Second-highest turnover for any given day was Tokyo Electric with 446b yen on May 21, 2013, followed by SoftBank with 431b yen on Nov. 29, 2005.

  *  *  *

  Seems sustainable, right?

  Having second thoughts? Maybe you're right? From Gawker:

  "Pokémon Go Is a Government Surveillance Psyop Conspiracy"

  Less than a week after Pokémon Go’s launch, our streets are already filled with packs of phone-wielding, Weedle-catching zombies. They’re robbing our teens, filling our churches with sinners, and tricking our children into exercising. But worst of all, Pokémon Go is turning us all into an army of narcs in service of the coming New World Order.

  Allow me to explain.

  More like Privacy Poli-See Everything

  Lots of apps have sketchy privacy policies, that’s nothing new. But the first set of alarms go off as soon as you realize that Pokémon Go’s policy does seem a bit more liberal than most, because not only are you giving Pokémon Go access to your location and camera, you’re also giving it full access to your Google account (assuming you use that to sign in).

  There’s one section of the privacy policy in particular that seems to be getting the conspiracy theorists of the world up in arms and which Reddit user Homer_Simpson_Doh calls “very Orwellian”:

   

  

   

  Most Orwellian of all is this line:

  We may disclose any information about you (or your authorized child) that is in our possession or control to government or law enforcement officials or private parties.

  As TechCrunch explained, Pokémon-loving millennials are far less likely to object to a few extra permissions when its Squirtle staring them in the face as they abandon their every god-given freedom than they do when Google reads their email.

   

  Pokémon Go comes directly—directly—from the intelligence community

   

  And it’s not like Pokémon Go itself doesn’t already have a direct(-ish) line to the CIA. After all, Pokémon Go was created by Niantic, which was formed by John Hanke.

   

  Now, Hanke also just so happened to help found Keyhole. What does Keyhole do, you ask? I’d tell you to go to Keyhole’s website—but you can’t. It just takes you straight to Google Earth. That’s because Keyhole was acquired by Google back in 2004.

   

  Before that, though, Keyhole received funding from a firm called In-Q-Tel, a government-controlled venture capital firm that invests in companies that will help beef up Big Brother’s tool belt. What’s more, the funds In-Q-Tel gave Keyhole mostly came from the National Geospatial-Intelligence Agency (NGA), whose primary mission is “collecting, analyzing, and distributing geospatial intelligence.”

   

  Still unsure if Pokémon Go’s creator is a government spook? Check out this excerpt from the NGA’s in-house publication…

   

  Read more here…

  

  

• Housing Bubble 2.0 – Are You Ready For This?

  The mind-numbing Case-Shiller regional charts below are presented without too much comment. As MHanson.com's Mark Hanson adds, the visual says it all.

  Bottom line:

  Q:  If 2006/07 was the peak of the largest housing bubble in history with affordability never better vis a’ vis exotic loans; easy availability of credit; unemployment in the 4%’s; the total workforce at record highs; and growing wages, then what do you call “now” with house prices at or above 2006 levels; worse affordability; tighter credit; higher unemployment; a weakening total workforce; and shrinking wages?

   

  A:  Whatever you call it, it’s a greater thing than the Bubble 1.0 peak.

  1)  Funny (and Demented) Seattle area Realtor anecdote regarding the potential for another housing Bubble: “House prices can’t be in a bubble because they are only 10% greater than the 2006 peak, meaning growth of only 1% per year since 2006. And 1% per year is not the Bubble type gains we saw back in the mid-2000’s”.

  DOH! How do you argue with that? You don’t, you just turn the other cheek and pound a drink.

  2)  Case-Shiller’s most Bubblicious Regions

  Bottom line: If these key housing markets hit a wall they will take the rest of the nation with them; bubbles and busts don’t happen in “isolation”.

  Not shown in these charts of absolute index levels is the three-straight months of national yy price gain deceleration. Moreover, the CS captures prices up to 7-months old at the tail so conditions are already a lot different than shown here.

   

  

  3) Notes & Observations on above chart:

  • The bubblicious regions above all have one thing in common…STEM. As such, if the tech and biotech sectors hit a wall, which some believe has already begun, so will these housing regions.

  • If these key housing markets hit a wall they will take the rest of the nation with them; Bubbles and busts don’t happen in “isolation”.

  • House prices have retaken Bubble 1.0 levels on the exact same drivers: easy/cheap/deep credit & liquidity that found its way to real estate. The only difference between both era’s is which cohorts controlled the credit and liquidity. In Bubble 1.0, end-users were in control. In this bubble, “professional”/private investors and foreigners are. But, they both drove demand and prices in the exact same manner. That is, as incremental buyers with easy/cheap/deep credit & liquidity, able to hit whatever the ask price was, and consequently — due to the US comparable sales appraisal process — pushed all house prices to levels far beyond what typical end-user, shelter-buyers can afford. Thus, the persistent, anemic demand.

  • Bubble 2.0 has occurred without a corresponding demand surge just like peak Bubble 1.0. As such, it means something other than fundamental, end-user demand and economics is driving prices this time too.

  • The end result of Bubble 2.0 will be the same as 1.0; a demand “mix-shift” and price “reset” back towards end-user fundamentals once the speculators finish up, or events force them to the “sidelines”.

  • Lower prices will create demand, which the housing sector will always achieve one way or another…it’s what it does. Just like the anemic demand led the price crash of Bubble 1.0, which ultimately led to increased demand as prices stabilized lower.

  • The Bubble 2.0 pop will also free up supply in the same manner as Bubble 1.0, just not as much from foreclosures. However, I do think people underestimate the volume of low-down mortgages originated over the past several years, and those with little to no equity in legacy loans or rising interest rate mods, which if house prices drop a few percent turn high-risk, especially when factoring in the 6%+ cost to sell. But, it doesn’t matter where the supply comes from — maybe the PE firms start to dump rentals — as it’s fungible.

  • Sure the bubble could blow bigger. Maybe we get a double-bubble. Bubbles are strange things. But, when they begin to fall there is a lot of air under there because the downside has clearly been established.

  • Lastly, I am betting 2016 marks the high for house prices, as mortgage rates can’t go meaningfully lower, the unorthodox demand cohort is exhausted, and real affordability to end-user shelter-buyers has rarely been worse. In fact, I believe this is the year house prices go red yy.

  

  

• What Is Helicopter Money? Goldman Explains

  Whether Japan admits it or not, helicopter money – thanks to Ben Bernanke – is here, and the market’s reaction this week was simply the first stage of pricing it in, as confirmed by the biggest drop in the Japanese currency this century.

   

  

   

  Incidentally, we are “confident” that the SEC will inquire whether Citadel- Ben Bernanke’s official employer – was actually short the Yen ahead of its employee going to Japan and advising the Bank of Japan what to do, and how to crush its currency. Obviously that would be a grandiouse, and criminal, conflict of interest.

  We won’t be holding our breath, but while we wait here is a useful primer for all those wondering just what is coming, courtesy of Goldman Sachs, which explains the nuances of monetary policy’s endgame: Helicopter Money.

  Q1: What does helicopter money refer to in the first place?

  A1: Literally, it is a policy whereby the government or central bank supplies large amounts of money, as if it were scattering money from a helicopter. A more practical definition, however, is a policy whereby the central bank has primary responsibility for funding to facilitate more flexible and active fiscal spending by the government. The concept of helicopter money has been around for years. Professor Milton Friedman was first to propose the idea in 1969, and in the early 2000s then Federal Reserve Board Governor Ben Bernanke raised it as one prescription to prevent deflation.[1] Very recently, a July 13 Sankei Newspaper article suggesting Prime Minister Abe and his advisers were considering helicopter money sparked debate on the subject in Japan.

  According to Adair Turner (former chairman of the UK FSA), there are two specific schemes: (1) the BOJ directly underwriting JGBs, and (2) converting JGBs purchased by the BOJ on the secondary market into zero-coupon perpetual bonds.[2]

  The first scheme is referred to as monetization. This was actually done in Japan under Takahashi fiscal policy in the 1930s, which served as a model for Abenomics (see Q4 for details).

  The second scheme, although not involving direct JGB underwriting, is in effect very similar to the first one because it is no longer necessary for the government to pay interest on JGBs or even redeem them.

  Either way, it would theoretically allow the government to fund fiscal spending of any amount it deemed necessary. It can be thought of as the ultimate form of fiscal and monetary policy unification.

  Q2: Why is this a hot topic in Japan now?

  A2: This is closely associated with the fact that Abenomics, which has monetary policy as its central plank, is faltering. The BOJ, under Governor Kuroda, launched unprecedented easing in April 2013, with the initial aim of achieving 2% inflation in two years by doubling base money. It has now pushed back the timeline for achieving this inflation target to the end of FY2017, and we, along with many other observers, believe it will take even longer.

  The core CPI (excluding fresh foods) fell into negative territory in the most recent reading in May 2016, at -0.4% yoy. The BOJ’s new core CPI (excluding fresh foods and energy), which the BOJ has emphasized recently as a gauge of price trends, also slowed to +0.8% in May 2016, after printing strongly at +1.3% in December 2015. On top of this, the 2016 shunto spring wage negotiations ended on a sour note for the BOJ too, even though it had hoped for stronger wage hikes.[3] The real economy, meanwhile, is sluggish, oscillating between positive and negative growth since 2015. .

  We also think the BOJ’s unprecedented easing policy is approaching its limits. Qualitative easing (ETF purchase in particular), part of the BOJ’s three-dimensional monetary easing, still has relative scope for expansion, but many observers are skeptical about the sustainability of the BOJ’s quantitative target of increasing the monetary base by ¥80 tn a year through JGB purchases.[4] The negative interest rate policy introduced by the BOJ in January 2016 as well has been met with a critical eye not only by financial institutions but also the general public.

  If Prime Minister Abe and his advisors are indeed giving consideration to helicopter money, as the Sankei Shimbun article suggests, this may indicate that they are also sensing limitations to the BOJ’s three-dimensional easing.

  Q3: Is helicopter money legally feasible?

  A3: It is prohibited, in principle, but there is a gray zone here. Article 5 of Japan’s Public Finance Law prohibits the BOJ from underwriting any public bonds. However it goes on to say that in special circumstances, the BOJ may be able to do so within limits approved by a Diet resolution.

  The first sentence prohibits the underwriting of JGBs in principle. This is based on lessons learned from the bitter experience, under the Takahashi fiscal policy in the 1930s, of JGB underwriting by the BOJ leading to a complete loss of fiscal discipline and ultimately to hyper-inflation (see Q5). The gray zone is the proviso in the second sentence. “Special circumstances” are usually interpreted to be limited to JGBs bonds issued to refinance JGBs held by the BOJ, and not ones issued to support active government fiscal stimulus measures. However, proponents of BOJ underwriting tend to believe that this proviso can be interpreted more broadly to include a more active role for the BOJ in financing fiscal measures.

  Q4: What kinds of benefits are proponents of this policy expecting?

  A4: We believe proponents are focused on two main benefits. The first is the direct demand-generating effect that comes from the ability to freely increase fiscal spending with no concern over how it will be funded. While households may opt to direct this money into savings rather than spend it if the policy is only in place for a very short period of time, the possibility of consumption picking up increases the longer the policy is in effect.

  The second benefit is the “announcement effect” targeting the markets generated by the decision itself to adopt a very radical policy such as the BOJ directly underwriting public debt, long considered taboo (see Q5). For the currency markets, we expect this policy to place a downward pressure on the yen.

  Q5: What are the risks?

  A5: The largest risk is that once helicopter money is adopted it may not be able to be stopped. If the markets take the view that the policy cannot be reined in, there is a risk the government and BOJ may trigger a substantial collapse in confidence in the yen, resulting in excessive currency depreciation.

  Under the Takahashi fiscal policy of the 1930s, on which Abenomics is modeled, the BOJ actually took the step of underwriting JGBs. Then Minister of Finance Korekiyo Takahashi attempted to pull Japan out of a period of severe deflation by supplementing the weaker yen that accompanied the exit from the gold standard with aggressive fiscal stimulus via the underwriting of JGBs.[5] While the BOJ’s underwriting of public debt was also viewed as taboo at that time, Finance Minister Takahashi considered it just a short-term expedient, and planned to rapidly exit the policy once Japan had escaped the deflationary cycle.

  The Takahashi policy breathed life into the Japanese economy, but contrary to the Minister’s intentions, the BOJ continued to underwrite JGBs unabated. After the assassination of Minister Takahashi in 1936, what started out as a short-term expedient became the fiscal norm and the fiscal deficit grew sharply, ultimately leading to hyper-inflation. While the era of militarism only further accelerated the loss of fiscal discipline, it all began with giving the government a really convenient tool of the BOJ’s underwriting of public debt.

  While some promoting helicopter money highlight the possibility of building a framework that will ensure fiscal discipline, such as linking the policy to the inflation target, given past Japan’s experiences noted above, many including us are skeptical about whether or not an effective framework can really be built.

  Q6: Is helicopter money likely to be used in Japan?

  A6: While we think the overt adoption of helicopter money is highly unlikely in Japan, we see a possibility that the market could come to associate future large-scale fiscal and monetary policy mix as a step toward helicopter money.

  As explained in Q5, the main reason why we think helicopter money is unlikely in Japan is that the BOJ is acutely aware of the difficulty of exiting such a policy once it has been set in motion. Governor Kuroda is a notable proponent of fiscal consolidation, and is in our view unlikely to agree to a policy that is highly likely to result in a future loss of fiscal discipline.

  That said, the point at which helicopter money begins is extremely vague. The BOJ’s net purchasing of JGBs is currently running at ¥80 tn per year. Although these purchases are made via the market and therefore do not amount to the underwriting of government debt in the strictly defined sense, the economic principle is the same. The government issues bonds that are purchased by private sector financial institutions who quickly sell them on to the BOJ. In terms of fund flow, the only difference from the direct underwriting of government debt is that in this case the bonds pass through private sector financial institutions.

  Accordingly, if the Japanese government decides to implement a massive fiscal stimulus package and the BOJ concurrently steps up three-dimensional easing (particularly if it increases JGB purchasing), we think the market could react as if this is a step toward helicopter money in all but name.

  * * *

  And here are some schematics from Jefferies

  

  

  

  

  

  

  

  

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• Piling On: EU's "Competition Enforcer" Lays More Charges On Google

  Submitted by Michael Shedlock via MishTalk.com,

  The anti-free trade consortium in Brussels is leveling more charges
  at Google. The EU nannycrats just cannot stand or deal with a successful
  business that people like.
  

  The Financial Times reports Brussels Piles New Charges on Google as Vestager Digs In.

  Brussels launched another volley of competition
  complaints against Google on Thursday, marking the latest gambit in a
  protracted antitrust saga.

   

  Margrethe Vestager, the EU’s competition enforcer, issued two extra
  sets of charges against the US group, alleging that it abused its search
  clout to muscle out smaller rivals in online advertising and shopping
  comparison markets.

   

  However, rather than significantly broadening the regulatory assault
  against Google, the moves largely consolidate the European Commission’s
  position as it edges towards infringement decisions and possible fines.
  These would only come to pass in 2017 at the earliest — some eight years
  after the first complaint against Google was filed.

   

  The new charges create a three-front legal battle line with Google by
  adding to allegations in April related to the Android mobile operating
  system, which are potentially the most problematic for the company.
  Google has rejected any wrongdoing and said its “innovations and product
  improvements have increased choice for European consumers and promote
  competition”.

   

  Competition investigators generally wish to avoid additional charge
  sheets, which indicate their legal case is trickier than first expected.
  But the concession does not mean the investigation is dead — Ms
  Vestager stressed such follow-up charges were issued in Brussels’
  successful cases against Microsoft and Intel.

   

  Indeed, her decision signals that she is raising her stakes and is
  likely to see the matter through to a decision and possible fine —
  rather than opting for a settlement — according to legal analysts.

   

  “She is doubling down. They are sinking their teeth in further and
  they will finish the shopping case. That is plain,” said Alec Burnside, a
  lawyer at Cadwalader acting for complainants in a separate matter
  against Google.

  Meet Margrethe Vestager, the EU’s “Competition Enforcer”

  

  Google Tax in Spain

  In a stunning display of stupidity, Spain passed a “Google Tax” that
  charged news aggregators like Google for showing snippets and linking to
  news stories. Rather than pay the tax, Google left.

  Then, in an amazing twist of irony, the publishers who were in favor of the tax, demanded Google stay.

  A study shows Spain’s “Google tax” has been a disaster for publishers.

  A study
  commissioned by Spanish publishers has found that a new intellectual
  property law passed in Spain last year, which charges news aggregators
  like Google for showing snippets and linking to news stories, has done
  substantial damage to the Spanish news industry.

   

  In the short-term, the study found, the law will cost publishers €10
  million, or about $10.9 million, which would fall disproportionately on
  smaller publishers. Consumers would experience a smaller variety of
  content, and the law “impedes the ability of innovation to enter the
  market.”

   

  The study concludes that there’s no “theoretical or empirical justification” for the fee. The full study (PDF) is available for download; it’s in Spanish with an English-language executive summary.

   

  The law, which provides for fines of up to $758,000 for violators, was passed in October.
  Unlike previous attempts to impose a “Google News tax” in Germany and
  Belgium, the Spanish law doesn’t allow publishers to opt out. In
  response, Google simply closed down Google News in Spain.

   

  Whatever loss of traffic occurs due to readers who may read a
  news aggregator and then choose not to read an entire story, is more
  than made up for by the “market expansion” effect, the study found. In
  other words, given access to a news aggregator like Google, people read
  much more news.

   

  The NERA analysis found a 6 percent overall drop in traffic from the
  Spanish Google News closure and a 14 percent drop for smaller
  publications.

  The entire notion there needs to be a “Competition Enforcer” is
  idiotic in and of itself. People use Google because they like Google.
  Others use Firefox because they like Firefox.

  The market is fully capable of deciding what needs to be, not “competition enforcer” bureaucrats demanding mediocrity.

  Margrethe Vestager and her nannycrat idiocy provides a stellar example as to why the UK should be pleased to be out of the EU.

  

  

• Fed Loses Another Excuse As China "Super Friday" Data Dump Beats Expectations

  China's 'Super Friday' data dump arrived and despite the 10% devaluation in the Renminbi basket over the past year, and an utterly incredible spike in borrowing (new loans spiked again in June!!), China economic data merely muddles through in its centrally-planned goal-seeked way. Earlier 'researchers' proclaimed Chinese GDP at around 6.5% but China GDP grew at 6.7% YoY (beating expectations of 6.6%). While Fixed Asset Investment disappointed (+9.0% vs +9.4% exp), Retail Sales (+10.6%) and Industrial Production (+6.2%) beat expectations.

   

  The devaluation against the USD is starting to accelerate as the broad Renminbi basket has now dropped 10% in the last year (against all of China's major trading partners)…

  

   

  The search for yield has once again led to Chinese Corporates, which have rallied back to almost record bubble low yields (despite the utter carnage in Chinese balance sheets as leverage rises). Bonds have replaced stocks for now as the bubble-du-jour in China…

  

  Not easily seen in this chart but SHCOMP has actually rallied bak to April levels in recent weeks amid the world's flood of central bank largesse.

  

  As Bloomberg notes, whenever China's GDP beat or met market consensus, the country's stock market fell. Here's how the Shanghai Composite did following the last four GDP releases:

  • 1Q on April 15, 2016: +6.7%; SHCOMP -0.1%
  • 4Q on Jan. 19, 2016: +6.8%; SHCOMP +3.2%
  • 3Q on Oct. 19, 2015: +6.9%; SHCOMP -0.1%
  • 2Q on July 15, 2015: +7%; SHCOMP -3%

  But it has not helped the macro-economic data much…

  • Industrial Production rose 6.2% (acclerating from 6.0% in May) BEATING expectations of a 5.9% rise (5.3 to 6.2% range)
  • Retails Sales printed +10.6% (faster than May's 10.0%) BEATING expectations of a 9.9% gain (with 40 economists estimating between 9.2 and 10.2% gains)
  • Fixed Assets Investment rose 9.0% YoY (slowing from 9.6% in May) MISSING expectations of 9.4% (between 8.8 and 9.8%) – lowest since 2000.
  • GDP printed +6.7% (flat from May) BEATING expectations of 6.6% YoY rise (6.3 to 6.8% range among 46 economists) – equal lowest since 2009.

  

  And all of this was achieved with another massive surge in credit…

  

  So The Fed loses another excuse – US Jobs – Fixed! BREXIT – handled! China Growth Fears – No Worries!

   

  

  

• We're Witnessing A Complete Breakdown In Western Values

  Submitted by Simon Black via SoveeignMan.com,

  Two months ago I was with the former President of Colombia, Alvaro Uribe, at his home outside of Medellin.

  He was telling me some hilarious stories about his interactions in the early 2000s with Hugo Chavez, who had recently seized power in Venezuela.

  Chavez was a fanatic socialist. He believed so strongly in the idea of redistributing wealth from rich to poor.

  Yet even when it was clear his policies weren’t working and Venezuela was rapidly sliding into economic chaos, Chavez’s only solution was to double down and redistribute even MORE wealth.

  It was the classic definition of insanity.

  Chavez failed to understand what Uribe told me so succinctly: “If there’s no wealth creation, there’s nothing left to redistribute.”

  We know how Venezuela turned out; its failed socialist experiment led to today’s infamous shortages of food and toilet paper.

  But here in Russia is perhaps the most famous example in our modern times.

  Marxists came to power in a bloody 1917 revolution with the goal of eradicating poverty and redistributing wealth.

  Yet like Venezuela, the only equality the Soviet Union managed to achieve was making everyone equally poor to the point that this vast wasteland of destitution finally collapsed in the late 1980s.

  These economic disasters almost invariably start with a rising gap in wealth and income– a growing percentage of the population feeling left behind who rally behind someone promising to “spread the wealth around.”

  As Historian Will Durant wrote in his incredible 1969 book Lessons from History:

  “The concentration [of wealth] may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich. . . which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”

  This is exactly what’s happening in the West now.

  The statistics are obvious: the wealth gap is bigger than it’s been since the Great Depression.

  Middle class wages, when adjusted for inflation, are stagnant.

  2015 was the first time in years that the average wage increase in the United States actually surpassed the rate of inflation.

  But on a longer timeline, household incomes haven’t kept pace with either productivity or the cost of living.

  We can see the effects of this anecdotally.

  Thomas Piketty’s 2013 book Capital in the Twenty-First Century, which criticized such inequality and advocated a global wealth tax, was an explosive best-seller.

  A 2011 Pew Research Center poll showed that 49% of US respondents had a favorable view of socialism.

  And of course, Bernie Sanders made wealth and income inequality major issues in his presidential campaign, resonating with tens of millions of people.

  On the way over to Russia I was reading an article in Newsweek about Uber, the ride-sharing pioneer that is currently worth around $70 billion.

  The author was upset because the company’s stock isn’t publicly traded like Apple or Facebook, meaning he’s not able to own any Uber shares for himself.

  He complains that the founders of these tech companies have been “actively deciding to keep as much for [themselves] as possible and shut out the rest of the populace by avoiding public stock offerings.”

  According to the author, we’re apparently all entitled to our “fair share” of other people’s businesses and private property.

  Unbelievable.

  He’s not alone– there’s a growing chorus of politicians beating up on Uber, evidenced by Elizabeth Warren’s statement in March 2016 that “all the benefits [of Uber and related “shared-economy” companies] are floating to the top 10%.”

  What an ignorant comment to make.

  Uber loses billions of dollars each year.

  So if anything, investors’ capital ends up in the pockets of the hundreds of thousands of drivers who use the app to generate extra income.

  In reality Uber constitutes an enormous transfer of wealth from investors to workers and consumers. So her comment was totally wrong.

  But what was more amazing was that she was complaining about how it benefits the top TEN percent.

  Usually these people whine about the top 0.1%, then the top 1%. Now it’s the top 10%.

  When will they start complaining about the top 20%? Or those evil people in the top 55%, i.e. the percentage of households that actually pay US federal income tax.

  Wealth and income inequality is real, and the gap is growing. So is the consequent rise of socialism.

  People know they’re getting screwed. And they are. They just don’t know why.

  They have no idea how central bankers who conjure money out of thin air have rigged the entire economy against them.

  So instead they blame “capitalism” and naturally embrace its opposite.

  Seven centuries ago when Europe was just a plague-infested backwater, glimmerings of economic freedom began to appear on the continent.

  The West adopted core values, like the sacrosanct protection of private property; the ability for an individual to work hard and build wealth; and spirited intellectual debate.

  This is how western civilization became the most prosperous that history has ever known.

  But this is all changing.

  Being wealthy used to be a virtue worthy of widespread aspiration.

  Now it’s met with skepticism and derision.

  Similarly, intellectual dissent used to be embraced.

  Now it’s increasingly considered “hate speech” that must be banished from university campuses and their infantile ‘safe spaces’.

  And the entire west, it seems, is moving towards an ever-expanding, fiscally unsustainable welfare state that creates swelling masses of dependents.

  This is a complete breakdown of western values, and that has serious consequences.

  It’s incredible how rapidly this trend has unfolded– it’s a very steep line from the economic chaos of the 2008 financial crisis to where we are today.

  And given the speed of this pro-socialist trend, just think about where it’s going to be in a few more years.

  More than likely, it will progress straight into your wallet.

  

  

• The Reasons Why The Globalists Are Destined To Lose

  Submitted by Brandon Smith via Alt-Market.com,

  Under the surface of almost every sociopolitical and economic event in the world there burns an ever-raging, but often unseen, war. This war, for now, is fought with fiction and with truth, with journalistic combat and with quiet individual deeds. It is defined by two sides which could not be more philosophically or spiritually separate.

  On one side is a pervasive network of corporate moguls and elites, banking entities, international financial consortiums, think tanks and political puppets. They work tirelessly to reshape public psychology and society as a whole into something they sometimes call the “New World Order;” a completely and scientifically centralized planet in which they control every aspect of government, trade, life and even moral compass. I often refer to them simply as the “Globalists,” which is how they at times refer to themselves.

  On the other side is a movement that has developed organically and instinctively, growing without direct top-down “leadership,” but still guided through example by various teachers and activists, driven by a concrete set of principles based in natural law. It is composed of the religious, the agnostic and even some atheists.  It is soldiered by people of all ethnic and financial backgrounds. These groups are tied together by a singular and resounding belief in the one vital thing they can all agree upon — the inherent and inborn rights of freedom. I call them the “Liberty Movement.”

  There are those who think they do not have a dog in this fight, those who ignore it and those who are completely oblivious to it. However, EVERYONE can and will be affected by it, no exceptions. This war is for the future of the human race. Its consequences will determine if the next generation will choose the conditions of their environment and maintain the ability to reach their true potential as individuals or if every aspect of their lives will be micromanaged for them by a faceless, soulless bureaucracy that does not have their best interests at heart.

  As you can probably tell, I am not unbiased in my examination of these two sides. While some of the more “academically minded” cynics out there do attempt to marginalize the entire conflict by accusing both sides of simply trying to impose “their ideology” on the rest of humanity, I would say that such people are generally ignorant of what is at stake.

  There is in fact an elemental force behind this war. I would even call it a conflagration between good and evil. For a more in-depth analysis on the evil behind globalism, read my article “Are Globalists Evil Or Just Misunderstood.”

  Some people don’t adhere to such absolutes or they think good and evil are fantasies created by religion to keep society in check. I have no intention of trying to convince them otherwise. All I can say is, I have seen and experienced these absolutes first hand and, therefore, I have no choice but to remain a believer.

  I would also point out that the general experience of most men and women is that the act of organized and legitimate oppression is inherently evil and such actions in the name of satisfying delusional elitist narcissism are even more evil. While these experiences are subjective, they are also universal, regardless of the culture, place or time in history. Most of us feel the same horror and the same defiance when presented with rising tyranny. We can’t necessarily explain why, but we all know.

  While I am firmly on the side of liberty and am willing to fight and trade my life to stop the “New World Order” the globalists are so obsessed with, I will not turn this examination of their tactics into a blind or one sided farce. I will point out where the elites are effective just as I will point out where they are ineffective. It would do more harm than good to portray the globalists as “stupid” or bumbling in their efforts. They are not stupid. They are actually astonishingly clever and should not be underestimated.

  They are indeed conniving and industrious, but, they are not wise. For if they were wise, they would be able to see the ultimate futility of their goal and the world would be saved decades of tragedy and loss. Their cultism has dulled their senses to reality and they have abandoned truth in the name of control. Here are some of the primary strategies that the globalists are using to gain power and work towards total centralization and why their own mindset has doomed them to failure.

  Globalism vs. “Populism”

   

  The globalists have used the method of false dichotomies for centuries to divide nations and peoples against each other in order to derive opportunity from chaos. That said, the above dichotomy is about as close to real as they have ever promoted. As I explained in my article, “Globalists Are Now Openly Demanding New World Order Centralization,” the recent passage of the Brexit referendum in the U.K. has triggered a surge of new propaganda from establishment media outlets.  The thrust of this propaganda is the notion that “populists” are behind the fight against globalization and these populists are going to foster the ruin of nations and the global economy.  That is to say — globalism good, populism bad.

   

  There is a real fight between globalists and those who desire a free, decentralized and voluntary society.  They have just changed some of the labels and the language. We have yet to see how effective this strategy will be for the elites, but it is very useful for them in certain respects.

   

  The wielding of the term “populist” is about as sterilized and distant from “freedom and liberty” as you can get. It denotes not just “nationalism,” but selfish nationalism. And the association people are supposed to make in their minds is that selfish nationalism leads to destructive fascism (i.e. Nazis).  Therefore, when you hear the term “populist,” the globalists hope you will think “Nazi.”

   

  Also, keep in mind that the narrative of the rise of populism coincides with grave warnings from the elites that such movements will cause global economic collapse if they continue to grow. Of course, the elites have been fermenting an economic collapse for years. We have been experiencing many of the effects of it for some time. In a brilliant maneuver, the elites have attempted to re-label the liberty movement as “populist” (Nazis), and use liberty activists as a scapegoat for the fiscal time bomb THEY created.

   

  Will the masses buy it?  I don’t know.  I think that depends on how effectively we expose the strategy before the breakdown becomes too entrenched.  The economic collapse itself has been handled masterfully by the elites, though. There is simply no solution that can prevent it from continuing. Even if every criminal globalist was hanging from a lamp post tomorrow and honest leadership was restored to government, the math cannot be changed and decades of struggle will be required before national economies can be made prosperous again.

   

  Communism vs. Fascism

   

  This is a classic ploy by the globalists to divide a culture against itself and initiate a calamity that can be used as leverage for greater centralization down the road.  If you have any doubts about fascism and communism being engineered, I highly suggest you look into the very well documented analysis of Antony Sutton. I do not have the space here to do his investigations justice.

   

  Today, we see elites like George Soros funding and aiding the latest incarnation of the communist hordes — namely social justice groups like Black Lives Matter.  The collectivist psychosis and Orwellian behavior exhibited by race junkies like BLM and third-wave feminists is thoroughly pissing off conservatives who are tired of being told what to think and how to act every second of every day. And this is the point…

   

  If you want to get a picture of America in 2016, look back at Europe during the 1930’s. Communist provocateurs, some real and some fabricated by the establishment itself, ran rampant in Europe creating labor disintegration and fiscal turmoil. The elites then funded and elevated fascism as the “solution” to communism. Normally even-handed conservatives were so enraged by the communist spitting and ankle biting that they became something just as evil in response.

   

  The U.S. may be on the same path if we are not careful. The latest shootings in Texas will make hay for the globalists. Think about this for a moment — on one side you have Obama telling the liberals that the answer to police brutality is to federalize law enforcement even more that it already is. On the other side, you have some Republicans arguing that a more militarized police presence will help prevent groups like BLM from causing more trouble. Notice that the only solution we are being offered here is more federal presence on our streets?

   

  I do see, though, a rather large weakness in the plan to ignite a communist vs. fascist meltdown in the U.S., and that weakness is the existence of the Liberty Movement itself.  The movement has grown rather sophisticated in its media presence and prevalent in influence. It does have enough sway now to diffuse some aspects of a rise to fascism in the political Right. The only option the elites have is to find a way to co-opt us. If they can manipulate the liberty movement into supporting a fascist system, then they would be very close to winning the entire fight. This would be highly unlikely given the stubbornness of liberty proponents when adhering to their principles.

   

  The elites might be able to get a large part of the public to take sides in their false paradigm, but if they can’t con the millions that make up the liberty movement into the fold, then their job becomes much harder.

   

  Moral Compass vs. Moral Relativism

   

  Moral relativism is perhaps the pinnacle goal of the globalists. Why? Because if you can convince an entire society that their inherent conscience should be ignored and that their inborn feelings of morality are “open to interpretation,” then eventually ANY evil action can be rationalized. When evil becomes “good,” and good becomes evil, evil men will reign supreme.

   

  The problem is, conscience is an inborn psychological product, a result of inherent archetypal dualities universal to almost all people. It is ingrained in our DNA, or our very souls if you believe in such a thing. It cannot be erased easily.

   

  Moral relativism requires a person to treat every scenario as a “gray area.”  This is not practical. Conscience dictates that we treat every situation as potentially unique and act according to what we feel in our hearts is right given the circumstances.  This does not mean, though, that there is no black and white; or that there are no concrete rules.  There is almost always a black and white side to any situation dealing with right and wrong.  Moral “dilemmas” are exceedingly rare.  In fact, I don’t think I have ever encountered a real moral dilemma in history or in personal experience. The only time I ever see moral dilemmas is in movies and television.

   

  Only in television fantasy is moral relativism ever the “only way” to solve a problem. And despite the preponderance of moral relativism in our popular culture, the ideology is still having trouble taking hold.  If it was so easy to undermine conscience, then the NWO would have already achieved complete pacification. We are still far from pacification. Whoever hard-wired our conscience should be applauded.

   

  Collectivism vs. Individualism

   

  The very core of globalism and the NWO is the position that sovereignty and individualism must be sacrificed for the "good of the group"; in other words, they promote collectivism.  Of course, groups by their very nature are abstractions; they only exist as long as the individuals within them recognize them as viable.  Unfortunately, collectivists do not accept this fact because it would mean that the group, not matter how utopian, is not the pinnacle of human existence – rather, the individual is and always will be the pinnacle of human existence.

   

  The elites MUST convince people that individualism is dangerous and that collectivism is the only way to prevent the tragedies wrought by those who wish to be separate.  Of course, most of the tragedies we experience on a national or global scale are actually engineered by the elites, not by wild individuals or sovereign nations looking for trouble.  They then blame the very concept of sovereignty as a barbaric ritual from the past that must be abolished for the sake of all.

   

  In order for the globalists to reinforce the need for collectivism, though, they must engage people on an individual psychological level.  Most human beings have an inherent desire to interact with their fellow man, but they also have an inherent identity and drive to pursue their own development without interference.  We like to be a part of a group as long as our participation is healthy and voluntary and our associations are a matter of choice.

   

  Human beings are instinctively tribal, but we have psychological and biological limits to the size of the tribe we prefer to be a part of.  Robin Dunbar, a professor of evolutionary psychology prevalent in the 1990's, found that there is a cognitive limit to the number of individuals any one person can maintain stable relationships with.  Dunbar found this number to be between 100 – 200 people.  A limitation also extends to the size of effective groups versus ineffective groups.  He found that effective tribes and communities tend to remain between 500 – 2500 people.

   

  The human mind does not adapt well to a vast tribal groups, and recoils from the idea of a "global tribe".  The truth is, human beings function far better in smaller groups and they do not like to be forced into participating in any group, let alone larger groups.  This may account for the feeling of isolation that is common among people who live in metropolitan areas.  They are surrounded by millions of neighbors and perhaps hundreds of associates yet they still feel alone because they do not have a functioning tribe of acceptable size.

   

  Vast numbers of people can be tied together by an ideal that resonates with them, which is the only purpose for nations to form (to protect that ideal), but that is as far as the voluntary association goes.  Globalist collectivism is simply unnatural.  People know it unconsciously, they know it is an act of force and oppression, and will invariably move to sabotage its false tribalism as they begin to see its true colors.

   

  Total Control vs. Reality

   

  This is where the globalists philosophy really begins to break down. The elitist pursuit of total information awareness and total social control is truly perverse and insane, and insanity breeds delusion and weakness.  The fact is, they will NEVER complete the goal of complete micro-control. It is mathematically and psychologically impossible.

   

  First, in any system, and in complex systems most of all, there are always elements that cannot be quantified or predicted. To understand this issue, I recommend studying the Heisenberg Uncertainty Principle. To summarize, the uncertainty principle dictates that anyone observing a system in action, even from a distance, can still affect the behavior of that system indirectly or unconsciously in ways they could never predict.  They are also limited by their ability to objectively perceive all available elements of what they observe.  Unknown quantities result, predictability goes out the window and total control of that system becomes unattainable.

   

  This principle also applies to human psychology, as numerous psychoanalysts have discovered when treating patients. The doctor, or the observer, is never able to observe their patient without indirectly affecting the behavior of their patient in unpredictable ways. Therefore, a completely objective analysis of that patient can never be obtained.

   

  What the elites seek is a system by which they can observe and influence all of us in minute detail without triggering a reaction that they wouldn’t expect.  The laws of physics and psychology derail this level of control.  There will always be unknown quantities, free radicals, wild cards, etc. Even a seemingly perfect utopia can be brought down by a single unknown.

   

  To break this down even further to the level of pure mathematics, I recommend study into Kurt Godel and his Incompleteness Proof. This, I believe is the ultimate example of the elites struggling against the fact of unknown quantities and failing.

   

  Godel’s work revolved around either proving or disproving the idea that mathematicians could define “infinity” in mathematical terms. For, if infinity can be defined, then it can be understood in base mathematical axioms, and if infinity can be understood, then the universe in its entirety can be understood. Godel discovered the opposite — his incompleteness proof established once and for all that infinity is a self inclusive paradox that CANNOT be defined through mathematics. Keep in mind that a proof is a set of mathematical laws that can never be broken. Two plus two will always equal four; it will never equal anything else.

   

  Well known globalist Bertrand Russell worked tirelessly to show that the entirety of the universe could be broken down into numbers, writing a three volume monstrosity called the Principia Mathematica.  Russell’s efforts were fruitless and Godel’s proof later crushed his theory. Russell railed against Godel’s proof, but to no avail.

   

  Now, why was an elitist like Russell who openly championed scientific dictatorship so concerned by Godel? Well, because Godel, in mathematical terms, destroyed the very core of the globalist ideology. He proved that the globalist aspirations of godhood would never be realized. There are limits to the knowledge of man, and limits to what he can control.  This is not something globalists can ever accept, for if they did, every effort they have made for decades if not centuries would be pointless.

  As mentioned earlier, the issue is one of unknown quantities.

  Can human society ever be fully dominated? Or, is the act of rebellion against stagnating and oppressive systems a part of nature?  Is it possible that the more the elites wrap the world in a cage, the more they inspire unpredictable reactions that could undermine their authority?

  This might explain the establishment’s constant attention to the idea of the “lone wolf” and the damage one person acting outside the dictates of the system can do. This is what the elites fear most: the possibility that despite all their efforts of surveillance and manipulation, individuals and groups may one day be struck by an unpredictable urge to pick up a rifle and put the the globalists out of everyone’s misery. No chatter, no electronic trail, no warning.

  This is why they are destined to lose. They can never know all the unknowns. They can never control all the free radicals. There will always be rebellion. There will always be a liberty movement. The entirety of their utopian schematic revolves around the need to remove unknowns. They refuse to acknowledge that control at these levels is so frail it becomes useless and mortally dangerous. In their arrogance, they have ignored the warnings of the very sciences they worship and have set their eventual end in stone. While they may leave a considerable path of destruction in their wake, it is already written; they will not win.

  

  

• "This Is Not Encouraging" – Credit Manager Index Crashes To 7 Year Lows

  "Year-over-year numbers have not been encouraging of late," warns National Asscociation of Credit Managers' economists Chris Kuehl, noting that the "nice little run of steady improvement in NACM’s Credit Managers’ Index seems to have come to an end."

  as the index suggests the credit cycle is back at its weakest since 2009…

  

  Source: NACM

  As credit extended is tumbling… not at all what The Fed wants…

  

  Source: NACM

  As Bankruptcies soar…

  

  Source: NACM

  And breaking another narrative that the service economy will support the economy despite manufacturing's collapse…

  “The dark clouds on the manufacturing horizon include a decline in the sales of new cars and the potential drop in export demand as the dollar gains a lot more strength against the pound and the euro. How this will all play out remains to be seen,”

  …Kuehl concludes, 

  "The service sector is leading that decline after some months of good news. The summer has not yet been a positive experience, and global issues are depressing the average business and consumer even more."

  

  

• "The Resentment Will Explode" – In Dramatic Twist, McKinsey Slams Globalization

  The IMF is getting nervous, and what it appears to be most concerned about, is a collapse of the status quo.

  Moments ago, in a speech in Washington, IMF head Christine Lagarde said that “The greatest challenge we face today is the risk of the world turning its back on global cooperation—the cooperation which has served us all well. We know that globalization – and increased integration – over the past generation has yielded many economic benefits for many people.”

  The IMF is not alone: for years, consultancy giant McKinsey towed the party line as well saying in 2010 that “the core drivers of globalization are alive and well” and adding as recently as 2014 that “to be unconnected is to fall behind.“

  That appears have changing, and cracks are starting to form behind the cohesive push for globalization, at least among those who benefit the most from globalization.

  In a stunning study released today, one which effectively refutes all its prior conclusions on the matter, McKinsey slams the establishment’s status quo thinking and admits that the economic gains of changes in the global economy have not been widely shared lately, especially in the developed world. In the report titled “Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies” it finds that prospects for income growth have deteriorated significantly since the financial crisis, and that the benefits from globalization are now over:

  This overwhelmingly positive income trend has ended. A new McKinsey Global Institute report, Poorer than their parents? Flat or falling incomes in advanced economies, finds that between 2005 and 2014, real incomes in those same advanced economies were flat or fell for 65 to 70 percent of households, or more than 540 million people (exhibit). And while government transfers and lower tax rates mitigated some of the impact, up to a quarter of all households still saw disposable income stall or fall in that decade.

  As Bloomberg reports, Britain’s vote to exit the European Union exemplifies what happens when people feel like the system is letting them down, Richard Dobbs, the co-leader of the research, said in an interview Wednesday, ahead of the report’s release. He likened the buildup of resentment over globalization to a dangerous natural gas leak in a row of houses. 

  “One of them will explode. I did not think that it would be the U.K. first,” said Dobbs, a senior partner of McKinsey and a member of the McKinsey Global Institute Council in London.

  “When we launch a new policy, let’s think about the impact on those groups” who have been left behind, Dobbs said. Sometimes the goals of fairness and efficiency can conflict, he said. “Are we prepared to damage competitiveness a bit to reduce the risk of an explosion?”

  To be sure, just like the IMF’s U-turn on austerity after the failure of the second Greek bailout, McKinsey was unwilling to admit it has flop-flopped on such a critical position. Instead, Dobbs described the institute’s stance on globalization as an “evolution,” not a reversal. “We’re not saying throw it all out. … It’s about a sophistication in our thinking,” he said. The McKinsey Global Institute still sees value in offshoring, immigration, trade, and so forth, Dobbs said: “Generally we’re pro those, but there’s a however, and we need to be more aware of the however.”

  In a startling finding, the report said that 65 to 70% of households in 25 advanced economies were in income segments that had flat to falling incomes between 2005 and 2014, up from less than 2 percent between 1993 and 2005. More troubling is that for some of the biggest supposed winners from globalization such as the US, this number is as high as 81%, while in Italy it soars to just shy of 100%!

  

  A silver lining emerges when one takes into account “socialy equalizing” considerations such as transfers and taxes into account, aka government welafre. In that case, only 20 to 25% of households were in income segments that had flat to falling incomes between 2005 and 2014, the study said.  Curiously, the biggest winners from this reindexation were such socialist nations as Sweden, France and… the United States, which when accounting for government generosity would report less than 2% of household segments with falling income (inexplicably, when applying government genersoity in Italy, the number of households who saw their income decline rose from 97% to 100%).

  This is how McKinsey puts it:

  Labor-market practices can make a difference, as can government taxes and transfers—although the latter may not be sustainable at a time when many governments have high debt levels. For example, in Sweden, where the government intervened to preserve jobs during the global downturn, market incomes fell or were flat for only 20 percent of households, while disposable income advanced for almost everyone. 

   

  In the United States, lower tax rates and higher transfers turned a decline in market incomes for four-fifths of income segments into an increase in disposable income for nearly all households. Efforts such as these—along with additional measures such as encouraging business leaders to adopt long-term thinking—can make a real difference.

  A less spun way of saying that is that the vast majority of social inequality in the US has been “smoothed over” courtesy of the government over the past decade, which of course, is another way of saying that the political class holds hundreds of millions  of Americans hostage: “if you want your welfare checks, EBTs, disability payments to continue, don’t you dare force a political change or else…“

  One wonders just how sustainable this form of subsidized income truly is, especially if the mechanism that funds the US government apparatus, the dollar’s reserve status which allows the US to issue trillions in debt with impunity, is somehow impaired. Not only that but as McKinsey also admits, government transfers “may not be sustainable at a time when many governments have high debt levels.”

  Why wasn’t it just McKinsey which one year ago “discovered” just how massive the global debt load had risen to in the years since the financial crisis.

  

  Perhaps the report’s author could have synthesized McKinsey’s previous findings to comment on the viability of such an artificial approach to keeping people happy.

  Still, that does not change McKinsey’s troubling conclusion that globalization is now hurting, not helping, the majority of people.

  In fact, the summary adds, “If the low economic growth of the past decade continues, the proportion of households in income segments with flat or falling incomes could rise as high as 70 to 80 percent over the next decade. Even if economic growth accelerates, the issue will not go away: the proportion of households affected would decrease, to between about 10 and 20 percent—but that share could double if the growth is accompanied by a rapid uptake of workplace automation.”

  The conclusion, silver lining notwithstanding, is a troubling one for the IMF and for all those who defend globalization at any cost:

  These findings provide a new perspective on the growing debate in advanced economies about income inequality, which until now has largely focused on income and wealth gains going disproportionately to top earners. Our analysis details the sharp increase in the proportion of households in income groups that are simply not advancing—a phenomenon affecting people across the income distribution. And the hardest hit are young, less-educated workers, raising the spectre of a generation growing up poorer than their parents.

   

  The economic and social impact is potentially corrosive. A survey we conducted as part of our research found that a significant number of those whose incomes have not been advancing are losing faith in aspects of the global economic system. Nearly one-third of those who are not advancing said they think their children will also advance more slowly in the future, and they expressed negative opinions about free trade and immigration.

  They also tend to vote for things like Brexit and unsavory presidential candidates.

  But our biggest concern is that just weeks after the BIS slammed central banks for merely boosting capital markets as a reaction to what is now clearly the failure of globalization to work ratably for all, and now McKinsey also splinter from the “all is well” camp, the response by policymakers has been one which not only does not address the underlying issue, but makes it even worse. Because if the world’s elites are still deluded into believing that propping the world’s stock markets to all time highs will somehow “trickle down” to the great unwashed masses, they will very soon get a very painful, and long overdue, reminder of just what happens in human history any time the vast majority is angry and feels betrayed by its “leaders.”

  

  

• Natural Gas Report Analysis 7-14-2016 (Video)

  By EconMatters

  
  

  

  A Bigger Build in Natural Gas inventories this past week compared to the last couple of weekly reports. We could go down to $2.50 per MMBtu the next couple of weeks if we get milder weather forecasts for the remainder of the summer season.

  © EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle   

  

• Still No Explanation For Dallas Gunman's Honorable Discharge

  Almost a week after the Dallas sniper attacks, AP's Will Weissert reports that it's still unclear how the gunman obtained an honorable discharge from the military even though Army officials sent him home from Afghanistan with a recommendation that he be thrown out of the armed forces.

  

  As we noted previously, exactly how Micah Johnson came to be the man who murdered five police officers in Dallas remains unsolved.

   Johnson, a mid-twenties man (much like Bin Laden's son), apparently had taken his love for the ladies a little too far when he was serving in the Army Reserves. The killer who "stated that he wanted to kill white people, especially white officers", as we posted, had an apparent fetish for women's panties.

   

  Johnson was kicked out of the Army for stealing panties, returned home as a soldier who fell from grace, was exposed to Eric Garner's July murder and Michael Brown's August murder, all while trying to negotiate a deal with his lawyer regarding his panty heist…. et voila, he became a crazed murderer.

   

  At this point it has become clear that the story-line being spun to the public is one focused on the details.  The people of Dallas and the rest of the world are to believe:

  • an Army Reserve recruit stole panties,
  • saw two high profile murders play out on American media,
  • felt bad in the juxtaposition of Presidential praise in the midst of a possible discharge,
  • had two guns stolen from him,
  • then turned into a Dallas sniper much like Lee Harvey Oswald.

  But, as Military.com details, it's still unclear how the gunman obtained an honorable discharge from the military even though Army officials sent him home from Afghanistan with a recommendation that he be thrown out of the armed forces.

  An attorney appointed by the military to represent Micah Johnson in a sexual harassment case speculated last week that Johnson's behavioral record could be more serious. The attorney says he's now under strict orders not to discuss the matter with reporters.
  Johnson, 25, served in the Army Reserve for six years before the July 7 sniper attack, which killed five Dallas police officers.

   

  "We are reviewing all of his records," Army spokesman Col. Patrick Seiber said Wednesday. He would not elaborate or discuss any aspect of the review.

   

  Johnson's lawyer said he had prepared documents for a more severe other-than-honorable exit almost two years ago.

  An other-than-honorable discharge is not as serious as a dishonorable discharge, the harshest form of dismissal from the military. The lesser punishment may be issued for misconduct, for security reasons or in lieu of trial by court-martial. In some cases, it can bar a soldier from re-enlisting or receiving some veterans' benefits.

  Army lawyer Bradford Glendening was assigned to represent Johnson following an accusation of sexual harassment against him by a female soldier in his unit, Glendening said. Exactly what Johnson is accused of doing has not been made public.

   

  Johnson deployed to Afghanistan in 2013, but was sent back to Texas with the recommendation that he be removed from the Army with an other-than-honorable discharge, said Glendening, who prepared the other-than-honorable discharge papers in September 2014.

   

  However, Johnson didn't actually leave the service until the following April, according to service records released by the Army that do not classify his discharge.

   

  His attorney later learned that the discharge was honorable.

   

  "I was shocked to see that," he told The Associated Press by phone last week, less than 24 hours after the Dallas shooting. He said he never received final documentation on how Johnson's case was resolved.

   

  "Somebody really screwed up but to my client's benefit," he said.

   

  Since then, Glendening has declined to comment saying, "I'm under direct orders not to divulge anything further and am subject to military prosecution if I do."

  Other members of Johnson's Army Reserve unit have suggested they are under similar gag orders as active-duty personnel.

  The Army would not comment on those reports. Instead, it said all questions about Johnson's military service should be referred to the Army's public affairs office at the Pentagon.

   

  Johnson entered the Army Reserve in March 2009 at age 18, after graduating from high school in the Dallas suburb of Mesquite. He was a carpentry and masonry specialist assigned to an engineer brigade based in Seagoville, south of Mesquite.

   

  He deployed to Afghanistan in November 2013 as part of the 420th Engineer Brigade. He was accused of sexual harassment the following May.

  Sending a soldier home from Afghanistan and then starting the process of removing him from the Army was "highly unusual" if it was based solely on a single sexual harassment complaint, Glendening said last week.

  He said: "99 percent of the time, you counsel the soldier. You say, 'Don't let it happen again.' "

   

  The attorney suggested that Johnson may have had other problems in his unit.

   

  "It was not just the act itself," Glendening said. "I'm sure that this guy was the black sheep of his unit. Every unit's got one."

   

  The accuser in the sexual harassment complaint has declined repeated requests for an interview with the AP. In a 2014 statement, she said she wanted Johnson "to receive mental help." She also sought a protective order against him "pertaining to myself, my family, my home."

   

  Glendening said Johnson was subsequently ordered by the Army to stay away from his accuser. It's unclear whether he got mental counseling.

   

  The Army last week released a brief summary of Johnson's record, detailing his dates of service, his deployment to Afghanistan and his awards.

  *  *  *

  Will the average American believe the narrative of a botched panty heist sparking a downfall that dragged Johnson through sensationalized US media coverage of murder, to a home invasion, all the while feeling ashamed about his own disgrace as the US President heaps praise upon his group?

  … And now that narrative appears to breaking down as the military seem confused over the facts.

  

  

• Trump Postpones VP Announcement Due To "Horrific Attack" In France

  With all the world’s eyes now firmly fixed on the south of France and the horrific ‘terrorist attack’ on Nice, Donald Trump has decided to postpone the announcement of his vice-president (until the next news cycle).

  As Politico reports, Donald Trump will postpone the announcement of his vice presidential pick, citing the “horrible attack” in Nice, France, in which a tractor-trailer drove through crowded streets, killing scores.

  Trump was scheduled to announce and introduce his selection Friday morning in Manhattan, but he tweeted Thursday evening that he would postpone the event.

  In light of the horrible attack in Nice, France, I have postponed tomorrow’s news conference concerning my Vice Presidential announcement.

  — Donald J. Trump (@realDonaldTrump) July 14, 2016

  Another horrific attack, this time in Nice, France. Many dead and injured. When will we learn? It is only getting worse.

  — Donald J. Trump (@realDonaldTrump) July 14, 2016

  Trump was expected to reveal his vice presidential choice, widely believed to be Indiana Gov. Mike Pence, at an 11 a.m. news conference.

  

  But, as The Hill reports, campaign manager Paul Manafort downplayed those reports Thursday, tweeting that Trump was still making the decision.

  “A decision will be made in the near future and the announcement will be tomorrow at 11 am in New York,” Manafort tweeted Thursday.

  

  

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• Endgame for Corporation USA without Trump

  Money doesn’t exist – as we explain in Splitting Pennies.  Money is an idea, an abstraction – a belief system.  A dogma.  So is a country.  In fact, a country IS a currency.  EU nations have given up their sovereignty to join the Euro (and we see how well that’s working out for them).

  Brexit made a lot of money for FX traders, but planted a seed in the masses that change is possible (we’ll see, if the British government actually goes through with Brexit..)  Countries are born, and die.  As far as countries go, the United States of America (USA) is actually one of the world’s oldest countries.  Actually there’s only a small handful of older countries, such as San Marino (1600), Vatican City (1274), and the United Kingdom (1707).  USA changed the global political landscape in many ways, especially during the 20th century – not only directly (through invasive foreign policy) but by example.  USA was one of the first ‘superstates’ – now such superstates are common (the EU being one).  USA was the first country to detach from cultural or ethnic identity, Americans were a mix of Europeans and others.  So, what has USA become – does Television define what USA is?  No, it’s just a powerful control mechanism.  Millions of Americans don’t watch TV.  In fact, for the majority of residents in USA, they are completely oblivious to how the other 99% live.  Not everyone lives in Midtown and works for a prop shop.  Not everyone lives in the burbs.  But if you do – it seems that – this is America!  We define the outside world by what we see inside our own.  Which is a big mistake, but at least we have freedom to do it (so they tell us).

  Through the evolution of the global system, USA became a big business, a big corporation.  America, Inc. is the largest employer in the world.  What the US government actually does is a mystery to many analysts in the world, but one thing is for sure – they create employment.  US Citizens who can’t find reasonable jobs, and can’t teach, usually end up working for the government.  According to government data (here’s the need for a governemnt job, compiling data on how many jobs), about 4.1 Million work for the government, down from it’s 1970 peak of 6 Million +.  Jimmy Buffet has a song “Everyone has a cousin in Miami” which is basically true for 99% of Americans – also everyone has a cousin that works for the government.  This business runs very well.  It greases all the right palms.  That’s why it exists.  Not because of voters.  Corporation America is a global octopus of trade.  It’s a form of uber Facism – words can’t describe the system we have now in America because frankly, 90% of it is ‘secret’ and so it hasn’t been studied.  So what can make this machine break?  Several social factors, domestic issues.  But the machine can’t break – it’s too big, it’s too involved in every aspect of global empire management.  But it can change.  

  Looking at America as a closed system, inside the walls that have been built by DHS, SEC, CFTC, FBI, CIA, IRS the social fabric of America is polarized.  At the end of the day, all these riots, shootings, what everything comes down to is economics.  People who are employed, don’t take time off work to protest for their rights.  They are happy for their jobs.  Rich people, don’t insinuate riots or shoot people, generally.  Most of the time, your life determines your political views.  If you have a nice life, a good job (about 95 Million Americans) you want the system to continue as it is, you don’t want to lose what you have.  If you have no job, no money, life sucks – you want change.  But at some point, such as we are in now, social factors can become extreme, and a critical mass or ‘tipping point’ is reached, where a sufficient amount of angry people congregate into a mass of really angry people, which can choose to leave and create their own state, their own government- like America did when it was a part of Britain.  Texas, just voted NOT to seced.  These violent elements whether they be racial or other, make all this more extreme.  

  The Establishment in America, for at least 30 years, has thrashed the Constituion, violated their own laws they create, and created a real Oligarchy, banana republic style.  It coincides in parallel with other signficant social trends, such as the demise of the Mafia, and the rise of the robots.  To someone like a Clinton, it’s not what you know – but who you know.  Well, that works in College or maybe to get into a Golf Club but it’s no way to run a country.  Like with any Oligarchy, it is the job of the Oligarchs to allow the system to flourish, and not to take too much bribes for themselves, because it becomes like a cancer, and finally the host dies.  The masses who are unemployed have a strong argument to the Establishment – you’re not doing a good job running our economy because there are unemployed people (i.e. ME).  But you have your fancy haircuts and private jets and so on, so let’s get rid of all of you!  That’s the idea of voting for Trump.  True or not, he’s seen as the anti-Establishment candidate.  The Elite have created such a mess this year, whether by purpose or not it’s irrelevant; the only thing that can save Corporation USA is a Trump Presidency.  It’s not as if Trump will save us from anything, and certainly he is self-serving.  But he’s a businessman, and really the only thing that can keep Corporation America ticking is a businessman.  Probably, he doesn’t even know the good he’ll do in the White House until he gets there.  Simple things can go a long way – such as a trade deal with Russia.  Developing Thorium nuclear reactors.  And most importantly, de-polarizing the population to pre-crisis levels, when we are ‘all Americans.’  Trump can do all this and more without even knowing it.  We need a self-serving Hitler like dictator to run America’s facist enterprise.  It’s just good for business.  The stock market can double.  QE will become QEEEEEE.  Because the alternative is disaster (and no businessman wants to file bankruptcy).  When Trump realizes that Corporation America can actually turn a profit, he’ll cut taxes and at the same time double the size of entitlements, all paid for with a massive budgetary surplus, coupled with a strong dollar and finally 10% interest rates.  Whoa!  There’s just so much opportunity out there, when you look from this perspective, economically speaking.  This was one of Bush talents (and, as a national comedian).  Bush made a business out of his office, and although he made a hefty empire for his family, he also made many other people, many Oligarchs, rich beyond their dreams.

  If a politician like Clinton is elected, based on Cybernetic systemic analysis, that USA will collapse.  Business will move on, but the political system will collapse.  States like Texas and the South will secede first.  California will follow.  Washington will struggle to maintain control.  If you want to see what a new USA might look like, forget ‘futurists’ and just look the Federal Reserve map, they’ve already carved it out:

  

  But, the Fed drew these according to state lines, so more likely, the lines will shift a little, based on demographic trends, and infrastructure geography.  It will probably look more like this:

  

  Probably, Trump will get in and this will be a non-issue.  But if not, we will be faced with a real ‘clash of civilizations’ in America.  This was best described by Noam Chomsky in his book “Hegemony or Survival:”

  Chomsky’s main argument in Hegemony or Survival is that the socio-economic elite who control the United States have pursued an “Imperial Grand Strategy” since the end of World War II in order to maintain global hegemony through military, political and economic means. He argues that in doing so they have repeatedly shown a total disregard for democracy and human rights, in stark contrast to the US government’s professed support for those values. Furthermore, he argues that this continual pursuit of global hegemony now threatens the existence of the human species itself because of the increasing proliferation of weapons of mass destruction.

  Chomsky noted that, during times of economic crisis like the post 9/11 world, the Elite (Oligarchs) decided to invest in weapons and security as opposed to social programs and businesses, such as the CCC.  Meaning that, instead of growing a garden, they decided to build a bunker, and protect themselves from hungry people (or rioters) whether they be the black power movement, or just nomadic flash mobs of brainless teens being told what to do via phone app.  Ironically, Rand corporation doesn’t have scenarios gamed out for collapse USA, maybe DOD does and it’s just private.  If you haven’t read Civil War 2 – it’s a bit dated but will be chilling to any current reader, as it explains how the fabric of society will melt down as it has in last weeks and months.  It’s a great read about the strategem of a collapse scenario, written by a military man.

  The breakup of USA isn’t a new idea, it’s just easily laughed off as content for science fiction.  It’s not a reality, it can’t happen – not in America!  That’s what Briton’s thought before the Brexit vote.  In fact if you look at any new country, it’s always a surprise.  I’m sure looking back, it was a big surprise to King George when the American ruffians decided to be defiant against their home country – England.  All of a sudden, America was a country.  Remember, during this time, Europe’s colonial powers ruled the world, bit by bit.  Revolution is always a surprise:

  Every revolution is a surprise. Still, the latest Russian Revolution must be counted among the greatest of surprises. In the years leading up to 1991, virtually no Western expert, scholar, official, or politician foresaw the impending collapse of the Soviet Union, and with it one-party dictatorship, the state-owned economy, and the Kremlin’s control over its domestic and Eastern European empires. Neither, with one exception, did Soviet dissidents nor, judging by their memoirs, future revolutionaries themselves. When Mikhail Gorbachev became general secretary of the Communist Party in March 1985, none of his contemporaries anticipated a revolutionary crisis. Although there were disagreements over the size and depth of the Soviet system’s problems, no one thought them to be life-threatening, at least not anytime soon. – Foreign Policy

  This time though, it really IS different.  With electronic markets, the system is so robust, America could splinter and life would barely change.  So while the idea of USA collapse seems earth-shattering, as a practical matter, things could very much continue as it were.

  It’s an exciting idea for Forex traders, the ability to trade regional currencies in North America, I’d immediately go long the New England Dollar and short the Cali-peso (sorry, birthplace).  But most people don’t know, there’s already many US Dollar alternatives that are used right now, today, in America (not just Bitcoin):

  1. Bitcoin. The world’s best-performing currency, according to Kemp-Robertson, Bitcoin’s value is tied to the performance of a computer network. It’s “completely decentralized—that’s the sort of scary thing about this—which is why it’s so popular,” Kemp-Robertson says. “It’s private, it’s anonymous, it’s fast, and it’s cheap.” Bitcoin is a case study in the increasing desire to place trust in technology over traditional institutions like banks.
     .
  2. Litecoins. A virtual currency based on the Bitcoin model, Litecoins have a higher limit: “The number of coins that can be mined is capped at 21 million Bitcoins and 84 million Litecoins,” explained a recent Wall Street Journal post, which also noted that Bitcoins are worth more and currently accepted more widely.
     .
  3. BerkShares. While Bitcoin and Litecoins are worldwide currencies, BerkShares are hyper-local: they’re only accepted in the Berkshires, a region in western Massachusetts. According to the BerkShares website, more than 400 Berkshires businesses accept the currency, and 13 banks serve as exchange stations. “The currency distinguishes the local businesses that accept the currency from those that do not, building stronger relationships and greater affinity between the business community and the citizens,” the site reads.
     .
  4. Equal Dollars. Philadelphia is also trying out a local currency with Equal Dollars. When you sign up to participate, you receive 50 Equal Dollars; to earn more, you can offer your own possessions in an online marketplace, volunteer or refer friends.
     .
  5. Ithaca Hours. Another hyperlocal currency, Ithaca Hours—usable only in Ithaca, New York—also hopes to boost “local economic strength and community self-reliance in ways which will support economic and social justice, ecology, community participation and human aspirations.” (For a full list of local currencies in the US, go here.)
     .
  6. Starbucks Stars. Use of Starbucks’ Stars is limited not to a particular geographic locality, but to the corporate ecosystem that is Starbucks. Once you get a Starbucks Card, you can earn Stars—which buy drinks and food—by paying with the card, using the Starbucks app, or entering Star codes from various grocery store products. According to Kemp-Robertson, 30 percent of transactions at Starbucks are made using Stars.
     .
  7. Amazon Coins. Another company-specific currency, Amazon Coins, can be exchanged for “Kindle Fire apps, games, or in-app items.” You get 500 Amazon Coins, worth $5, by purchasing a Kindle Fire, or can buy more Coins at a slight savings.
     .
  8. Sweat. Kemp-Robertson points to a particularly innovative business-specific currency in Nike’s “bid your sweat” campaign in Mexico. Your movements, energy, and calorie consumption are tracked and can be exchanged for goods, ensuring a “closed environment”—only people who (a) own and (b) use their Nike products are welcome.
     .
  9. Tide detergent. This is a barter system that’s about as far from government-backed as you could get: in 2011, it was discovered that across the US, thieves had been stealing 150-ounce bottles of Tide detergent to trade for $5 cash or $10 worth of weed or crack cocaine. An article in New York Magazine from earlier this year details the fascinating story and what it says about Tide’s super-successful branding.
     .
  10. Linden Dollars. Linden Dollars, usable within the online community Second Life, can be bought with traditional currency or earned by selling goods or offering services to other Second Life residents. Many people earn actual Linden salaries—some to the tune of a million Linden Dollars—says this article from Entrepreneur.com.
      .
  11. BONUS: Brownie Points. Granted by the universe as a reward for good deeds. Not exchangeable for tangible goods, just self-satisfaction, which we think is also important.

  To learn more about Forex, checkout Splitting Pennies – Understanding Forex.

  

  (South Carolina, 2016 – undisclosed location)

  

  

• The Italian Banking Crisis (In 1 Simple 'Death Cross' Chart)

  Submitted by Lars Christensen via Market Monetarist blog,

  Today I was interviewed by a Danish journalist about the Italian banking crisis (read the interview here). He asked me a very good question that I think is highly relevant for understanding not only the Italian banking crisis, but the Great Recession in general.

  The question was: “Lars, why is there an Italian banking crisis – after all they did NOT have a property market bubble?”

  That – my regular readers will realise – made me very happy because I could answer that the crisis had little to do with what happened before 2008 and rather was about monetary policy failure and in the case of the euro zone also why it is not an optimal currency area.

  Said, in another way I repeated my view that the Italian banking crisis essentially is a consequence of too weak nominal GDP growth in Italy. As a consequence of Italy’s structural problems the country should have a significantly weaker “lira”, but given the fact that Italy is in the euro area the country instead gets far too tight monetary conditions and consequently since 2008 nominal GDP has fallen massively below the pre-crisis trend.

  That is the cause of the sharp rise in non-performing loans and bad debt since 2008. The graph below clearly illustrates that.

  

  I think it is pretty clear that had nominal GDP growth not fallen this sharply since 2008 then we wouldn’t be talking about an Italian banking crisis today. There was no Italian “bubble” prior to 2008 and there are no signs that Italian banks have been particularly irresponsible, but even the most conservative banks will get into trouble when nominal GDP drops 25% below the pre-crisis trend.

  Therefore, I also don’t think that the “solution” to the crisis is a re-capitalisation of the Italian banks or of the entire European banking sector. Rather the solution is to ensure nominal stability in the euro zone. The best way of doing that would be for the ECB to aggressive increase the money base to ensure 4% NGDP growth in the euro zone (see my recent post on what the ECB in the present situation here and my post from 2012 on a cheap firewall against an escalation of the crisis here.)

  A key problem, however, is that the euro zone is not an optimal currency area. In a good recent blog post my friend Marus Nunes rightly argued that there is a “Northern” part of the euro zone where monetary policy broadly speaking is “right” and a “Southern” part, where monetary policy is far too tight. Italy is part of this latter group.

  This means that the question is whether keeping euro zone nominal demand “on track” is enough to ensure enough NGDP growth in the Southern countries to avoid banking and sovereign debt crisis coming back again and again. Unfortunately the development over the past eight years gives little reason for optimism.

  P.S. There are now also increasing talk about problems in the German banking sector. Given the fact that the German economy has doing quite well compared to most other economies in Europe this is rather incredible. Therefore if we should talk about imprudent banking (due to moral hazard problems) then we might want to point the fingers at the German banks.

  

  

• Central Bank Wonderland is Complete and Now Open for Business — The Epocalypse Has Fully Begun

  The following article by David Haggith was first published on the Great Recession Blog.

  

  Summer vacation is here, and the whole global family has arrived at Central-Bank Wonderland, the upside-down, inside-out world that banksters and their puppet politicians call “recovery.” Everyone is talking about it as wizened traders puzzle over how stocks and bonds soared, hand-in-hand, in face of the following list of economic thrills: 

   

  • Britain voted to exit the EU, and a handful of other nations are talking openly along similar lines. One major crack in the European Union just happened, and others are forming. (Brexit is the name of this new Earthquake ride near the gates of Wonderland.)
  • Italy’s oldest bank (also the world’s oldest bank, Banca Monte dei Paschi di Siena) faces bankruptcy unless it gets bailed out. The bank that has survived the greatest tests of time (founded in 1472 before Columbus sailed the ocean blue) is going down unless it finds a savior! Italy’s prime minister is screaming for tax-payer bailouts. At the same time, one of Germany’s oldest banks and one of the largest — Deutsche Bank — has just about become a penny stock and faces the likelihood of imminent collapse if not bailed out, too. (Welcome to Wonderland’s zombie freak show of the world’s oldest walking-dead banks dying again.)
  • Gold and silver have been soaring as though people are fleeing to safety (in Wonderland’s Bouncy House of Coins).
  • People are also fleeing to safety in bonds, bringing the US 10-year bond down to a 1.318% yield, its lowest yield in history. (Hit me on the head with a hammer like a pop-up gopher, and watch me smile.)
  • In many nations around the world, government bonds have been selling hotter than bombs in Syria even with negative interest rates, meaning you lose money every day you hold them. (The bonking game of bigger gophers for the near-sighted so that Wonderland remains handicap accessible.)
  • In Switzerland, people are cuing up in the ticket line to give the government their money to hold for a fifty year ride now that the Swiss 50-year bond has turned negative. (Wonderland’s biggest gopher for the totally blind. You don’t just hit this one; it takes you the ride of your life for the rest of your life. We call it “Gopher Broke.”)
  • US jobs crashed in May, causing stocks to drop, but rebounded in June, causing stocks to rise, so that May is now seen as an unexplained anomaly. (Welcome to Ripley’s House of Unexplained Economic Mysteries.)
  • The Great Britain Pound crashed to a thirty-year low against the dollar. (Enjoy your ride on the currency bumper cars!)
  • Japan’s decade of quantitative wheezing has accomplished so little that they’re going to cough up more of the same all over again because it was so much fun the first five times. (House of Bodily Humors and Horrors.)
  • Central banks in Europe say they need to and will crank their own quantitative easing back up, so effective have all previous rounds been. (And, so, the merry-go-round spins and the calliope plays its happy music in Euro Dizzyland.)
  • Falling oil prices, which contributed significantly to January’s spectacular stock market plunge, are going back down the pipeline while oversupply is building rapidly at the bottom again with the buildup reaching its highest point in ten weeks. (Wonderland’s log ride through oil with more than one crude splash.)
  • Venezuela and Brazil are collapsing into economic chaos. (It’s more fun than that bungy-jumping vehicle for two at the carnival.)
  • Etc. (I know, darn! Just as he was on a roll. Well, hang on…)

   

  Yet, the S&P 500 and Dow have soared to all-time record highs! Whoohoo! Hold onto your safety harness and try not to choke on your popcorn for the fun never ends in Bankster Wonderland!

   

  What’s up with stocks and down with bond yields?

   

  US Stocks are flying high at the same time demand for sovereign bonds is soaring and precious metals are experiencing a bull market. That says to me that money is fleeing to safety, and the apparent irrational exuberance in the stock market, considering all the flights to safety, is partially fueled by foreign investors fleeing to US investments now that Europe’s cracks are showing like Frankensteins body seams.

  This chart from David Stockman’s Contra Corner shows how people are piling into bonds right now:

   

  

   

  As a result, US bond interest rates are the lowest they have been in the history of this nation! Here’s another chart from Contra Corner:

   

  

   

  Whoohoo! Two massive records in one week. Highest stock market prices and lowest bond rates in the history of the United States! Does it get any better than this? Geez, I love this place!

   

  We have never seen anything like this

   

  Stocks are setting all-time record highs, and interest on US bonds is hitting all-time record lows. Money is running to gold and silver. Money is running to long-term sovereign bonds. And money is running to the US stock market all at the same time. Heck, money is running all over the place! What is there not to be happy about?

  However, before you think, Whoo! the stock market is going up; there’s no crash happening, ask yourself what the heck is happening. We’ve never before seen either of these two extremes where stocks are free of all bondage and all bonds are free of their stocks. Only during the years of quantitative easing and zero-interest-rate policy have we seen bonds and stocks play together, but never to this extreme. So, when all the gauges on the instrument panel are pegging their needles past the red zone, including the one that says “We’re going super fast now,” you might want to say, “Whoa! What’s going on?” Maybe the engineer on this train has fallen dead over the throttle.

  As Jesse Felder said on Contra Corner, “We’re witnessing the greatest dichotomy in the history of financial markets.” Interest rates on bonds have now gone below any low of any recession … ever. Far, far below. We’re digging out the sub basement to find where the money is buried. If you were to gauge the economy’s future based on where bonds have gone, you’d have to say, “This must be the scariest future ever because there has never been such a flight to presumably safe vehicles at any cost.”

  At the same time, stocks have never been more overpriced than they are today. They hit their highest price ever during a period in which earnings have been flagging for many months. So, they’re not rising because, “Woohoo! Businesses are making bank!” No, they’re making new heights in spite of the fact that sales are down, profits are down, and wholesale inventories have remained locked in a highly backed-up position that is comparable only to the Great Recession and the dot-com crash … and while things are not looking generally good in the world economically. So, there is not a lot of reason to think sales will grow to fit the high stock values. In other words, median price-to-sales ratio (price of stocks compared to sales of the businesses) has also hit an all-time record high.

  Three all-time records in one week! This is the funnest place in the universe!

  Is this irrational euphoria among investors? Is it even people who are buying the bonds? Is it people who are buying the stocks? Or is it entities like central banks and their proxies — not buying them as investments, but buying them in mass to shore up the entire global economy and stop the crash that started right after Brexit … or that started right after December 16, 2015? (It’s just one crash right after another here at Wonderland’s National Demolition Derby.) Are central banks firing up all engines to stop a crash in its tracks with a massive coordinated salvo of purchases?

   

  So, what is happening as central bankers watch each other in mutual admiration?

   

  

  Says Jeff Cox of CNBC,

  The reason anyone would buy negative-yielding debt is actually pretty simple: Because they have to. They are central bankers looking to help promote economic growth. They are insurance companies, pension funds and money managers who have to match liabilities with assets. They are not, by and large, retail investors who are so afraid of risk that they’re willing to pay for the privilege of lending money to a government. Together, those buyers have helped build a nearly $12 trillion funnel of negative-yielding sovereign debt — unprecedented in world history.

   

  Gee, there are a lot of things breaking historic world records this week. That must mean it’s a great week!

  Cox thinks the big buyers of bonds are central banks, pushing down interest rates to stimulate the economy. No surprise there. Central banks have been going pedal-to-the-metal to hold interest rates to the floor for almost a decade, so why not continue? The record highs in bond sales (with corresponding lows in interest) and high in stock sales most likely are due to rapid pressure being applied to the accelerator as a counter-measure to the concerns governments and bankers have had about Brexit.

  Central banks could do that directly, or they could do it invisibly (since they operate under a cloak most of the time anyway) by offering enticements or pressure to their proxies. (“You want this mega-conglomerating merger to happen: buy ten billion dollars worth of US bonds, and then I’m sure we can get it approved.” If not that, there’s a thousand other ways for central banks to push money into markets now that they are accustomed to doing so in an unbridled fashion. It’s the new norm.)

  That the stock markets are being driven up by central bank purchases can be seen in the following graph:

   

  

   

  Emerging markets (EM) that were crashing at the start of 2016 offloaded assets to raise funds to keep the home front running at the start of the year. That contributed to January becoming the worst January in the history of the US stock market — worse than any start of a year in the Great Depression or the Great Recession. The central Bank of Japan and the European Central Bank increased their buying of those assets to offset that fall, and both recently announced they are going to apply a lot more stimulus.

  Cox goes on to write,

   

  Ostensibly, the global race to the bottom was supposed to stimulate growth, and it may just well keep pushing risk assets [stocks in particular] higher. But what awaits on the other side is adding to the worries of investing professionals. “Ultimately, there will be a day of reckoning,” said Erik Weisman, chief economist at MFS Investment Management…. There remains a pervasive feeling on Wall Street that the risk rally is built on sand, with a price to pay in a world where owning government debt no longer pays but rather costs.

   

  Even central banksters who create money out of nothing cannot create a free lunch.  Somebody pays, but probably you, not them. It’s an ominous feeling really — a sense that there is no underlying reality anymore — that the sands are shifting under your feet.

   

  “There’s no doubt that there are and will continue to be unintended consequences, and the further we move away from something conventional into unconventional, the ratio of unintended consequences to intended consequences will rise,” Weisman said.

   

  We’re seven years on since stimulus responses to the Great Recession began. These have also been the greatest stimulus measures in the history of the world. (No wonder these rides are so thrilling as they reach new world records multiple times a week.) However, outside of flying stocks, we still have a global economy that seems endlessly stuck in the dog days of summer. Or, to change to my old winter metaphor (now that summer has turned abnormally cold here where I write), the longer and harder the snow plows push the snow straight ahead, the more it piles up as an impossible obstacle ahead of them. The louder they get with chained tires clawing and engines roaring and smoking, the less snow they push. The plows are now grinding away at full throttle in the lowest gear they have, and it is looking like they are going to remain stuck in that gear for a very long time — maybe another decade … unless they simply give up the battle.

  The world is buried under the highest mountains of the cheapest debt ever imaginable, and nothing is moving in the overall economy (except financial instruments that are trading places). And that is where I said we would wind up when I wrote my very first articles in my Downtime series on government bailouts and stimulus back at the start of the Great Recession. I said they were pushing all the snow straight ahead, instead of off to the side, so (quite a ways down the road) they would have a mountain of snow so high in front of them that all the plows in the world could push it no further. We are now quite a ways down the road.

  The European banks that are screaming for bailouts are buried in bad debt they pushed forward from the Great Recession. They never wrote it off then because the damage to their balance sheets would have been so severe. As I said back then, such policies only meant the damage to their balance sheets in the future would be even more severe. The problem of bad debt owned by banks in Italy is now four times worse than it was at the bottom of the Great Recession.

  Why did I know that would happen? Because nothing about this “recovery” is recovery. It has all been a forestalling of problems, “kicking the can further down the road,” with the inevitable pay-back time becoming worse the longer we forestall the inevitable write-off of bad debt. My Downtime articles years ago sounded many warnings that everything governments and central banks were doing was making a very bad situation worse just so we could avoid the pain at the time. Such actions resolved none of the true underlying problems that are built right into the foundation of our debt-based economy. Until we stop thinking we can build true monuments of wealth over ever-growing chasms of debt, we will solve nothing at all.

  Europe’s banking troubles are now far deeper than they were at the belly of the Great Recession Part One. Europe endlessly scrambles to solve banking troubles that become harder to solve with each new phase. The snow plows I talked about in my Downtimeseries have not only stopped pushing the snow ahead, but the drift is now avalanching back onto them and pushing the plows backward, even as their wheels are spinning and screeching forward.

  (This is what we do in the parking lots here in Winter Wonderland.)

   

  Why else would the entire financial world be upside down?

   

  Another explanation for the greatest dichotomy in financial history that is now happening in the US is that money is exiting European markets and fleeing to anything in the US because the US remains the best looking corpse in the cemetery; so, if you want to dance with stocks, do so with Stockzilla, bride of Bankenstein. What appears completely irrational is in part a flight of money from one part of the world to the last safe place on earth. (Safe for the moment, but moments count when you’re fleeing an avalanche.)

  Central banks have become the biggest bullies in the playpen. With the biggest bullies pushing their weight around as much as they possibly can, there is no safe place for small investors in the playpen. So, individual investors around the world are fleeing to the safest investments they can think of. With Europe in such volatile flux and China being such an unknown with its own massive upheavals, what more readily comes to mind right now as a final resting place than the good ol’ US of A?

  Naturally, the US will be the last major economy affected by the second avalanche of bank failures, which this time has started in Europe. Brexit isn’t likely to trigger anything in the US directly, other than the immediate panic selling that was seen in stocks right after the vote. Once it was clear that Brexit wasn’t going to destroy the United States, some euphoria within the US probably kicked in and helped push the stock market up rapidly past its long-standing ceiling because that euphoria was accompanied by even larger money flows from outside the nation as people ran for cover.

  Brexit appears to be triggering the failure of banks that were too fat to fail, lest they flounder upon us and squish us all — some of the world’s most established banks. As things fall apart to this unprecedented degree in Europe, money has to run somewhere, and the US casino still has pretty lights that can be seen as far away as the growing darkness in Europe.

  The United States will not remain immune to what is happening in Europe forever, but the hot air coming out of Europe’s balloon may fill the US sails for awhile. For the moment, the US is the beneficiary of Europe’s decline.

  This could be a brief moment, however, as there are likely to be surprising connections (black-swan events) between Europe’s failing banks and US banks that materialize faster than anyone expects. We’re sailing in uncharted territory that looks nothing like anything we’ve seen before, so who knows what comes next in a world where stocks soar in the face of generally gloomy economic news while bond sales also soar at the lowest interest rates in history? (Welcome to our Pirates of the Caribbean boat ride where Mario Draghi plays the part of Jack Sparrow!)

  With Europe reaping the whirlwind as its banks turn out the lights, with China looking lost and confused and sometimes spinning erratically, with Japan ecstatically voting to start its umpteenth round of unsuccessful quantitative easing, with South America breaking into greater anarchy every day of its pitiful, starving life, and with the US in longterm manufacturing decline with corporate profit growth also in continual decline, one cannot seriously think the world is just going to pull out of this!

  That means those who are buying stocks because they believe there’s a new 30% rising bull market just beginning are taking euphoria to new heights, too. They are, in the very least, taking a perilous ride.

   

  “Investors are buying bonds for capital appreciation and stocks for income. The world has turned upside down,” said James Abate, chief investment officer at Centre Asset Management LLC. The shift, according to Abate, has been fueled by central-bank stimulus inflating government-bond prices across the world, pushing yields on nearly $12 trillion of government debt into negative territory. And as bond yields tumble, more and more equities are yielding more than government bonds, spurring demand for companies offering sustainable income in the form of dividend payments. “It is a poison brew that central banks keep serving us,” Abate said. (MarketWatch)

   

  In other words, central banks have taken all rationality out of all financial markets … at least in one sense. Everything everywhere now is contingent upon what central banks are doing. The contagion of their poison is ubiquitous. There is another sense, however, in which this is all rational. I call it the new rationality: central banks have all the money, and money follows money. So, individual investors are doing the best they can in following the money. So, in terms of global economics and politics, its irrational; but in terms of following the makers of money who run the show, it makes perfect sense. It has is own mad mindset.

   

  “There’s a perception there’s a greater fool behind you,” Kohli said, pointing to the strategy of buying a bond with the intention to sell later at a higher price. But the main forces behind the rally, Kohli added, are central-bank purchases that keep fueling demand and propelling prices higher.… What’s more, the recent divergence between the main U.S. equity indexes and benchmark Treasury yields has been flashing “mind the gap” signals that fuel fears of a sharp correction…. So, despite popular belief, the decline in interest rates “should be viewed as a bad sign,” noted BAML’s Global Rates and Currencies Research team, in a report released Monday. “Too often we have heard how declining interest rates are good news and are used as a justification for investors being pushed out the risk spectrum. We disagree and argue this time is different and the decline in rates should be interpreted as a bad sign,” the analysts noted. (MarketWatch)

   

  If Kohli’s first statement doesn’t sound like the definition of a Ponzi scheme, what does?

  In terms of everything that once made sense financially, central banks’ transformation of this world into Wonderland is now complete. In this topsy-turvy world, Mad Hatters may not be so mad as they look. Everyone is simply trying to maneuver around the biggest bullies in the playpen by finding the safest place to play. It’s the new rationality of a world intentionally turned on its head — at last, by nearly everyone’s recognition — even more than it is euphoria. The irrationality has become obvious. What is not so obvious is the rationality of the irrationality.

  In other words, if investors take the bullish gamble on a rising stock market in the US at a time when most of the world is falling apart, they may be right for all the wrong reasons … for now. In Central Bank Wonderland, they have nowhere to fall but up. On a short-term basis (probably very short-term) market bulls could be right only because all the other circling drain holes around the world are dumping into sovereign bonds, precious metals … and the US stocks as the last casino open for business. Everything is now flowing into the extreme zone at the same time.

  You can bet on the wild ride in US stocks, or you can bet on bonds that guarantee you almost nothing (or even less than nothing), or you can bet on precious metals. All three markets are rising together right now. The question is which one is likely to continue rising as Europe disintegrates, the oldest banks in the world crash, China teeters between crashes and stimulus while running the world’s most notoriously cooked books, Japan takes the governor off the throttle and flies with full-hot afterburners blazing into the rarified nozone, and South American economies implode into social chaos?

  This is the crazy new zombie economy I call “The Epocalypse” — a world of economic collapse everywhere, apocalyptic in scale, epic in that it already exceeds the greatest extremes in history, and epoch in that it will come to be known as its own period in time. One word that says it all.

  You have witnessed the beginning of this hideously convoluted world, and it only gets more distorted from here because nothing has been done to right the essential problems that are creating this grotesque chaos while ungoverned greed rules the day.

  The children are no longer asking, “Are we almost there yet?” We’ve arrived, and they’re now asking if they can go home. Welcome to Central Bank Wonderland where Janet Yellen is the Queen of Hearts and all the little carnival riders are Mad Hatters whose moves are rational if you live in a world with irrational rules created by truly mad leaders. Dinner is served in our Zombie Epocalypse Room where only zombie banksters get to dine … and dinner is you! You see, if you were ever able to walk out the back door of Wonderland and look over your shoulder, the sign above the door says “Hotel California.” You are always welcome here … and can never leave.

  Doest it get any more fun than this?

  Sure it does. Wait till you see Act Two, which could be as early as next week!

  

• Paul Craig Roberts Warns "'Adolf Hitler' Is Alive & Well In The US"

  Authored by Paul Craig Roberts, originally posted at Strategic-Culture.org,

  Gestapo America

  FBI Director James Comey got Hillary off the hook but wants to put you on it. He is pushing hard for warrantless access to all of your Internet activity.

  Comey, who would have fit in perfectly with Hitler’s Gestapo, tells Congress that the United States is not safe unless the FBI knows when every American goes online, to whom they are sending emails and from whom they are receiving emails, and knows every website visited by every American.

  In other words, Comey wants to render null and void the Fourth Amendment of the US Constitution and completely destroy your privacy rights.

  The reason Washington wants to know everything about everyone is so that Washington can embarrass, blackmail, and frame on felony charges patriots who stand up in defense of the US Constitution and the rule of law, and dissidents who criticize Washington’s illegal wars, reckless foreign policies, and oppression of American citizens.

  Washington’s demand for power has nothing to do with our security. It has to do with destroying the security that the US Constitution gives us.

  The security that Comey wants to protect is not our security or the national security of the United States. Comey’s intent is to make Washington secure despite its violations of statutory law and the US Constitution. The way Comey intends to do this is by intimidating, harassing, and arresting Washington’s critics.

  Comey wants the unconstitutional power to demand from the providers of telephone and Internet services all records and information about you. These demands are not to be subject to oversight by courts, and the communication companies that serve you are prohibited from telling you that all of your information has been given to the FBI.

  US Senators rushed to stick their swords into the Fourth Amendment. John Cornyn slapped an FBI-written amendment on the Electronic Communications Privacy Act Amendments Act of 2015. This caused the American Civil Liberties Union and Amnesty International to withdraw their support for the act, which caused the act to be withdrawn.

  Senator John McCain rushed to the aid of the FBI. This Constitution-hating senator proposed an amendment to a criminal justice appropriations bill that would use a provision in the unconstitutional PATRIOT Act to grant the unlimited unaccountable power to the FBI to totally destroy your privacy.

  McCain’s amendment failed, but Senate Majority Leader Mitch McConnell (R-KY) changed his vote so that he could negate the Senate’s vote with a vote to reconsider.

  The FBI’s senators will continue with amendments to legislation, related or not, until they deliver to the FBI the power it wants.

  Unfortunately, most Americans today, unlike their forebears, are too ignorant and uneducated to know the value of the privacy rights that our Founding Fathers put in the US Constitution. The imbeciles say nonsense such as: "I haven’t done anything wrong. I have nothing to fear". God help the imbeciles.

  If the American people were sufficiently sophisticated, they perhaps would wonder why such a large chunk of the US Senate had rather represent the FBI than the American people, their constituents who elected them to represent the people in the state, not a police power in Washington.

  Why are so many US senators more responsive to the FBI’s desire for Gestapo police power than they are to the civil liberties embodied in the US Constitution?

  As the Bill of Rights Defense Committee and the Defending Dissent Foundation show, the Orlando shootings, the Dallas shootings and whatever shootings, real or staged, next occur have nothing to do with the FBI’s demand to completely destroy all privacy rights of the American people.

  What’s that I hear? You say you knew nothing about this? Little wonder. Your media consist of people well paid to deceive you and to deliver you into a Police State. To strip you of all constitutional protection and deliver you unprotected to a police state is the function of the New York Times, Washington Post, Fox 'News', CNN, the rest of the presstitute print and TV media and many Internet sites.

  Adolf Hitler is alive and well in the United States, and he is fast rising to power.

  

  

• As Chinese Refiners Flood The World, Gasoline Tankers Pile Up In New York City Harbor

  Just over a month ago, when we pointed out that that the gasoline curve was about to shift from contango into backwardation, we said that the gasoline tanker armada off the coast of Singapore was about to start offloading as it would soon become uneconomical to hold product in offshore storage. This meant one thing: China was about to unleash a wave of accelerated gasoline exports across the entire world.

  We pointed out the unprecedented surge in Chinese gasoline stocks…

  

  … and added that as China continues to imports tremendous amounts of both crude and product, far greater than actual demand, this would send “China’s gasoline stocks to even higher record levels. In other words, the global glut is now not only at the crude and distillate level, but also in global gasoline stocks.”

  One month later we find out that this was a correct assessment of the situation. 

  According to the WSJ, while initially China’s demand for oil helped soak up some of the surplus crude sloshing around the world, China is no longer the handy excess supply “buffer” it once was and as a result China’s teapot refiners are now flooding markets with products including diesel and gasoline, in the latest example of how surging Chinese exports are shaking the commodities industry.

  China’s total exports of refined fuels jumped 38% on-year to 4.2 million tons, or roughly 1.02 million barrels a day, in June, according to the latest data released Wednesday by the customs administration. Its refined fuel exports are up 45% overall so far this year. Much of the surge is attributable to a leap in China’s shipments of diesel. In May, China’s exports of the fuel mainly used in heavy industry had quadrupled on-year to 1.5 million tons; detailed data for June is due later this month.

  The sharp rise is merely a confirmation of what many have said all along: in its relentless bailouts of all enterprises, the Chinese government is unleashing a deflationary wave around the globe, which forces Chine to dump its products to any and every buying around the globe, in the process massively undercutting prices. This mirrors similar increases in China’s exports of processed basic materials like steel in recent months, a trend that has provoked anguished complaints from governments and industry bodies across the world.

  Worse, what many thought was stable Chinese domestic demand, ended up being just the filling of every possible container, not to mention the now almost full SPR, in lieu of actual domestic commodity demand. As such, China’s sagging demand as the economy slows once more has left the country’s oil and metal refiners with huge surpluses they are increasingly looking to sell abroad.

  

  “[China’s] demand for diesel continues to disappoint, mainly as a result of slower industrial output compared to [the] same period in 2015,” according to a recent report from the Organization of the Petroleum Exporting Countries. 

  Thus, unable to sell at home, China is aggressively exporting the latest deflation tidal wave, and the flood of Chinese diesel and other refined products spilling outward is bringing down prices in Asia, hitting China’s regional rivals hard. Refining margins—the difference between what refiners pay for crude versus the prices of the refined products they sell—have dropped by a third to around $4 a barrel since the first quarter across Asia, according to a report by J.P. Morgan.

  Gasoline hasn’t proved immune.

  Despite relatively strong demand within China as passenger vehicle sales continue to rise, China has been exporting more, with shipments doubling in May from last year to 780,000 tons.  “[Global gasoline] demand was off the chart last year and margins were in the double digits. All the refiners were incentivized to produce gasoline,” said Michal Meidan, a China specialist at Energy Aspects, a London-based energy research firm. “But demand for this year is not as stellar, so you have a surplus of gasoline everywhere,” she said.

  That is most certainly true not only for China, but as we noted earlier in our post about oil’s “death spiral” in the US as well, where plunging crack spreads likewise confirm that the US also now finds itself with far too much product (albeit due to different dynamics). As we have explained previously, much of the increase in Chinese refined product exports is due to shifts in the way the industry is regulated at home. Beijing has more than doubled the amount it allows refiners to sell abroad this year, according to Energy Aspects data.  The resurgence of China’s independent crude refiners, known as teapots, has also been key.

  Last year, Beijing allowed these teapots to directly import crude from abroad for the first time, rather than having to buy more expensive crude from domestic state-owned oil companies. Their subsequent ramp-up in production has provided big state-owned refiners such as Sinopec and China National Petroleum Corp. with greater competition at home, leading them to sell more abroad.

  But the worst news is that this is just the beginning:

  Teapot refiners could also soon export more too: Some are aiming to ship 50% of their total output abroad within three years, up from around 10% currently, says Nelson Wang, energy analyst at brokerage CLSA, based on recent conversations with a number of such operators.

  But who will they sell too? After all the world is already flooded with gasoline? Well, for a low enough price, they will find buyers. Teapots already often sell refined products at a discount compared to their rivals at home and abroad to attract customers. “This is just the beginning, and the bigger threat [on margins] is yet to come,” Mr. Wang said.

  But the worst possible case is if China’s economy were to hit another major snag. As the Chinese government seeks to steer the economy from an industry-heavy focus to a consumption-based one, domestic demand for refined fuels could wane further, in turn stoking more exports of diesel, analysts say. In turn, analysts say China’s crude imports could also decline: they hit a five-month low in June at 30.62 million tons, though that was still up 3.8% on-year.

  Chinese refineries’ rising output could keep its gasoline exports high too. The country’s gasoline production could outpace domestic demand growth by 9% this year, according to analysts at energy researcher ICIS.

   

  “Exports are still the main solution for China to mitigate the oversupply of gasoline,” said ICIS, forecasting China’s shipments this year to hit 8 million metric tons, or 160,000 barrels a day, a jump of 40%.

  And while Chinese gasoline exports have not hit the US yet (and they well may eventually), the US is already having a major problem with storing all the gasoline the rest of the world has to export. None other than the IEA in its monthly report said that the global gasoline glut is so big that tankers are now storing in New YOrk’s harbor. “Brimming” inventories, concern over gasoline demand in key markets, “weighed down” prices for the fuel in June.  The IEA also adds that some companies “have been forced to turn to floating storage in the New York Harbour area.”

  As Reuters reported last week, at least two tankers carrying gasoline-making components have dropped anchor off New York Harbor for nearly a week, unable to discharge their cargoes in the latest sign that storage for the fuel is running out, traders said. Several tankers with gasoline have also been diverted from the New York region to Florida and the U.S. Gulf Coast in recent days, a rare move that underscores oversupply in the pricing hub for the benchmark U.S. gasoline.

  The 74,000 tonne tanker EMERALD SHINER , carrying a cargo of alkylite from the west coast of India has been anchored off the New York Coast since June 28, according to Reuters shipping data and traders.

   

  The 37,000 tonne ENERGY PROGRESS , with a cargo of reformate from Turkey, has similarly been waiting outside New York since June 28.

   

  Furthermore, at least three cargoes of gasoline from Europe, which heavily relies on exports to the U.S. East Coast, have been diverted in recent days from New York Harbor to Florida and the U.S. Gulf 

  Coast, ship tracking showed.

   

  Those include the tankers ENERGY PATRIOT , SEASALVIA and ANCE.

  “Tanks are full to the brim in New York Harbor,” a trader said.

  

  There is much more on this topic, but at its core it is a very simple story of too much supply and not enough demand.

  And now that the market is finally realizing what happened, the understanding that oil’s “death spiral – edition 2016″ is being catalyzed not just by oil market dynamics, but by oil products such as diesel and gasoline, is finally being appreciated by the market…  just as we predicted would happen back in February.

  

  

• Too Many Laws: Why Police Encounters Escalate

  Submitted by Ryan McMaken via The Mises Institute,

  The debate over the shooting of Philando Castile has ignited the debate over the way the police, generally speaking, often enforce petty, small-time offenses with often overwhelming force. In the case of Castile, the controversy hinges partially on whether or not Castile was being detained as a suspect in a real crime (such as armed robbery), or if he was being stopped and harassed for a small-time non-violent infraction such as drug possession or a broken tail light. 

  People instinctively know there is a real difference between the situations. Moreover, it is a safe assumption that in the case of armed robbery, someone has actually requested the services of the police, while it is extremely unlikely that any citizen complained about, or was harmed by, a broken tail light or the possession of marijuana. If it proves to be true that Castile was, in fact, stopped for a small-time infraction, then the escalation to a situation in which Castile was shot dead can be shown to be all the more unnecessary and needlessly violent. 

  But, of course, we don't need the Castile case to prove our point. Everyday, people are stopped and detained by police for what should be regarded as peaceful non-criminal activities. But those situations often escalate to tense confrontations, and even in some cases to violent interactions. 

  It doesn't have to be this way.

  Police Didn't Always Patrol Areas Looking for People to Arrest  

  Modern policing is largely a nineteenth-century invention, and prior to modern urban police forces, state agents were generally called in to deal only with episodes of general social unrest. 

  Prior to the age of the modern police patrol in English-speaking countries, state agents — often a sheriff-like official — were used primarily to compel named defendants to appear in court when another citizen had made a complaint in court against that person, usually to demand restitution for some wrong inflicted. It wasn't until the twentieth century that police agents routinely patrolled an area looking for places to intervene. In the United States, for example, as Jack Greene notes, "the American police service was originally cast as a reactive force, not as a preventive of interdicting force. … America's police were to provide assistance on request, not to proactively intervene in the lives of the community." 

  In England, the tradition of legal action only beginning in response to a private complaint is very old, and law enforcement agents were expected to act only in response to court orders. Michael Giuliano writes: 

  Since early medieval England, long before the Norman invasion of England, criminal actions had been instituted by aggrieved private parties. They were primarily settled by compensation or restitution, and not imprisonment, capital punishment, or even the blood-feud that was common in much of Europe. For most offenses, specific civil fines and compensation were established. … The affirmative role of the victim or next of kin initiated the legal process. Particularly heinous offenses requiring more than “mere” intentional homicide, were often excluded from the realm of compensatory remedy. As process, judges were appointed to preside over the courts and enforce the decisions made by the assembled freemen of a district. Policing and law bore elements of democracy.

  This reliance on a private restitution-based model continued into the late nineteenth century, and was hotly defended by many of the English on the presumption that a shift to "public" prosecutions — prosecution initiated by the state itself — would lead to a destruction of English civil liberties. Giuliano continues: 

  The formal transition from private to public prosecution in England did not occur until 1879 and years passed before it could be implemented in practice. The English gentry had long been suspicious of both a public prosecution system and a professional police force.

   

  Indeed, the private initiation of criminal prosecution in England was a curiosity to visitors. Among them was the French jurist Charles Cottu, who like many was unaware of the “traditional arguments of English gentlemen against a constabulary and state prosecution,” according to legal historian Douglas Hay. Those Englishmen believed, in Hay’s characterization, that the power of prosecutorial institutions could lead to a “political police serving the Crown.” This opposition to public prosecution has been cast by law professor Bruce P. Smith as an example of old England's “national commitment to civil liberties.”

  Obviously, today, we see few traces of a legal system that even resembles the English Common Law system that relied on there being an actual victim for a crime to have taken place. Today, police actively patrol neighborhoods looking for potential offenders even if no one has requested the "service."

  In response, this has led to some observers to suggest that the police should function instead on a "fire department model" in which police respond only to actual complaints, rather than seek out "offenders" on their own. 

  Certainly, this could potentially be a step in the right direction, but the larger problem lies in the fact that not only can arrests and prosecutions be initiated in the absence of any complaint or victim, but the list of offenses for which a person can be arrested and imprisoned has grown disastrously long. 

  Every Police Encounter Is an Opportunity for Arrest and Criminal Prosecution 

  Dealing with violent crime constitutes only a small minority of what police deal with on a daily basis. For example, in 2014, out of 11,205,833 arrests made nationwide (in the US), 498,666 arrests were for violent crimes and 1,553,980 arrests were for property crime.

  That means 82 percent of arrests were made for something other than violent crime or property crime. 

  Moreover, many of these non-violent offenses — such as drug use, liquor violations, carrying an illegal knife, or other infractions that should be regarded as small-time offenses can result in serious jail time or prison time, as well as steep fines and lost earnings. 

  For instance, the highly publicized death of Eric Garner at the hands of police officers was a conflict precipitated by the sale of untaxed cigarettes by Garner. The police officers who killed Freddie Gray in custody in Baltimore later claimed the arrest was necessary because Gray possessed a knife that violated city ordinances. 

  And then there are the countless cases of non-criminals who have been stopped, searched, arrested and imprisoned for petty drug offenses such as possession. 

  Indeed, police departments spend an immense amount of time and resources on these non-violent offenses. In their book, The Challenge of Crime, Henry Ruth and Kevin Reitz observe: 

  [W]e do know that the effort to stem the tide of illicit drugs has been massive — and expensive. On the local level, 93 percent of county police agencies and 82 percent of all municipal agencies with more than one hundred police officers contained a full-time drug enforcement unit, as did about 60 percent of the state police agencies, and almost 70 percent of all sheriffs' departments. New York City alone in 1997 reported over 2,500 police officers dedicated to drug units and task forcese. More than 90 percent of all these police agencies received money and property forfeited by drug sellers for use in law enforcement opertations. …

   

  State and local police made about 1.6 million arrests for drug abuse violations in 2000, four-fifths of them for drug possession. … And in 1998, drug offenders were 35 percent of all felons convicted in state courts.

  In Gangs and Gang Crime, Michael Newton Reports: "In 1987, drug offenses produced 7.4 percent of all American arrests, nearly doubling to 13.1 percent by 2005."

  As Ruth and Reitz note, there are financial incentives to police agencies to pursue drug offenders. The nature of drug offenses also gives the police more reason to make arrests in general. As explained by Lawrence Travis in Introduction to Criminal Justice:

  With increased emphasis on drug crimes, agents and agencies of the justice system have uncovered offenses that have been present for years. Because drug offenses have gone unreported in the past, Zeisel (1982) noted that they present an almost limitless supply of business for the police. changing public perceptions of the seriousness of drug offenses has supported increased drug enforcement efforts.

   

  [Peter] Kraska observed that with drug offenders, police "can seek actively to detect drug crimes, as opposed to violent and property crimes, for which they have little choice but to react to complaints." Thus, the volume of drug offenders entering the justice system is more a product of police activity than is that of violent or property offenders.. Political pressure to treat drug offenses more seriously, coupled with giving incentives such as profit from seizing the property of drug offenders, spurs more aggressive police action."

  In other words, rather than react to complaints about violent crime or property crime, drug enforcement provides the police with nearly limitless opportunities to search, question, and arrest suspects for any number of offenses related to drugs. Moreover, if the police attempt to stop and search a person, and the person becomes uncooperative, police may then be able to justify an arrest for "resisting arrest" or similar offense even if no drugs are found. 

  Arrests in turn then bolster a police officer's career, even though little time has been spent on investigating violent crime or recovering stolen property. 

  The results of this emphasis among law enforcers can be seen in the incarceration data. Erinn Herbermann and Thomas Bonczar report that, of the 3,910,647 adults on probation in the US at the end of 2013, 25 percent (approximately 977,662 people) had a drug charge as their most serious offense.

  According to the Justice Policy Institute: "approximately one-quarter of those people held in U.S. prisons or jails have been convicted of a drug offense. The United States incarcerates more people for drug offenses than any other country. With an estimated 6.8 million Americans struggling with drug abuse or dependence, the growth of the prison population continues to be driven largely by incarceration for drug offenses."

  Consequently, more than one-fifth of prisoners (21 percent) in state prisons are held due to drug violations, while more than half (55 percent) of prisoners in federal prisons are held due to drug violations. This does not include offenders in county jails for shorter non-prison sentences. 

  The Effects of an Expansive Criminal Code on Police-Suspect Interactions 

  The effects of these trends should be predictable. 

  Imagine, for example, a world in which the only offenses that brought significant jail terms or large fines were violent criminal acts and property crimes. Obviously, in this case, the range of action open to the police would be greatly reduced, and citizens stopped by the police would have little to worry about in terms of stiff jail sentences. The possession of a switchblade or a certain type of cigarette would be of little concern to either the police or the suspect. Even if policymakers could not bring themselves to legalize these activities but only de-criminalize them, the stakes would be much lower in police-citizen interactions when citizens fear only a citation and fine instead of prison time for any offense that does not involve thievery, fraud, violence, or destruction of property. 

  When suspects know they are unlikely to be arrested or face a serious criminal charge, they are unlikely to panic and resist the police in a way that may lead to escalation of violence. 

  Moreover, given the relative rarity of real crime versus mere drug offenses and other small-time violations, police would be forced to concentrate their efforts on violent crime and property instead.

  After all, given the reality of scarce resources for any endeavor, including policing, the opportunity cost of pursuing drug offenses leads to fewer police resources being devoted to recovering stolen property and pursuing violent criminals.

  Contrary to un-serious and absurd claims that the police "enforce all laws," police use their discretion all the time as to what laws to enforce and which to not enforce. Those laws that are enforced are often laws that can lead to profit for the police department — such as drug laws which leads to asset forfeiture — or laws that can make for easy arrests — such as loitering and other small time laws — which improve a police officers' arrest record.

  If we want to be serious about scaling back the degree to which police interactions with the public can lead to violent escalations, we must first scale back the number of offenses that can lead to serious fines and imprisonment for members of the public, while shifting the concentration of police efforts to violent crime and property crime. The emphasis must return to crimes that have actual victims and which are reported by citizens looking for stolen property and violent criminals. Not only will this increase the value of policing, but will also improve relations with most of the public while reducing the footprint of the state in the lives of ordinary people.

  

  

• FBI Agents Were Told To Sign A "Very, Very Unusual" NDA In Hillary Email Case

  The State Department restarted their investigation into Hillary Clinton’s emails following the DoJ’s unanimous recommendation that Attorney General Loretta Lynch not pursue criminal charges for Hillary’s negligence in handling classified documents. FBI insiders now believe a deal was struck when Bill Clinton met Loretta Lynch on a Phoenix airport tarmac in June. Agents have also said they were forced to sign a document that went above and beyond the typical NDA signed when performing investigations

  When news broke of the infamous tarmac Lynch-Clinton meeting we said: “Well then, if Lynch says it was a completely random encounter with Hillary Clinton’s husband on a tarmac (admit it, that happens often to most people), and nothing was discussed that pertains to official business, then that certainly must be the truth.”

  We were sarcastic. We may also have been right.

  According to The New York Post, which not only cited a source saying that “FBI agents believe there was an inside deal put in place after the Loretta Lynch/Bill Clinton tarmac meeting”, but it also reports that FBI agents had been required to sign a Case Briefing Acknowledgment Addendum. To wit:

  In an unusual move, FBI agents working the Hillary Clinton email case had to sign a special form reminding them not to blab about the probe to anyone unless called to testify.

  As for what that “special form” is:

  Sources said they had never heard of the “Case Briefing Acknowledgment” form being used before, although all agents must initially sign nondisclosure agreements to obtain security clearance.

  A retired FBI Chief opined on agents signing a Case Briefing Acknowledgment saying:

  “This is very, very unusual. I’ve never signed one, never circulated one to others”

  Zero Hedge searched for “Case Briefing Acknowledgment” throughout various databases and found no credible hits relating to such a document. Which is odd in light of that by-chance meeting on a tarmac because the document was acknowledged in a July 1 letter from Stephen Kelly, the top legislative affairs official for the FBI in a response to Chairman Charles Grassley’s letter requesting more information about the Case Briefing Acknowledgment.

  The Clintons continue to display an uncanny ability for creating the best timed coincidences.

   * * *

  Stephen Kelly, Asst. Director Office Congressional Affairs Letter To Grassley
  

  

  

• We Just Found Out Who Has Been Buying All These Record-Low-Yielding Bonds

  When your nation’s bonds are trading with a record low 28bps negative yield (10Y JGBs), everything else in the world (aside from Swiss 10Y) is a relative ‘value’…

  

   

  Which appears to have driven Japanese investors to panic-buy a record 2.549 Trillion Yen of foreign bonds – an all-time record (in Yen and USD)…

  

   

  A week after near-record sales of JGBs…

  

   

  So now we know who (among others) was responsible for sending global developed sovereign bond yields to their record lows at 40bps last week…

  

   

  And if The BoJ cuts rates deeper into negative territory this week – what do you think Japanese investors will do?

  Charts: Bloomberg

  

  

• "$2 Billion A Year" – Illegal Immigrants Get More Food Stamp Benefits Than Poor American Citizens

  Submitted by Mac Slavo via SHTFPlan.com,

  There’s a reason Americans are angered over illegal immigration and despite what liberal-leaning socialists like Hillary Clinton and the Huffington Post may suggest, it has absolutely nothing to do with racism.

  It’s an economics issue, plain and simple.

  

  And as highlighted by a new report from the Washington Examiner, it’s actually American citizens who are feeling the brunt of the pain and being treated unfairly, not the other way around:

  Illegal immigrant households tapping into the federal food stamp program are receiving $1.4 billion to $2.1 billion a year despite their ineligibility, according to a new analysis of the Agriculture Department program.

   

  And rules guiding who can get food stamps favor households with illegal immigrants over all-U.S. citizen homes, according to the detailed report from the Center for Immigration Studies released Monday morning.

  David North of cis.org explain how the scam works:

  Let’s say that the all-citizen family consisted of three people, employed father, stay-at-home mother, and a small child. Dad makes $2,400 a month. The family’s income is too high for food stamps since the maximum monthly income is $2,177 for a family of three.

   

  Then next door there is a mixed family, also three people, with the father being the only worker, also earning $2,400 a month. The difference is that the father is an ineligible alien and so, under many states’ regulations, one-third of the family’s income is ignored (prorated is the word in SNAP circles), leaving the family with a nominal income of $1,600 a month that allows the family to get a food stamps allotment, but only for the two citizens, not for all three in the family.

   

  There is thus a band of households of three with earnings in the range of $2,177/mo. at the bottom to $2,589/mo. at the top that would be eligible for food stamps but only if the wage earner is a non-eligible alien in the eyes of USDA; all-citizen households in this band would not be eligible for food stamps. (Here’s the math: $2,589 = 150 percent of $1,726, the maximum income allowable for a family of two when there is a 33.3 percent discount on the illegal’s wages).

  That $2 billion a year in free food offered to people who shouldn’t be in this country in the first place is only part of it.

  An already overburdened American taxpayer is also forced, by way of the gun, to pay for illegal immigrants’ health care, college tuition, and other social services.

  But if you argue against illegal immigration or the “free” services they consume you are a racist.

  We’d argue you’re a realist, especially if you understand that all of these free services only work until the government runs out of other peoples’ money.

  

  

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• Germany Is About To Sell Zero-Coupon 10 Year Bonds For The First Time Ever

  When the financial media says that governments get paid to issue negative yielding debt, that is not exactly true: most sovereign issuers still pay out a cash coupon, a modest as it may be, while they pocket the negative amortization on a bond issued above par for the life of the bond resulting what ultimately ends up being a negative yield for the buyer net of all cashflows at maturity. However, the lower – or more negative – yields get, the less the need for an issuer to actually pay a cash coupon: after all with a negative yield, it is essentially superfluous.

  Still, while no sovereign has issued bond with negative cash coupons yet, some are starting to issue zero-coupon ten years: bonds which pay no cash coupons at all.

  This is precisely what Germany is about to do in a few hours.

  According to Bloomberg, on Wednesday morning Germany will sell 10-year bonds with a zero coupon for the first time, as a rally in fixed-income securities pushes investors to forgo annual interest payments in order to hold the safest assets.

  The nation is selling €5 billion of zero percent bonds due in August 2026 on Wednesday, after yields in the secondary market dropped to an all-time low of minus 0.205% last week.

  

  Then again, with a rather vicious snapback higher in yields over the past two days now that Japanese helicopter money looks increasingly probable, Germany may not be able to continue this experiment for much longer, and may have to revert back to its 0.5% coupon issued until now.

  Of course, once this latest modest spike in yields subsides and the world reverts back to its deflationary trendline (a move which will eventually prompt every other central bank, not just Japan – to proceed with helicopter money), and German yields are deeply negative, Germany can then proceed to, if only in theory, issue “negative” coupons, demanding that bond buyers pay Germany. Of course, while in practice this is impossible, it would present the world with such an interesting thought experiment as the “inverse” bankruptcy: a state in which the creditor to the debtor “defaults” because it is unable to make a payment on a bond they lent to the same debtor.

  Yes, the new normal sure is interesting. If only in theory.

  

• "Bring It On!"

  Submitted by Robert Gore via StraightLineLogic.com,

  Five words are important now: failure, exposure, rejection, repression, and war. The status quo has failed on multiple fronts. Its failures and corruption are being exposed, its governance and legitimacy questioned and rejected. The response is all too predictable: repression at home, war abroad. The Clintons represent the toxic confluence, the maelstrom’s vortex, and Hillary Clinton will press the powers’ response.

  Anything but free market economics is a redistributive shell game with a sell-by date. Government debt, spending, and programs, redistribution, and central bank debt monetization and interest rate suppression have passed their expiration, leaving mountains of IOUs that will never be repaid and prostrate economies in the first thralls of a deflationary contraction that will be one for the ages. Particular rancid: illusory, credit-based wealth has gone to a small, well-connected coterie who access microscopic interest rates for financial engineering and speculative fun and games. Left behind: honest producers and savers, who have seen their incomes shrink and the economy wither.

  Not content to lay waste to their own countries, the powers have visited their destructive and murderous mayhem upon wide swathes of the globe. Seeking to impose order they have instead promoted chaos, failed states, refugee flows, and the spread of terrorism. Stuck in costly and inconclusive quagmires in second-tier states, the US war lobby seems intent on provoking decidedly first-tier Russia and China, with a concomitant escalation of negative consequences. You can’t get any bigger, or potentially more suicidal, than war with the second and third largest nuclear-armed powers.

  Propaganda, indoctrination, a captive press, and widespread obliviousness and passivity will only take the incompetent and corrupt governing class so far. There’s too much to be swept under the rug. Eventually notice is taken of the telling details. The economy is going nowhere. The US has been in Afghanistan for fifteen years and in Iraq for thirteen. The capital is an overflowing cesspool; the Clintons being the most visible and malodorous turds floating by on that river of filth. The Internet has shone a light on failure and corruption, but even the mainstream media take note, if only in passing, before it exculpates those responsible.

  Exposure and anger concern the powers—they threaten the façade of legitimacy—but outright rejection would be intolerable. Never has an aristocracy exercised such power, lived so opulently, and received such publicity, adulation, and deference. Popular discontent given full vent and expression would threaten all that, and could lead to prison, or worse.

  Hillary Clinton embodies the power, wealth, and corruption of the aristocracy, which confronts the most serious threat yet to the world order it erected after World War II. It embraces her not merely because she is emblematic, but because she will implement naked repression and wage wars, its last resorts to hold on to power. She’s never met a “national security” measure or war she didn’t love. The FBI’s refusal to recommend charges despite Hillary’s obvious criminality appears to be the aristocracy’s take-off-the-kid-gloves moment.

  In their folly, the rulers have isolated themselves from the ruled. Never underestimate the former’s stupidity, born of isolation and arrogance, nor the intelligence and resourcefulness of the latter. Resort to repression and war is weakness, not strength, and in so doing, the aristocracy is taking a gamble it cannot win.

  It is a curious sort of tyranny that extracts its sustenance from the tyrannized, must borrow from them, and relies on them to accept its intrinsically valueless scrip as a medium of exchange. How strong can a tyranny be if it can be brought to its knees if the tyrannized were to stop working, lending, or accepting its scrip? If that seems farfetched, observe the frantic exertions the powers undergo to stop systemic runs on banks and other financial institutions. Why? Because all financial institutions are leveraged speculators, and if what they hold as assets decline in price sufficiently, their equity is gone and they are bankrupt. Bankrupts by definition cannot pay all their liabilities, and those liabilities are the public’s assets.

  As we saw in 2008, once enough assets are meaningfully impaired (as they inevitably will be, again), the whole scrip-based financial system unravels. Ultimately governments backstop much of the financial system’s scrip-based liabilities with…scrip based liabilities! The only thing that gives those liabilities any value are people’s willingness to accept them and an implicit and often broken promise by politicians and central bankers not to create too many of them. Right now, they are breaking that promise and doing everything possible to undermine the value of their own scrip. That’s Alice in Wonderland, not 1984.

  If the aristocracy’s dreams come true, they will destroy what’s left of the illusion of value of their scrip and consequently, destroy their ability to acquire resources outside commandeering them, or theft. That’s a one-off, as Venezuela has demonstrated. People stop producing; businesses close or flee. Totalitarianism isn’t free. Prisons, concentration camps, weapons, soldiers, surveillance, and police cost money, and the expense is only partially offset by slave labor, which, once all its costs are properly accounted for, confers very little, if any, economic benefit.

  But, never underestimate the stupidity of the aristocrats. Let’s say the US government descended into full-on totalitarianism. This is the same government that couldn’t subdue Vietnamese in Vietnam, Afghans in Afghanistan, Iraqis in Iraq, Syrians in Syria, Libyans in Libya, or Yemenis in Yemen. Nevertheless, it will attempt to subdue Americans in America, who collectively are far better armed (thank you, NRA) than any of the insurgencies in those other countries.

  Of course, many Americans are sheep so the resistance would be a subset, but the daunting math of fighting insurgents on their own territory, according to military expert Richard Maybury, is about 20 military personnel for each domestic guerrilla fighter. So even if only a million US insurgents resist, probably a low estimate, it would require 20 million government personnel to suppress them, not to mention what would be necessary to maintain order should any collateral chaos and violence, including racial and ethnic animosities, erupt. Currently, there are a little over 2 million active and reserve personnel in the military, and about 1.1 million in law enforcement, and some of both are administrative personnel who would not participate in suppression or combat. The government is stockpiling weaponry, but where does it find at least 17 million recruits to pull the triggers and drive the MRAPS, and with what will it pay them?

  Pity the police and the military. They will be caught between the dictates of an aristocracy that couldn’t care less about them and an insurgency bent on killing them. They would be ordered to fire on fellow Americans: neighbors, friends, and family members. There are plenty of praetorian thugs who would do so, but some would quit. Some might join the resistance, providing expertise and leadership. Already retired police and military, disgusted by the current state of affairs, would be another potential resistance recruiting pool.

  Incidentally, today’s command and control systems require computers. The Chinese and Russians have hacked sensitive government computers with impunity. If the US government went after its own people, would there be any shortage of home-grown hackers volunteering to bring down its systems?

  To paraphrase John F. Kennedy, if the aristocrats make peaceful and necessary change impossible, they will make violent resistance inevitable. It’s not a war they can win, but if it’s a war they are too foolish and arrogant to avoid, bring it on.

  

  

• Where The 'Richest' Live

  To be considered in a top 1% earner in the United States, the magic number that must be reached is $521,411 per household.

  However, as VisualCapitalist's Jeff Desjardin explains, it turns out that on a county level, the income of the Top 1% varies wildly based on location.

  For example, if you want to be in the “1% Club” in New York City, you’re going to have work extremely hard, get very lucky, or preferably, manage some incredible combination of those two things.

  Meanwhile, if you want to be in the crème de la crème of the social scene in Jackson, Kentucky or Chattahoochee, Georgia, things might seem a little more realistic. In fact, if you’re doing well for yourself, you may even be able to do it based on your income today.

   

  

  Courtesy of: Visual Capitalist

   

  The above map by HowMuch.net, a cost information site, shows the average income of the top 1% by county.

  Here’s the breakdown by county:

  Richest Counties by Average Income of Top 1%

  1. Teton, Wyoming – Average Income: $28,163,786
  2. New York, New York – Average Income: $8,143,415
  3. Fairfield, Connecticut – Average Income: $6,061,230
  4. La Salle, Texas – Average Income: $6,021,357
  5. Pitkin, Colorado – Average Income: $5,289,153
  6. McKenzie, North Dakota – Average Income: $4,709,883
  7. Shackelford, Texas – Average Income: $4,585,725
  8. Westchester, New York – Average Income: $4,326,049
  9. Collier, Florida – Average Income: $4,191,055
  10. Union, South Dakota – Average Income: $4,106,670

  Poorest Counties by Average Income of Top 1%

  1. Quitman, Georgia – Average Income: $127,425
  2. Taliaferro, Georgia – Average Income: $139,439
  3. Wade Hampton, Alaska – Average Income: $149,639
  4. Robertson, Kentucky – Average Income: $152,637
  5. Chattahoochee, Georgia – Average Income: $158,749
  6. Glascock, Georgia – Average Income: $169,027
  7. Shannon, South Dakota – Average Income: $174,433
  8. McCreary, Kentucky – Average Income: $177,132
  9. Menifee, Kentucky – Average Income: $177,192
  10. Jackson, Kentucky – Average Income: $178,917

  MAKING THE TOP 1%

  Taking the top spot by a long mile is Teton, Wyoming – the county home to the affluent Jackson Hole ski area, and 40.4% of the famous Yellowstone National Park. The Top 1% that live near Old Faithful are particularly well-off, making an average of $28.2 million each year!

  New York City is another place that needs Gordon Gekko-like income to make it into the top ranks. An income of $8.1 million will put you on par with the average one percenter there.

  Meanwhile, you don’t need a private jet to be one of the wealthiest people in counties in Georgia, Alaska, Kentucky, or South Dakota. If you make $180,000 per year, you are actually doing better than the average member of the Top 1% in many of those places.

  The rural county of Quitman, Georgia, has the lowest average 1% income at $127,425 per year.

  

  

• If The Shooting Of Dallas Police Surprises You; You Haven't Been Paying Attention

  Submitted by Dan Sanchez via The Foundation for Economic Education,

  Five police officers were killed and six were injured in Dallas lasst week when reportedly a lone sniper opened fire during a protest of the recent police killings of Philando Castile and Alton Sterling. This mass shooting was a despicable act of murder.

  It was also blowback.

  “Blowback” is a term generally reserved for foreign policy. It refers to the reverberating ill effects of foreign interventions. Ron Paul famously and persuasively characterized the 9/11 attacks as blowback from decades of US warfare and imperialism in the Greater Middle East.

  In the 1980s, American support for the anti-Soviet Mujahideen in Afghanistan helped lay the groundwork for what would become Osama bin Laden’s jihadist network, Al Qaeda. And in the 1990s, further US interventions in the Middle East spurred the jihadis to turn on their former sponsors and to wage a terrorist war on the west that culminated in the attacks on September 11, 2001.

  The outrage elicited by those attacks provided cover for a massive US-led war for the Greater Middle East that rages to this day. That Long War has only served to plummet the entire region into chaos and carnage, which has caused the number of jihadis and would-be terrorists to grow exponentially. As a result, western civilians continue to suffer blowback in the form of terror attacks in San Bernardino, Orlando, Paris, Brussels, etc. These attacks are fueling Islamophobia and driving calls for further violence and repression against Muslims.

  Collective Punishment

  The motor of this spinning cycle of reciprocal bloodshed is collectivism. Seeing fellows attacked prompts fear and anger. Fear and anger focused by the lens of reason pinpoints individual offenders for the delivery of justice. But refracted through the lens of collectivism and primal reaction, fear and anger disperses into indiscriminate terror and hate, which scatters to cover whole populations who are ascribed collective guilt and prescribed collective punishment.

  This collective punishment of innocents then prompts fear and anger among the targeted population. If they too are afflicted with collectivism, some of them will also succumb to terror and hate, which will be expressed in retaliatory indiscriminate violence: blowback. This collectivist retaliation begets further collectivist retaliation, and the cycle of violence spins out of control.

  The Home Front

  But this phenomenon is by no means restricted to international affairs. It can characterize civil unrest as well. Again, what we saw last week in Dallas was, if not something even more diabolical, blowback.

  The American people feel under siege. Different populations feel besieged by different forces. Black Americans especially have suffered decades of persecution by the American “justice” system: police brutality and harassment, mass incarceration, being nickel-and-dimed by tickets and fines, etc. And especially since the summer of 2014, they have been seeing a litany of viral photos and videos of black Americans having been gunned down, throttled, and broken by the police.

  This violence too is driven by collectivism. Law enforcement officers are granted an exceptional status in society: a special dispensation to mete out violence with impunity. This caste privilege has instilled deep tribalism in many police officers, which is amplified by training and police union propaganda. Cops are trained to be obsessed with “officer safety” and to effectively treat those outside the “blue tribe” (whom they ostensibly “protect and serve”) as an enemy population: as if every American they detain is a potential quick-draw gunman ready to shoot them down in a millisecond. This paranoia, combined with the impunity of the badge, is what makes an encounter with the police so potentially lethal: especially for black civilians.

  Take the collectivism of “blue” tribalism explained above and add, for some individuals, the collectivism of racial terror (irrational, hateful prejudice that every black male is a potential super-predator), and you begin to understand the epidemic of police violence against American blacks.

  Hate and Terror

  This police violence has elicited thoroughly justified fear and anger. Virtually all of this emotional response has expressed itself in peaceful protest, led by the Black Lives Matter movement.

  However, for some already-unstable individuals, it can boil over into terror, hate, and indiscriminate violence: blowback. Ismaaiyl Abdullah Brinsley was filled with hate when he killed two off-duty NYPD officers in 2014 following the killing of Michael Brown and Eric Garner. So was whoever killed five police officers in Dallas yesterday following the killing of Philando Castile and Alton Sterling.

  True justice is always individual and never collective. Badges do not grant extra rights, but neither do they negate the human rights of officers. Victims of police violence have a right to protect themselves from current attacks with proportional defensive force against actual perpetrators. They or their heirs also have a right to secure restitution from the specific individuals who violated their rights. But collectivist “retribution” is neither defense nor restitution.

  Just as international terrorism is often blowback from international war and occupation, the sniper attack on cops in Dallas last week was blowback from American police acting as a domestic army of occupation. And just as the victims of terror attacks do not deserve to be killed for the crimes of war-making politicians, the victims of yesterday’s shootings did not deserve to be killed for the crimes of other cops.

  This police violence has elicited thoroughly justified fear and anger. Virtually all of this emotional response has expressed itself in peaceful protest, led by the Black Lives Matter movement.

  However, for some already-unstable individuals, it can boil over into terror, hate, and indiscriminate violence: blowback. Ismaaiyl Abdullah Brinsley was filled with hate when he killed two off-duty NYPD officers in 2014 following the killing of Michael Brown and Eric Garner. So was whoever killed five police officers in Dallas yesterday following the killing of Philando Castile and Alton Sterling.

  True justice is always individual and never collective. Badges do not grant extra rights, but neither do they negate the human rights of officers. Victims of police violence have a right to protect themselves from current attacks with proportional defensive force against actual perpetrators. They or their heirs also have a right to secure restitution from the specific individuals who violated their rights. But collectivist “retribution” is neither defense nor restitution.

  Just as international terrorism is often blowback from international war and occupation, the sniper attack on cops in Dallas yesterday was blowback from American police acting as a domestic army of occupation. And just as the victims of terror attacks do not deserve to be killed for the crimes of war-making politicians, the victims of yesterday’s shootings did not deserve to be killed for the crimes of other cops.

  Collectivist retaliatory violence is not justice. It is despicable warfare and murder. That does not change the fact that refraining from collectivist violence is not only the right thing to do, but is also the best way to avoid collectivist retaliatory violence: that is, to avoid blowback. We are not “blaming the victim” when we counsel a foreign policy of peace. It is not only right; it is also the best way to be safe from terrorism. Neither is it “blaming the victim” to counsel a domestic policy of justice. It is not only right; it is also the best way to be safe from civil unrest and domestic terrorism.

   That does not change the fact that refraining from collectivist violence is not only the right thing to do, but is also the best way to avoid collectivist retaliatory violence: that is, to avoid blowback. We are not “blaming the victim” when we counsel a foreign policy of peace. It is not only right; it is also the best way to be safe from terrorism. Neither is it “blaming the victim” to counsel a domestic policy of justice. It is not only right; it is also the best way to be safe from civil unrest and domestic terrorism.

  

  

• Peak Polarization – Why Investors Should Really Worry About The Next Election

  It will come as no surprise to anyone that the relative polarization within America's body politik is at its highest ever (in both the The House and Senate)…

  

   

  but while the decision-making process remains mired in quagmired partisanship (with no party able to dominate)…

  

   

  The Federal Reserve is there to ensure that politicians do not have to "go back to work," no matter how pissed off the peasantry gets…

  

   

  However, with the uncertainty surrounding the upcoming election near record highs there is one scenario that US equity investors should be very afraid of with regard the President/Senate/House combination…

  

   

  Simply put, as JPMorgan details, if Trump wins in November (Republican president) but control of The Senate is lost (to the Democrats) while Republicans maintain control of The House, then US equity investors may want to take cover. Ironically a Hillary victory and the status quo of Republican House and Senate has historically been the most 'bullish' for US equity investors.

  Source: JPMorgan

  

  

• Did Citi Just Confiscate $1 Billion In Venezuela Gold

  Just over a year ago, cash-strapped Venezuela quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which Maduro converted part of his nation’s gold reserves into at least $1 billion in cash through a swap with Citibank.

  As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices. Needless to say, the socialist country’s economic situation is orders of magnitude worse now.

  According to El Nacional, “the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup.”

  As Reuters further added:

  “former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.  A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.”

  On paper yes – very much as any comparable gold leasing operation conducted by sovereign nations with central banks – but the actual physical gold would be transferred to an unknown vault of Citi’s choosing where it would become an asset controlled by the bailed out US bank.

  We note this peculiar gold swap case because something curious took place overnight. On the same day that Venezuela announced it would seize a local Kimberly-Clark factory after the US consumer-products giant announced it would shutter its Venezuela operations after years of “grappling with soaring inflation and a shortage of hard currency and raw materials”, Venezuela’s President Nicolas Maduro said on Monday that Citibank planned to shut his government’s foreign currency accounts within a month, denouncing the move by one of its main foreign financial intermediaries as part of a “blockade.”

  Among the many reasons why the sudden departure is surprising is that due to strict currency controls in place since 2003, the government relies on Citibank for foreign currency transactions, meaning that suddenly Venezuela’s financial “blockade” is indeed about to get worse.

  “With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela’s accounts,” Maduro said in a speech, adding that the government used the U.S. bank for transactions in the United States and globally.

  

  In typical bluster, Maduro added: “Do you think they’re going to stop us with a financial blockade? No, gentlemen. Noone stops Venezuela.”

  What Maduro did not mention is that among the central bank accounts closed by Citi will be at least one, rather prominent, gold swap launched just over a year earlier.

  Reuters adds that Citibank, could not immediately be reached for comment about the purported measure against Venezuela’s monetary authority and the Bank of Venezuela which is the biggest state retail bank. 

  With the OPEC nation’s economy immersed in crisis, various foreign companies have been pulling out or reducing operations. However, few of them held over $1 billion in Venezuela gold as hostage.

  So during his next address, perhaps someone inquire Maduro if as part of its “blockade” Citi also absconded with a substantial portion of the country’s gold reserves, and if so, which other banks have comparable “swap” arranagements with the insolvent nation?

  Meanwhile, Hugo Chavez, who spent the last years of his life repatriating Venezuela’s gold is spinning in his grave.

  

  

  

• The "Mystery" Of Who Is Pushing Stocks To All Time Highs Has Been Solved

  One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year – the fastest pace of withdrawals for any first half on record…

  

   

  … are these same markets trading at all time highs?  We now have the answer.

  Recall at the end of January when global markets were keeling over, that Citi’s Matt King showed that despite aggressive attempts by the ECB and BOJ to inject constant central bank liquidity into the gunfible global markets, it was the EM drain via reserve liquidations, that was causing a shock to the system, as net liquidity was being withdrawn, and in the process stocks were sliding.

   

  

  Fast forward six months when Matt King reports that “many clients have been asking for an update of our usual central bank liquidity metrics.”

  What the update reveals is “a surge in net global central bank asset purchases to their highest since 2013.”

  

  And just like that the mystery of who has been buying stocks as everyone else has been selling has been revealed.

  But wait, there’s more because as King suggests “credit and equities should rally even more strongly than they have done already.”

  

  More observations from King:

  The underlying drivers are an acceleration in the pace of ECB and BoJ purchases, coupled with a reversal in the previous decline of EMFX reserves. Other indicators also point to the potential for a further squeeze in global risk assets: a broadening out of mutual fund inflows from IG to HY, EM and equities; the second lowest level of positions in our credit survey (after February) since 2008; and prospects of further stimulus from the BoE and perhaps the BoJ.

  His conclusion:

  While we remain deeply skeptical of the durability of such a policy-induced rally, unless there is a follow-through in terms of fundamentals, and in credit had already started to emphasize relative value over absolute, we suspect those with bearish longer-term inclinations may nevertheless feel now is not the time to position for them.

  And some words of consolation for those who find themselves once again fighting not just the Fed but all central banks:

  The problems investors face are those we have referred to many times: markets being driven more by momentum than by value, and most negatives being extremely long-term in nature (the need for deleveraging; political trends towards deglobalization; a steady erosion of confidence in central banks). Against these, the combination of UK political fudge (and perhaps Italian tiramisu), a lack of near-term catalysts, and overwhelming central bank liquidity risks proving overwhelming – albeit only temporarily.

  Why have central banks now completely turned their backs on the long-run just to provide some further near-term comfort? Simple: as Keynes said, in the long-run we are all dead.

  

  

• An Ordained African-American Minister Asks "What If Whites Strike Back?"

  Authored by Mychal Massie, originally posted at Mychal-Massie.com,

  It would serve race mongers well to consider that even a docile old dog will bite you if you mistreat it often enough and long enough. Tangential to same is the reality of the “laws of unintended consequences.”

  I’m tired of seeing, reading, and hearing white people blamed for everything from black boys not being able to read to whites being privileged because of the color of their skin. If I am tired of these Americans being used as scapegoats to further the agenda of race mongers, then it is a sure bet that those being unjustly vilified are especially weary of same.

  This isn’t 1860 and it certainly isn’t 1955. There are no slaves in America and there are no Jim Crow laws dictating access based on skin color. Specific to that point it is time to remind people like Obama, Al Sharpton, and the New Black Panther Party that the racial discord they are fomenting can become the harbinger of their own peril.

  Obama foments racial unrest and a racial divide to further his neo-Leninist agenda. Sharpton foments racial unrest for personal gain. The New Black Panther Party foments racial hostilities and the demonization of whites in the foolish belief they can bring about a Western version of apartheid where blacks rule.

  Too many blacks have lost sight of the fact that it was Africans who were responsible for the enslavement of other Africans. It was war, invasion, conquest, and various caste systems that contributed to slavery. And although one would be hard-pressed to believe it from the invented myths that masquerade as fact, persons of color were not the only slaves.

  From Genesis to the Sudan of today, slavery has been a staple around the world. And it should be noted that given the first opportunity in America, the former slaves of color became owners of those whose skin color matched theirs.

  But unlike the rest of the world, America had the good sense and decency to end slavery. In America, there is no caste system, and yet at every turn we are bombarded with how bad blacks have it because of whites and how unfair the so-called “white system” is to blacks.

  All people, including those who are here illegally, have it better in America than they would have it anywhere else on earth. And yet blacks are encouraged to blame their ills on whites.

  Therein the “laws of unintended consequences” come into play. America has shed the blood of her people on her own soil to ensure the freedom of all Americans. Americans joined hands with blacks to end Jim Crow. And, to the detriment of all concerned, political correctness and guilt have contributed to discrimination against whites vis-a`-vis race-based affirmative action initiatives.

  Still the bastardization of whites continues. White law enforcement personnel are labeled racist for defending themselves against black criminals, especially when bad things happen to the black criminals.

  To put it succinctly, the single greatest non-biblical truth today is that many times the majority of blacks are their own worst enemies. Many blacks go through life with a chip on their shoulder and bad attitudes toward whites. Many blacks growing up in dysfunctional single parent or no parent homes are loathe to realize that their lives are the result of bad decisions made by their families that adversely affect their adulthood – its not the white man.

  But as I said, there is a thing called “the laws of unintended consequences.” To that end, sooner or later a pendulum reaches its arc and starts to swing back in the other direction.

  How long before white people, many of whom are growing increasingly resentful at being falsely maligned, decide to respond in kind? How much longer will whites stand by and allow the likes of Sharpton and Obama to continually cast them as racist villains?

  If the 1915 silent movie, The Birth of a Nation by D.W. Griffith, which depicted blacks as unintelligent and sexual predators of white women, (which was a lie) gave rise to the resurrection of the Ku Klux Klan, what can we expect to be brought about by the heathen behavior of many blacks today?

  Many blacks are quick to attack those of us who condemn the untoward, barbaric behavior of some blacks. They curse us for not glossing over their behavior and for not engaging in “blame whitey.” But if a phony movie was able to give rise to at least two generations of condemnation of blacks, what will the in-your-face belligerent hostilities so many of them exhibit today ultimately result in?

  America has figuratively bent over backward to assuage its perceived guilt but for many blacks that is not good enough. They accuse and self-alienate but do nothing to incorporate the greatness of America into their lives.

  How much longer will America allow blacks to vilify those who have done them no harm – even as blacks attack, terrorize, and condemn those who truly do just want to get along?

  *  *  *

  

  About Mychal Massie

  Mychal S. Massie is an ordained minister who spent 13 years in full-time Christian Ministry. Today he serves as founder and Chairman of the Racial Policy Center (RPC), a think tank he officially founded in September 2015. RPC advocates for a colorblind society. He was founder and president of the non-profit “In His Name Ministries.” He is the former National Chairman of the conservative Capitol Hill think tank, Project 21; and a former member of its parent think tank, the National Center for Public Policy Research. Read the entire Bio here

  

  

• Caught On Tape: State Department Refuses To Answer Any Questions On Arming Syrian Rebels

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  If for some bizarre reason you still have any faith left in the U.S. government, this should take care of it.

  "Thanks for the question… and we have no comment because there is an ongoing investigation.." rinse. repeat.

  Why hold a press conference at all?

  

  

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• Here's How Much Europe Depends On The UK

  Via MauldinEconomics.com,

  Euroskeptiscism is on the rise in Europe. Countries like Poland and Hungary have actively sought to limit the EU’s influence and ignore its rules—most recently with regard to refugee policies.

  Even the most Euroskeptic governments, however, campaigned against Brexit. While European nations may want to limit the EU’s role and influence at home, both economic and security interests led them to support the UK’s membership in the EU (read our free special report on Brexit implications).

  This opposition to Brexit is an example of why interests—much more than ideology—matter in geopolitics.

  European powers depend on exports to the UK

  European nations are heavily invested in their relationship with the UK. The UK is the fourth-largest importer in the world, and the EU needs British import demand.

  EU member states’ trade ties with the UK vary, but several European economies send a significant amount of their exports to Britain.

  Nearly 14% of Irish exports went to the UK in 2015. 9% of the Netherlands’ exports and 7.4% of Germany’s exports also went to this nation in 2015.

  

  With countries like Germany facing reduced global demand for their goods, European governments cannot afford to lose access to British customers.

  The UK was a major contributor to the EU’s budget

  12.6% of the EU’s revenues came from the UK in 2015. When less developed countries joined the EU, the older members took on a greater financial burden. They hoped that expansion would boost investment opportunities and enhance the bloc’s security in the long term.

  The UK was one of only 10 net contributors to the EU budget – along with Germany, France, the Netherlands, Italy, Sweden, Austria, Denmark, Finland, and Ireland. For these wealthy European economies, a British exit means an increased financial burden.

  Eastern Europe needs access to UK labor markets

  British job opportunities and remittance flows are highly significant for Eastern Europe. Eastern Europe has enjoyed low unemployment rates—in large part because millions of Eastern Europeans work in other EU countries… most notably, the UK.

  Over 740,000 Polish citizens and over 160,000 Lithuanian citizens resided in the UK in 2014 according to Eurostat. There are also reportedly over 500,000 Hungarians abroad, with an estimated 300,000 in the UK.

  

  Britain and the EU are likely to reach a trade deal. Nevertheless, if this deal is bilateral, there are no guarantees that workers from Central Europe could continue working in the UK.

  Brexit is more than just an economic threat to Europe

  Europe’s unease is about more than economics. Some countries see Brexit as a threat to the region’s security interests. The Kremlin has been working to split the Western alliance, while the EU has been fragmenting under the weight of internal challenges and diverging interests.

  Eastern European nations fear that Western Europe may abandon them. Countries like Poland know that a more divided Europe is even less likely to act rapidly and cohesively to aid allies in the east.

  The UK is a highly strategic ally for European nations. Britain boasts one of Europe’s most powerful militaries, despite some downsizing and a reduction in overseas operations over the years.

  

  Plus, The Royal Navy remains the second-largest navy in NATO, after the US Navy.

  All of this confirms that Europe can’t afford a break-up with Britain. The EU and Britain, therefore, are likely to reach a trade deal and maintain close economic and military ties despite the Brexit vote.

  

  

• Europe’s Economic Crisis Has Spread from the Periphery to the Core

  We’ve noted for more than 5 years that the European crisis would spread in the following order … more or less:

  Greece → Ireland → Portugal → Spain → Italy → UK

  We also warned that the EU’s approach to economic problems in the periphery would lead the cancer to spread to the core. For example, we’ve repeatedly warned that:

  • Bailing out the big European banks would just transfer the risk to the people

  • Propping up stocks and asset prices won’t get Europe out of the crisis

  • Covering up fraud by the European banks would sink the economy

  Now, the IMF is forecasting that Italy could be in recession for two decades … and that it’s weakness could spread to the rest of the system.

  Britain is – of course -in trouble.  But it’s not just Brexit …

  Europe has been stuck in a downturn worse than the Great Depression for years.  The former Bank of England head Mervyn King said recently that the “depression” in Europe “has happened almost as a deliberate act of policy”. Specifically, King said that the formation of the European Union has doomed Europe to economic malaise.

  He points out that Greece is experiencing “a depression deeper than the United States experienced in the 1930s”.

  

  (Indeed, some say that the UK was smart to get out while it could.)

  Even Germany’s largest bank, and the bank with the highest exposure to derivatives anywhere in the world – Deutsche Bank – is in big trouble.

  Here’s its stock price:

  And here’s its market capitalization:

  In May, Moody’s downgraded Deutsche to a mere 2 notches above junk.

  And credit default swaps – bets that a company is in risk of failing – against Deutsche have absolutely skyrocketed:

  

  Deutsche Bank’s chief economist just said:

  Europe is extremely sick and must start dealing with its problems extremely quickly, or else there may be an accident.

  He’s calling for a $166 billion dollar bailout of European banks.

  Similarly:

  BlackRock Inc. Vice Chairman Philipp Hildebrand said earlier this month the European Commission should allow governments to take temporary equity stakes in their banks, similar to what the U.S. did with its Troubled Asset Relief Program during the 2008 crisis.

  Europe has made bad choices since the 2008 crisis … so Europe’s economic crisis has spread from the periphery to the core.

  

• Don't Just Blame The Cops: Who Is Responsible For America’s Killing Fields?

  Submitted by John Whitehead via The Rutherford Institute,

  “I could never again raise my voice against the violence of the oppressed in the ghettos without having first spoken clearly to the greatest purveyor of violence in the world today: my own government. For the sake of those boys, for the sake of this government, for the sake of the hundreds of thousands trembling under our violence, I cannot be silent.”—Martin Luther King Jr.

  The latest shootings—in Texas, Minnesota, Louisiana, Illinois, New York, Missouri and every other state in the nation—are symptomatic of a psychotic outbreak by a nation that has been waging a war against its own citizens for too long.

  We have long since passed the stage at which a government of wolves would give rise to a nation of sheep. As I point out in my book Battlefield America: The War on the American People, what we now have is a government of psychopaths that is actively breeding a nation of psychopathic killers.

  We’re getting distracted, people.

  Instead of focusing our ire on the architects of the American police state, who are responsible for turning the streets into mini-war zones, we’re getting distracted by the many voices eager to play the blame game by pointing their fingers at someone else.

  Police groups are blaming President Obama and the Justice Department for failing to prosecute “cop killers.” Texas Republicans are blaming the Black Lives Matter movement for fomenting a “war on cops” mindset. Gun control advocates are blaming “gun lovers and their mouthpieces at the National Rifle Association” for America’s gun violence, reasoning that if all Americans were unarmed, police would not have to treat them as potential threats.

  News outlets such as Rolling Stone and Mother Jones have concluded that racial bias is to blame for the “disproportionately high number of African-Americans among police shooting victims.” The Drug Enforcement Administration has suggested that illegal steroid use could be responsible for “police officers who exhibit rage, aggression and/or poor judgment (all symptoms of possible steroid abuse) in confrontations with citizens.”

  Human Rights Watch blames police misconduct and excessive use of force on a systemic lack of accountability within law enforcement agencies and the criminal justice system. And civil rights advocates are blaming police militarization and the abundance of laws (overcriminalization) pushed by lawmakers for the nation’s over-policing, over-jailing and over-killing.

  Yet in the midst of all this finger pointing, no one is stepping forward to take responsibility for the violence that is tearing the nation apart, deepening racial tensions, heightening police tensions, justifying all manner of civil liberties abuses, and pushing us ever closer to a state of lockdown.

  Shame on President Obama for not taking personal responsibility for the blowback resulting from America’s endless wars abroad, the militarization of local police, and the ramifications of allowing police to use battlefield equipment such as drones, assault weapons, tanks, etc. How telling that the first domestic killing of an American citizen by a drone (in this case, a bomb-equipped police robot) should be carried out during the final term of a president whose targeted drone killings abroad have resulted in the deaths of thousands of innocent civilians.

   

  Shame on Congress and the countless federal and state policy-making bodies for not taking responsibility for the overabundance of laws that have turned law-abiding citizens into criminals and police into the inflexible enforcers of a legal code that benefits the corporate elite at the expense of the working classes.

   

  Shame on Corporate America, particularly the military industrial complex, for not taking responsibility for having militarized America’s police forces and subjected its citizenry to the tyranny of a heavily armed police state.

   

  Shame on the various government agencies, from the FDA and Social Security Administration to the Department of Education, for not taking responsibility for ratcheting up tensions by using military firepower to advance their bureaucratic agendas.

   

  Shame on Republicans and Democrats for not taking responsibility for having sidelined legitimate matters of concern such as police misconduct in favor of party politics and campaign contributions from special interest groups and unions.

   

  Shame on the courts for not taking responsibility for allowing government agents to hide behind the shield of qualified immunity, rather than being held accountable for their actions.

   

  Shame on law enforcement agencies for advancing the notion that the lives—and rights—of police should be valued more than citizens. Shame on them for not taking responsibility for allowing blind allegiance to the so-called “thin, blue line” to trump the constitutional rights afforded to every American equally.

   

  Shame on communities for not taking responsibility for using SWAT teams that are armed to the teeth and ready for action to deliver mere search warrants, terrorizing and killing American citizens.

   

  Shame on those who embrace violence as an answer to what ails America for not taking responsibility for their part in contributing to an environment that is growing increasingly tense with every new shooting. It’s a vicious cycle in which the police are becoming more hypersensitive, twitchy and quick to shoot at the slightest provocation, and the populace is growing more fearful, outraged and unconvinced that if they “just obey,” all will be fine.

   

  Shame on the religious community for not taking responsibility for its deafening silence in the face of what can only be termed evil, despite its historic lineage of dissenters such as Jesus, Gandhi, Martin Luther King Jr. who dared to speak truth to power.

   

  Shame on white Americans, black Americans, brown Americans and every other skin tone in between for not taking responsibility for their part in allowing racism, prejudice and bigotry to dictate justice in America.

   

  And shame on so-called “patriotic” Americans who equate good citizenship with blind obedience to government authority and adulation of the military for not taking responsibility for holding their government officials accountable to the nation’s founding principles. Remember, “we the people” were entrusted with the power to make and unmake the government whenever it ran afoul of its primary purpose, which is to protect our lives, freedoms and property.

  Clearly, there’s more than enough blame to go around, but the real question is what can “we the people” do about it? What can average Americans do to stay alive and counter the violence being inflicted on our communities? What can you do to push back against the power of the police state?

  For starters, let’s all agree that violence can never be the answer. Violence will only give rise to more violence.

  Stop buying into the “us vs. them” rhetoric being pushed by politicians, police unions and those who use the race card as a justification for bloodshed. No matter what color your skin is, what politics you subscribe to, how much money you’ve got, whom you love, where you live, whom you worship, what school you attend, where you work, or any other superficial label that is used to divide us: we all bleed red.

  Put your prejudices behind you and stop dealing in stereotypes. Not all police are bloodthirsty. Not all young black men are thugs. Not all people who challenge government authority want anarchy.

  In a police state, you’re either the one with your hand on the trigger or you’re staring down the barrel of a loaded down. In other words, we’re all in this together. The oppression and injustice—be it in the form of shootings, surveillance, fines, asset forfeiture, prison terms, roadside searches, etc.—will come to all of us eventually.

  Stop allowing yourself the luxury of distraction and the sin of neutrality. These things happen—the madness and the mayhem—because good people stood by and did nothing.

  The only real power we have to push back against the police state is as a unified body.

  So what can you do on a practical level?

  For starters, find common ground on the issue of gun control, especially as it pertains to government agents. Demilitarize the police. It’s worked in other countries.

  Demand that police be held financially responsible for official misconduct.

  Put your taxpayer dollars to work for you instead of against you for a change. Tell your elected representatives to stop investing in militarization, wars and weaponry that will only be used against you eventually. Instead, apply the same funds being wasted on endless wars abroad on badly needed infrastructure here at home. By putting more Americans to work rebuilding our communities and our economy, we’ll also strike at the heart of the poverty that drives crime.

  Get informed about the workings of government. Get outraged about the corruption that has rotted our republic from the core. Get vocal about the need for transparency, accountability and reform. There are so many issues in need of attention. Pick just one to start with and raise hell about it. For instance, why has the government been spending three times more on jails and prisons than schools for the past 30 years?

  Finally, take it upon yourself to interfere. Pay attention to what’s going on around you. Use those cell phones that are never far from your side and record police interactions in order to hold them accountable to playing by our rules, the rules of the Constitution. Most important of all, take a stand for freedom and humanity. “Neutrality,” as Holocaust survivor Elie Wiesel reminded us, “helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented. Sometimes we must interfere. When human lives are endangered, when human dignity is in jeopardy, national borders and sensitivities become irrelevant. Wherever men and women are persecuted because of their race, religion, or political views, that place must – at that moment – become the center of the universe.”

  

  

• The Chinese Will Need Another Bailout

  Here we go again. China is primed for more bailouts as their corporations and State Owned Enterprises (SOE) continue burning through billions of yuan. At the turn of the month we learned Sinopec manipulated revenues. As Reuters reported at the time, some 12 subsidiaries of Sinopec had fake invoices among other faults. Chinese companies are loading up on debt and they are investing it terribly. 

  Reuters also said 10 state-owned firms had "huge losses" driven primarily from bad investment decisions. Sinopec subsidiaries blew cash on 14 unused chemical plants as well acquiring two dozen fuel stations illegally. 

  "China's national audit department reviewed the financials of the 10 largest state-owned companies including Aluminium Corporation of China (CHALCO), Sinopec and China National Offshore Oil Corporation (CNOOC), exposing huge losses in these firms as a result of low efficiency and bad investment decisions. The auditing office also pointed to wasted investments Sinopec's subsidiaries made, such as 14 unused chemical plants, and raised red flags on two dozen "illegally acquired" fuel stations."

  Oh yeah, these guys are real winners when it comes to running business and making investments. As Citi pointed out, China's SOE's have Pre-tax Profit Margins and Liability-to-Asset ratios that do not appear to reflect wise decision making:

  

  China's corporations are horrible with investment. We are not shocked by this. We expect many more Chinese bailouts to come as the country's money-gods lose total control of the monster they have unleashed through reckless monetary policy.

  The investment decisions have become so bad that a source told Bloomberg that up to 10 SOE's may require a bail out:

  China is considering providing about 10 of its state-owned enterprises with an aid package, people familiar with the matter said. Sinosteel Corp. is among those that may receive help, one of the people said

  In an effort to throw the kitchen sink plus more at the equity market, China will now be deferring a portion of a $300 billion pension fund into the Chinese market. A wise choice?  Perhaps not, especially since the Chinese have painted themselves into another bailout corner.

  With malinvestment as we saw re: Sinopec, to China's need to backstop at least 10 failing state-owned enterprises, and now the clear desperation of getting pension money exposed to the equity market, presumably ahead of more central bank stimulus, it's becoming evident that the Chinese are running out of options. Once the entire nation is invested in stocks and the central bank is buying hand over fist, the Chinese market manipulation will have jumped the shark, because their explosive Debt-to-GDP didn't seem to mark a turning point in the Chinese economic story as of yet:

  

  But don't worry, the National Council for Social Security Fund in China that will manage the pension fund investments has an appreciation from the Chinese people akin to what some believe American's have for Warren Buffett, reportedly:

  The NCSSF has "such a good reputation in being a value investor that if they take the lead, the signaling effect is actually quite strong," said Hong, who had predicted the start and peak of China’s equity boom last year. "It’s almost like Warren Buffett saying he is buying a stock."

  Which is unique because frequent Zero Hedge readers may recall a different Chinese version of Warren Buffett:

  On Thursday, we learn that yet another high profile businessman has apparently vanished and this time, it’s none other than “China’s Warren Buffett,” Guo Guangchang (worth some $7 billion at last count) whose conglomerate Fosun International is morphing into an insurance-focused investment group. Fosun spent more than $6 billion buying stakes in 18 overseas companies between February and July.

  China just burning cash and it is amazing they have lasted this long.  How much longer will the cash pile burn? Maybe MOAR cash infusions is the answer…

  

  

  

• Harvard Study Finds No Racial Bias In Police Shootings

  A very recently published Harvard study on racial bias in police use of force finds that, as the mainstream narrative proffers, black men and women are treated differently in the hands of law enforcement. However, in what the (African-American) author of the study calls "the most surprising result of my career," when it comes to the most lethal form of force – police shootings – the study finds no racial bias, contradicting the mental image of police shootings that many Americans hold.

  As The NY Times reports, the study did not say whether the most egregious examples — the kind of killings at the heart of the nation’s debate on police shootings — are free of racial bias. Instead, it examined a much larger pool of shootings, including nonfatal ones. It focused on what happens when police encounters occur, not how often they happen. (There’s a disproportionate number of tense interactions among blacks and the police when shootings could occur, and thus a disproportionate outcome for blacks.) Racial differences in how often police-civilian interactions occur have been shown reflect greater structural problems in society.

  Black men and women are treated differently in the hands of law enforcement. They are more likely to be touched, handcuffed, pushed to the ground or pepper-sprayed by a police officer, even after accounting for how, where and when they encounter the police…

  

  But Roland G. Fryer Jr., the African-American author of the study and a professor of economics at Harvard – which examined more than 1,000 shootings in 10 major police departments, in Texas, Florida and California, was "surprised" to find that when it comes to the most lethal form of force — police shootings — the study finds no racial bias.

  

  Mr. Fryer said his anger after the deaths of Michael Brown and Freddie Gray and others drove him to study the issue. “You know, protesting is not my thing,” he said. “But data is my thing. So I decided that I was going to collect a bunch of data and try to understand what really is going on when it comes to racial differences in police use of force.”

  In officer-involved shootings in these 10 cities, officers were more likely to fire their weapons without having first been attacked when the suspects were white. Black and white civilians involved in police shootings were equally likely to have been carrying a weapon. Both of these results undercut the idea that the police wield lethal force with racial bias.

  …

  However, for Mr. Fryer, who has spent much of his career studying ways society can close the racial achievement gap, the failure to punish excessive everyday force is an important contributor to young black disillusionment.

  “Who the hell wants to have a police officer put their hand on them or yell and scream at them? It’s an awful experience,” he said. “I’ve had it multiple, multiple times. Every black man I know has had this experience. Every one of them. It is hard to believe that the world is your oyster if the police can rough you up without punishment. And when I talked to minority youth, almost every single one of them mentions lower level uses of force as the reason why they believe the world is corrupt.”

  

  

• Kyle Bass Was Right: Here Is SocGen's Primer How To Trade The Biggest Yuan "Depreciation Wave" Yet

  For a few months in early 2016 it was cool to make fun of Kyle Bass’ career bet on Yuan devaluation; now that the Yuan is back to 6 year lows and sliding as China once again quietly loses control of its capital outflows, it is not so cool any more.

  

  And with every passing day, it is only going to get worse because despite all the rhetoric, China’s economy is getting worse by the day.  As SocGen puts it, “there have been signs of reviving capital outflow pressure since early 2Q. If the deprecation continues apace, capital outflow pressure will build up further and potentially quite quickly. The fact that the PBoC keeps stepping up capital controls despite the innocuous official flow data seems to suggest that it is also expecting an uphill battle.“

  And speaking of SocGen’s outlook for China’s currency , this is what the French bank – which just cut its Yuan forecast from 6.80 to 7.10 – thinks will happen next.

  A New Normal for the RMB

   

  We revise our peak forecast for USD-CNY to 7.10 from 6.80. Similar to immediately following the August devaluation, consensus is too complacent on the ability and willingness of policymakers to arrest the nearly three-year-old depreciation trend.

   

  The new normal in recent months is gradual RMB depreciation that doesn’t create a negative feedback loop to other currencies or broader market sentiment. This could embolden policymakers to keep pushing the limits of depreciation, especially if speculative positioning stays subdued. Implied volatility, risk reversal, forward points, and the forward curve have all been unresponsive to the recent RMB weakness. This is partly due to the reluctance of speculative investors to add exposure after being burned by the RMB depreciation trade in January, but also because intervention remains ongoing despite not showing up in headline reserves or the forward book.

   

  

   

  The best solution remains for policymakers to let the RMB find its market clearing price. This is not an exact science and we can only guesstimate what the level would be – 6.80 was our previous assumption but 7.10 now seems more realistic. The recent depreciation at a time when the dollar has not been strengthening suggests policymakers are increasingly giving in to capital flow pressures and are willing to the test the limits of depreciation. Further depreciation could reinforce capital outflows in the short term but should eventually help capital flows reach equilibrium.

   

  

   

  7.10 peak – our base case, 80% probability

   

  The next wave of RMB depreciation will see USD-CNY trade up to 7.10 by mid-2017. Since USD-CNY bottomed in early 2014, there have been five waves of depreciation and each has followed a predictable pattern: three to five months of USD-CNY increasing (+3.5% on average), followed by modest gains (+1%) spanning an equivalent time span, before another round of depreciation ensues. The predictability is  suboptimal from a policy perspective, but it appears to be the PBoC’s standard playbook. While there could be some consolidation or modest strength after the current depreciation phase ends (3.6% since April), the ensuing wave and medium-term path should see USD-CNY reach 7.10 over the next year.

   

  Cumulative depreciation of 6% over the next year would be similar to what has been experienced since October. This would not be an atypical base case for a country in a structural slowdown, with perceptible credit and banking sector risks, an imbalance in the supply-demand of capital, a tenuous reserve adequacy position, and local residents harbouring a strong desire for FX diversification.
  We continue to believe that consensus is underestimating the chances of CNY depreciation, both from the ability and willingness of policymakers to prevent further depreciation. Consensus is at 6.80 in one year, which was our prior out-of-consensus call immediately following the August devaluation (back in late August consensus was at 6.50).

   

  

   

  A gradual and controlled depreciation with periods of stability and bouts of accelerated weakness is still the most likely scenario (80% probability). A move to 7.10 may continue to be absorbed by investors without disturbances to broader market sentiment occurring, and as such we see no need to revise our EM forecasts, which currently entail modest spot depreciation that broadly matches the forwards.

   

  Importantly, the USD-CNH trading pattern since 2014, of only retracing a portion of its gains and never revisiting the lows after an up move, should remain in place. Coupled with little fundamental justification for a stronger CNH over a 12-month horizon and fairly neutral speculative positioning, it is unlikely that USD-CNH will trade below the 6.50-6.55 area.

   

  8.0 – the new risk scenario, 20% probability

   

  Back in January (CNY7.50 World) we identified USD-CNY trading up to 7.50 as the risk scenario for the currency. Given ongoing capital outflows, the ability of the market to absorb recent depreciation without negative consequences, the policy decision to weaken the renminbi when the USD has been stable, and our new forecast of 7.10, the risk scenario for CNY is now much higher.

   

  The new risk scenario for CNY is 8.0 (20% increase in USD-CNY). We assign 20%  probability to this scenario. The caveat is that the pain threshold for the market appears to be much higher than before and the implications for the global financial markets will primarily depend on the speed of depreciation. We believe that it would take significantly more pressure on capital flows than what we have seen over the past few years, or an economic hard landing, for our risk scenario to unfold. Note that we have a 30% probability of a hard landing of the Chinese economy. We think that an economic hard landing might not necessarily trigger a sharp devaluation, as the authorities would most likely respond with strict capital controls amid concerns over capital flight.

   

  Within the risk scenario, the path to 8.0 could be abrupt (not likely), slow (more likely), or fast (most likely).  

  • Scenario 1: one-off devaluation (<10% probability): A one-off move (i.e. step devaluation) where the PBoC then chooses to defend the new level. There would be enormous political backlash with the  appearance of any active pursuit of devaluation. This would also be too risky for Beijing’s taste given that no one can say for sure how much depreciation is enough to equilibrate supply and demand. However,  we assign it a nonzero probability because the authorities might ultimately decide it is the best way to realign expectations and halt domestic capital outflows.

  • Scenario 2 (free float over the next year – >70% probability): The PBoC fast-tracks currency reforms through a big-bang approach to currency flexibility because either: a) capital outflows remain large and the depletion of FX reserves too great; or b) it deems the domestic and global financial markets able to absorb the shock.
  • Scenario 3 (slow and steady move – 20% probability): The current strategy of steady depreciation picks up pace and intervention is used to limit overly destabilising volatility. The risk to a steady creep higher in USD-CNY is a build-up in speculative pressures and resident outflows that creates a vicious cycle of depreciation.

  Finally, here is SocGen with its best ways to trade the coming Yuan devaluation:

  Long USD-CNH: In our view, over a one-year horizon, being long USD-CNH has attractive risk-return characteristics on a 6% spot move, 2.5% negative carry, and limited potential for CNH to strengthen on a sustained basis. However, the entry point is critical to achieving a favourable PnL outcome and it might be prudent to wait until CNH consolidates or strengthens modestly to enter long USD-CNH positions.

   

  Vanilla calls or call spreads are too expensive: Both these structures are too expensive when considering the probability-weighted terminal value of CNH a year from now. For example, a one-year 25d USD-CNH call has a breakeven at 7.37 while a 25d/10d call spread needs to see a move to the 7.50 area for risk-return to be attractive.

   

  Buy 1-year call spread (6.85/7.20 strikes) and sell 1y-year 6.55 put: Under the premise that USD-CNH only retraces a modest portion of the recent gains (similar to past experience) coupled with no strong arguments for sustained appreciation on fundamental grounds, selling downside optionality can cheapen the cost of the call spread quite significantly. For example, the indicative cost of a 6.85/7.20 call spread is 1.43%, compared with a cost of 0.42% in a structure that buys the same call spread and also sells a 6.55 put. The 70% cost reduction entails unlimited losses below 6.55 but the position can be delta-hedged.

   

  But 1-year 6.85 USD-CNH call with a knock-out at 8.0: Owning a 1-year 6.85 call option is quite expensive (indicative cost of 3% of notional) and has a poor breakeven (7.05). Whereas owning a 1-year 6.85 call with a knock out at 8.0 (our risk scenario) entails a 60% cost reduction over the vanilla call. The risk is limited to the premium paid. Positive PnL at expiry accrues above 6.90, but if the barrier level (8.0) is hit at any point over the life of the trade the structure is knocked out and the premium is lost. The structure has risk-reward of 10-1.

   

  Short RMB against an abridged CFETS basket: Whether the CNY stabilises against the USD, depreciates modestly in an orderly and controlled manner (our base case), or experiences stronger depreciation (our risk scenario), the trade-weighted basket will be at best stable and could continue to fall. To mitigate fluctuations in the USD-CNY exchange rate, investors can short the trade-weighted exchange rate. An abridged CFETS index that includes the USD (36% weight), EUR (325), JPY (13%) and AUD (19%) is able to track the larger thirteen currency CFETS index very closely (link). The abridged basket is highly liquid and has similar negative carry as being long USD-CNH (22bp/month).

  And with that, good luck in catching up to Kyle Bass.

  

  

• One Year After Surpassing Walmart, Amazon Is Now Bigger Than Berkshire

  Jeff Bezos has marked another milestone. Nearly one year to the day following Amazon’s surpassing of Walmart’s market capitalization on the heels of a great report on AWS (Amazon Web Services) growth numbers, Amazon has surpassed another American business icon’s market capitalization, that of Warren Buffett’s Berkshire Hathaway…

  

   

  Notably tomorrow is Amazon Prime Day 2016.

  Leaving the big question – when does Amazon rise to Apple’s market cap level or will Apple fall to Amazon’s market cap level? Place your bets…

  

   

  Charts: Bloomberg

  

  

• Why Gundlach Thinks It's Going To Get Worse, And Why He Is "Pretty Sure That Trump Will Win"

  Yesterday, when referring to the latest interview Jeff Gundlach gave Barron’s, we presented the bearish DoubleLine “bond king’s” portfolio which he broke down as follows: “high-quality bonds, gold, and some cash.” He promptly added the following rhetorical response to inbound inquiries: “People say, “What kind of portfolio is that?” I say it’s one that is outperforming everybody else’s. I mean, bonds are up more than 5%, gold is up substantially this year [28%], and gold miners have had over a 100% gain. This is a year when it hasn’t been that tough to earn 10% with a portfolio. Most people think this is a dead-money portfolio. They’ve got it wrong. The dead-money portfolio is the S&P 500.”

  

  Today, the market is doing its best to prove Gundlach wrong, with the S&P breaking out to new all time highs while gold takes a modest leg lower.

  But while the market remains entirely reliant on the actions of central banks, and as we noted earlier, the latest push higher appears to have come from Bernanke whispering in Abe and Kuroda’s ear about the fringe benefits of helicopter money, Gundlach does not see the gains in the market trickling down into the broader economy. Just the opposite, because in another part of the same Barron’s interview, when asked if things are going to get worse – both in the economy and society – Gundlach responds as follows:

  What is really happening here is that there’s massive technological change, and big changes almost always lead to political instability. People who benefit from the old construct are loath to see it change, because they don’t want to lose their power and economic advantage. And so they dig their heels in even harder. That’s what we’re seeing in Britain right now. People who remember the good old days when they had factory jobs and made a good living—that’s been taken away, and they want to do something about it… Robots are taking an awful lot of jobs. Driverless cars are coming; just think about how many jobs that is going to take away. Think of all the taxi drivers; think of all the Uber drivers who have found a source of income. How about the truck drivers? How about the livery people? A lot of people are out there driving around and getting paid for it. You get a driverless car, and all of a sudden they’re unemployed. Not all of them, of course, and not all at once. This is all part of this process.

  It’s not just technology, though. Gundlach is just as worried about slumping demographics, not only :

  One of the big problems in parts of Europe is a collapsing labor force. In Italy, the fertility rates are so low, and the baby-boom piece so big, that their labor force will plunge, absent immigration. Demographics are a problem that takes a generation to go away. And then you’ve got the robots, and they’re never going away. And you’ve got all this debt—the world’s debt-to-gross-domestic-product ratio is 240%—so you’re already putting a big headwind onto economic growth. Pair that with the demographics, and you get slow global growth.

  When asked if he expects more political risk in the market, Gundlach responds as follows: “This is a train that’s moving down the tracks, and I don’t see it stopping until substantial change occurs. Minor fixes—like raising the top tax bracket to 39% from 36%—are not going to create an enduring solution. We are going to see it in the U.S., in our presidential election.”

  Which finally brings Gundlach to the topic of Trump, and why he thinks The Donald will be America’s next president.

  One of the reasons I believe Trump might win is that Brexit won. The parallels are far too great to be coincidental. They are identical in time. They are identical in mood, in the attitude of “I’m not doing what you say anymore.” People don’t want to admit that they support Trump. They hide it. A lot of people in Britain didn’t want to admit that they were voting to leave. My suspicion is that if Trump is even within the margin of error come November, he’ll win by a few percentage points.

   

  * * *

   

  The establishment media is putting out a lot of scare pieces about how Trump is going to destroy the world economy; that [his presidency] could lead to protectionism, noncooperation, tariffs, and stuff like that. And, in Europe, you are having a new uptrend in noncooperation. But I’m pretty sure that if Trump wins—and I do think he is going to win—he is going to increase the deficit. He talks about building up the military, building walls. These things cost money. And if the deficit goes up, which it would under a President Trump, that will give a short-term bump to economic growth. So maybe it is not as scary as people think.

  Perhaps Gundlach is right, and if indeed Japan is the Gunniea pig for Helicopter money, who better to have on top of the US economy than a president who will follow closely in Japan’s footsteps, and boost fiscal spending, expand the deficit, and in the process greenlight the Fed to do even more QE, courtesy of hundreds of billions in more Treasurys that someone has to backstop will be bought in the coming years.

  

  

• Japanese Savers Flood Into Gold Fearing The Endgame Is Close

  For all the talk about the surging yen as the biggest threat to Japan’s embattled economy, the truth is that there is another soaring currency (and asset) that is far more troubling for Shinzo Abe.

  Gold.

  

  While in past decades, the natural instinct of Japanese savers when faced with financial uncertainty has been to rush into the “safety” of cash (after all why allocate funds to government bonds that yield almost, or less, than nothing) as we recently showed in Safes Sell Out In Japan and Demand For Big Bills Soars As Japan Stuffs Safes With 10,000-Yen Notes, now something has changed. That something is increasing loss of faith in Japan’s currency.

  Take the case of Tetsushi Kudo, a 50-year-old office worker, who as Bloomberg writes, bought a one-ounce gold coin this month for the first time. With stocks slumping and zero percent interest on savings, he says it won’t be the last.

  “I want to buy gold every year as a birthday present for my daughter,” Kudo said at a store in Tokyo’s posh Ginza district where he made the 162,000 yen ($1,600) purchase. “She will thank me for the gift when she grows up because gold will have value wherever she goes.”

  What a delightful epiphany: if ordinary, 50-year-old Japanese citizens can get it why not Nobel-prize winning economists? 

  Ignore that please.

  Individual investors like Kudo drove a 60% jump in sales of the precious metal in June from May at Tanaka Holdings Co., the operator of Japan’s largest bullion retailer, as the yen’s rebound against the dollar made it more affordable. Why the surge into gold? Because far behind the glitzy facade of Abenomics, which is really just the BOJ intervening daily in the USDJPY via trust banks, and manipulating the Nikkei to give the impression that all is well, the people have checked out. According to Bloomberg, while Prime Minister Shinzo Abe’s ruling party scored a convincing victory in July 10 upper house elections, confidence in his economic policies is crashing. A July 2-3 Asahi newspaper poll showed 55% of those surveyed support a new direction versus 28% for maintaining course.

  While both gold and the Yen have soared in 2016, it has been for oddly similar reasons. The yen’s 20% gain this year, slightly less than that of USD-denominated gold, has been a reflection of Japanese investors fleeing from overseas markets due to pessimism about global growth rather than confidence in their own economy. As for the reason why Japanese interest in gold has soared, it is an even simpler one: fear that the days of the Yen as a stable currency are numbered.  Gold in yen terms has risen 7.5% this year, compared with the 28% jump in the dollar-based price of the metal

  

  Gold sales more than tripled at Tanaka’s shops on June 24, when the Japanese currency jumped to an almost three-year high against the dollar after the U.K. decided to exit the European Union. Japan’s Topix stock gauge dropped the most in five years the day after the Brexit referendum, while 10-year sovereign bond yields tumbled further below zero.

  “For investors, buying gold is similar to casting a no-confidence vote,” saidItsuo Toshima, 68, an investment adviser and former regional manager for the World Gold Council in Tokyo. “Gold is the unprintable currency, unlike the yen. The yen’s appreciation in spite of the adoption of the negative-rate policy has kindled skepticism about the policy’s benefits. It’s also led to investors seeking to protect their assets in case Abenomics fails.”

  Another traditional lament said about gold is that it pays no dividend. Well, when the return on other “safe assets” is negative – as it the case in Japan – gold does have a relative real return. Indeed, gold’s lack of yield isn’t a big draw-back for investors at a time when almost 90% of Japanese government bonds have yields below zero, according to Eiichiro Kato, a general manager at Tanaka’s precious metals retail department. The benchmark 10-year JGB yield was at minus 0.28 percent on Monday.

  And then there are the philosophical questions.

  “We don’t know who will take responsibility for reducing Japanese government debt,” said Akihiro Morishige, a senior economist at Mitsubishi Research Institute.

  What reduction in Japanese government debt?

  “If trust in Japan’s fiscal policy decreases, Japanese long-term interest rates may soar towards 5 percent by 2030.”

  Make that 500%.

  What makes Japan’s gold rush more unique than in most countries is that many are not only buying gold as protection against a crash, they are storing it abroad as protection against confiscation as we reported last week.  Japanese buyers of gold to store in Switzerland jumped 62% in the first six months from the second half of 2015 because of negative interest rates and concern the yen will eventually weaken, according to BullionVault Ltd., an online trading and storage company. Also: due to fears that Abe will pull an “Executive Order 6102”, and force gold confiscation from the population.

  Meanwhile, as they flood into gold, Japanese investors are retreating from riskier assets as the nation’s shares plunge. Households’ holdings of equities decreased 9.9% from a year earlier at the end of March and investment trusts fell 3.7 percent while their cash and bank deposits rose 1.3 percent to 894 trillion yen, the second-highest amount on record, according to BOJ data.

  “Gold is attractive because its prices don’t move much, compared with other assets,” said Kudo, the buyer of the coin in Ginza. “I may lose lots of money if I buy stocks without doing much research on them.”

  Come to think of it, he is 100% right; making things worse, he may – and likely will – lose lots of money even if he buys stocks having done lots of research on them.

  The good thing about gold: no research required for it to “work.” Only lots and lots of stupid politicians and economists. Luckily, we have more than enough of those.

  

  

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• Brexit Ironies Mount: Belgian Premier Warns EU Won't Help UK Out Of "Black Hole"

  Submitted by Michael Shedlock via MishTalk.com,

  The move to punish the UK picks up steam even though such actions will damage the EU far more than the UK. Belgium is the latest country bound and determined to punish the UK.

  Please consider EU will not help UK out of ‘black hole’, Belgian premier warns.

  Britain’s vote to leave the EU has opened a political “black hole” in Westminster and Europe’s leaders will not bend to help it out, Belgium’s prime minister has warned.

   

  Charles Michel’s caustic views on the unreal “dreams” of Brexiters, outlined in an hour-long interview with the Financial Times, speak to the difficulties Britain faces in reaching an exit trade deal that satisfies all 27 EU leaders and their parliaments.

   

  Before the referendum, the liberal leader doggedly resisted giving Britain a special deal on its EU membership terms. He is now showing similar resolve over any Brexit deal, pushing the UK to start the divorce promptly and telling it to expect no big concessions on migration or market access.

   

  “The truth is it’s a very negative situation for the UK, there is no doubt,” he said.

  The Truth

  The truth is Brexit is very bad for the EU, and punishing the UK will make matters worse, possibly even starting a global trade war.

  Facts of the Matter

  • “Italian Gov’t Collapse More Than Just a Possibility”
  • The EU Cannot Survive as a Prison
  • Spain’s Social Security Program Will Go Bust in 2018
  • Austria’s Constitutional Court Orders Rerun of Presidential Election.
  • Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster

  Risk of Global Trade Collapse

  Please consider “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish

  

  Bluff or Stupidity?

  Germany exports €50,963,643 to the UK than it takes back in imports.

  Instance the UK must abide by migration rules when that's the reason the UK left the EU is blatant stupidity given balance of trade numbers

  — Mike Shedlock (@MishGEA) July 10, 2016

   

  Another irony in this madness is Marine le Pen is the leading candidate in French polls.

  Le Pen stated “This Is the Beginning of the End of the European Union“.

  For details please see Hollande Lectures US About Trump.

  The final irony in this mess is that it’s the EU on the verge of falling into an economic black hole, and punishing the UK is one sure way to make that happen.

  

  

  

• The Prospects For Money

  Submitted by Alasdair Macleod via GoldMoney.com,

  In my view, this new bout of turmoil in financial markets is the prelude to the final demise of government currency.

  If I’m right, a long-expected collapse in the purchasing power, and of the very concept of fiat currency, will evolve from current events. The purpose of this article is to explain why monetary theory predicts a currency collapse.

  The question at the heart of today’s market instability is the validity of fiat currency; that is to say, forms of money issued and sanctioned by individual governments, with no backing other than faith in those governments’ creditworthiness, and the enforcement of its use by law. The risks they impose on all of us will be evidenced one day by both the speed of the fall in each individual fiat money’s purchasing power, and inevitably by their comparison with gold’s more stable purchasing power. Essentially, an awareness of the dangers of unsound money will gradually become evident to every economic actor.

  So far, or at least since the days when fiat money was freely exchangeable for gold, central banks have managed to enforce upon us their currencies as money, originally on the basis they were gold substitutes. That pretence was finally dropped in 1971. The purchasing power of fiat currencies has never been seriously challenged since, except in relatively few extreme cases, such as Zimbabwe and Venezuela. Not even the financial crisis eight years ago threatened a collapse in fiat currencies, when banks had to be rescued with unlimited extra quantities of money and credit.

  The current crisis has commenced while there are determined efforts to stop the purchasing power of the major currencies from rising, even leading to the deployment of negative interest rates in this quest. None of the central banks’ policies appear to have worked. The increasing purchasing power of the yen, despite all attempts to lessen it, is the clearest example of the abject failure of a central bank to achieve its monetary objectives. The same can be said of the ECB and the euro, a currency even more synthetic than those it replaced. It is clear that the central banks are setting monetary policy more in hope than in a true appreciation of their own hopelessness.

  They place an undue emphasis on empirical evidence. That’s why charts and statistics are so important to them and all their epigones. When you don’t understand and cannot explain something, you turn to the so-called evidence. And when very few people actually have a reasonable grasp of what money is about, you can rely on empirical evidence being unchallenged. For monetary policy, this tells us two things: central banks are clueless about monetary theory, and in the event of a second systemic crisis, they will be misguided by their experiences of the last one.

  Today’s empirical evidence reflects the bail-out of the global banking system in 2008/09. Neo-classical monetarists were initially worried by the potential for price deflation in the wake of the banking system’s rescue, and so central bankers expanded narrow money by unprecedented quantities to counter credit deflation, real and anticipated. These were intended to be short-term measures, to be replaced with more normal monetary policies as soon as the immediate crisis was over. These short term measures are still in place today eight years later.

  The impact on the gold price

  After the Lehman shock, which led to a temporary flight into both money and short-term government debt, the purchasing power of currencies relative to that of gold rose, with the gold price falling from $930 to $690. Subsequently, when it became apparent that monetary expansion had succeeded in curbing deflationary forces, this trend reversed, taking the gold price to over $1900. That then changed in September 2011, following concerted central bank intervention to supress the gold price.

  The dollar-gold relationship has now turned once again, signalling that the tide of confidence is moving against currencies. The purchasing power of currencies measured against that of gold is now falling. We now have a banking crisis in the making, if the share prices of major banks are any indication. The UK’s decision by referendum to leave the EU points to Europe’s political disintegration. Increasing market volatility tells us that another systemic crisis may well be imminent, and government bonds reflect a continuing flight to safety.

  Already, the Bank of England has announced that a further £250bn in monetary support will be made available to the banks, and that additional swap lines have been agreed between the major central banks. We can take this as evidence that the central banks, relying on empirical evidence, are preparing a new round of monetary expansion as the solution to any future crisis, confirmed in their belief that the risk to the credibility of their currencies is unlikely to be a problem.

  This is not what gold, when priced in these currencies, is telling us. To understand why and where the central bankers are mistaken, we must consider some fundamental points about how money actually works.

  The theory of money and its purchasing power

  To prepare our minds for a comprehensive understanding of monetary theory, we must at the outset dispense with any idea that statistical analysis is relevant. It is not, because there are no constants involved. Valid statistics require at least one constant, usually the purchasing power of money. In the whole field of economics, let alone money, there are none. The purchasing power of money is to a large degree independent of its quantity, and depends on a fluctuating acceptance that it is exchangeable for goods. Quack monetarists that believe in the equation of exchange, despite all evidence it does not work, overlook the subjective factors that qualify something as money.

  When we set out to understand money, we must acknowledge there are three major influences at work, besides a general acceptance that a particular form of money is exchangeable for goods. There is the subjective value of the goods for which an exchange is considered, there are the fluctuations in the relative quantities of goods and money in the exchange process, and there is the balance of relative desires in the population as a whole to increase or decrease the quantity of money held, relative to goods. All these factors are the unknowable decision of every single economic actor, and fluctuate accordingly.

  This self-evident truth continually risks undermining the very function of any particular form of money, which in order to be acceptable to the parties in any transaction must have a commonly accepted value, even though one party will want money more than the other at a given price. This commonly accepted value has been described by the economist, von Mises, as money’s objective exchange value. It is the one thing that parties to a transaction can agree upon. A dollar is a dollar, a euro is a euro, and so on, even though different individuals will want these forms of money more or less than other individuals.

  So far, we have addressed only one out of four dimensions of the money problem. A second dimension is that demand for some goods is always greater than demand for other goods, so money’s purchasing power will differ for every good and class of good exchanged for it. It is never sufficient to just assume that, for instance, the price of housing is rising solely due to demand for housing. It also rises because people place a lower value on money than they do on bricks and mortar. On reflection, this truth should be self-evident. But it also holds true for every other good for which any particular form of money is exchanged, and it is too simplistic to assume that changes in price come from the goods side alone.

  A third dimension to consider is that the products and quantities of goods and services purchased yesterday will not be the same as the products bought tomorrow. Besides making the point again, that statistics are wholly irrelevant to understanding money, we can also add that what money will be used to buy tomorrow and in what proportions cannot be predicted, beyond perhaps some broad generalisations, such as people will buy food, they will use energy, and they will enjoy some leisure time. Such platitudes are of no practical value to understanding monetary theory, and disqualify the use of price indices and aggregates such as gross domestic product.

  The fourth dimension is one of time. The injection of money into an economy will start at a point, typically the banks creating loans, or governments through unfunded spending. Money therefore enters an economy unevenly, benefitting some at the expense of others. This is known as the Cantillon effect, and is universally ignored by the neo-classical economic community.

  The problem today

  The reader should now have a grasp as to why attempts to discern future purchasing powers for money are futile, and why monetary policies of central banks never succeed, except perhaps by pure chance.

  As if the four dimensions cited above were not enough, there is a further problem. Most fiat money is produced not by central banks, as is commonly supposed, but by commercial banks, which lend money into existence. Bank credit is essentially temporary money, and is regularly extinguished in credit cycles. It is the obvious potential for this bank credit to contract which concerns central bankers most. When bank credit contracts, businesses that are over-reliant on debt for their capital requirements, and companies that have borrowed to finance unprofitable production go bankrupt. This is the bust of the credit cycle. In recent decades, the bust has been deferred and deferred and deferred, but hasn’t gone away.

  The failure of central bank monetary policies appears to have reached an inflection point. This is what the share prices of systemically-important banks are telling us. This is what the political disintegration of Europe, upon which the new synthetic euro is based, is telling us. This is what the cul-de-sac of permanently zero and negative interest rates are telling us. This is what wildly over-priced government bonds are telling us. This is what the greatest indicator of all, the price of gold is now telling us.

  The inflection point, I believe, is the marker for a potentially catastrophic decline in the purchasing power of paper currencies that are unbacked by exchangeable gold. The faith and credit-standing of issuers of paper money, and not the known and suspected inadequacies of commercial finance, is the last rotten pit-prop supporting the system. We can easily see how a new round of monetary expansion designed to save the global banking system from its nemesis will lead, not to a Lehman-style outcome, but to a collapse of paper currencies.

  This, apart from the implied forecast for gold in the paragraph before last, is the only truly subjective statement in this article on a truly subjective subject.

  

  

• "I Do Not Like This Uncle Sam…"

  With markets and monetary policy already reduced to Seussian fantasy, and the average insta-American incapable of comprehending anything but snapchat-‘memes’, we thought the following summed up the state of US politics perfectly…

   

  

   

  Source: The Burning Platform

  

  

• Warmongers Delight: Abe Hits Super-Majority With Sweeping Victory In Japan Election

  Submitted by Michael Shedlock via MishTalk.com,

  The warmongers and gun manufacturers are cheering today as Shinzo Abe Wins Sweeping Victory in Japan Elections.

  Shinzo Abe has won a sweeping victory in elections to Japan’s upper house, leaving him within reach of a parliamentary supermajority that would allow the government to revise Japan’s pacifist constitution.

   

  With seven proportional representation seats left to declare on Sunday night, Mr Abe’s ruling Liberal Democratic party and its allies had won 72 out of the 78 seats they need for a two-thirds majority.

   

  Toru Takigishi, a 76-year-old chemistry professor in Tokyo and a long-time LDP supporter, said he voted for the Communist party for the first time. “I’m happy with the current constitution and I want peace to be maintained. At least there is a checking mechanism for constitutional change under the Communist party,” Mr Takigishi said.

  Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution

  The Wall Street Journal reports Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution

  With most results in, Mr. Abe’s Liberal Democratic Party and its junior partner, Komeito, were on track to win nearly 70 of 121 seats that were up for grabs in the 242-seat upper house. A handful of seats remained undecided early Monday.

   

  The coalition parties plus smaller opposition parties and unaffiliated lawmakers who favor constitutional revision were likely to control two-thirds of Parliament’s upper house after the election, projections by Japanese media showed. Revision requires two-thirds of both houses of Parliament, after which the changes must be approved by a majority of voters in a national referendum. The coalition already controls two-thirds of the lower house, which wasn’t up for election, meaning Mr. Abe has the votes to start the revision process.

   

  Any move to change the constitution is likely to spark a divisive battle. Last year, Mr. Abe’s government enacted a bill allowing Japanese troops to fight overseas along with the country’s allies, following a controversial reinterpretation of one article of the constitution.

   

  The move prompted months of protests, some attracting tens of thousands of people. Though the security bill was passed by both houses of Parliament, experts testified that it was unconstitutional.

   

  With the election over, Mr. Abe will likely focus on passing the stimulus package, a task that has gained urgency since the U.K.’s decision last month to leave the European Union cast further uncertainty over the global economy.

   

  Mr. Abe hasn’t disclosed any details, but the stimulus program is expected to be a multiyear effort to upgrade the nation’s transport infrastructure, expand child care and nursing-care services and create scholarships for students.

   

  Meanwhile, the Bank of Japan is widely expected to expand its efforts to stoke growth and inflation when its policy board meets July 28-29. Its most likely options are increasing the size of its unprecedented asset-purchase program and pushing a key interest rate on bank reserves further into negative territory.

  For further discussion of warmongering possibilities, please see Japan’s Abe Angling for War with China? Could the US be Drawn In?

  

  

• The Federal Reserve's Grand Scheme Exposed (In 1 Simple Chart)

  For 138 years, consumer prices in America slightly declined. After The Federal Reserve was created, things changed…

  The 'scheme' exposed…

  

  Source: VisualizingEconomics.com

  But, not satisfied with that shift, in 1971, Nixon unhooked American economics from any rationality, because – as we detailed previously – 'The 1%' hate the Gold Standard… between 1930 and 1970, it was only the "bottom 90%" that saw their incomes rise, as can be seen on the next chart.

  

  In other words, the ascent of the non-1% peaked when the Deep State forced Nixon to depart from the gold standard's constraint on largesse.

  Which should also clarify just why to the "1%", including their protectors in the "developed market" central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.

  

  

• Theory Of "Conspiracy Theorists"

  Submitted by Marcus Godwyn via OrientalReview.org,

  It seems to have become one of the most popular ways of ridiculing somebody’s argument or position, calling into question someone’s sanity or even somebody’s right to their very own existence in recent years are “You’re a conspiracy theorist!”, “That sounds like a conspiracy theory to me!”  We hear such accusations let fly in TV and radio debates all too often as soon as anyone begins to question a perceived, generally excepted “truth”.  The accuser always seems supremely confident that this accusation is enough to immediately put the accused beyond the pale of all human reason and that all participants and viewers of the debate should be expecting men in white coats to arrive at any moment and the accused to be led away in the interests of all for “corrective treatment”.

  The definition of conspiracy of the on-line dictionaries insists on the “evil, harmful, bad” side of things.  In other words; in the English language, it is impossible to conspire to do good.  This is one of the reasons why the accusation of being a conspiracy theorist remains an effective put down as it implies that the accused believes that their government, company bosses and colleagues, military or police commanders, friends and acquaintances or even members of their own family and partaking in secret, evil deeds and plots for harmful ends which have happened or are going to happen and hence at best implies lack of good faith and paranoia and at worst, extreme negativity, treachery; being a fifth columnist.  All labels with which most of us would wish not to be tarnished.

  Here however are some alternative definitions of “conspiracy theorist”:

  • someone who has seen through the bullshit (David Icke);
  • someone who questions the statement of known liars (unknown).

  It is clearly not possible to see these definitions as morally negative unless we are creators of bullshit or known liars.

  Could it be that the time has come for a reappraisal of the definition of the word conspiracy because the following is palpably undeniable.  Every development in politics and affairs of state, every war, every campaign within a war, every attack and counter attack, every putsch, every terrorist act, every revolution and even every democratic election manifesto and campaign, every new bill passed, every budget or construction project proposed on a national or local level ad infinitum, throughout human history has been born of human planning, plotting or conspiracy depending upon which side we were or are on or how you view the proposals!  Effected to a lesser or greater extent by chance undoubtedly and maybe borne on a current of destiny as well!  The latter I will not discuss further here.  Not because I dismiss it. Heaven forbid.  Simply it is not important for the points I want to make.  One of the most important of which is this, in short: our history is littered with and shaped from, not conspiracy theories but conspiracy facts!  One of the earliest and most famous that springs to mind is that of The Trojan Horse.   A very cunning plot by the Greeks which broke the stalemate of the long siege of Troy and enabled them to conquer and ransack the city but by the current English definition, a conspiracy only from the point of view of the Trojans as for them it was “bad and harmful” but not for the Greeks.  But who amongst us now really sees one side or the other as the “evil” one?  So was it a conspiracy or not?

  

  A Nazi soldier gets ready to murder two Soviet Slavic women during Operation Barbarossa, summer 1941. This incident probably took place in the Ukraine or Belarus.

  There are times in history, usually more recent history, (examine and discuss) when there seems to have clearly been a good and evil side.  One such example I would posit is Operation Barbarossa.  Hitler’s attack on the Soviet Union!  While this was of course a life saving event for Great Britain, even the most diehard anti communist must surely see that the invasion of Nazi forces into the USSR was unequivocally bad and harmful for the peoples of that empire as it promised no liberation at all;  only abject slavery or total oblivion whatever their position in Soviet society. It was clearly planned or plotted in advance but according to the English language, it was only a conspiracy from the point of view of the peoples of the USSR and the Soviet government, not from the point of view of Nazi Germany and her allies as they perceived that attack as beneficial to them at the time which, of course, is why they contrived and went ahead with it.

  What about Operation Overlord- The Normandy landings or D-Day?  This massive military undertaking was literally years in the planning or plotting.  Was it a conspiracy?  According to the current English definition, only for the rulers of Nazi Germany as it can be argued that it was actually beneficial even for most Germans not actively involved in the Nazi hierarchy as it lead to their liberation as well as to that of the other nations of western Europe.  In spite of this, the German army fought like tigers on the western front to the bitter end but I digress.  I will however be returning to the D Day landings a little later for reasons that will become clear.

  Surely therefore, it is obviously undeniable that the accusation of being a conspiracy theorist is in fact totally subjective and because of that, totally spurious from an objective, truth seeking point of view concerning any, as yet, unsolved or disputed events in human history or actuality and hence it follows that those using this accusation to discredit the ideas or theories of others have an agenda for doing so.  This agenda maybe conscious or subconscious but it is always there.

  The purpose of this article is neither to prove or disprove any famous conspiracy theories and, although I, like anybody else, have my own ideas and suspicions, I am not putting them forward here.   What I am putting forward here is the fact that if you hear someone publicly dismissing somebody else’s ideas as conspiracy theories and especially if the “dismisser” is a western journalist, government spokesperson or a politician they are trying to prevent you thinking about something by ridiculing you into not delving further..  The unconscious agenda of such accusers I mentioned earlier is the cognitive dissonance caused when presented with information that contradicts long held and emotionally charged beliefs. The conscious agenda is of course blatant lying in order to cover up the truth.

  

  Let us look at a concrete example.  In Toronto Canada there is a high profile televised political discussion called the Munk Debate. Here is the link to the particular episode I’m going to concentrate on.

  The motion proposed on this occasion was “Be it resolved, The West should engage, not isolate Russia”.  As you can see this motion assumes that Russia is somehow wrong and the only question is how best to deal with Russia’s wrongness.  Given this obvious slant from the beginning the pro team of Vladimir Pozner and Stephen F. Cohen did a reasonable job but were unable to fend off the barrage of 100% truth inversions (all of which conforming to the strictly controlled and censored Canadian mass media slant) from the rabid, foaming at the mouth, jumping up & down, Jihadi anti- Putin and Russia team of Anne Applebaum and Garry Kasparov.  At around the 16^th minute Applebaum starts to speak about the Kremlin’s “massive” investment in their multi-language media “disinformation machine” including RT television.  At around 17.12 minutes in this recording she then states that “When Malaysian airliner MH17 was shot down by a “Russian missile” over Ukraine this media machine immediately came up with all sorts of crazy conspiracy theories such as planes taking off already full of dead people” and explains that this is done deliberately by Russia and only by Russia  in order to cloud people’s minds until “they” don’t know what to think any more.  Well!  Sure!  Planes taking off full of dead people does sound pretty crazy doesn’t it.  I couldn’t believe my ears when I first heard that one actually but let’s look more closely at what she said before coming back to that.  How many conspiracy theories does she mention?  One?  Well, I count three and a half.  The above mentioned plus two and a half  more.  The statement that Russian media is disinformation is also a conspiracy theory as is the position that they alone came up with all these conspiracy theories.  Many of them are proposed and published  by westerners.  The accusation that MH17 was shot down by a Russian missile is also a conspiracy theory as well as propaganda because all weapons at that time on both sides were either Russian made or Soviet made.  Who is using them, how and why is the pertinent question which the western media always seeks to obfuscate. And yes, well, okay, true. I admit that the last sentence I’ve just written is another conspiracy theory at least for some of you.  Are you beginning to see how deep the rabbit hole goes and how ridiculous the allegation of conspiracy theorist is under any circumstances?

  Fact.  The “official” version of 9/11 is every bit as much a conspiracy theory as all the others!

  Especially as it has proved impossible to prove over the years and seems indeed, ever easier to disprove.  When governments and the mainstream media tell us a version of events after a terrorist act or invasion or murder etc they then accuse anybody who voices doubts or proposes another version of events of being conspiracy theorists but the governments and main stream media are themselves conspiracy theorists until, I repeat, there emerges incontrovertible proof and evidence to confirm one of the conspiracy theories as the conspiracy fact.

  

  Back to Applebaum’s “planes taking off full of dead people”. When I first heard that one I was literally seething at the sheer stupidity of such an insane theory being voiced almost immediately after the disaster.  At the time I was still only just emerging from an umbilically wet, comforting “womb warmth” world where our western governments were working for our best interests but were just rather incompetent at doing it.   In the immediate aftermath of that tragedy I reluctantly assumed that the self defense forces had mistaken it for a US backed Kiev bomber or that a guided missile had locked on to the airliner by error or evil destiny.  After all at the time, they were being attacked by the air-force of the US installed Kiev government everyday and, in spite of having no aircraft themselves had been increasingly successful in downing their attackers.  Then came the immediate barrage of western press headlines.   From Britain for example: The Sun:  PUTIN’S MISSILE  and PUTIN’S LOOTERS ROB BRIT VICTIM  The Daily Mail:  PUTIN’S KILLED MY SON    The Daily Mirror:  PUTIN’S VICTIMS to name but a few.   US Secretary of State John Kerry claimed that the US had proof of exactly what kind of missile was used and where it was fired from.  He stated, as reported by The Guardian, that “all the evidence surrounding the downed Malaysian airlines flight MH17 points towards pro-Russia separatists in eastern Ukraine being to blame.”    Well.  All those newspaper headlines are simply conspiracy theories and as it turns out, more insane than the dead-bodies-taking-off idea.  While Kerry’s accusations could have seemed feasible at the time, the fact that not one jot of “all that evidence” has been made public twenty two months later reduces his words to a conspiracy theory too.  The headlines are totally insane because of the lack of motive.  The fact is, after taking into account the ill fated crew and passengers of MH17 and their families, loved ones and friends there is simply not one human being on earth out of all seven billion of us who had less motive to get involved in shooting down a passenger plane anywhere in the world, let alone over Eastern Ukraine than Russian president Vladimir Putin and his government followed by The Donetsk Republic’s armed forces who were and are fighting at home, on their own land for their very existence.  In the shock of the immediate aftermath, European governments some of whom had been resisting US pressure to impose sanctions on Russia as punishment for having saved Crimea, at the behest of Crimeans, from invasion by ultra racist Ukrainian US backed rebels bent on their eradication one way or another, caved in and sanctions were imposed.  Anyone placing themselves in the position of detective would see straight away, that the new Ukrainian government had massive motive for and massive profit to gain from MH17’s downing if it could be pinned on Russia, followed by those governments who had plotted and helped the coup in Kiev -the US, UK, Dutch, Polish, Swedish and EU baron’s to name the main players.  That in itself is of course not proof that they were complicit but it would be one of the areas where any real investigation would concentrate a lot of effort and inquiry.

  

  In the Munk Debate, broadcast on the 11^th April 2015, more than eight months after the tragedy, Applebaum is careful to avoid pointing the blame specifically at Putin personally while using language that generally insinuates instead.  Could it just be that legal advice has something to do with that.  Another video, which judging by its title indicates that she “apparently” knew all the details of what happened, seems to have disappeared completely from the net:    “Anne Applebaum: MH17 attack | what happened. How it happened and who was responsible.”  If anybody saw it or has a transcript it would be great to know what she actually said here.

  Meanwhile as more and more theories as to how this tragedy occurred were coming forth , spurred on by the lack of any evidence being made public, including the content of the black boxes, some aspects of the plane full of already dead people theory were beginning to seem, well, just slightly less insane.  On March 8^th 2014 Malaysian airlines flight MH370 disappeared on route from Kuala Lumpur to Beijing.  It’s fate remains a mystery to this day.   Such a story is the very oxygen of conspiracy theorists, some well intentioned and some undoubtedly less so and the internet and You Tube is not lacking in explanations.  Many posit the idea that the plane was hi-jacked to the closed US military island base of Diago Garcia and many, made and published before the downing of MH17 and all those I saw, none of which were made by Russians or the Russian media, predict that this missing plane would turn up being used in a future false flag event.  After the downing of MH17, it didn’t take long for the idea to gain circulation that it was in fact the missing MH370 and that it had been transported to Donbass and blown up on the ground maybe with the preserved bodies of the ill fated passengers of MH370 inside or that it had even taken off from Amsterdam with the bodies inside etc!  Well dear reader, maybe you, like me find all these theories pretty far fetched if not ridiculous or maybe in very bad taste.  The fact however is that neither you nor I can absolutely rule them out no matter how far fetched they seem because there is a small window of possibility.  The US and her allies have the means to pull off such an operation and the motive.  We would do well to remember the film of an explosion on the horizon that was broadcast by all the world’s mainstream media, including Russian, as the explosion of MH17 hitting the ground.  As many quickly pointed out, a plane, still over half full of fuel, blown up at high altitude by a ground to air or air to air missile would have left smoke trails in the sky as it fell.  That seems beyond all scientific doubt but absolutely no traces in the sky appear in that video so that would seem to suggest that either it does not show the impact of MH17 but something else (more likely in my opinion) or, well yes, the plane was in fact blown up on the ground. There has also been a historical precedent for such an idea albeit on a much smaller scale physically but, nonetheless of great historical significance.

  Operation Mincemeat which was made famous as a book and a film called The Man Who Never Was.  This was a plan executed in April 1943 to fool the Germans into thinking that the allied invasion of Sicily would in fact happen in Greece.  A dead body was procured, dressed up in a British officer’s uniform, given a false identity and a briefcase chained to his wrist containing “top secret” documents about the allied invasion of Greece not Sicily.  The dead body was made to look like the victim of a plane crash of the coast of nominally neutral but in fact pro German Spain.  In reality however his body was delivered to the area by a submarine.    The plan worked so well that when the actual allied invasion of Sicily began the German’s thought it was just a diversion and didn’t respond having transferred the majority of their forces to Greece.  When, the following year, just after the D Day landings, the Nazis found genuine top secret plans in an abandoned landing craft, they refused to believe them being sure it was another such ruse as operation Mincemeat.  Here’s a link (now promise not to laugh) to a Daily Mail article on the whole subject.  It does just suggest that the idea of already dead bodies in planes might have a certain feasibility after all which is something Anne Applebaum, among many others, doesn’t want you to think about.

  I repeat that I am not supporting or debunking any conspiracy theories here.  I cannot prove, or disprove just as you cannot prove or disprove any of the above mentioned theories or, for example, that Aliens exist or that they don’t exist therefore we cannot dismiss or confirm one hundred percent those theories involving aliens either.  It really is that simple.

  

  As for the conscious or unconscious agendas I talked about earlier, I would, in spite of his virulence, put Garry Kasparov in the unconscious camp.  He so often loses control of his emotions and his discourse which is clearly out of all reality.  I wonder if he has ever asked himself why he thinks and feels that which he does, I very much doubt it.  Berezovsky was someone with a very similar mind set in my opinion.  Anne Applebaum on the other hand seems to be squarely in the conscious camp.  In other words, she is deliberately lying in order to, not distort the truth but totally reverse it in true Orwellian style.  I don’t claim to know exactly what her motive is.  Due to the fact that her husband was the Polish foreign secretary (he was one of the EU politicians who brokered and signed the ill fated deal with the Yanukovych government in Kiev that didn’t even last twenty four hours), her finances had to be made public and, as many pointed out, she benefited from a huge spike in earnings as soon as the Ukrainian crisis began in 2013 followed by an ongoing scandal concerning the disclosure of their earnings in subsequent years but I find it hard to believe somehow that her motive is solely financial.  Maybe simply anti-Russian racism and/or a commitment, ideological and self interested, to financial world takeover of the US, western debt based fractional reserve banking system.  Whatever the reason is, it has to be admitted that she is a very effective propagandist who’s discourse remains coherent, controlled, pointed but utterly premeditated and false.  In fact her tirade in the Munk Debate against Russia since Putin became president is in reality one of the most concise and accurate descriptions of today’s USA and also post putsch Ukraine that I’ve ever heard.  Her total insistence that the western media is truthful and objective is also a 100% truth inversion.   Russian media has become infinitely more truthful and objective than its western counterpart which has descended into out and out double speak.   I have never seen or heard her lose her temper or be overtaken by emotions of any kind.  It must be said however that I’ve never seen her in debate against someone who actually takes her apart as it would be eminently possible to do.  That, of course, is anything but coincidence.

  “Truth is by nature self-evident. 
  As soon as you remove the cobwebs
  of ignorance that surround it,
  it shines clear”  – Mahatma Gandhi.

   As many of us have already noticed it is not a comfortable experience when our emotionally charged, often, long held beliefs are challenged by adverse, contradictory information which we are unable to ignore.  It takes the kind of courage not given to all to accept and analyse the cognitive dissonance that comes in such situations and to ask why it is happening and many people, including plenty that I know personally, simply refuse to believe anything that contradicts the, invariably “cozy” world  which they have allowed to be constructed for themselves.  Such people often become defensive and sometimes down right aggressive when pressed.  This is because they can’t ignore the information, only smother it or block it from their conscious mind.  The reason that some information is impossible to ignore is a very important phenomenon as basically this means that it is fundamental truth or at the very least the grain of truth that can lead us out of the pit of lies.   If, for example, somebody tells you or I that the Earth is flat, we are not going to feel any surge of panic or cognitive dissonance of any kind for obvious reasons but try telling an American who comes from a staunch, traditionally Democrat family and has a deeply entrenched – indoctrinated belief that the Democrats are “the good guys”, the ones who care about other people and the poor at home and abroad and are anti-war etc, that, in fact, Obama and Clinton are among the most dangerous warmongers in history, responsible for illegal invasions and that they are just puppets of the military, industrial complex, Wall Street and “some people” called the Illuminati and sparks will certainly fly.   There is an excellent video on-line called “Confronting Cognitive Dissonance – The Eyeopener”:

  At 5.11 an American lady begins to describe her physical reaction when she understood that she was receiving very uncomfortable information about 9-11 which, much as she wanted to, she just could not ignore.  Her reaction is courageous and very moving and anyone who dismisses her as a conspiracy theorist can only be mal-intentioned or seized by cognitive dissonance themselves.  It is our intuition or as some like to say “our gut”; in truth, our connection to universal intelligence, that tells us whether such information is real or not.  This is the same phenomenon as the moment of inspiration that artists and scientists have when a new scientific understanding or invention, poem, novel, song, symphony is born.  First the moment of inspiration and insight; then starts the hard work of creation, building, experiment, investigation, trial and error and bringing forth.  Every single human being is connected to universal intelligence, not just an elite few, but intuition, just like any other human faculty, becomes stronger the more we use it.  The vital fact here is that we all know the truth when we here or see it whether we like it or not.  Again, “Truth is by nature self-evident.  As soon as you remove the cobwebs of ignorance that surround it, it shines clear”.

  We live in a time of massive change where the world seems to have been turned upside down at such lightning speed that many of us feel that we can’t keep up which is of course disturbing.  I use words like “seems” and “feels” because this is an illusion.  In fact this situation has been growing for a long time.  Centuries in fact and some would say millennia.  This particular moment in history started, was started (examine & discuss) at the beginning of the 1990s.  I would liken it to a wave that as it comes in slowly to shore, grows and swells inexorably until it finally crashes leaving that which was on the top, on the bottom.  That which seemed democratic and free, undemocratic and tyrannical, that which seemed to be built on solid foundations, built on quicksand, that which seemed good, evil and vice versa.  Above all, there are no ideologies left although for those with the aforementioned long held emotional attachment to this or that ideology = products of Man’s ego, this is pretty hard to accept.  What’s left on the shore as the wave recedes is simply right or wrong, good or evil, truth or falsehood.   In fact a world of fundamental polar opposites.  Many.  Especially in the western world lulled by the media bubble of unreality are seemingly, on the surface, unaware of these massive shifts.   My own awakening only came with the Ukrainian crisis as I have already documented in “NATO Through the Looking Glass”.  I now live in a totally different world and it is much more frightening than the one I was living in up to three years ago but I’m getting used to it and in no way want to return to unconsciousness.  I now question everything and am exercising my intuition and faith, in the true sense of the word, every day.  What this reveals is infinitely more terrifying than the cozy “womb warmth” I used to live in but the payback is that things line up and actually make sense and I feel much healthier for it.  The many layered onion skins that were enveloping my perception are falling away one after another and I’m very aware that this process is very far from over but the idea of crawling back into my former mind set is impossible for me.  It would be akin to committing suicide.  I’m also very aware that, thank God, I am very far from being the only one undergoing this process.

  Of course, like so many others during these times, I’ve got used to being called a conspiracy theorist which is probably why I was moved to write this article. I am proud to be in the camp  inhabited and moved by people such as the lady in the “Confronting Cognitive Dissonance” video who states that she felt physically sick when she understood that her government, which she had more or less trusted up until that moment might have been behind 9-11. Such people are searching for truth and discovering themselves.  The other kind of conspiracy theorists are those who invent or propagate conspiracy theories for money and power and, or because they want to convince us that their particular prejudice is the one and only true prejudice whoever it be directed against.  “It’s all the fault of the people I’ve learned to hate and you must agree with me.”  Perennially popular targets remain: The blacks, the Jews, Monarchs, business people, immigrants and Russians to name but a few and these conspiracy theorists are of course the 100% polar opposite of the former.  One looking for the truth and the other, deliberately trying to destroy it. The American Lady reluctantly facing up to her realization that the official government conspiracy theory about 9-11 doesn’t hold water and the fear of looking into what seems to be at first glance, the darkness of the abyss or:   Anne Applebaum’s constantly and professionally reiterated conspiracy theories about Putin being a tyrannical dictator and mafiosi obsessed with world domination who has to be stopped by the “free, democratic” West before he, followed by his “brainwashed” millions in Russia will march in “good old” WWII style to enslave us all.  I leave you to contemplate these two examples.  These two absolute, polar opposites.  The seeker for truth and the bald faced liar for gain!

  

  

• "The World Is Walking From Crisis To Crisis" – Why BofA Sees $1,500 Gold And $30 Silver

  With both stocks and US Treasury prices at all time highs the market is sensing that something has to give, and that something may just be more QE, which likely explains the move higher in gold to coincide with both risk and risk-haven assets. As of moments ago, gold rose above $1,370, and was back to levels not seen since 2014. Curiously, the move higher is taking place after Friday’s “stellar” jobs report, suggesting that someone does not believe the seasonally-adjusted numbers goalseeked by the BLS.

  

   

  And while we reported last week that one way investors are rushing into the anti-QE safety of gold is by buying paper gold derivatves such as ETFs, which rose above 2,000 tons for the first time since 2013, many others have bypassed paper claims on gold such as GLD entirely, and are rushing into physical.

  Case in point, Japanese savers who, fearing domestic confiscation, have been accumulating gold in Switzerland. It’s not just the Japanese: as Nick Laird shows, the past week saw the second largest ever increase in physical gold holdings, as the total published holdings of physical funds rose by 2.5 million ounces to 85.8 million, second only to the 4 million ounce increase in early 2009.

  

   

  Finally, with even the sellside starting to turn, there may be more upside as the slow money starts to move in. In a whimsical note released on Friday, Bank of America’s metals team writes “Gold: always believe in your soul. Glad you are bound to return. You’re indestructible.”

  Yes, we were surprised too, but it’s true.

  

  Strange golden “poetry” aside, this is why BofA thinks gold is going to $1,500 and silver’s next stop is an “overshoot” to $30.

  The world has been walking from crisis to crisis and we see risks that this may not change. The importance of that dynamic for the precious metals is mirrored by the high correlation between potential US GDP growth and gold quotations. Many of the underlying issues affecting the global economy are structural, with Brexit merely a symptom of the problems many countries are facing. To that point, we called a bottom in gold in February and Brexit reinforces our view. As such we are upgrading next year’s gold price forecast from $1,325/oz to $1,475/oz. We called a bottom in silver in April on supply and demand dynamics; an overshoot of prices to $30/oz is possible.

   

  Gold heading for $1,500/oz

   

  After a weak US labour market report earlier in June, the risk of Brexit added to the gold price rally ahead of the vote (Chart 11) and after. In our view, Brexit has affected gold through various transmission channels. On the fixed income side, US Treasuries and German bunds have benefited from a flight to quality; the current uncertainty also suggests that an accelerated rate hiking cycle is unlikely, so interest  rates globally are set to remain low, which in turn reduces the opportunity costs of holding a non-yielding asset like gold. Given this dynamic, we believe gold prices could rise to $1,500/oz near-term.

   

   

   

  The world will keep on walking from crisis to crisis

   

  Switching tack slightly, macroeconomic uncertainty in the UK, Eurozone and US remains elevated; the high correlation between US potential GDP growth and gold (Chart 12) highlights how important this is for the precious metal. While the underlying ills are nuanced between countries, an increasing polarization of politics and a rise in populism have been common by-products; to that point, wealth generation/wealth distribution, immigration and sovereignty have caused contentious debates. Of course, this has not helped confidence and did not make it easier for governments to implement the measures necessary to put economies on a more sustainable footing. As a result, a host of countries has moved through a series of mini-crises in recent years, which we believe is unlikely to change. Hence, we reinforce our view first published in February 2016 that gold prices have bottomed.

   

  Silver can overshoot to $30/oz

   

  Gold has been the market’s focus through most of 2016, although silver has outperformed the yellow metal of late. The rally does not necessarily come as a surprise, a point made in April, when we highlighted that silver is bottoming out (Global Metals Weekly: Silver has a silver lining 25 April 2016).

   

  Chart 13 shows the model behind our rationale. That analysis assumes that investors are the marginal buyers, so we ask how strong non-commercial demand needs to be to balance the silver market at $15/oz, $20/oz and $25/oz. Our analysis suggests the following:

  • For silver to trade at or below $15/oz, non-commercial market participants would need to reduce purchases further compared to 2015. This is not our base case.
  • Silver can average $20/oz if investors increased their purchases slightly, which we believe is likely.
  • A sustained rally towards $25/oz would require an increase of non-speculative demand to the tune of 30% YoY. While possible, this looks a tall order.

  

   

  Taking a closer look at investment demand, Chart 14 shows that silver coin sales in the US, an important demand segment, have been strong YTD. Having said that, we note that coin premia (an indicator for market tightness; Chart 15), but also prices in China have not rallied as much as international spot quotations (Chart 16). This is an indication that the rally in the past few days, which was largely based on the  paper market, may not necessarily have the underpinnings of physical buying.

   

  

  

  

• China To Use Pension Funds As $300 Billion "Plunge Protection Team"

  One of the more troubling stories to hit the tape last week was that despite, or rather due to, roughly $100 billion in losses in the past 5 quarters, Japan’s gargantuan $1.4 trillion state pension fund, the GPIF, which has desperately been selling Japan’s best performing asset – Japanese Government Bonds – in order to buy local stocks and the Nikkei at its decade highs only to see its equity investment plunge, is now forced to buy even more stocks, i.e. double down, as part of a ridiculous rebalancing which will lead to even more losses.

  Japan is not alone.

  After China did everything to prop up its own stock market, including arresting hedge funders, sellers, “rumormongers”, halting short selling, eliminating futures trading, and ultimately culminating with the “Buttonwood SPV” in which the PBOC finally threw in the towel and admitted it was directly buying stocks,  we now learn that Chinese pensioners are about to become unwitting stock funds.

  As Bloomberg reports, “China’s pension funds are about to become stock investors.”

  The country’s local retirement savings managers, which have about 2 trillion yuan ($300 billion) for investment, are handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities including equities. The organization will start deploying the cash in the second half, according to China International Capital Corp. and CIMB Securities.

  For the rhetorical answer to the rhetorical question of “what can possibly go wrong” here is the one-title answer, also from Bloomberg:

  

   

  Why is China – for whom social stability is absolutely paramount and thus gambling with people’s retirement funds is truly a foolish initiative – doing this? Simple: whereas in the US legions of clueless investors buy any and every stock mentioned by such “legends” of crony capitalism as Warren Buffet, in China it is the pension fund. To wit:

  For the nation’s equity markets – which are dominated by retail investors and among the world’s worst performers this year – the state fund’s presence is even more valuable than its cash, said Hao Hong, chief China strategist at Bocom International Holdings Co. The NCSSF has “such a good reputation in being a value investor that if they take the lead, the signaling effect is actually quite strong,” said Hong, who had predicted the start and peak of China’s equity boom last year. “It’s almost like Warren Buffett saying he is buying a stock.”

  China’s “Warren Buffett” may be about to have a very rude awakening. According to Bloomberg, China’s NCSSF, which oversees 1.5 trillion yuan in reserves for China’s social security system, has returned an average 8.8% a year since 2000, the Securities Daily reported earlier this year, citing official data. Truly a remarkable number, and one which is alas just too good to be true when one considers that the larger pension system has been locally managed and made just 2.3% annually through 2014, the newspaper said. This also ignores China’s epic stock market wipe out in 2015.

  Here is the official spin:

  The organization’s entry will come as Shanghai stocks begin a gradual recovery that has pared their losses for the year to 16 percent from as much as 25 percent. While yuan depreciation concerns are pressuring Chinese assets lower, the economy is showing some signs of stabilizing. The nation’s foreign-exchange reserves unexpectedly climbed in June in a sign of slowing outflows, while a measure of services rose.

   

  The entry “will be a positive event in terms of sentiment but the actual impact won’t be drastic,” said Ben Bei, an analyst at CIMB Securities in Hong Kong. “The fund will tend to be prudent and the progress may be very gradual — that is, it will enter the market over the next several years.”

  The unofficial one is simpler: to boost confidence that China’s openly rigged and manipulated markets are once again safe:

  Venturing into China’s volatile stock markets — where a crash erased $5 trillion of value last year — isn’t without its risks for funds traditionally focused on more stable assets. Japan’s government pension fund, the world’s largest, may have lost about $43 billion in the second quarter, Morgan Stanley MUFG Securities Co. estimated. This adds fuel to criticism over the Government Pension Investment Fund’s decision to boost equity allocations in 2014.

  The problem, however, is that like in Japan and the rest of the world, pension funds simply have no choice than to swing for the fences when it comes to returns. Especially in China.

  Low returns are a challenge for China’s pension system, which is already facing pressure from a rapidly aging population. The country’s old-age dependency ratio — a measure of those 65 or over per 100 people of working age — is set to triple to 39 by 2050. The NCSSF didn’t respond to an e-mail seeking comment. The pension funds are more likely to buy blue-chip firms, said CIMB’s Bei, while Bocom’s Hong said they’ll probably seek out shares of state-owned enterprises with low valuations. With the market down for the year, the timing is right for entry, said Hong.

  The only silver lining on this latest foray into risk assets by a pension fund is that the exposure will be capped. Up to 30% of Chinese pension investments’ net value can be allocated to stocks, while the cap for bonds is 135 percent. While that means the funds can theoretically inject 600 billion yuan into shares – compared with the Shanghai market’s 25.9 trillion yuan size – CICC estimates that purchases this year will be limited to about 100 billion yuan. This means less than $20 billion in buying power: hardly impactful at all to push stocks much higher.

  * * *

  But the real reason why this latest $300 billion in stock buying “dry powder” is being activated can be summarized in just two words: plunge protection. Bloomberg explains:

  Giving the NCSSF more ammunition may serve one more purpose: helping stabilize markets during the next rout. During last year’s tumble, policy makers armed state-run investing company China Securities Finance Corp. with more than $480 billion to try and limit declines. “Their mandate is to make a return and make sure the fund doesn’t have a deficit,” said Hong. “But in times of crisis when they’re called upon by the state, I think it will be difficult to refuse the request.”

  Too bad China does not know how to use HFTs like Citadel who, in collaboration with entities like the NY Fed, unleash massive upside momentum on very little capital to prevent market routs as has been the case in the US at every major inflection point during the past 7 years. That China has not yet gotten to the most modern method of market manipulation – with or without the Fed’s blessing – is troubling and suggests that at least one more major round of pain is in store for Chinese stocks.

  

  

  

• The Unlikely Story That A Panty Theft Sparked The Dallas Shooter's Downfall

  Exactly how Micah Johnson came to be the man who murdered five police officers in Dallas remains unsolved. Johnson, a mid-twenties man (much like Bin Laden's son), apparently had taken his love for the ladies a little too far when he was serving in the Army Reserves. The killer who "stated that he wanted to kill white people, especially white officers", as we posted, had an apparent fetish for women's panties. 

  As The Daily Beast reports, Johnson was kicked out of the Army for stealing panties, returned home as a soldier who fell from grace, was exposed to Eric Garner's July murder and Michael Brown's August murder, all while trying to negotiate a deal with his lawyer regarding his panty heist. 

  Johnson’s military lawyer, Bradford Glendening, says that a female corporal mentioned Victoria’s Secret underthings when she filed a sexual harassment complaint against his client. The lawyer further reports that the corporal was worried enough to seek an order of protection against Johnson and to recommend that he receive mental health treatment.

  And…

  Down in Texas, Micah Johnson waited for his lawyer to work out some kind of deal with the Army. Family friend Myrtle Booker noted that along with becoming withdrawn, Johnson had developed an increased interest in firearms, as might befit a onetime panty stealer who found himself lacking.

  Johnson's bad luck began shortly after the President visited Bagram Air Base in Afghanistan on a surprise visit to Johnson's group and others in 2014.

  

  Imagine knowing that you are about to be discharged for stealing panties and now you have to help set up for a surprise pep-speech from the President.  Furthermore, imagine being in the group, with other proud soldiers surrounding you, and hearing the President say:

  …I’m also here representing 300 million Americans who want to say thank you as well. (Applause.) I know sometimes when you're over here, away from home, away from family, you may not truly absorb how much the folks back home are thinking about you. So I just want you to know when it comes to supporting you and your families, the American people stand united. We support you. We are proud of you. We stand in awe of your service.

  Johnson, likely very worried about what would come of his panty theft, learned in August of 2014 after arriving back in the US, that his Mesquite home, where he went to highschool and graduated in 2009, was broken into and two guns were stolen.

  

  At this point it has become clear that the story-line being spun to the public is one focused on the details.  The people of Dallas and the rest of the world are to believe:

  • an Army Reserve recruit stole panties,
  • saw two high profile murders play out on American media,
  • felt bad in the juxtaposition of Presidential praise in the midst of a possible discharge,
  • had two guns stolen from him,
  • then turned into a Dallas sniper much like Lee Harvey Oswald.

  As we highlighted just hours ago, Johnson has links to Leftist Revolutionary Groups and the Nation of Islam. As we've shown, Johnson's ties have been consciously made and clearly part of a deeper slide into a world where unapologetic calls for the murder of fireman and cops are regular propaganda.  On the African American Defense League (AADL) Facebook back, founder Dr. Mauricelm-Lei Millere wrote:

  The white­man wants your blood! How many of us has he killed and enslaved? Trillions!…We need the action that makes them pay atten­tion. An eye for an eye phi­los­o­phy! Arm your­self in Fer­gu­son, Mis­souri and across Amer­ica! A life for a life!" He con­tin­ued, "Also, we must go to their com­fort­able neigh­bor­hoods and raid those stores. It is time to LOOT & BURN those stores…

  At this point we're beginning to wonder if "Johnson's Panties" will be the "Benghazi Youtube Video" or the "Syrian Chemical Attacks Video" of American constitutional repression efforts. Remember, for all the talk we've heard about gun control lately, there seems to be a lack of discussion surround Attorney General Eric Holder's gun smuggling operation with the Mexican drug cartels that killed a US border agent. Those are details we need though. 

  Will the average American believe the narrative of a botched panty heist sparking a downfall that dragged Johnson through sensationalized US media coverage of murder, to a home invasion, all the while feeling ashamed about his own disgrace as the US President heaps praise upon his group?

  * * *

  Draw your own conclusions.

  

  

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