• Four More Mega-Banks Join The Anti-Dollar Alliance

  Submitted by Simon Black via SovereignMan.com,

  That was fast.

  Yesterday I told you how a consortium of 15 Japanese banks had just signed up to implement new financial technology to clear and settle international financial transactions.

  This is a huge step.

  Right now, most international financial transactions must pass through the US banking system’s network of correspondent accounts.

  This gives the US government an incredible amount of power… power they haven’t been shy about using over the last several years.

  2014 was one of the first major watershed moments when the Obama administration fined French bank BNP Paribas $9 billion for doing business with countries that the US doesn’t like– namely Cuba and Iran.

  It didn’t matter that this French bank wasn’t violating any French laws.

  Nor did it matter that only months later the President of the United States inked a sweetheart nuclear deal with Iran and flew down to Cuba to attend a baseball game with his new BFFs.

  BNP had to pay up. A French bank paid $9 billion because they violated US law.

  And if they didn’t pay, the US government threatened to kick them out of the US banking system.

  $9 billion hurt. But being kicked out of the US banking system would have been totally crippling.

  Big international banks in particular cannot function if they don’t have access to the US banking system.

  As long as the US dollar remains the world’s dominant reserve currency, major banks must able to clear and settle US dollar transactions if they expect to remain in business.

  This means having access to the US banking system… the gatekeeper of the US dollar.

  But having watched BNP Paribas get blackmailed into paying an absurd $9 billion fine to the US government, the rest of the world’s mega-banks knew instantly that their heads could be next ones on the chopping block.

  So they started working on contingency plans.

  Blockchain technology provided an elegant solution.

  Instead of passing funds through the US banking system’s costly and inefficient network of correspondent accounts, blockchain technology provides an easy way for banks to send payments directly to one another.

  I cannot understate how important this technology is.

  Blockchain may very well be what neutralizes the US government’s domination of the global financial system.

  And while there’s been a lot of momentum in this direction (hence yesterday’s letter to you), even I’m surprised at how fast it’s moving.

  Today, four of the world’s largest banks announced a brand new joint venture to create a new financial settlement protocol built on blockchain technology.

  Deutsche Bank from Germany, UBS from Switzerland, Santander from Spain, and Bank of New York Mellon have joined together to launch what they’re naming the very un-sexy “utility settlement coin”.

  Like Ripple, Setl, Monetas, and several other competing technologies, Utility Settlement Coin has the potential to end the reliance on the US banking system for cross-border payments and financial transactions.

  Banks will be able to send payments to one another directly without having to transit through the Wall Street financial toll plaza.

  (Global consulting firm Oliver Wyman estimates that the cost of clearing and settling international financial transactions at up to $80 billion annually.)

  This has enormous implications, especially for US banks.

  The Federal Reserve, for example, has already warned that financial technology could pose stability risks to the US financial system.

  And they’re right.

  If foreign banks are able to transact directly with one another without having to go through the US banking system, then why would they need to park trillions of dollars in the United States?

  They wouldn’t.

  Adoption of this technology could cause a gigantic vacuum of deposits out of the US banking system.

  US banks would take a big hit. And the US government would have far fewer foreign buyers to sell its ever-expanding piles of debt.

  Make no mistake, the adoption of this technology is a game-changing development with far-reaching implications. And it’s happening very quickly.

  If these mega-banks can hit their milestones, they’ll launch commercially in eighteen months.

  Mark it on your calendar– that may be the end of peak US financial dominance.

  

  

• Most Millennials Have Less Than $1,000 In Savings, Live Paycheck-to-Paycheck

  The majority of millennials are living paycheck to paycheck.

  A recent survey of millennials by HowMuch.net found that 51.8% of those aged 18-34 have less than $1,000 held between bank accounts and cash savings.

  As Visual Capitalist's Jeff Desjardins notes, this echoes previous data we’ve seen – not just on millennials, but Americans in general. For example, we know that 14% of Americans have “negative” wealth. We also know that 62% of Americans don’t have emergency savings that could cover a $1,000 hospital visit or a $500 car repair.

  Taking that into consideration, let’s dive deeper into this more recent millennial data…

  

  Courtesy of: Visual Capitalist

   

  YOUNGER VS. OLDER MILLENNIALS

  The broad survey data can be further divided into “younger” and “older” millennial segments: those aged 18-24, vs. those between 25-34.

  Based on the survey question, an intuitive expectation would be that younger millennials are much more likely to have less than $1,000 in savings. After all, many of the people in this group would still be in school, and many are struggling withstudent debt.

  However, the difference is far less than one may expect. While it is true that 57.6% of the younger demographic has less than $1,000 in savings, the older group is not much better off with almost half (47.1%) of them being in the same boat. This shows that many millennials in their late 20s and early 30s are still not able to generate substantial savings.

  MALE VS. FEMALE MILLENNIALS

  There is also a significant divide between male and female millennials here, with 56.7% of females having less than $1,000 in savings. Compare this number to the male percentage of 46.5%, and it is clear there is a substantial divide between genders.

  Lastly, males are also more likely to have a substantial amount stored away in their bank account. According to the survey, 21.5% of males have more than $20,000 of savings, while only 11.9% females can say the same.

  

  

• Globalism Is A Barbaric Relic – Voluntary Tribalism Is The Future

  Submitted by Brandon Smith via Alt-Market.com,

  I have been writing rather extensively about the ideology of globalism in recent months, primarily because the battle lines between sovereignty and global centralization have never been more defined than they are in 2016.  In the past, globalists have often hidden the true motives of their cult; namely the goal of erasing national borders and all remaining vestiges of self governance.  Normally, they would only pronounce the great advantages of globalization while dancing around the fact that millions of people will not accept it.  Today, however, the globalists have come out in direct confrontation with supporters of sovereignty.

  After the Brexit referendum, a new tone appears to have been set.  The elites have now entered the mainstream media to state in essence that yes, they are globalists, they want total centralization and they are here to fight a philosophical and/or physical battle with those they call “populists” (also known as conservatives and sovereigns).

  When they have discussed globalization in previous years, it has always been presented as some kind of natural progression of events rather than an agenda.  The first secret of elitist propaganda is their constant assertion that globalism is “inevitable;” that it is foolish to fight against it because it is the unavoidable future evolution of mankind.  The fact is that if globalism is so inevitable, the elites would not need to expend trillions in capital and decades of energy trying to fool the masses into accepting it.  If globalism is inevitable, couldn’t the elites simply lay back in their pool-side cabanas, sip their dry martinis and just watch it all unfold on its own?

  Instead, the elites have foisted globalism upon the shoulders of the public, and are by some indications preparing for outright war in order to force us “populists” into compliance.

  The second secret of elitist propaganda is their strategy to disguise centralization as decentralization.  For instance, the new globalist claim is that a shift away from a system in which the dollar is the world reserve currency into a system in which a basket of currencies becomes the world reserve is a move towards a “multi-polar world.”  Nothing could be further from the truth.

  In reality, the basket currency system the elites are pushing for falls under the umbrella of the IMF’s Special Drawing Rights.  Meaning a switch away from the dollar into the SDR will result in even MORE centralized power for the elites.  That is not a multi-polar world; it is a uni-polar one.

  It is schemes like this that expose the great weakness of globalism as an ideal — the elites cannot accomplish it without using deception and force against innocents.  Such a philosophy is a failure by default.

  The third secret of globalist propaganda is that they present the system as if it is a “new” idea. This is yet another lie. Globalism is merely another expanded form of centralization (or collectivism), and centralization has been the prevailing tool of cultural control for ages.  If anything, the freely elected governments and voluntary tribalism of constitutional Republics is the newest and most advanced social concept in all of human history.  Such systems present the potential for lasting decentralization, as long as participants remain vigilant to co-option by globalists.

  Sadly, the people of America and the rest of the West have NOT been vigilant for quite some time, and today our experiment in sovereignty is being  twisted, eroded and overrun.

  Some seem to find new hope in the rise of conservative activism like the U.K.’s Brexit movement.  As I explained in my pre-referendum article 'Brexit — Global Trigger Event, Fake Out Or Something Else?', these movements are a step in the right direction, but they have a tendency to underestimate the globalist strategy.

  I suspect according to the evidence outlined in the article linked above, as well as the behavior of elites ever since the U.K. referendum passed, that a plan is underway to ALLOW conservatives and sovereign activists marginal victories.  Ultimately, in order for the elites to achieve the long-game of total centralization, they need to fully demonize and destroy their philosophical opponents.  That is to say, they need to make conservatives and freedom fighters out to be historical monsters, and themselves out to be the heroes of the day.  The ONLY way for the elites to win is to fool the masses into accepting and even demanding globalization while casting out conservative principles as dangerous or evil.

  But how would they make this possible?

  It’s simple, really.  They have already set the stage for an international economic and political crisis of epic proportions.  Why not let conservatives and sovereigns take over as captains of an already sinking ship, then blame them when there aren’t enough lifeboats to save the passengers?

  Following this line of thinking was how I was able to correctly predict the success of the Brexit vote, it is the reason why I have consistently argued that the Fed will continue to raise interest rates in 2016 despite multiple signs of a recessionary downturn, and why I believe Donald Trump will be the next president.

  Once instability has run its course, and once the damage is done and the “populists” are blamed, the elites plan to swoop in with globalism as the fix-all.

  The question then arises, if this is the strategy being implemented by the globalists, what can be done about it?

  As with most conundrums, the problem is often the source identifier of the solution.  That is to say, if centralization and the elites behind it is the problem, then decentralization and the removal of those elites from power is the most effective solution. If forced globalization is leading to the ruination of man, then voluntary tribalism may be the cure.

  The issue actually has more to do with individual psychology than geopolitics.

  Human beings have two inherent psychological qualities that can work together, or they can conflict; the need for individual liberty, and the need for community.

  We are social creatures.  We can accomplish great feats by working together, but the ideas for these feats are always born in the imaginations of individual minds.  Without the group, the success of the individual can be greatly hindered.  Without individual minds, the success of any group is impossible.

  The elites would have us believe that individual success and community success are mutually exclusive; that we cannot have both.  This is simply not true.

  Globalists assert that if the individual focuses on his own success, then he cannot focus on the success of the group.  This “conceited” self interest, they claim, will sabotage society as a whole and lead to humanity’s destruction. Therefore, under globalism, the individual must sacrifice his freedom of choice and association; he must sacrifice his right to apply his labors how he wishes, so that the group can supposedly thrive.

  I would assert the opposite.  Because all ideological groups are abstractions and not cultural facts, they are completely dependent on the success of the individual in order to thrive.  While the individual may need help from others, he must be allowed to CHOOSE who those people are.  He also must be able to CHOOSE how his ideas and efforts are realized.  Otherwise, the ideas have no steward, no protector.  Under globalism/collectivism, ideas immediately become the property of the group if they are even acknowledged at all, and the group does not think; the group is not capable of thinking.  The group only has merit as long as the individuals within it have merit.  The group is not real.  And so, under the control of a vaporous collective, good ideas usually die.

  With globalism as the dominant ideology, individual accomplishment falls and thus, the system itself will eventually fall.

  This does not mean that the solution is to end all group interaction or organization so that individuals can go off to to form their own one-man, mini-nation states.  If that is what an individual wishes to do then that is all well and good, but failure is just as likely in that scenario as it would be under globalism.  Instead, the answer may be a return to tribalism, of a voluntary variety.

  Our inherent needs for individual freedom as well as community interaction can in fact work together.  The group does not need to supplant the individual to succeed, each member of the group just needs to share the same goals and understand the merits of those goals.

  If a person does not understand or respect the goals of that group, then he can easily leave, or refuse to join.  As long as it is unacceptable for any group to use force to compel an individual to participate, then there can be no loss of individual liberty.  Under this model, we could see the rise of numerous tribes, and tribes within tribes.  Some of them fleeting, some of them long lasting.  Of course certain universal truths would have to be respected.

  The most common argument against tribalism, whether voluntary or not, is the argument that it will lead to so many conflicting interests that chaos and violence is inevitable.  Wars over resources and property will erupt, some claim, or society will falter into a dog-eat-dog survival of the strongest Mad Max scenario.

  First, I would like to point out that globalization and centralization have not solved any of these problems.  Globalism only seems to lead to more efficient war and death, rather than less war and death, and the sides are less defined.  Under the global elites, people are constantly pitted against each other over false narratives and false flags.  We become pawns that are sacrificed to further their objectives.  I hardly see how this is a superior system.  The only wars ever worth fighting are against centralizing tyrants.

   

  Second, while tribal conflict is surely possible due to philosophical differences, the promotion of individual freedom, rather than the collective, as the essential element of society makes violent opposition far less likely.

   

  Freedom is a universal inborn psychological construct.  Almost all people have a sense of it and its usefulness.  In fact, most fundamental moral principles including freedom are shared by people regardless of their cultural backgrounds.  The only places in which freedom is not respected are places in which centralizing elites have propagandized and threatened the citizenry.  Look at almost any totalitarian system and you will find under scrutiny that globalists helped give birth to these monsters from behind the scenes.  When those elites and their influence are removed for a time, there is usually a natural wellspring resurgence of respect for liberty within that society.

   

  Men and women will organize and rally around freedom without being lied to or threatened.  There are not many ideologies that can make the same claim.  Globalism certainly can’t.

   

  Third, the next objection from skeptics will be that a handful of controllers under globalism would be preferable to tens of thousands of tyrants lording over thousands of fiefdoms.  Again, these people just don’t seem to grasp the notion of voluntary community or the effectiveness of individual rebellion.

   

  I would rather face a thousand minor tyrants with minor armies than a tiny cabal of tyrants with a global army.  The difference being that it is far easier to erase a tyrant with a hundred men in my way than it is to erase a global tyrant with hundreds-of-thousands of men and a massive surveillance apparatus in my way.  In a world where individual liberty is paramount and the people are armed, minor tyrants would be so terrified to pursue power they would likely be dissuaded altogether.  The minimal protection they might muster would never be enough to stop every single bullet flying in their direction.

  The idea of voluntary community is so foreign to the public today that it would probably need a catastrophe before such a system is ever adopted.  But, since the global elites have already taken it upon themselves to create the catalysts for an economic and political crisis, we might as well take advantage and rebuild from the ashes with voluntary community in mind.

  The elites never let a good crisis go to waste, maybe we should use the same strategy.

  This, of course, requires that the liberty minded not only survive the catastrophe, but also fight back and remove the elites from the picture.  There can be no voluntary tribes with the globalists in control of the mechanisms of power.  They are themselves, in effect, a bastardization of a tribe that has been allowed through lack of vigilance to subversively and systematically destroy all other tribes.  They have convinced much of the world through chicanery that their tribe is the ONLY tribe with merit.

  The propaganda only works to a point, however.  During any breakdown in normal social order, people invariably create their own social order, and they usually do this by forming small tribes.  Families come together, neighborhoods come together, towns come together and so on, and they do this voluntarily, without being aggressively compelled by others.  The natural default of human beings is freedom and tribalism; two things which do not necessarily have to conflict.  Our natural default has never been to pursue globalism or utter collectivism at the expense of the individual; those kinds of machines are products of the treachery of a power-mad minority.

  In the end, globalism is doomed to crash in a ball of flames, but not before the globalists attempt to take everyone else down with them.  It would behoove us to start constructing our tribes now, rather than after the situation has become grim in the absolute.  Through localized production, alternative trade models, local organization for mutual aid and defense, and the principles of liberty, America could become a network of tribes within a tribe; a self reliant system built around redundancy rather than interdependency.

  The globalists?  Well, they will try to stop us.  But at least at that point the sides will be drawn more clearly.  I cannot think of a better war to fight than a war to stop the barbaric trespasses of the global elites.  And when it is all over, I look forward to a more complex and “chaotic” society where collectivist streamlining is abandoned for a wild west of voluntary associations.  A land where tribes roam free.

  

  

• China's "Answer To LendingClub" Plunges Most On Record After Regulator Imposes Peer-To-Peer Caps

  Over the years, China has valiantly struggled to convince the international public it will end its debt addiction any minute now, with the Politburo vowing year after year that it would if not delever in the immediate future, then surely limit the issuance of household loans. So far, every such attempt has been a failure, for one simple reason: as goes China’s debt, so goes the most important asset in China’s economy, its housing stock.

  

  So while there are ample reasons to be skeptical, overnight China’s Banking Regulatory Commission unveiled its latest attempt to halt the country’s relentless debt load when it imposed limits on lending by peer-to-peer platforms to individuals and companies in an effort to curb risks in one part of the loosely-regulated shadow-banking sector. An individual can borrow as much as 1 million yuan ($150,000) from P2P sites, including a maximum of 200,000 yuan from any one site, the CBRC said in Beijing on Wednesday. Corporate borrowers are capped at five times those levels.

  The regulator added, in what we doubt was an attempt to reassure industry watchers, that China had found problems in 1,778 online lending platforms, accounting for 43.1% of total.

  China’s authorities are rightfully concerned about defaults and fraud among the nation’s 2,349 online lenders. In December, the country’s biggest Ponzi scheme was exposed after Ezubo, which until then had been China’s largest P2P lender, defrauded more than 900,000 people out of the equivalent of $7.6 billion and promptly folded (the response was hardly enthusiastic, as we revealed in a clip from February.)

   

  The measures will probably leave about 200-300 P2P platforms by this time next year, said James Zheng, chief financial officer of Lufax, the top lending platform in China. “That’s okay because they’re cracking down on all the bad guys,” he said at a conference in Hong Kong. “What doesn’t kill will make you stronger. That’s the case for us.” Good luck.

  Under the new rules, P2P lenders are barred from taking public deposits or selling wealth-management products and must appoint qualified banks as custodians and improve information disclosure. 

  “The P2P business is not very strictly regulated yet, but you can see the regulator is taking a step forward,” said Xu Hongwei, chief executive officer of Shanghai-based Yingcan Group, which tracks the industry. Products offered by P2P platforms in China can include anything from loans for weddings, guaranteed against the cash gifts that couples expect to receive, to high-yield lending for risky property or mining projects.

  As Bloomberg notes, China’s P2P industry brokered 982 billion yuan of loans in 2015, almost quadruple the amount in 2014 and an approximately 10-fold increase from 2013, according to Yingcan. P2P firms attracted more than 3.4 million investors and 1.15 million borrowers in July, with loans extended at an average interest rate of 10.3 percent, according to Yingcan. Still, despite its torrid growth, P2P lending is still a tiny fraction of the overall loan market, and certainly of the broadest Total Social Financing universe, which infamously saw $1 trillion dollar in aggregate new loans created in the first quarter of 2016, providing a global credit impulse, which has since faded.

  In any case, it appears that in this particular case, China is eager to halt this problem before it becomes too big. In April, China’s cabinet launched a campaign to clean up illicit activities in Internet finance, focusing on areas such as third-party payments, peer-to-peer lending, crowdfunding and online insurance. It suspended the registration of all new companies with finance-related names.

  And we have our doubts that this latest “debt cap” will last, because earlier today, Peer 2 Peer lender Yirendai, the company which Bloomberg has dubbed “China’s answer to LendingClub” plunged 22%, the most on record since its December 2015 IPO, on massive volume, following yesterday’s imposed P2P limits. For a sense of scale, YRD created some $680 million in loans in Q2, up 118% Y/Y, with net revenue more than doubling to $110 million, or 140% Y/Y. 

  

  Needless to say, the company acts, and is priced like, a growth stock. The problem, as the chart below shows, is that the growth suddenly stopped.

  

  Furthermore, if the company is indeed China’s answer to the recently devastated LendingClub, this is just the beginning, as the bubble has now popped with a little help from the government.

  So will the CBRC relent, and lift the caps? It depends on just one thing, the only thing that the politburo is more worried about than asset bubbles – social unrest.

  If enough people protest, get angry or downright violent as a result of the collapse in P2P stocks, and eventually, the entire industry, or simply are unable to obtain loans elsewhere should the industry falter, then Beijing will promptly undo what it has done. Until then, however, keep an eye on risk levels in China, where suddenly the most permissive marginal source of lending – and this risk asset upside –  was just advised ordered to go into a state of near hibernation.

  

  

• University of Chicago Tells Millennials to Suck It Up, "We Do Not Condone 'Safe Spaces'"

  In a refreshing and stark contrast to other universities that have seemingly tripped over themselves to accommodate every silly request from America's pampered Millennials in their never ending quest for "safe spaces," the University of Chicago has sent the incoming class of 2020 a letter making very clear that they will find no "safe spaces" in their intellectual journey at Chicago.  The full letter is presented below but here are a couple of the best comments for your reading pleasure:  

  You will find that we expect members of our community to be engaged in rigorous debate, discussion, and even disagreement.  At times this may challenge you and even cause discomfort.

   

  Our commitment to academic freedom means that we do not support so-called “trigger warnings,” we do not cancel invited speakers because their topics might prove controversial, and we do not condone the creation of intellectual “safe spaces” where individuals can retreat from ideas and perspectives at odds with their own.

  Just when we thought all hope had been lost, an establishment of higher learning finally steps up to interject some rational thoughts into the public discourse surrounding freedom of expression.

   

  .@UChicago does not:

  ???? "support so-called 'trigger warnings'"
  ???? "cancel invited speakers"
  ???? condone "safe spaces" pic.twitter.com/DH7IVfYZ4U

  — Justice Don Willett (@JusticeWillett) August 25, 2016

   

   

  The letter also directs students to a note it had previously written on freedom of expression…

  

  The full letter can be reviewed in its entirety at the end of this post, but below are a couple of the gems that we particularly liked:

  “Education should not be intended to make people comfortable, it is meant to make them think. Universities should be expected to provide the conditions within which hard thought, and therefore strong disagreement, independent judgment, and the questioning of stubborn assumptions, can flourish in an environment of the greatest freedom.”

   

  Of course, the ideas of different members of the University community will often and quite naturally conflict. But it is not the proper role of the University to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even deeply offensive.

   

  In a word, the University’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the University community to be offensive, unwise, immoral, or wrong-headed.

  For Millennials getting ready start at University of Chicago might we suggest some reading material (here) that we shared a few months back that might help you cope in the absence of "safe spaces" at your new home…

  

  No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.

   

  

  

• Demographic HomeMageddon Underway… Will Last Until At Least 2035

  Submitted by Chris Hamilton via Econimica blog,

  91% of all US home buying is done by those aged 20-69yrs/old, according to NAR data.  In 2015, Millennials (20-35yrs/old) made up 35% of home purchases, Gen X (36-50yr/olds) bought 26%, Boomers (51-70yr/olds) 31%, and the Silent Generation (70+yrs/old) 9%.  I'm no great fan of the NAR, but this makes basic sense as most homebuyers need an income to be homebuyers and most 70+yr/olds are retired and have the lowest average incomes of all the above groups.

  Here's the very big problem for residential real estate… the chart below shows that over 70% of all the population growth among potential home buyers (20+yrs/old) from 2017–>2030 will be among the 70+yr/olds (chart shows average annual growth for the two groups from 2000–>2016 (left) and 2017–>2030 (right)).  This is simply unprecedented in US history.

   

  

   

  To put it in a broader context, the chart below shows annual growth in the 20-69yr/old population (red line) vs. annual growth in the 70+yr/old population (blue line) since 1980.  That unprecedented, impending crossover in the lines means everything for real estate and the economy in general.

  

   

  The impending nosedive in the growth of potential buyers vs. surge in elderly (those more likely to downsize or out-right sell than buy) should be quite disconcerting considering:

  • Home prices are at or near '07/'08 bubble peaks meaning any new investments require far more cash down to achieve a positive cash flow

  • Mortgage rates can effectively go no lower and a marginal increase is probable (unless the Fed reinitiates QE and implements NIRP)

  • Present lending standards are far more stringent than during the '07/'08 fog-a-mirror NINJA free for all

  • The dollar is likely to continue appreciating making foreign buying continually more expensive…and less likely (unless the Fed reinitiates QE and implements NIRP)

  • Rents and rent to income ratios are off the charts to new records well above '08…maintaining the pace of rent appreciation is highly unlikely and rent declines may be the more probable course.

  Plus, add in the pace of new housing creation continues ramping up (still only half way to '08 levels but still far more than can ultimately be absorbed with the changing dynamics).  With so few new buyers, a growing quantity of new homes, and so many likely sellers…a very simple question must be asked, who will buy all those houses and at what price?

  

  

• 5 Factors That Could Turn America Into Another Collapsed Empire

  Authored by Todd Buchholz, originally posted op-ed at MarketWatch.com,

  Nations are just as likely to unravel after periods of prosperity as afte periods of depression

  Have you ever met an Ottoman? Or a Habsburg? Neither have I.

  Like a chopped-up Magritte painting, all that is left of the Habsburgs is a homburg hat. Yet in the 1800s, the Ottoman and Habsburg Empires controlled a huge chunk of the modern world. One in 10 Americans can trace his or her heritage to Habsburg lands, which spanned most of middle Europe from Poland down to Dracula’s castle in Transylvania.

  Many people have written about poor countries that have fallen apart. But rich nations fall apart, too. In fact, nations are just as likely to unravel after periods of prosperity as after periods of depression. The 2016 presidential campaign appears so bitter precisely because so many Americans worry that the “other” party’s candidate will annihilate the nation.

  I have found five forces that undermine nations after they achieve economic success – and they are biting down on the U.S. today. We have little time to spare to renew the nation. Whichever candidate wins in November better come up with tough and effective solutions.

  Falling birthrates

  As countries grow rich, people have fewer babies. (The average American women now gives birth to just 1.89 children.) To keep up their lofty standard of living, citizens need new workers to serve them, whether as neurosurgeons in hospitals or as manicurists. This requires immigrants. But immigrants can splinter the dominant culture. So countries face either declining relative wealth or a fraying cultural fabric. Great empires of the past, from the Roman to the Venetian to the British, have faced this challenge — and failed to surmount it.

   

  Globalized trade

  Nations cannot grow and stay rich without trading. Countries that fold themselves into a self-contained bubble grow fetid, like a badly aerated terrarium. Or a dank prison, which pretty much describes North Korea. South Koreans, who believe in trade, are 17 times richer, live 10 years longer, and stand several inches taller than their neighbors. South Korea produces super-sharp Samsung flat screens, fine Hyundai cars and charismatic K-pop singers.

   

  But there’s a downside to trade. It shakes the customs and character of the nation. Donald Trump has skillfully tapped into this anxiety and is right to ask whether trade deals like the Trans-Pacific Partnership are vigorously negotiated to boost the incomes of typical Americans, or simply to boost the ego of the president.

   

  Rising debt loads

  As countries grow richer, they build bigger bureaucracies and inflate their debts. Here’s a puzzle I call “The Paradox of Theft:” As a family grows wealthier, it is less likely to fall into deep debt, default and bankruptcy. But the opposite is true of individual countries — wealthier nations may pile up proportionately more debt than poorer nations.

   

  Amid the Great Recession of 2010, developing countries like Mexico and Russia had smaller debt burdens than Japan, the U.S. and the eurozone. Why do we borrow more? Because we can! And because today’s politicians aren't held responsible for the debts they leave for our children and grandchildren.

   

  Eroding work ethic

  When a rich nation shatters, people don’t go hungry. They just stop waking up early. The proportion of adults who want to work has been sliding over the last 17 years. In West Virginia, only half of working-age adults have a job. Between 2000 and 2013, disability claims across the country surged 43%. Even though jobs have grown less dangerous, the chances of a judge approving a disability claim has jumped 50% since 1980.

   

  We are seeing a structural shift: Millions have decided they just don’t care much for the idea of showing up for work in the morning and staying on the job until the end of the day.

   

  To prod the unemployed back to work, I propose they receive a signing bonus if they accept a new job before their unemployment compensation payments run out.

   

  The challenge of patriotism in a multicultural country

  Unless rich nations discover and embrace their national characters, they won't survive. In many schools, the Pledge of Allegiance and “My Country ’Tis of Thee” have been pushed aside in favor of self-esteem chants. Characters like Columbus, the Pilgrims and George Washington have been disdained as pillagers, rather than as symbols of exploration, religious freedom and courage.

   

  To help ensure that all learn America’s story and values, all immigrants and any U.S. student applying for a federal loan be required to get their passports stamped at no fewer than five historical monuments or museums around the country.

  Is it too late?

  Should the U.S. and European nations simply hold a “going out of business sale” while the wealthiest individuals sneak off to private islands or to New Zealand? The odds are against us, as the Spartans, Romans, Ottomans, and Habsburgs would attest — if they were still around.

  But as Bill Murray said in Stripes: “We’re not Watusi. We’re not Spartans. We’re Americans, with a capital ‘A”…that means that our forefathers were kicked out of every decent country in the world. We are the wretched refuse. We’re the underdog. We’re the mutts.”

  And we can win again.

  

  

• France To Deploy 3,000 Troops To Schools: "The Threat Is Real" Education Minister Says

  Two weeks ago we reported that as part of its proactive effort to tackle future terrorist attacks, the French government announced that starting in September, French 14-year-olds would receive lessons how to survive a terrorist attack on their schools, following a spate of Islamist killings in recent months.  It appears that was not enough, because earlier today the France interior minister Bernard Cazeneuve announced France would deploy about 3,000 reserve troops, train school authorities and ramp up school anti-terror drills in case of attacks, its education and security ministers announced on Wednesday, a week before the start of a new academic year.

  

  “The threat is high, it is real,” Education Minister Najat Vallaud-Belkacem, said during a joint news conference in Paris alongside Cazeneuve. “This is not about ceding to panic or paranoia,” she added quoted by Reuters.

  About 12 million students are expected to head back to school across France from on Sept. 1. All students aged 13-14 will be adding basic life-saving measures to their portfolio of skills, in case they need to provide assistance to classmates in a worse-case scenario. Right now, only 30% of students are trained, the Education Minister said in a Wednesday press conference, according to AP.

  Around 500 school administrators will be trained every year at the national gendarme training center to manage crisis centers and act as liaisons with security officials, while some 1.2 million students in the fourth year of secondary school are expected to be trained in first aid. In addition to training students and staff stepping up to the plate, security forces have been ordered to be particularly vigilant around schools, and some 3,000 gendarme reservists will be deployed to provide reinforcement for local authorities, including police, Reuters reported.

  “Throughout the year, particular attention will be put around schools. Active surveillance around schools, high-schools and universities will be reinforced by roving patrols,” Cazeneuve said. RT adds that the government has decided to provide 50 million euros ($56.2 million) to local councils to help them pay for security equipment such as video door phones and new alarm systems.

  As previously reported, anti-terror drills in schools will also be increased to three per academic year, up from the current requirement of two drills per year. During those drills, students will be taught how to hide or escape. At least one drill will include a mock assailant entering the premises. Children aged two to six should not be told of any attacks or dangers during the drills, but will be taught to hide and keep quiet through games.

  The French announcement comes at the same time as Germany is deciding whether to put “troops on the streets” to protect the population from terrorism. While a formal decision has yet to be announced, Europe’s distinct creep toward increasing militarization of society continues.

  

  

• Largest Saudi Bank Crashes To Record Low

  Despite the exuberant rebound in the price of oil – and the hope that this means something other than an over-financialized commodity being short-squeezed by rumors – all is not well across the oil producers of the world. Having noted the record surge in default protection for Saudi Arabia (ahead of its looming debt deal)…

   

  

   

  We note that National Commercial Bank's stock price has collapsed to record lows.

  

  h/t @pierpont_morgan

  This is Saudi Arabia's largest bank, and is often used as a proxy for the royal family's wealth.

  Interestingly,just as we were surprised to see Saudi CDS "stabilizing" amid record demand for protection, NCB CDS has tightened dramatically in the last few weeks – as the stock has crashed…

  

   

  If we were the tin-foil-hat-wearing types, we might suggest that every effort is being made to put lipstick on Saudi's credit pig before the looming debt deal is done.

  

  

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• Is The EU Volcano About To Erupt?

  Submitted by Mike Shedlock via MishTalk.com,

  I am wondering if the EU volcano is about to erupt.

  My rationale is Matteo Renzi, Francois Hollande, and Angela Merkel met on a volcanic island near Naples, specifically chosen as a symbolic mark of their joint resolve to stay the course with the EU after the UK voted to leave.  

  

  Europe is the Solution Says Hollande

  Please consider EU Leaders Pledge Brexit Will Not Weaken Bloc.

  The leaders of Germany, France and Italy declared they would not allow Britain’s departure from the EU to propel the bloc into reverse as they discussed plans to deepen intelligence co-operation and bolster a pan-European investment plan.

   

  At a summit on the Mediterranean island of Ventotene, they pledged to address some of the bloc’s most urgent problems by reinforcing European defence, overcoming a refugee crisis and spurring economic growth.

   

  “We think that Europe is not the problem. It’s more the solution,” said Italian premier Matteo Renzi at a press conference with German chancellor Angela Merkel and French president François Hollande on the flight deck of an Italian aircraft carrier.

   

  Almost two months after Britain voted to the leave the EU, the summit was cast as an opportunity for the three largest founder members of the union to declare their common commitment to European integration.

   

  The volcanic island near Naples was specifically chosen for the meeting, the leaders’ second since the Brexit referendum, as a symbolic mark of their joint resolve to stay the course with the EU after the UK voted to leave.

  Pure Ignorance

  Earlier today a reader commented …

  To think that EU is only a economic construction is pure ignorance, The main objective was (and still is) TO AVOID MILITARY CONFLICTS in the most violent continent in the last 3 centuries. This has been successful.

   

  Analyzing EU with “nannycrats” and other silly notions denotes only the lack of culture, lack of meaningful readings and shortsighted view of the writer.

  I know full well what the mission of the EU is. The problem is two fold.

  1. Mission creep: The nannycrats did not stick to the mission.
  2. The Euro: The euro is fatally flawed as a currency.

  I fully embrace freedom of movement, within the EU, for the right reasons.

  I do not embrace open invites to terrorists, from elsewhere. Nor do I embrace open invites from elsewhere for economic reasons.

  The results speak for themselves, and the volcano is arguably ready to blow its top.

  Volcano Offers Perfect Symbolism

  • Beppe Grillo’s eurosceptic Five Star Movement party is in a dead heat with Matteo Renzi in Italian polls.
  • Marine Le Pen eurosceptic National Front party is leading or in second place France.
    The Eurosceptic AfD party is on the rise in Germany.
  • Norbert Hofer of the Freedom Party, a right-populist group with an anti-immigrant, Eurosceptic platform, is in the lead in a presidential re-run in Austria.
  • Spanish separatists in Catalonia threaten to break away from Spain and are in open defiance in Madrid.

  Brexit happened because of inane nannycrat rules and also because of Merkel’s blatantly stupid open arms welcome of outsiders for political and economic reasons.

  Termite Infestation

  Europe is more splintered now in many ways than it was before the adoption of the Euro.

   

  #eu Brexit is a direct result of nannycrat mission creep on a foundation consisting of termite infested wood commonly known as the euro.

  — Mike Shedlock (@MishGEA) August 22, 2016

   

   

  Anger is visible everywhere. The volcano is ready to blow.

  

  

• TRoLL MaGaZiNe

  

  

• Illinois Warns Of "Crippling Tax Hikes", "Devastating Impact" If Largest Pension Fund Admits Reality

  Defined Benefit Pension Plans are, almost by definition, a ponzi scheme. Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities: classic Ponzi.  But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit.  Everyone from government officials to union bosses are incentivized to maintain the status quo – public employees get to sleep better at night thinking they have a “retirement plan,” public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees.  

  We even published a note several weeks ago titled “Establishment Tries To Suppress “Dissident Actuaries” Explosive Report On Public Pensions,” which pointed out that the American Academy of Actuaries and the Society of Actuaries killed a report that would have warned about the implications of lowering long-term expected returns on pension assets.  Apparently the truth was just too scary.

  Similarly, Janus’ Bill Gross has been warning of the unintended consequences of low interest rates for years, and reiterated his concerns to Bloomberg recently:

  Fund managers that have been counting on returns of 7 percent to 8 percent may need to adjust that to around 4 percent, Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund, said during an Aug. 5 interview on Bloomberg TV. Public pensions, including the California Public Employees’ Retirement System, the largest in the U.S., are reporting gains of less than 1 percent for the fiscal year ended June 30.

  Two weeks ago, we decided to take a look at what would happen if all federal, state and local pension plans decided to heed the advice of Mr. Gross. As one might suspect, the results were abysmal.  We conservatively assume that public pensions are currently $2.0 trillion underfunded ($4.5 trillion of assets for $6.5 trillion of liabilities) even though we’ve seen estimates that suggest $3.5 trillion or more might be more appropriate.  We then adjusted the return on asset assumption down from the 7.5% used by most pensions to the 4.0% suggested by Mr. Gross and found that true public pension underfunding could be closer to $5.5 trillion, or over 2.5x more than current estimates.  Others have suggested that returns should be closer to risk-free rates which would imply an even more draconian $8.4 trillion underfunding.  

  

  The result which we dubbed an “Unsolvable Math Problem“, is the reason why so few pension funds have dared to address this issue face on.

  However, to our surprise perhaps because they realize just how near to the end really is or for other unknown reason, certain pension funds are finally taking notice, and action. In early August, Richard Ingram of Illinois’s largest pension fund announced that he would be taking another look at long-term return expectations noting that “anybody that doesn’t consider revisiting what their assumed rate of return is would be ignoring reality.”  Ingram’s Illinois Teachers’ Retirement System is only 41.5% funded and currently assumes annual returns of 7.5%, down from 8% in 2014.

  And right here we get an example of precisely why US pensions are a legal ponzi, because the moment one person is willing to do the right thing, and evaluate the situation soberly, someone else promptly steps in, realizing that if just one card is removed from the house of cards, the whole thing collapses.

  Enter Illinois governor Bruce Rauner, who warned that should his state’s largest public pension fund do what it should have done long ago, it would put a big dent in the state’s already fragile finances and lead to “crippling” pension payment hikes, Reuters reported today.

  
  Bruce Rauner and his wife Diana

  According to a Monday memo from a top Rauner aide, the Teachers’ Retirement System (TRS) board could (or rather, should) decide at its meeting this week to lower the assumed investment return rate, warning that this move “would automatically boost Illinois’ annual pension payment.”

  “If the (TRS) board were to approve a lower assumed rate of return taxpayers will be automatically and immediately on the hook for potentially hundreds of millions of dollars in higher taxes or reduced services,” Michael Mahoney, Rauner’s senior advisor for revenue and pensions, wrote to the governor’s chief of staff, Richard Goldberg.

  As a reminder, the TRS already lowered its assumed rate of return once, back in 2014, and as a result of the even bigger underfunding hole created by the lower assumed rate of return, the state’s pension payment increased by more than $200 million, according to the memo.

  It is about to do it again, only this time it would have to cut the discount rate far lower, if it wishes to be even remotely realistic: recall Gross’ suggestion is to lower the expected return to 4% (or even lower).  However, as we reported two weeks ago, the TRS hole is already gargantuan and about to get even bigger. Illinois’ fiscal 2017 pension payment to its five retirement systems was estimated at $7.9 billion, up from $7.617 billion in fiscal 2016 and $6.9 billion in fiscal 2015, according to a March report by a bipartisan legislative commission. The country’s fifth-largest state’s unfunded pension liability stood at $111 billion at the end of fiscal 2015, with TRS accounting for more than 55 percent of that gap. The funded ratio remains just under 42%, implying that any rate reductions will push the already frigthfully low funding ratio even lower.

  And this is where the politicians come in.

  An impasse between the Republican governor and Democrats who control the legislature left Illinois as the only state without a complete 2016 budget, however a six-month fiscal 2017 spending plan was passed in June.

  Still, Mahoney has cautioned that “unforeseen and unknown automatic cost increases would have a devastating impact” on Illinois’ ability to fund social services and education.

  What Rauner’s senior advisor is essentially saying, is that if the TRS does what the Fed and other central banks are forcing it to do, our political careers may be over, and that could be just the beginning.

  And here is the punchline: one of Rauner’s top Republican legislative allies, Senate Minority Leader Christine Radogno, urged the TRS board to delay a vote Friday to give the public time to weigh in on its possible actions. “This issue is important enough at the very least to put the TRS board on notice we don’t want them taking any action that could cost taxpayers $200 to $300 million without appropriate scrutiny,” she said. The action in question, Radogano is demanding the TRS not take, is to lower its return expectations from the ludicrous 7.5% to something realistic; instead she is suggesting the fund pretend all is well, and avoid the day of reckoning for at least a few more years, ideally until she has quit as Senate Minority Leader, at which point the TRS can by all means go ahead and admit just how terrible its underfunding truly is.

  Translation: please keep your heads stuck in the sand, and dare not admit the reality of near-zero returns in the new normal, but instead keep the projected return rate at 7.5%, or else you will not only admit just how much bigger the underfunding hole truly is, but the resultant surge in public anger following the broad rise in taxes coupled with cut to pensioner benefits could lead to millions of furious voters sweeping all of Illinois’ current career politicians right into the unemployment office.

  Incidentally, this is precisely the fight that countless ponzi schemes, pardon pension funds, across the US will be forced to go through in the coming months, unless somehow the Fed funds a way to guarantee 8% returns every year, or else sending inflation soaring, and wiping out the fund’s liabilities.

  Since neither is likely to happen for a while, the biggest losers will once again be taxpayers and pensions recipients, who this time will be forced to pay – literally – because their public fiduciaries lied to them, and because other fiduciaries are hoping the lies will continue for at least a few more years.

  

  

• Children Of The American Police State: Just Another Brick In The Wall

  Submitted by John Whitehead via The Rurtherford Institute,

  We don’t need no education

  We don’t need no thought control
  No dark sarcasm in the classroom
  Teachers leave them kids alone…
  All in all it’s just another brick in the wall
  All in all you’re just another brick in the wall.
  —Pink Floyd, “Another Brick in the Wall”

  The nation’s young people have been given front-row seats for an unfolding police drama that is rated R for profanity, violence and adult content.

  In Arizona, a 7-year-old girl watched panic-stricken as a state trooper pointed his gun at her and her father during a traffic stop and reportedly threatened to shoot her father in the back (twice) based on the mistaken belief that they were driving a stolen rental car.

  In Oklahoma, a 5-year-old boy watched as a police officer used a high-powered rifle to shoot his dog Opie multiple times in his family’s backyard while other children were also present. The police officer was mistakenly attempting to deliver a warrant on a 10-year-old case for someone who hadn’t lived at that address in a decade.

  In Maryland, a 5-year-old boy was shot when police exchanged gunfire with the child’s mother—eventually killing her—over a dispute that began when Korryn Gaines refused to accept a traffic ticket for driving without a license plate on her car.

  It’s difficult enough raising a child in a world ravaged by war, disease, poverty and hate, but when you add the police state into the mix, it becomes near impossible to guard against the growing unease that some of the monsters of our age come dressed in government uniforms.

  The lesson being taught to our youngest—and most impressionable—citizens is this: in the American police state, you’re either a prisoner (shackled, controlled, monitored, ordered about, limited in what you can do and say, your life not your own) or a prison bureaucrat (politician, police officer, judge, jailer, spy, profiteer, etc.).

  Unfortunately, now that school is back in session, life is that much worse for the children of the American police state.

  The nation’s public schools—extensions of the world beyond the schoolhouse gates, a world that is increasingly hostile to freedom—have become microcosms of the American police state, containing almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside.”

  If your child is fortunate enough to survive his encounter with the public schools with his individuality and freedoms intact, you should count yourself fortunate.

  Most students are not so lucky.

  From the moment a child enters one of the nation’s 98,000 public schools to the moment he or she graduates, they will be exposed to a steady diet of

  • draconian zero tolerance policies that criminalize childish behavior,
  • overreaching anti-bullying statutes that criminalize speech,
  • school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students,
  • standardized testing that emphasizes rote answers over critical thinking,
  • politically correct mindsets that teach young people to censor themselves and those around them,
  • and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement.

  Clearly, instead of making the schools safer, we have managed to make them more authoritarian.

  Young people in America are now first in line to be searched, surveilled, spied on, threatened, tied up, locked down, treated like criminals for non-criminal behavior, tasered and in some cases shot.

  It used to be that if you talked back to a teacher, or played a prank on a classmate, or just failed to do your homework, you might find yourself in detention or doing an extra writing assignment after school.

  That is no longer the case.

  Nowadays, students are not only punished for minor transgressions such as playing cops and robbers on the playground, bringing LEGOs to school, or having a food fight, but the punishments have become far more severe, shifting from detention and visits to the principal’s office into misdemeanor tickets, juvenile court, handcuffs, tasers and even prison terms.

  Students have been suspended under school zero tolerance policies for bringing to school “look alike substances” such as oregano, breath mints, birth control pills and powdered sugar.

  Look-alike weapons (toy guns—even Lego-sized ones, hand-drawn pictures of guns, pencils twirled in a “threatening” manner, imaginary bows and arrows, even fingers positioned like guns) can also land a student in hot water.

  Consider that by the time the average young person in America finishes their public school education, nearly one out of every three of them will have been arrested.

  Moreover, just as militarized police who look, think and act like soldiers on a battlefield have made our communities less safe, the growing presence of police in the nation’s schools is resulting in environments in which it’s no longer safe for children to act like children.

  Funded by the U.S. Department of Justice, these school resource officers have become de facto wardens in elementary, middle and high schools, doling out their own brand of justice to the so-called “criminals” in their midst with the help of tasers, pepper spray, batons and brute force.

  Now advocates for such harsh police tactics and weaponry will tell you that school safety should be our first priority.

  What they might fail to mention in their zeal to lock down the schools are the lucrative, multi-million dollar deals being cut with military contractors to equip school cops with tasers, tanks, rifles and $100,000 shooting detection systems.

  Indeed, the militarization of the police has been mirrored in the public schools, where school police have been gifted with high-powered M16 rifles, MRAP armored vehicles, grenade launchers, and other military gear. One Texas school district even boasts its own 12-member SWAT team.

  What we’re grappling with is not merely a public school system that resembles a prison and is treating young people like prisoners but also a profit-driven system of incarceration has given rise to a growth in juvenile prisons and financial incentives for jailing young people.

  It has been said that America’s schools are the training ground for future generations.

  Instead of raising up a generation of freedom fighters, however, we seem to be busy churning out newly minted citizens of the American police state who are being taught the hard way what it means to comply, fear and march in lockstep with the government’s dictates.

  As I point out in my book Battlefield America: The War on the American People, it’s getting harder by the day to convince young people that we live in a nation that values freedom and which is governed by the rule of law.

  With every school police raid and overzealous punishment that is carried out in the name of school safety, the lesson being imparted is that Americans – especially young people – have no rights at all against the state or the police.

  The bottom line is this: if you want a nation of criminals, treat the citizenry like criminals.

  If you want young people who grow up seeing themselves as prisoners, run the schools like prisons.

  But if you want to raise up a generation of freedom fighters, who will actually operate with justice, fairness, accountability and equality towards each other and their government, then run the schools like freedom forums. Remove the metal detectors and surveillance cameras, re-assign the cops elsewhere, and start treating our nation’s young people like citizens of a republic and not inmates in a police state.

  

  

• TIME Argues "Trolling" Demands Formal Policing Of The Internet

  Via The Daily Bell,

  How Trolls Are Ruining the Internet, Joel Stein … Troll Culture of Hate, Time … They’re turning the web into a cesspool of aggression and violence. What watching them is doing to the rest of us may be even worse  …  This story is not a good idea. Not for society and certainly not for me. Because what trolls feed on is attention. And this little bit–these several thousand words–is like leaving bears a pan of baklava.  It would be smarter to be cautious, because the Internet’s personality has changed. – TIME

  TIME magazine has written yet another horrible article, this one basically calling for the Internet to be controlled and censored because of too many “trolls.”

  

  It’s not clear why there are more of them now than before. The only reason the article gives is that “mores” are being stripped away by anonymity and “aggression and violence” are “seeping from our smartphones into every aspect of our lives.”

  This doesn’t make much sense but TIME often doesn’t seem to make a great deal of sense. Smartphones have been around for years but TIME has only decided now, apparently, that trolling is a big enough problem to warrant a major article.

  And it’s one, eventually, that TIME suggests ought to be dealt with by civilian policing. You’d think the Internet itself provides enough ways, for the most part, to deal with all but the most persistent harassment. But TIME doesn’t see it that way.

  TIME is actually a little late to the party. The article actually builds on reports (here) that London’s Metropolitan Police are setting up a £1.7 million “Twitter squad” to fight social media trolling. Some £500,000 is funding a Home Office Online Hate Crime “hub” as well.

  More:

  Once it was a geek with lofty ideals about the free flow of information. Now, if you need help improving your upload speeds the web is eager to help with technical details, but if you tell it you’re struggling with depression it will try to goad you into killing yourself.

   

  Psychologists call this the online disinhibition effect, in which factors like anonymity, invisibility, a lack of authority and not communicating in real time strip away the mores society spent millennia building.

   

  … The people who relish this online freedom are called trolls, a term that originally came from a fishing method online thieves use to find victims. It quickly morphed to refer to the monsters who hide in darkness and threaten people.

   

  Internet trolls have a manifesto of sorts, which states they are doing it for the “lulz,” or laughs. What trolls do for the lulz ranges from clever pranks to harassment to violent threats.

  The article goes on to mention “doxxing” –  which is “publishing personal data, such as Social Security numbers and bank accounts.”

  Also something called “swatting,” –  “calling in an emergency to a victim’s house so the SWAT team busts in.”

  So we can see the article is conflating words with actions. Trolling, it is implied includes the theft of data and false reports of an emergency. Additionally, some of the examples of trolling seem aimed at men and women whose belief structures seem to be emphatically politically correct.

  No matter. Toward the end of the article, we get to the argument that the Internet needs official policing.

  As more trolling occurs, many victims are finding laws insufficient and local police untrained. “Where we run into the problem is the social-media platforms are very hesitant to step on someone’s First Amendment rights,” says Mike Bires, a senior police officer in Southern California who co-founded LawEnforcement.social, a tool for cops to fight on-line crime and use social media to work with their communities.

   

  “If they feel like someone’s life is in danger, Twitter and Snapchat are very receptive. But when it comes to someone harassing you online, getting the social-media companies to act can be very frustrating.” Until police are fully caught up, he recommends that victims go to the officer who runs the force’s social-media department.

  This excerpt mentions Twitter, which (controversially) has been relatively aggressive about punishing users it deems abusive. In some cases, lifetime bans are levied. Of course, it’s not just Twitter. Facebook and Google (via YouTube) monitor user communications on an ongoing basis.

  This is ironic, however, because both Facebook and Google are basically CIA-supported and funded facilities (here and here). One can make the argument within this context that the Internet’s largest providers are basically part of the US’s military-industrial complex.

  Thus the same groups that fight interminable overseas conflicts wounding and killing millions are also concerned with “trolling.”

  Certainly some “trolling” may be extremely malicious and even dangerous. But it obvious as well that the Internet has given people an independent voice along with important, alternative points of view. And this is obviously – and increasingly – disturbing to those who control society from behind the scenes.

  Conclusion: The idea is to generate yet another faux reason to regulate and police information technology. Britain has already begun, and TIME apparently wants to ensure that the US won’t be far behind.

  

  

• Chicago Violent Crime Spreading To The "Safe" North Side Neighborhoods

  Chicago’s violent crime problem seems to be spreading to the historically safe “north side” neighborhoods.  The spike in crime on the north side comes as Chicago’s police department has diverted more officers to the city’s violent south and west side neighborhoods to fight extreme levels of violence there.  As reported by local Chicago news station WGN, violent crime is up 61% in the Loop this year with Near North Side up 50%, Lincoln Park up 42% and Edgewater up 44%.

  WGN also reports that officers have seemingly lost control of Chicago’s streets as they’re growing increasingly hesitant to confront people out of fear of being humiliated by the next viral arrest video.  Meanwhile, local gangs are reported to be offering incentives to “cop killers.”

  Officers are reportedly more hesitant to confront people engaging in criminal activity, for fear of having their arrests posted on viral video.

   

  Some local gangs are said to be offering incentives to cop killers.

  Per data collected by HeyJackass!, while crime on the north side is elevated it’s still no where near the level of violence reported in the city’s infamous south and west side neighborhoods like Austin, Englewood and Garfield Park. 

  

   

  Chicago experienced a violent weekend with over 50 shootings and 7 homicides reported in just 2 days. 

  

   

  With 470 homicides expected by the end of August, Chicago is well on its way to eclipsing the 508 homicides committed throughout all of 2015.

  

  

  

• The US Has A Huge Rate Of Whites In Incarceration (But Nobody's Talking About It)

  Submitted by Alice Salles via TheAntiMedia.org,

  Data provided by PrisonStudies.org is helping shed light on America’s incarceration problem, demonstrating that only the small archipelago of Seychelles, located in the Indian Ocean off East Africa, has a higher incarceration rate than the U.S.

  

  But when studied carefully, the rates demonstrate yet another trend: America’s white prison population has been increasing in recent years while the number of blacks in prison has been dropping — and nobody is talking about it.

  According to the Prison Policy Initiative, America holds “more than 2.3 million people in 1,719 state prisons, 102 federal prisons, 942 juvenile correctional facilities, 3,283 local jails, and 79 Indian Country jails.” And while the racial disparities in the American justice system are well reported — especially considering one in every five people in jail is arrested for breaking drug-related laws — we are seldom asked to review imprisonment rates among other ethnic groups.

  

  Data provided by the U.S. Department of Justice shows 0.5 percent of white U.S. residents were in prison in December 2013, placing the rate of incarceration among whites in America at 466 per 100,000 citizens.

  When compared to the incarceration rates of other countries without regard for other ethnic groups, the rate of white prisoners in America is still higher than most. At 466 per 100,000 citizens in jail, America still has a place in the top ten list of countries with the largest prison population in the world if only the white population is taken into account.

  Despite the trend, the media seldom discusses the high incarceration rate among whites.

  In an article published earlier this year by the Washington Post, Keith Humphreys writes that “[t]here’s been a big decline in the black incarceration rate [in America], and almost nobody’s paying attention.”

  In the article, Humphreys suggests that as the overall number of prisoners drops, the biggest winners are members of the black community. But hidden in plain sight is the new trend: the growth of incarceration rates among whites, both female and male.

  According to the Washington Post article, the rate of incarceration among white women went from 34 per 100,000 in 2000 to 53 per 100,000 people in 2014. Among the black female community, 205 out of 100,000 were imprisoned in 2000 while nearly half that number (109 per 100,000) were imprisoned in 2014.

  Among the black male population, 3,457 inmates per 100,000 people were imprisoned in 2000 while in 2014, there were 2,724 black inmates per 100,000 people. In 2000, there were 449 white inmates per 100,000 citizens while in 2014, the rate increased slightly with 465 inmates per 100,000.

  Though rates of incarceration among the black population are still higher than other groups, the number of white prisoners has grown considerably over the past 15 years, prompting experts in the area to attempt to identify the causes behind the shift.

  

  To Pew Charitable Trusts’ Adam Gelb, the director of the organization’s public safety performance project, “changes in drug use and enforcement over the past 15 years” could be responsible for this demographic shift.

  “Methamphetamine, prescription opioid and heroin epidemics have affected whites more than did the crack cocaine epidemic,” reported the Washington Post. In the 1980s and 1990s, incarceration rates among blacks increased because of the crack cocaine epidemic, a phenomenon that may be repeating itself now among whites.

  But whether blacks, Latinos, or whites go to jail more often is far from the most important point one should take from the data at hand. Instead, one should look into how the drug war has been exploited by law enforcement, placing a great number of low-level, nonviolent offenders in jail — at times for life — over drug-related laws.

  

  

• "In Preparation For Crisis" Germany Considers Bringing Back Military Service

  If ordinary Germans were not traumatized enough by this weekend’s shocking official announcement that they should prepare to stockpile several days of food and water “in case of an attack of catastrophe” as part of the country’s revised “Civil Defense Concept”, then the latest news from German press agency DPA, which cites a confidential document prepared by the government according to which the government is considering “bringing back nationwide conscription in times of crisis”, such as situations in which the country needs to “defend NATO’s external borders,” will surely put them over the edge.

  “An attack on German territory that would require conventional defence is unlikely,” the document said. However, civil defence measures are necessary because a “major security threat in the future cannot be ruled out,” it added.

  

  The German government abolished compulsory military service in 2011, arguing that there was no longer a geopolitical need for it. Even before then, many young men had avoided military service by opting to perform non-military service, such as working in care homes or in hospitals.

  However, it appears that the government is now quietly considering its reintroduction under the controversial Civil Defense Plan, which is due to be discussed by the German cabinet on Wednesday, and focuses on fulfilling Germany’s obligations to defend NATO’s external border. However, as DPA adds, the proposal to revive military service is not readily apparent and can only be found buried in a section entitled “Civil support for the armed forces.”

  According to DPA, Germany is considering new security strategies after two terrorist attacks and a mass shooting last month, as well as tensions between the NATO military alliance and Russia about the 2014 annexation of Crimea and subsequent military involvement in eastern Ukraine.

  “Quick and reliable delivery of mail especially important for the Bundeswehr (in particular, call-up papers and notices of performance in times of reintroduction of conscription) is ensured under Post- and Telecommunications Safety Act,” the draft reads according to the German press agency.

  Adding to the unexpected militarization of German society, Defence Minister Ursula von der Leyen said earlier this month that the Bundeswehr would undergo training with federal police in preparation for deployment in domestic counterterrorism operations.

  Should the government decide that there is sufficient grounds for it, conscription can be easily reintroduced as it is specifically authorized in the German constitution and can be returned with a simple law approved by the parliament, according to Die Zeit. 

  Apart from conscription, the German Interior Ministry’s paper also mentions the obligations of civilians and civilian organizations to assist the Bundeswehr in other ways, particularly by helping “recruitment organizations and accommodation infrastructure.” Some of the military’s support functions could also be outsourced to civilian companies, such as “a limited provision of catering for the troops during operations,” the paper reportedly says. In other words, should war break out German GDP will soar.

  However, then the document goes far beyond modern-day military outsourcing tasks and discusses other proposals resembling war-time measures. Cited by RT, in times of crisis, the draft reads, the federal government can ensure “nutritional emergency preparedness” by imposing “tax obligations relating to cultivation, processing, distribution and sale of food products.” The plan also includes the abovementioned suggestion to ration food and water in case of crisis.

  As we reported on Sunday, the proposed “Civil Defense Concept” is the first time since the Cold War that the German government has considered such measures, but the plan was devised as early as 2012, according to Germany’s FAZ newspaper.

  The German cabinet will review and decide on the “defense concept” plan tomorrow, at which point – if endorsed – we will likely have more details on how Germany is preparing for war crisis.

  

  

• How The Fed's Facebook PR Campaign Went Terribly Wrong

  Over the weekend we reported that just days after the Fed’s launched its first Facebook page last Thursday, in an attempt to mollify the masses with this odd public relations gambit in which the Fed tried to pass off as “one of the people”, the result was… “not what it had expected.” Overnight, even American Banker chimed in, reported that “when the Federal Reserve Board finally launched its own Facebook page last week, the response was as swift as it was predictable. The page was quickly overrun by critics, who angrily denounced the central bank as a tool of Wall Street and accused it of working against the American public. “The Federal Reserve is the root of all problems in the United States,” Luke Peets, a libertarian, wrote in a response that earned nearly 500 likes on its own and was typical of the commentary on the page.”

  Ironically, while the Fed racked up “likes” for the page,  topping 11,000 by Monday afternoon leading many to wonder just which Bangladeshi clickfarm Janet was printing money for to burnish the Fed’s image, the comments it received were universally negative, leaving some – like this website for example – to wonder how long it would be before the central bank would decide to retreat.

  Amusingly, American Banker pointed out something spot on: just like everything else it does, the Fed had zero real world experience when it came even to its first foray into FaceBook, which also explains why this PR attempt was such a debacle:

  The Fed’s move surprised more than internet trolls, however, but also social media experts, who questioned what the central bank was trying to accomplish and its overall commitment to social media. To some, the page appeared to take a particularly clueless approach.

   

  All of the postings — eight by deadline — were either press releases, speeches by officials or general explainers on the nature of the Fed system. Essentially, the Fed is using Facebook as one more way in which it releases its standard public relations material.

   

  That fundamentally misunderstands the nature of Facebook, which is a social network designed for interaction and conversation — not the simple spouting of PR.

  The Fed is “checking a box,” said Frank Eliason, the head of customer experience for Zeno Group and formerly head of global social media at Citigroup. ” ‘We were told we should be in social media.’ This is the biggest mistake I see.” Perhaps just like the Fed “was told” to lower rates to zero and print money 7 years ago, and realize in retrospect that all those “conspiracy theorists” who had slammed its policy as destructive and clueless, had been spot on.

  Meanwhile, the farce continued:

  Social media experts universally faulted the Fed for failing to respond to any comments it received. No one expected the central bank to take on trolls opposed to, say, the existence of the Fed itself. But failing to even generally respond is a big mistake, they said.

   

  “They are not responding at all from what I can see,” said Jennifer Abernethy, president of Socially Delivered, a global social media management concierge firm, and the author of “The Complete Idiot’s Guide to Social Media Marketing.”

   

  “They don’t need to respond to everybody, but at the end of the day, post some kind of response,” Abernethy said. “They need to see if they can turn it back around and get it to be more of a conversation.”

  Sadly they can’t, because in this particular case it really is the Fed, alone, against the entire world, and any additional response would lead to an even more aggravated battering by the commentariat.

  “That may be its most egregious error, experts said — and a sign that the Fed’s social media strategy will be a failure.” By just posting press releases and speeches, the Fed may be inadvertently reinforcing critics’ views of the institution.

  Considering how many times the Fed itself has admitted that its critics were right, this shouldn’t really be a surprise.

  “You really want to come across as one with the community rather than ‘I’m speaking at you,’ ” Eliason said. ” ‘Let me teach you about the Federal Reserve’ — that’s not being one with the community. It’s sending a message that we view ourselves as above. It’s playing into the stereotype of what people think.”

  Frank… it’s not a stereotype.

  And for those who missed all the fun on Sunday, here is a great video summary courtesy of Mile Maloney.

  

  

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• Dispelling The Norwegian Housing Myth

  Submitted by Alexander Grover in Oslo, Norway

  Recently, Dagens Næringsliv published an article where an economist from DnB (Norway’s largest bank) stated that Norway is not in a housing bubble although conditions resemble one and prices can still fall.  The article bases the current prices on the following assumptions:

  • High population growth
  • High development in household incomes and expectations
  • Good conditions on the labor market
  • Low-interest rates and high credit supply

  The article continues, differentiating the Norwegian housing market from the American one, basically stating that a socialist country with lots of benefits can handle higher debt levels than a capitalist one. It fails to acknowledge the impact of the eroding oil foundation on the long term economy.

  My previous article discusses and questions the above in detail. To further emphasize that housing’s best days are behind us, let’s take a look at prices in dollar and commodity terms:  

  

  Oslo Apartment Prices in Dollar Terms

  Regarding universal currency, this bubble already popped in 2013, now trying to stage a recovery. However, the long-term USDNOK rate will depend on oil prices, trade balances and interest rates.

  

  Housing Prices in Gold Terms          

  Gold is considered both the universal commodity and currency since it does not perish, easy to assay and disconnected from the Central bank’s hysterics.  In gold terms, the bubble burst back in 2007.

  

  Real Interest Rates

  As long as real rates are negative (and becoming more so), the economy is out of balance (since mid-2012), eroding the currency value and creating asset bubbles.  When people stop losing from saving at a bank and Norway finds an alternative to the oil industry, the economy can be considered stable.  Since my last article, the gap between inflation and benchmark rates have widened (from ca. -3.3 to -3.9), putting more pressure on the NOK and bringing us closer to a day of reckoning: uncontrollable inflation or an asset price correction via sudden and decisive rate hikes. 

  

  Source: Norges Bank and SSB

  Conclusion        

  Nevertheless, even though recent inflation figures make Norway reluctant to cut rates, they may do so, maintaining the illusion. House prices may increase in NOK terms, but they won’t buy much when sellers realize a profit. Remember, there are other investments than housing: dividend yielding stocks in companies with high equity ratios, precious metals, education and your own business.

  

  

• Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

   

   

  
  

  Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

  Written by Nathan McDonald (CLICK FOR ORIGINAL)

  
  

  

  Volatility is the name of the game. Stocks are acting up, but standing strong. Oil is propelling higher and the US dollar is falling. Turmoil around the world has never been higher and an ominous shadow is lurking in the background, ready to strike.

   

  The situation that we now face is ultimately going to end in a collapse of epic proportion. The financial world is now a ticking bomb that is just waiting to explode – I know this, you know this and even if the masses don’t, they can feel it in their bones.

   

  The only ones that don’t seem to be aware of this dangerous situation are the elites who are currently profiting off of this heightened turmoil and their mainstream media mouthpieces who couldn’t be more happy to assist in the destruction of the Western financial world. After all, it would make for a good story, right?

   

  Unfortunately, I am not alone in this assessment of the current global situation. Marc Faber, a prominent voice in the financial community and the editor of the Gloom, Boom and Doom report has taken an ultra bearish view of the current economy.

   

  A recent CNBC article, highlights a recent interview they had with Marc Faber this past week, and states the following:

   

  The notoriously bearish Marc Faber is doubling down on his dire market view.

  
  

  The editor and publisher of the Gloom, Boom & Doom Report said Monday on CNBC’s “Trading Nation” that stocks are likely to endure a gut-wrenching drop that would rival the greatest crashes in stock market history.
  

  “I think we can easily give back five years of capital gains, which would take the market down to around 1,100,” Faber said, referring to a level 50 percent below Monday’s closing on the S&P 500.

  
  

  The S&P 500 is sitting at 2,184.29 at the time of writing! This would be a truly stunning collapse of the markets. One that would send the financial world plummeting out of control. Contagion would spread and the credit markets would utterly and completely seize up.

   

  What is equally as shocking as this claim of monumental collapse is the fact that Marc Faber believes this will happen in the near term future! This isn’t some far fetched 5-10 year prediction that no one will remember he made down the road. No, this is a bold statement from a man who accurately predicted the 2008 crisis and many of the drastic events that have unfolded in modern times.

   

  Marc Faber is just one more expert that is ringing the alarm bells. Sadly, the mainstream media continue to dismiss the experts who are trying to warn the masses, stating that we are conspiracy theorist and nothing more. Even though we have been proven right in our predictions time and time again, causing the trash can to nearly overflow with tin foil hats.

   

  I don’t know if the collapse is in the near term such as Marc Faber believes, but I know that it could occur at anytime. Whether it be a week, a month, or years from now, wouldn’t you rather be prepared? The risk is simply too great to not be.

   

  Please email with any questions about this article or precious metals HERE

   

   

   

  Marc Faber Rings the Alarm Bell, Predicts a 50% Near Term Correction in Stocks

  Written by Nathan McDonald (CLICK FOR ORIGINAL)

  

• Follow The Money Trail For Source Of "Russian Threat" Paranoia

  Submitted by Neil Clark, originally posted op-ed via RT,

  You’d have to have been locked in a wardrobe if you live in the West not to have heard ominous phrases like “The Russian threat”, “Russian aggression in Europe” and “Russia set to invade Poland/Estonia/ Ukraine/Finland.”

  Certain people are trying to scare us witless about Russia and the “threat” the country apparently poses. The hysteria reminds one to the build up to the Iraq war, when we were warned every day about the “threat” of Saddam’s deadly WMDs, which – surprise, surprise – turned out not to exist.

  Now, we can talk for hours about grand, highfalutin theories in the field of geopolitics and international relations in attempts to explain why this is happening.

  But “follow the money” trail is all we really have to do. Ask yourself who benefits financially from all this scaremongering and then you’ll understand it.

  This week, The Intercept revealed how US defense contractors have been telling investors that the so-called “Russian threat” was good for business.

  Retired Army general Richard Cody, vice-President of the US’s seventh largest defense contractor, L-3 communications, bemoaned the fact that "when the old Cold War ended” defense budgets went south.” Now though a “resurgent Russia” meant an "uptick was coming.”

   

  There was a similarly upbeat message from Stuart Bradie, chief executive of CBR, who talked of the "opportunities" the current situation presents.

   

  The case for higher defense spending to counter the “Russian threat” has been made by a series of think-tanks. And guess what? The most hawkish of these lobbyists – sorry, “think tanks” – receive sizable funding from US defense contractors!

  The Intercept cites the examples of the Lexington Institute and the Atlantic Council.

  But there’s plenty others too. Back in February, I wrote about a “non-partisan” US policy institute called the Center for European Policy Analysis. The CEPA issued a paper attacking Russian media outlet Sputnik for giving a voice to "anti-establishment protest politicians" who were critical of NATO.

  And who funds the “non-partisan” CEPA? Recent donors include the US Department of Defense, Boeing, Raytheon Company, Textron Systems, Sikorsky Aircraft, Bell Helicopter and the Lockheed Martin Corporation.

  What’s happening in Europe today is the same that’s been happening in the Middle East for years.

  The US creates chaos, then goes in to sell countries in the region the latest military hardware to “protect” them from the chaos. It’s quite a racket and clearly modeled on the extortion schemes of the Mafia. Countries that don’t want to pay up, like Yugoslavia in 1990s, are likely to get bombed.

  Consider how the crisis in Ukraine started. The US spent billions of dollars in a “regime change” op to topple the democratically elected government of Viktor Yanukovych and replace it with a pro-US puppet administration. We even heard the State Department’s Victoria Nuland – after she had handed out cookies to anti-government protestors in the Maidan – discussing who should and shouldn’t be in the new “democratic” Ukrainian government, with US Ambassador Geoffrey Pyatt.

  When the people of Crimea predictably said “Nyet” to the State Department’s operation, and voted overwhelmingly to rejoin Russia in a referendum, Russia was cast as the “aggressor” who had “invaded” the Ukraine. The US would have known that its regime change op in Ukraine would cause chaos and increase tensions with Russia. And that’s exactly why they did it!

  To counter the new Russian “threat” not just to “democratic” Ukraine, but to other countries in eastern Europe, we’re told we need a big increase in NATO “defense” spending. And who does that benefit? Why, US defense contractors!

  Last year, as I reported here, Poland picked US-made Patriot Missiles – manufactured by Raytheon and Airbus military helicopters for a $5.53bn military upgrade.

  In November 2014, “threatened” Estonia purchased 80 Javelin missiles from the US at a cost of 40m Euros. In February, we heard that the country would be spending 818m euro on new weapons and equipment by 2020.

  As Charlie Chaplin commented in his classic 1947 black comedy Monsieur Verdoux, "Wars, conflicts, it’s all business!"

  By any objective assessment it's NATO – not Russia – with its build up of arms and soldiers on the borders of Russia, which threatens the peace of Europe. But anyone who points this out, and mentions the military alliance’s relentless Drang nach Osten, threatens the profits of US defense companies and is attacked as an “appeaser” or “Kremlin stooge” by those with a vested financial interest in keeping tensions high.

  Consider the hysterical attacks on British Labour party leader Jeremy Corbyn for his recent, very sensible comments on NATO and Russia. Corbyn was asked in a leadership television debate: "How would you as Prime Minister react to a violation by Vladimir Putin of the sovereignty of a fellow NATO state?"

  He replied: 

  You’d obviously try to avoid that happening in the first place. You would build up a good dialogue with Russia to ask them, support them in respecting borders. We would try to introduce a demilitarization between Russia and Ukraine, and all the other countries down on the border between Russia and Eastern Europe. What we cannot allow is a series of continuous build-ups of troops on both sides which can only lead to great danger in the future. It’s beginning to look awfully like Cold War politics at the present time. We’ve got to engage with Russia, engage with demilitarization in that area, in order to try and avoid that danger happening… I don’t wish to go to war, what I want to do is achieve a world where we don’t need to go to war, where there is no need for it. That can be done.

  As Carlyn Harvey, writing in The Canary, points out: "For millions of citizens around the world, this (Corbyn’s anti-war stance), is great news. But for those intent on maintaining the politics of power and the lucrative industries that support that, Corbyn’s vision is nothing short of a disaster.”

  Corbyn is portrayed by the endless war lobby as a “dangerous extremist” because if other western politicians followed suit, and promoted disarmament and dialogue, instead of confrontation and war, defense profits would take a big hit.

  It was a US President, Dwight D Eisenhower, who first warned us about the US military-industrial complex, back in 1961: “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex.”

  No one could accuse Ike, the Supreme Commander of Allied Forces in Europe in World War Two, of being a “pinko” or a “Kremlin stooge.” But the situation is much worse today than it was back in Eisenhower’s day.

  Neocons have embedded themselves in the corridors of power. They claim to be interested in spreading “democracy,” but the reality is that the neocon movement is all about money and profits. Henry “Scoop” Jackson, the US politician who railed against détente with the Soviet Union in the 70s, was, with very good reason, nicknamed the “Senator for Boeing.”

  Thirty years later, the first post-launch meeting of the Henry Jackson Society discussed how to get smears about the anti-war academic Noam Chomsky being a “denier” of the Srebrenica massacre into circulation.

  For some people it seems, the old Cold War never ended.

  How much longer will the citizens of the world put up with a situation in which warmongers with ties to the military-industrial complex are allowed to stoke up international tensions? The next time you read or hear someone issue stark warnings about the “Russian threat” – and why NATO needs to hike its spending to deal with it – just follow the money trail.

  It’s likely to be revealing.

  

  

  

• Meet The Hedge Fund Puppetmaster Behind The US Presidential Election

  In the world of hedge funds, few have achieved as much consistent success and profitable returns as Jim Simon’s Renaissance Technologies, the multi-billion fund which unleashed and popularized quant investing, and whose legendary “Medallion” fund, run mostly for fund employees, has been the object of LP lust for years. However, just as notable is that Jim Simons, who Forbes calculated recently is the 50th richest person in the world and who made $1.7 billion last year alone, is not only a prominent Democratic donor, but has been one of the most generous sponsors of Hillary Clinton’s presidential campaign.

  

   

  A recent analysis by the WSJ calculated that, of the $48.5 million donated by hedge funds to the Hillary presidential campaign, Renaissance, and mostly Jim Simons, is the second most generous with $9.5 million, a runner up only to Saban Capital Group with $10 million, followed by such Democrat stalwarts as Paloma Partners ($8.1 million), the Pritzker Group ($7.9 million), and of course Soros ($7.9 million).

  

  To be sure, Simons’ appreciation of Clinton has been duly noted in the past, most recently by the Observer:

  Mr. Simons’ Rennaissance Technologies has begun pouring millions of dollars into Hillary Clinton‘s campaign, as the hedge fund has donated over $2 million to Ms. Clinton so far this election cycle. Euclidean Capital—also owned by Mr. Simons—has given the Clinton campaign over $7 million in contributions, and the figures are likely to increase as Ms. Clinton slowly transitions her attention from Democratic Primary opponent Bernie Sanders to the presumptive Republican presidential nominee, Donald Trump. Renaissance Technologies was called out by Senator John McCain in 2014 for evading nearly $6 billion in taxes by disguising day-to-day investments as long term investments, and in 2015, Bloomberg ran an article describing how the firm lobbied the U.S. Labor Department for special tax evading privileges.

  More recently, Jim Simons spoke to CNBC and said that “if you compare the presidential candidates using the Sharpe ratio, presumptive GOP nominee Donald Trump is ‘not a good investment.'”

  “Now even if those two candidates had the same expected return — which I doubt — but even if Trump’s was as good as Hillary’s, his volatility is so enormous that his Sharpe ratio is terrible,” Simons said. “So as an investment, Trump is not a good investment, no matter what you might think of his potential return. He’s just a wild man,” he said.

   

  Simons said that he is a supporter of Clinton, who he said would “make a fine president.” When asked what a Trump presidency would mean for the U.S. outlook, Simons said “it wouldn’t be good for the country.”

  Yet while Simons’ unabashed support for Clinton, both ideological and financial, and criticism of Trump is very public, what is perhaps less known is that Rentec’s Co-CEO, billionaire Robert Mercer, is the man who is now  pulling the string behind Donald Trump’s entire campaign.

  It did not start off that way. Robert Mercer began the presidential campaign by throwing millions, some $13 million to be exact, in financial donations at the person who was Trump’s final challenger, Ted Cruz, through a SuperPac run by Kellyanne Conway, Keep the Promise, before the republican’s campaign was extinguished by Donald Trump.

  

   

  Much more importantly, Mercer is the person who secretly instigated last week’s bloodless putch inside the Trump campaign, which saw the surprising overthrow of Paul Manafort as Trump’s campaign chairman (who subsequently resigned from the campaign due to allegations of undisclosed links to Ukraine lobbying and potential corruption which also implicated the consultancy firm of Tony Podesta), and the appointment of Breitbart’s Steve Bannon and Republican pollster Kellyanne Conway. Here are the details:

  Mr. Mercer, co-chief executive of the hedge fund Renaissance Technologies, has longstanding ties to both people elevated to top posts in the campaign on Wednesday. He and his daughter, Rebekah, had recommended both Breitbart News chairman Stephen Bannon and Republican pollster Kellyanne Conway, who already worked for the campaign, according to people familiar with the matter. The Mercers met privately with Mr. Trump at a fundraiser last weekend at the East Hampton, N.Y., home of New York Jets owner Woody Johnson, according to a person at the event.

  And just like that the man who Rentec’s founder, Jim Simons, said “is not a good investment” because his “Sharpe ratio is terrible”, has become the investment of RenTec’s CEO.

  Top Trump donors said the staff reshuffling showed the Mercers’ widening role in the campaign and was a potential setback for Trump campaign chairman Paul Manafort, who had sought to tailor Mr. Trump into a more traditional political figure. The expansion of a billionaire donor’s sway in the campaign follows more than a year of Mr. Trump criticizing major donors on the trail and casting his rivals as “puppets” for accepting the backing of super PACs.

  It’s not just Bob: it’s a family affair:

  Doug Deason, whose family was also a top contributor to the Cruz super PAC network, said Ms. Mercer and Ms. Conway worked together closely. “She and Kellyanne had a great working relationship and did a really good job of spending their dollars wisely,” he said. He called Ms. Mercer “very driven and very focused.”

  As for Mercer’s relationship with Steve Bannon, Trump’s new right hand man, it also has a simple trace: money. “Mr. Mercer has also funded Mr. Bannon’s employer Breitbart News, a conservative media outlet that delights in bashing the GOP establishment, and a nonprofit organization, the Government Accountability Institute, that was co-founded by Mr. Bannon, who runs it. Mr. Mercer’s daughter, Rebekah, is listed as a board member for the organization in 2014 tax filings.”

  Here another curious link emerged: “The Trump campaign recently hired Cambridge Analytica, a data analytics firm owned in part by Mr. Mercer that offers “psychographic” analysis related to the personalities and values of voters.”

  And while the emergence of the true puppetmaster behind Trump’s campaign is fascinating, we were more curious to dig deeper into the potential influence of Renaissance not on just one, but both candidates. We were not surprised by what we found.

  According to OpenSecrets, for the 2015-2016 period, Renaissance is not just generous; it happens to be the most “generous” financial contributor in the world, ranking 1 out of 16,867 tracked contributors.

  

  As a result, in the ranking of top contributors, RenTec is higher than such iconic names as Tom Steyer’s Farallon, Elliott Management, and Soros.

  

  Broken down by recipients…

  

  … we find that while the biggest recipients of cash is the Cruz-supporting Keep the Promise SuperPAC, whose effectively only donor was Robert Mercer, the second biggest recipient is the Clinton-supporting Priorities USA SuperPAC, where the top two donors are Jim Simons and George Soros.

  

   

  But what we find most fascinating is the dramatic ramp up in campaign spending by RenTec not just over the past two elections cycles, but most notably the current one, which is already bigger in one year than all previous contributions in RenTec’s entire donation history combined…

  

  … but the republican-democrat split. It’s effectively identical.

  

  Why this recent surge in political spending, and why the attempt to fund not just one both both presidential candidates’ campaigns? Some answers can be found in recent articles, such as “How RenTec Made More Than $34 Billion In Profits Since 1998: “Fictional Derivatives“, “Renaissance Said Probed by Senate Panel on Tax Maneuver” and “Senate Report: Tax Move Helped Hedge Funds Save Billions“, however not even the utmost determination to perpetuate a beneficial tax avoidance regime can explain this unprecedented level of campaign funding or, in the case of Mercer, micromanagement and orchestration.

  Perhaps the answer is far simpler: having learned that the best way to make virtually unlimited profits in the markets is to be as close to cornering them as possible (or being first, or cheating), RenTec’s executive team has applied the same philosophy to the presidential race, because if you are the primary source of strategy and/or cash for both presidential candidates, you are by definition, “perfectly hedged.” And, by that same definition, you are about to buy yourself a presidential election.

  

  

• Top 25 Corporate Pension Plans Alone Are Underfunded By Over $225 Billion

  Massively underfunded public and private pensions, and all the risks inherent therein, have been a frequent topic of conversation for us recently.  Today, Tobias Levkovich at Citigroup published a report pointing out just how dire the situation is for the S&P 500's largest corporate pension funds.  The study found that pensions of just the companies in the S&P 500 alone were over $375BN underfunded at the end of 2015 with the top 25 underfunded plans accounting for over $225BN of the underfunding.  Moreover, Citi pointed out that pensions don't seem to be participating in the massive equity rally that has grown ever so "bubbly" since 2009 (and issue we explained in detail here: "Pension Duration Dilemma – Why Pension Funds Are Driving The Biggest Bond Bubble In History").

  Pension under-funding continues to be a major issue for S&P 500 constituents as very respectable equity market gains over the last seven years have not substantially alleviated pension pressures. The S&P 500 has appreciated by more than 200% at the end of 2015 since the low in March 2009 but the aggregate underfunded status of $376 billion in December 2015 is now 22% higher than the $308 billion under-funding peak seen in December 2008 (see Figure 1). While the funding status in 2013 recovered by more than $225 billion versus 2012 alongside strengthening equity market performance and a higher discount rate, this trend reversed in 2014 and only improved moderately in 2015. Specifically, the slightly higher discount rate contributed to the progress in 2015’s pension funding status, not higher equity prices.

  Per the table below, S&P 500 corporate pensions went from being fully funded in 2007, in aggregate, to $375BN underfunded in just 8 years.  The primary problem, of course, is the Fed's low interest rate policies which are crushing both sides of the pension equation.  Pension assets have basically stagnated since 2007, up less than 10%, as pensions struggle to "find yield."  Meanwhile, lower yields on corporate bonds have driven discount rates through the floor causing the present value of liabilities to skyrocket over 40% over the same period. 

  After dipping in 2014, the discount rate rose modestly in 2015, causing pension obligations to ease but pensions remain severely underfunded. The present value of corporate pension obligations is heavily influenced by interest rates and thus lower yields typically cause deterioration in funding status. While forecasts for higher yields in the future should lead to decreased concerns over the underfunded status of US pensions, Other Post Employment Benefit (OPEB) accounts remain significantly under-funded as corporations attempt to shift these costs onto individuals, but that may take some time.

  

   

  Citi points out that all ten S&P 500 sectors remain underfunded, with Energy continuing to be the least funded sector. The pension review found that only 30 companies within the S&P 500 were fully funded at year-end 2015, with nearly half of the overfunded companies coming from the Financials sector.

  

   

  Finally, Citi points out that pensions have been pulling assets out of equities and moving into fixed income, a phenomenon they attribute to pensions being "unwilling to allocate assets towards stocks after two major equity pullbacks in the past 15 years."  But, as we've suggested before (see "Pension Duration Dilemma – Why Pension Funds Are Driving The Biggest Bond Bubble In History"), the problem is less likely due to fear of historical equity volatility and more related to a desire to match asset and liability duration.

  Pension funds appear unwilling to allocate assets towards stocks after two major equity pullbacks in the past 15 years clobbered pension programs leaving allocators and consultants relatively risk averse with LDI (liability driven investing) taking over the mindset. Moreover, current ERISA requirements call for companies to keep enough short-term cash and equivalents available to pay out current pension liabilities. Fortunately, corporate cash flow, free-cash flow, earnings and cash holdings are at or near record highs making required cash contributions to pension funds a much more manageable expense for S&P 500 constituents. Note that the funding status at 81.5% declined from the 87.8% level seen in 2013, which was the best reading in the past eight years, but remained markedly better than 2012’s 77.3%, which was the weakest point since 1991.

   

  S&P 500 constituents’ pension plan allocations to equities edged down to 42.4% in  2015 from 44.5% in 2014, the lowest level we have seen in the past nine years (see Figure 4). Interestingly, bond mutual funds saw a reversal of flows, as released by ICI, which saw more than $25 billion flow out of bond funds last year (vs inflows of roughly $58 billion so far this year), while US pension funds increased their fixed income allocation by almost one percent to 44.8% (see Figure 5).

  

   

  

   

  Equity markets have largely dismissed pension underfunding issues as they reach higher highs everyday.  That said, at some point the pension underfunding issue will deteriorate to a level that will be too large to ignore requiring either massive cuts in benefits for 1,000s of employees or taxpayer funded bailouts.  We suspect we know which will be the more palatable to our elected officials. 

  

  

• Idiocracy Director: It's Kind Of Scary How Quickly The Movie Became A Documentary

  Submitted by Carey Wedler via TheAntiMedia.org,

  For years, fans of the 2006 cult film Idiocracy have lamented society’s drift toward the fictional reality in which farmers and leaders water their crops with sports drinks but can’t figure out why they won’t grow.

  Earlier this year, the film’s screenwriter, Etan Cohen, tweeted, “I never expected #idiocracy to become a documentary.”

  I never expected #idiocracy to become a documentary.

  — Etan Cohen (@etanjc) February 24, 2016

    Now, Mike Judge, the film’s director, has weighed in on the growing similarities between his satirical, dystopian United States set hundreds of years in the future — and present-day America.   In the film, an “average Joe” from the Army participates in an experiment gone wrong that leaves him hibernating for centuries. When Joe Bowers awakens, he learns the intelligence of the general population has deteriorated so severely that he is one of the most intelligent people alive — so intelligent, in fact, that he is celebrated for suggesting people use water to nourish their crops.

  Judge, the creative mind behind Beavis and Butthead, Office Space, and HBO’s Silicon Valley, told the Daily Beast “it’s a tad bit scary” how closely the film and real world now parallel each other.

  “Three or four years ago, I started getting comments about it, people discovering it, and it just keeps building. Now every other Twitter comment I get is about Idiocracy, and how it’s a documentary now,” he said.

  He even pointed to specific instances where life is imitating art, not just in America, but around the world.

  “At first, I was just thinking, yeah, that’s nice to hear, but then very specific things, like Carl’s Jr. announcing that they were going to have a completely robotic, non-employee store — and it’s Carl’s Jr. in the movie.”

  Indeed, Carl’s Jr. has moved to employ robots.

  “Then there’s this thing called the Fellatio Café in Switzerland where you get blowjobs with coffee, and we had the Starbucks thing in there,” Judge said, referencing a scene from the film where Joe says he could use a coffee from Starbucks. “Yeah, well I really don’t think we have time for a hand job, Joe,” a character from the idiocracy tells him. They later pass a Starbucks and Joe learns they offer sexual services in addition to coffee.

  “And then Donald Trump being in the WWF [World Wrestling Federation] before, and talking about his penis size. It’s just one specific thing after another!” Judge continued, linking the Republican front-runner to the film’s President Dwayne Elizondo Mountain Drew Herbert Camacho, the ex-porn star and five-time wrestling champion who leads the futuristic United States.

  In fact, earlier this year, Judge and Cohen planned to produce a series of spots with Terry Crews, who played Camacho, to subtly criticize Trump.

  As the Daily Beast noted, “they were simply waiting on 20th Century Fox, which owned the rights to the film, to sign off on the ads.” But as word got out that the spots were intended to mock The Donald, Judge says the project “kind of fell apart.”

  “I wanted to put them out a little more quietly and let them go viral, rather than people announcing we’re making anti-Trump ads. Just let them be funny first. Doing something satirical like that is better if you just don’t say, ‘Here we come with the anti-Trump ads!’ Also, when Terry heard that announcement he wasn’t happy about it,” he said.

  When Daily Beast reporter Marlow Stern suggested notoriously right-wing Fox News might not have approved of the message, Judge replied, “Yeah. That’s the other thing. I think there was a roadblock there, too. I just heard that they were put on the shelf, so it looks like they’re not going to happen.”

  Though America is still a few years off from watering its crops with Gatorade — because electrolytes — the 2016 election continues to confirm Americans are struggling to maintain their intellectual (and moral) integrity.

  “It’s surreal. I didn’t want Idiocracy to get popular by the world getting stupider faster. I guess I was 450 years off! But yeah, it’s a tad bit scary!” Judge added with a laugh.

  But as Donald Trump, his supporters, Hillary Clinton, and the characters in Idiocracy might say:

  “I like money.”

  

  

• New Russia-China-Iran Alliance Could Push US Out Of Much Of The Middle East

  Submitted by Darius Shahtamasebi via TheAntiMedia.org,

  When the current Syrian conflict first erupted in 2011 – and then enflamed in 2012 – a small minority of the American public probably wondered why President Obama was not intervening to help the Syrian people as he had done in Libya (they were likely completely unaware the president had already been interfering heavily in Syria since the conflict began). However, some pundits speculated that Obama would eventually intervene directly, and that this intervention would be the beginning of the end of the American empire as we know it.

  What started out as a seemingly hollow prediction has become as true a statement as any. First, American involvement began with funding, arming, and training violent rebels to try to overthrow the Syrian government. Then came attempts to misrepresent so-called “intelligence” to justify military intervention against Assad in 2013. And finally, like a dream come true, Washington was then able to capitalize  on the growth of ISIS in Syria, a growth predicted by their own security establishment in 2012, which then became an excuse to start bombing Syrian territory in 2014. By interfering so forcibly in the affairs of Syria, the U.S. has forced a number of countries  — notably Iran, China and Russia — to step up and strike back at U.S. efforts to destabilize the region.

  Since the beginning of the conflict, Iran has been heavily involved due to the fact Syria is an important ally to the Islamic republic, bound by a mutual defense agreement. Much to the anger of the U.S., just this week, Iran allowed Russia to strike Syrian territory from its Hamadan air base. Iran is supplying ground troops, advisement, and high level training to Syrian pro-Assad forces. They are also providing a credit line, and Iranian involvement is growing in tandem with the two nuclear powers also working in defense of the Syrian regime.

  Russia has a history of being involved in Syria, but following its direct military intervention last year, they have shown they can set up their own no fly zone within the country at any moment (note that the Russian intervention is arguably legitimate given that they have received authority from the Assad regime to do so). Despite this, they have continued to extend a hand to Washington to achieve their stated goals of defeating ISIS together.

  China has sided with Russia and Syria for some time now, using its veto power at the U.N Security Council level to block resolutions on Syria – after Russia and China were completely duped by the Security Council resolution on Libya in 2011. China has warned the U.S. against attacking Syria and Iran, and now, they have officially stated they are looking to join the fight on the side of the Syrian government, further complicating the issue from Washington’s standpoint.

  Unless the U.S. wants to confront these players directly, it has no choice but to accept that they have lost a war they directly and indirectly started through covert CIA operations that began in 2011 (and as some would argue, well before that). This isn’t a loss in the Iraq or Vietnam sense — which are arguably victories in the eyes of the elite class. Rather, the Syrian war is an operation that has left them with less influence in the region than when the Syrian crisis began (cue picture of John Kerry dining with Bashar al-Assad in Damascus in 2009).

  It will be back to the drawing board for Washington, whose only real move is to continue arming and funding fanatical jihadists or encourage Saudi Arabia and Turkey to deliver on their threat to send ground troops into Syria. This will only delay the inevitable, however, and eventually they will have to either admit they have completely lost influence in the Shia-Crescent region of the Middle East — which has, in turn, been snatched up by Russia and China — or directly confront these nuclear powers in an all-out war.

  Or they can just wait until Hillary is elected president.

  

  

• As Predicted, Obamacare Is Absolutely Killing The Middle Class

  Submitted by Michael Snyder via The Economic Collapse blog,

  The critics of Obamacare have been proven right.  The Obama administration promised that health insurance premiums would go down.  Instead, they have absolutely skyrocketed.  The Obama administration promised that Obamacare would not kill jobs.  Instead, firms are hiring fewer workers because of suffocating health care costs.  As you will see below, even the Federal Reserve is admitting this.  The Obama administration also promised that the big health insurance companies would love the new Obamacare plans and would eagerly compete with one another to win customers in the new health insurance marketplaces.  Instead, many of the big health insurance companies are now dropping Obamacare plans altogether.

  We witnessed the latest stunning example of this phenomenon just a few days ago.  It turns out that Aetna has been losing hundreds of millions of dollars on plans sold through the health exchanges, and now they plan to pull out of the program almost entirely…

  Earlier this week, Aetna, which covers about 900,000 people through the health exchanges created under Obamacare, announced that it would dramatically reduce its presence those exchanges. Instead of expanding into five new states this year, as the insurer had previously planned, the company said that it would drop out of 11 of the 15 states in which it currently sells under the law.

   

  Aetna’s decision follows similar moves from other insurers: UnitedHealth announced in April that it would cease selling plans on most exchanges. Shortly after, Humana pulled out of two states, Virginia and Alabama. More than a dozen of the nonprofit health insurance cooperatives set up under the law—health insurance carriers created using government-back loans in order to spur competition—have failed entirely. While some insurers are entering the exchanges, even more are leaving.

  Another one of “the big five”, UnitedHealth, is going to lose more than half a billion dollars on Obamacare plans.  So just a few months ago they also announced that they would be dramatically scaling back their participation in the program.

  Because of the ridiculous costs, health insurance companies are either going to have to abandon the exchanges completely or they will have to raise rates substantially.

  Needless to say, the people that are going to ultimately feel the pain from all of this are consumers…

  Customers who are now forced to obtain insurance or pay a hefty fine that grows more costly over time are being left in a difficult position. Americans are essentially stuck between a rock and hard place, either losing coverage entirely, or having to cough up money for a plan they can’t afford.

   

  “Something has to give,” said Larry Levitt, a healthcare law expert at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.“

  On the low end of the spectrum, tens of millions of poor Americans benefit from government programs that provide health care at little or no cost.

  On the other end of the spectrum, the very wealthy can afford to pay the ridiculously high health insurance premiums that we are seeing under Obamacare.

  So what this means is that the people that are being hurt the most by Obamacare are those that belong to the middle class.

  As I mentioned above, employers are now hiring less workers because of Obamacare, and that is very bad news for the middle class.  One recent study conducted by the Federal Reserve Bank of New York discovered that nearly one out of every five firms is “employing fewer workers” because of this insidious law…

  According to a new survey by the Federal Reserve Bank of New York, 20.9% of manufacturing firms in the state said they were employing fewer workers because of the Affordable Care Act, the healthcare law known as Obamacare, while 16.8% of respondents in the service sector said the same.

  And middle class Americans that have to pay for their own health insurance are being hit with much higher bills these days.  According to one recent study, it is being projected that the average Obamacare premium will go up 24 percent in 2016…

  Now, courtesy of a new study by independent analyst Charles Gaba – who has crunched the numbers for insurers participating in the ACA exchanges in all 50 states – we can also calculate what the average Obamacare premium increase across the entire US will be: using proposed and approved rate increase requests, the average Obamacare premium is expected to surge by a whopping 24% this year.

  Even NBC News, which is about as pro-Obama as you can get, is reporting on the crippling premium increases that are devastating the middle class…

  Millions of people who pay the full cost of their health insurance will face the sting of rising premiums next year, with no financial help from government subsidies.

   

  Renewal notices bearing the bad news will go out this fall, just as the presidential election is in the home stretch.

   

  “I don’t know if I could swallow another 30 or 40 percent without severely cutting into other things I’m trying to do, like retirement savings or reducing debt,” said Bob Byrnes, of Blaine, Minnesota, a Twin Cities suburb. His monthly premium of $524 is already about 50 percent more than he was paying in 2015, and he has a higher deductible.

  All over the nation people are getting hit like this.

  Personally, my health insurance company wanted to nearly double the rate I was paying when Obamacare fully kicked in.  So I searched around and found another plan that was only about a 30 percent increase, but at least it wasn’t nearly double what I had been paying before.

  But when the time came to renew that plan, they wanted to jump my premium up another 50 percent per month.

  Those of us that are in the middle are being crushed by Obamacare.  We aren’t poor enough to qualify for government assistance, and we aren’t wealthy enough for these ridiculous health insurance premiums not to matter.

  Just about everything that Barack Obama promised us about Obamacare has turned out to be a lie.

  So where is the accountability?

  This is one of the big reasons why nearly one out of every five U.S. adults lives with their parents or their grandparents these days.  Many young adults cannot afford the basics of life such as health insurance, and so they have got to find a way to cut back expenses somewhere.  If that means moving back in with Mom and Dad, that is what some of them are going to do.

  I am astounded that our system of health care has become so messed up.  But this is just more evidence of how our society is falling apart in thousands of different ways, and I am not optimistic that things will be turned around any time soon.

  

  

• Goldman Calls It For Oil: "OPEC Freeze Insufficient To Support Prices; The Price Rally Should Stall"

  Exactly 24 hours ago, we explained why – in our view – the oil rally was over, and gave four key reasons: i) after the biggest documented short squeeze in history, all the “weak hands” had been blown out and any incremental covering from here on out would be far more difficult; ii) an oil OPEC freeze will have no impact coming at a time when production by many cartel members is at all time highs, iii) the Niger Delta Avengers have agreed to a ceasefire meaning up to 300kbpd in Nigerian oil production would hit market shortly, and iv) the fundamentals suggest far more supply in the future, notably out of the US shale sector much of which has reorganized with cleaner balance sheets, which in the absence of rising demand (in fact demand out of China is falling) means lower price.

  Moments ago, Goldman energy analyst Damien Courvalin released a note titled “More worried about a thaw than a freeze”, in which he effectively confirmed everything we said yesterday, when the sellside strategist said that the “three remaining large sources of oil supply disruptions – Nigeria, Iraq and Libya – have all shown signs of increasing output since last Wednesday”, warning that “each country has the potential to move the global oil market back into surplus given our modest 230 kb/d expected deficit in 2H16″ and “as a result, we reiterate our view that the oil price and fundamental recovery remains fragile.”

  But worst of all, if only for the headline scanning algos, and Venezuela’s increasingly more desperate oil minister Eulogio Del Pino, Goldman now thinks that “while discussions of an OPEC freeze and a weakening dollar have been catalysts for the sharp reversal in oil prices this month, we believe neither will be sufficient to support prices much further. In our view, thawing relationships between parties in conflict in areas of disrupted production would be more relevant to the oil rebalancing than an OPEC freeze which would leave production at record highs and could prove counter productive if it supported prices further and incentivized activity elsewhere.”

  As for fundamentals, “supply continues to feature the cross currents of rising low-cost supply, declining high-cost production, and new project ramp up. In fact, marginally more bearish data recently than we had assumed suggests in our view that the recent price rally should stall.“

  Precisely what we said yesterday.

  Here are the details:

  More worried about a thaw than a freeze, by Goldman’s Damien Courvalin
  

  Three remaining large sources of oil supply disruptions in recent months have all shown signs of increasing output since last Wednesday. In Iraq, flows from the Baghdad controlled northern fields resumed on Kurdistan’s pipeline to Ceyhan. In Libya, a vessel started to load crude from the Zueitina port, one of the three ports slated to reopen following an agreement between the UN-backed Government of National Accord in Tripoli and the Petroleum Facilities Guard, one of Libya’s armed brigades. Finally on Sunday, the Niger Delta Avengers announced that they had agreed to a ceasefire.

  There is potential for another large decline in production disruptions from Nigeria, Iraq and Libya

  

   

  Uncertainty on the sustainability and magnitude of these improvements remains large: the new Iraqi energy minister decided to resume flows on the pipeline and the political instability in the country or attacks on the KRG pipeline are significant risks to the recent recovery. In Libya, the vessel is only intended to draw from Zueitina’s oil inventories, with the port still closed and stated opposition by local tribes to a ramp up of the ports supply fields. In Nigeria, an NDA statement specified that it could resume “warfare” at any point and another militant group called Niger Delta Green Justice Mandate claimed an attack on Saturday with the government yet to comment on the ceasefire.

  Nonetheless, these latest developments are the most tangible since headlines of higher production from these countries started to intensify over the past two months with crude oil physically moving. Further, in each case, they suggest signs of easing tensions between the relevant parties. In Iraq, where production from Kirkuk fields is up by 70 kb/d, the energy minister was named with the support of the KRG. In Libya, the loading suggests a possible de-escalation between the PFG and forces loyal to a separate government in eastern Libya which had recently threatened to conduct attacks on the port. Finally, in Nigeria, this is the first ceasefire officially recognized by the NDA.

  We had conservatively assumed in our balances that only a combined 100 kb/d of these disruptions would reverse in 2H16 (with Nigeria starting from our estimated 1.3 mb/d level in July vs. the IEA’s 1.5 mb/d) with an additional 200 kb/d improvement in 2017. This left us expecting a 230 kb/d average supply-demand deficit in 2H16, however, these recent developments risk pushing the global oil market back into a surplus: Kirkuk production growth alone is scheduled to increase by 150 kb/d this week. We note that any upside to Nigeria production is likely to be slower than the 250 kb/d June increase as much of the production interruptions then were due to damages to onshore pipelines which could be quickly repaired where most of the current outage is due to damage to two offshore export pipelines which could take months to bring back online.

  We expect a shallow deficit in 2H16

  

  Even if flows fail to materially increase in each country, we reiterate our view that the oil price recovery is tenuous. Further, until we see enough evidence to raise our production forecasts in Libya, Iraq or Nigeria, we maintain our view that oil prices will remain in a $45-50/bbl range through next summer. As we argued in May, uncertainty on the forward supply-demand balances remains significant even as uncertainty on the industry’s cost structure is diminishing. We therefore believe that oil prices will need to reflect near-term fundamentals with a lower emphasis on the more uncertain longer-term fundamentals. Should disrupted production sustainably rebound by 500 kb/d more than we assume, for example, we estimate that 2017 WTI prices would decline to $45/bbl vs. our current $52.5/bbl forecast to generate an offsetting decline in US production.

  Accommodating a 500 kb/d recovery in disrupted oil production would require 2017 oil prices at $45/bbl

  

   

  Oil’s round trip not driven by incrementally better oil fundamentals

  While oil prices have rebounded sharply since August 1, we believe this move has not been driven by incrementally better oil fundamentals, but instead by headlines around a potential output freeze as well as a sharp weakening of the dollar (and exacerbated by a sharp reversal in net speculative positions). A deal to freeze production when OPEC and some non OPEC producers meet in Algeria on September 26-28 is possible in our view, after six failed attempts, as it would show signs of cooperation from Saudi’s new energy minister. But the possibility may not be high – Russia’s energy minister commented on August 8 that he did not see the basis for such a freeze (with legislative elections taking place before the meeting). Further, Saudi and Iran continue to focus on market share and therefore appear unlikely to unilaterally accept a freeze or implement a jointly agreed one. Ultimately, freezing production at current levels would leave 2H16 output from OPEC (crude) and Russia at 44.6 mb/d, 400 kb/d higher than our forecast as we assume a seasonal decline in Saudi volumes. Longer term, a production freeze would also likely prove self-defeating if it succeeded in supporting oil prices further with the US oil rig count up 28% since May. Finally, the correlation to the dollar has not been steady and oil fundamentals, as they did in May, can drive divergence in asset prices. Further, our FX strategists view the recent strength of the US economic data as leaving risks to the dollar skewed to the upside, not downside.

  A freeze at current level would keep the global market in surplus in 2H16

  

  On the fundamental side, supply continues to feature the cross currents of rising low-cost supply, declining high-cost production, and new project ramp up. In fact, marginally more bearish data recently than we had assumed suggests in our view that the recent price rally should stall. Saudi production reached a new record high in July at 10.7 mb/d with Reuters reporting that Saudi production could reach a new record in August, with large cuts to its OSP for September as well. Iraq has agreed to new contract terms with oil majors to increase its southern output by up to 350 kb/d next year vs. our current expectation for flat production into 2017. Finally, projects continue to ramp up in line with our expectations (i.e. TEN in Ghana and Goliat in Norway) or even beyond what we are assuming (i.e. ENI’s guidance on Kashagan for next year). On the demand side, the 1H16 trend continues to be of strong demand growth, which is now nearing 2 mb/d, driven by India and China, and we continue to expect a moderation in demand growth in 2H16. Demand continues to be revised upward with the August IEA data showing a broad based 100 kb/d increase in 1H16 demand growth. Additionally, the early 3Q16 data is pointing to a slowdown in growth in India and stable growth in the US in line with our expectation. With no evidence that demand growth is weakening sharply, supply will remain in our view in the driving seat in coming weeks.

  

  

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• Brexit: Worst Case Scenario For EU; Armageddon Promise Now Exposed As Pack Of Lies

  Submitted by Michael Shedlock via MishTalk.com,

  Project Fear predicted economic meltdown if Britain voted leave. Where are the devastated high streets, job losses and crashing markets?

  In other Brexit news, Sweden warns the UK about cutting corporate taxes. How should the UK respond? Who is in control?

  What Happened to Promised Armageddon?

  The Guardian reports Brexit Armageddon was a Terrifying Vision – but it Simply Hasn’t Happened.

  Unemployment would rocket. Tumbleweed would billow through deserted high streets. Share prices would crash. The government would struggle to find buyers for UK bonds. Financial markets would be in meltdown. Britain would be plunged instantly into another deep recession.

   

  Remember all that? It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer’s remorse.

   

  The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark. Far from dumping UK government gilts, pension funds and insurance companies have been keen to hold on to them.

   

  City economists had predicted an immediate rise in the claimant count measure of unemployment in July. That hasn’t happened either. This week’s figures show that instead of a 9,000 rise, there was an 8,600 drop.

  Pack of Lies Clearly Visible

  Armageddon fears were purposely over-hyped from the beginning. Now reality has set in.

  Project fear backfired. People can easily see what liars David Cameron and the nannycrats in Brussels were.

  Project Remain: Where are the admissions “We were wrong?”

  Worst Case Scenario for EU

  That the UK has gone on as normal has to be one of the worst fears for the nannycrats in Brussels. There is life, not death after Brexit. What country will be next to figure that out?

  Some rough times are likely ahead for the global economy, including the UK. But in the long run, Brexit will be a good thing for the UK, which means it will be a bad thing from the point of view of Brussels.

  Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks

  The nannycrats are now worried that the UK will do something smart, like lower corporate taxes again.

  Today, Sweden Warns U.K. Against Aggressive Tax Cuts Amid Brexit Talks.

  The U.K. should avoid any drastic steps to cut corporate taxes, or similar measures, as it prepares to start talks on leaving the European Union, Swedish Prime Minister Stefan Loefven said.

   

  If the U.K. wants some time to think about the situation, this will also give EU countries some time,” Loefven told Bloomberg after giving a speech in Stockholm on Sunday. “On the other hand, you hear about plans in the U.K. to, for example, lower corporate taxes considerably. If they, during this time, begin that kind of race, that will of course make discussions more difficult.”

  Stellar Opportunity for UK to Set Example for the World

  By all means the UK should precisely make things more difficult.

  Everyone says, Brexit terms need to be negotiated. Actually, the UK can pick up its marbles and go home. Who could stop the UK from doing just that?

  On July 11, I wrote Stellar Opportunity for UK to Set Example for the World.

  In that post I proposed among other things a recommendation “The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.”

  I was unaware at the time that UK chancellor George Osborne had already decided to cut taxes, but by a lesser amount than I suggested.

  Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan

  In a follow-up post I wrote Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan.

  Michel Sapin Pisses and Moans

  

   

  First Step in Training a Mule

  There’s an old saying “The first step in training a mule is to hit it as hard as you can in the head with a stick.”

  I don’t really advise that with mules, but it is the precise thing to do to EU nannycrats.

   

   

  The first step in training EU mules is to hit them in the head as hard as you can with a stick. Osborne just smacked French and German mules

  — Mike Shedlock (@MishGEA) July 11, 2016

   

   

  Reflections on Clearness

  “It’s clear that the UK can’t participate in the big decisions involving the EU’s future,” said Emmanuel Macron, France’s economy minister.

  Well, it’s equally clear the EU cannot participate in big decisions involving the UK’s future.

  And with his plan to cut corporate taxes, chancellor Osborne just hit nannycrat mules in Germany, France, and Belgium in the head with not a stick, but a brick.

   

  Trade War the Right Way

  The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.

   

  Set Example for the World

  Shed of inane EU rules and regulations coupled with the freedom to do anything it wants, the UK has a golden opportunity to embrace the benefits of genuine free trade and growth via low taxes.

  I have often stated the first country that fully embraces free trade, regardless of what any other country does, will come out stunningly ahead.

  The UK now has that chance.

  Negotiation Progress

   

  #eu Sweden is pissing and moaning along with Germany and France about UK tax rates. I call this progress. Advantage UK in Negotiations.

  — Mike Shedlock (@MishGEA) August 21, 2016

   

  I suggest the UK cram it straight down their throats by lowering taxes to 10% right now. This will set proper the negotiation tone  and inform the nannycrats in Brussels who calls the shots.

  France and Germany threatened to make things difficult for the UK. But as I have stated all along, the UK, not the EU, has the upper hand in these negotiations.

  Import/export math proves the point. The UK imports more from the the EU than it exports to them.

  For details, please see “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish.

  The more the EU pisses and moans, the more successful Brexit will be for the UK.

  

  

• Silver Is in a Different World, Report 21 August, 2016

  Measured in gold, the price of the dollar hardly budged this week. It fell less than one tenth of a milligram, from 23.29 to 23.20mg. However, in silver terms, it’s a different story. The dollar became more valuable, rising from 1.58 to 1.61 grams.

  Most people would say that gold went up $6 and silver went down 43 cents. We wonder, if they were on a sinking boat, tossing about in stormy seas, if they would say “that lighthouse went up 5 meters.”

  To our point last week, what would be the utility of a lighthouse that you measured from your boat which is going down and up, but mostly down? Would you wonder if lighthouses had another purpose, any other use? If you could make money betting against other sailors, on the lighthouse’s next position, would you care?

  “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” – Warren Buffet

  Of course, what Buffet doesn’t mention is that we’re forced to use paper certificates of government debt as if it were money. This debt is losing value as the government racks up ever more implausible amounts of it ($19.5T at the moment). Meanwhile, lenders are offered lower and lower interest rates to finance this growing monument to economic insanity.

  Surely anyone from Mars would be scratching his head at this, too.

  Unfortunately, Nixon’s gold default almost exactly 45 years ago to the day removed the extinguisher of debt. When you pay off a debt usinggold, the debt goes out of existence. When you pay a debt using dollar, the debt is merely shifted. So the debt grows—must necessarily grow—at an exponential rate.

  Also unfortunately, Nixon’s gold default also unhinged the rate of interest. It began to shoot the moon. It eventually peaked at an insane high (and historically unprecedented) level in 1981. Since then, it has been falling and now it keeps hitting insane low (and unprecedented) levels.

  You can get yourself out of the loop by buying gold, but you cannot effect the debt, interest rate, or banking system. You are disenfranchised. Instead, we have monetary policy administered the way the Soviet Union had food prices set by bureaucratic diktat.

  The problem is not that gold cannot have any utility. It had it, once. The problem is that the government has locked up gold’s utility. What’s left gold is just betting on the price action in the casino.

  Sooner or later, that price action is going to come to an ignominious end. Contra the Quantity Theory of Money, the value of the dollar will go to zero. This will not be because its quantity rises to infinity. It will be because gold owners no longer wish to risk holding dollars, for fear of counterparty default.

  About the best we can say is that today is not that day.

  Read on for the only the only true picture of the supply and demand fundamentals that ultimately drive the price action. But first, here’s the graph of the metals’ prices.

         The Prices of Gold and Silver
  
  

  Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It rose significantly this week. 

  The Ratio of the Gold Price to the Silver Price
  
  

  For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

  Here is the gold graph.

         The Gold Basis and Cobasis and the Dollar
  Price
  
  

  Well, well, well. Look at that. The abundance of gold (i.e. the basis, the blue line) falling all week, and the scarcity rising. Indeed, we see now this pattern has been going since the end of June. The same pattern holds true for farther-out contracts.

  This means that someone, or millions of someones—do not get too caught up in the fallacy of famous market players—is buying physical gold metal. In that time, speculators have not been eager to buy more. So the net result is that the fundamentals have nearly caught up to the price.

  The Gold Price and Fundamental
  
  

  The gold market may not be screaming “buy” yet—today is not that day—but it’s no longer screaming “danger”.

  It is interesting to see that the speculators—who are really betting against the dollar, even if they don’t always know it—sometimes go their own way. Perhaps they see a central banker in the news, or the jobs report disappoints. Buy, buy!

  No animal species can survive by cannibalism—by members eating other members. And speculators cannot drive the market by continually buying from one another, giving them both profits (as they reckon it, in dollars) and ever-rising price. Eventually either the fundamentals change and the speculators are proven right. Or the speculators give up, or get flushed out. This time, the speculators are proven right. They put their dollars in harm’s way, particularly since the end of April when the softening fundamentals fell below the market price. They continued to fall all the way through late June. But the market price did not follow this trajectory.

  The Silver Basis and Cobasis and the Dollar Price
  
  

  Silver is in a different world.

  We do see a falling basis and rising cobasis this week. However, it’s just tracking price. That is rising dollar price (i.e. falling silver price) corresponds with rising cobasis. As speculators reduce their positions, the price falls a bit.

  It has a long way farther to fall, before it catches down to the fundamentals.

   

  © 2016 Monetary Metals

  

• Summary Of Recent Fed Statements: Spot The Common Theme

  Actually, scratch that: the one thing that becomes clear after skimming this selection of select statements by Fed committee members over the past few months, is that there is absolutely no common theme.

  Seven years after the crisis, the Fed not only continues to fly blind, but the degree of disagreement among members has never been greater. Which is helpful to know 5 days before Yellen’s Jackson Hole speech this coming Friday is expected to reveal a new, less “omnipotent” Fed, one which will push for more fiscal stimulus just so the Fed has more debt to monetize the next time it has to ease, since thanks to “r-star” we now know it can hike rates at most just 1-2 times before it is forced to resume easing by way of QE as the rate of ~1% will not be nearly enough to provide the needed stimulus economic stimulus to offset the next economic contraction.

  

  Source: Goldman Sachs

  

  

• As The Vancouver Housing Market Implodes, The "Smart Money" Is Rushing To Get Out Now

  Three weeks after we suggested that the Vancouver housing bubble had popped in the aftermath of the implementation of the July 25 15% property tax in British Columbia targeting the Chinese free for all in Vancouver real estate, we got confirmation of that last week when we reported that only one word could describe what has happened to Vancouver housing in the past month: implosion.

  Zolo, a Canadian real estate brokerage, which keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price”, showed as of last week a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago. 

   

  

  The number of transactions has likewise slammed shut: while August is typically one of the slowest months for real estate transactions, MLS sales data from the first two weeks of the month shows what many have been hoping for during the last few years of escalating prices. According to MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94%.

  

  In short, the Vancouver housing bubble has poppsed, and  not surprisingly the “smart money”, which rode the bubble all the way up, has duly noticed, and wants out. Immediately.

  As Bloomberg reports, the Ontario Teachers’ Pension Plan is quietly seeking buyers for a minority stake in its C$4 billion ($3.1 billion) real-estate portfolio in Vancouver, including office towers and shopping malls, according to people familiar with the matter.

  Cadillac Fairview, the real-estate unit of Canada’s third-biggest pension fund, is looking to raise about C$2 billion from the sale. Cadillac Fairview has hired CBRE Group Inc. and Royal Bank of Canada for the sale.

  According to Bloomberg, Cadillac Fairview is the latest pension group seeking to reduce its holdings in the Vancouver commercial market, where prices have reached record highs amid an influx of foreign cash even as new supply drives up vacancy rates. Ivanhoe Cambridge and the Healthcare of Ontario Pension Plan are seeking about C$800 million for their office towers in Burnaby, British Columbia, just outside of Vancouver.

  The Cadillac Fairview portfolio, which hasn’t yet started marketing, includes 14 properties in downtown Vancouver and Richmond, with some of Canada’s largest shopping centers, office towers, and historic buildings up for grabs. The assets include a portfolio of waterfront properties including Waterfront Centre, a 21-story tower on the harbor built in 1990; the 238,000-square-foot PricewaterhouseCoopers Place; and The Station, a historic property built in 1912 that serves as North America’s largest transport hub, currently pending approval for an added office tower.

  The liquidation has a whiff of panic as some of the country’s biggest retail assets are also in the mix, such as the Pacific Centre, a downtown retailer with 1.6 million square feet for which Cadillac Fairview submitted a proposal this year to expand. It’s the third-most profitable shopping mall in Canada, according to brokerage Avison Young, with C$1,599 in sales per square foot Bloomberg adds. The center also contains eight office towers of two million square feet, including 701 West Georgia and the HSBC building.

  In recent years, alongside the plain vanilla housing bubble, commercial real estate soared too, as demand for Vancouver offices sent prices of properties to record highs in recent transactions, including the purchase by Anbang Insurance Group – another notorious Chinese offshore buyer – of the Bentall Centre.

  Meanwhile, a warning sign had emerged even before the July property tax hike as the vacancy rate in the city rose to a 12-year high of 10.4% as of June 30 as tenants absorbed 1 million square feet of new space since the same time last year, according to Avison Young.

  It is only set to get worse, because in a rerun of what happened to the Alberta office market in early 2015 after oil cratered, additional space is set to flood the market, with six office towers under construction for delivery as soon as this year totaling about 802,700 square feet, and 10 buildings proposed for the city, including Cadillac Fairview’s Waterfront Tower, according to Avison Young’s mid-year 2016 report. Despite the vacancy, rental rates for the best quality assets in Vancouver are the highest in Canada and some U.S. cities such as Chicago and L.A. at about C$30 a square foot, Avison Young said.

  And so, Vancouver – after enjoying years of unprecedented upside in both residential and commercial real estate – is on the edge of full blown, freely falling hangover, just like the one the OECD prudently warned about three months ago, when it said that a “disorderly housing market correction” notably in Toronto and Vancouver, is the biggest threat to Canada’s economy, one which “would damp residential investment and private consumption, and could threaten financial stability.” One can now add commercial investment and consumption to that list as well. 

  In the coming months, if not weeks, we will find out just how accurate the OECD’s gloomy forecast was.

  

  

  

• OPEC Ignites Biggest Short Squeeze In History: Hedge Funds Cut Oil Shorts By Most On Record

  Ever since the February crash, when oil tumbled to 13 years lows, and when OPEC started releasing tactical headlines at key inflection points about an imminent oil production freeze (which not only never arrived but has since seen Saudi Arabia’s output grow to record levels) which we first suggested were meant to trigger a short squeeze among headline scanning HFT algos, our suggestion was – as is often the case – dismissed as yet another conspiracy theory.

  Six months later, this conspiracy theory is now a widely accepted fact, and as Bloomberg reports tonight, “well-timed” OPEC talk of a potential deal to freeze output, has “forced bears” into a historic squeeze and helped push oil close to $50 a barrel, prompting West Texas Intermediate from a bear to a bull market in less than three weeks.

  “This is all courtesy of some very well-timed comments from the Saudi oil minister,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “They’ve been successful over the last year in jawboning the market, and this is the latest example.”

  And while one can debate whether OPEC’s “headline” leaks are timed to coincide with near-record short positions on WTI, one thing is certain: the past week saw the biggest crude oil short squeeze on record as money managers cut bets on falling prices by the most ever.

  According to Bloomberg, Hedge funds trimmed their short position in WTI by 56,907 futures and options during the week ended Aug. 16, the most in data going back to 2006. And, as one would expect following yet another record short squeeze similar to the one experienced earlier in the year, WTI futures rose 8.9% to $46.58 a barrel in the report week and closed at $48.52 a barrel on Aug. 19. WTI is up more than 20 percent from its Aug. 2 low, meeting the common definition of a bull market.

  

   

  Money managers’ short position in WTI dropped to 163,232 futures and options. Longs, or bets on rising prices, increased 0.1 percent, while net longs advanced 56 percent, the most since July 2010. 

  “This was a very short market so we were bound to get some covering,” said Stephen Schork, president of the Schork Group Inc., a consulting company in Villanova, Pennsylvania. “

  Schork added that we “probably won’t hear a lot from OPEC with prices up here, but if we get down to where we were a few weeks ago we can expect to hear more.”

  Ironically, even if OPEC does agree to a production freeze, it will be because its biggest members are already pumping at flat-out record levels, said Chakib Khelil, the group’s former president. Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, Khelil said in a Bloomberg Television interview on Aug. 17. Saudi Arabia told OPEC that its production rose to an all-time high of 10.67 million barrels a day in July, according to a report from the group.

  Saudi Energy Minister Khalid Al-Falih said that the talks may lead to action to stabilize the market. What he means is that while Saudi Arabia production levels will be “frozen” at an all time high, a level beyond which it could not produce even if it wanted to, all of its peers will be locked into a substandard output rate, which is also why few if any of them will agree to the proposal to be discussed next month in Algiers.

  Meanwhile, as even OPEC tries to ignite HFT algo short squeezes (one wonders who OPEC’s financial advisor inthis regard is), US shale is rapidly coming back on line: as reported on Friday, there has been an upsurge in drilling as prices have climbed. U.S. producers added oil rigs for an eighth week, the longest run since April 2014, according to Baker Hughes Inc. data on Aug. 19. Even the traditionally conservative EIA increased its domestic output forecast for 2017 to 8.31 million barrels a day from 8.2 million projected in July, according to its monthly Short-Term Energy Outlook released Aug. 10.

  “In the U.S., DUC completion and the drilling of new wells are changing the production outlook,” Morse said. “We might see U.S. production rise next year instead of falling.”

  For those who trade based on flashing red headlines, and not Econ 101, rising production means falling prices, absent a comparable increase in demand, which however with China close to filling its Strategic Petroleum Reserve, is about to enter freefall.

  Finally, now that virtually all weak hands have covered, it is time for the “flip” trade, as oil resumes its slide, and shorts once again pile on, just as Morgan Stanley forecast when it said that the mega short squeeze would finally end last week. Tomorrow we will find out if MS was correct.

  

  

• Multipolar World Order: Economics Vs. Politics

  Submitted by Frederico Pieraccini via Stratgic-Culture.org,

  International tensions have in recent years often led to conflicts between nations, leaving countries to face complicated choices. The world is under constant change, and the most direct results are political instability over vast areas of the globe combined with economic, cultural and often military confrontations. The economic priorities of cooperation and development are increasingly being sacrificed on the altar of protection of geopolitical interests. It is a return to the past where strategic interests prevailed over the economic model prescribed by modern capitalism.

  Nations like Russia, China and Iran have in recent years accelerated their rise on the global arena, expanding vital aspects of this in such areas as energy supply, transit of goods, the type of currency used in trade, defense of national borders, the granting of use of airspace, military–industrial cooperation with other nations, the joint fight against terrorism, and a general defense of the principle of national sovereignty. Washington has tried in every way to prevent this growing multipolarity, desperately trying to prolong its two-decade-old unipolar world.

  It is in this general climate that Beijing, Moscow and Tehran have had to engage with Western economic reactions in the process of defending their strategic interests. As a result, we have increasingly witnessed in recent years a conflict between economic convenience and politically driven policy decisions. The most difficult challenge faced by these challengers of the status quo lies increasingly in the complicated question of how to manage a situation where geopolitical interests have to fit into a global financial system largely managed and manipulated by Europeans and Americans.

  Currently the international financial system, as I have written many times before, is an American affair. The dollar stands as the dominant currency in relation to other financial institutions, and the whole global economic system is mainly conducted through the American currency. But the paradigm is changing, especially in recent years, thanks to supra-national entities like the AIIB and BRICS. Inevitably the IMF’s currency basket will have to incorporate the yuan, starting the process of the slow erosion of the dollar's dominance. The IMF, after years of wasting time trying to delay this event, will welcome from the October 1st, 2016, Beijing as an integral part of the reserve-currency system. Of course one of the most critical aspects is still the private banking sector and how the SWIFT payment system will work, given that it currently lies within the Euro-American orbit. Altogether this blend of public and private sector produces a situation where it is easy to see that the global economic system and its rules are often decided in Washington (IMF, World Bank), New York (Wall Street, FED), London (LSE), Basel (BIS) and Frankfurt (ECB), excluding all the other nations. The financial system is dominated by central banks, international bodies and the huge conglomerate of private banks, all strictly of a North Atlantic orientation.

  It is easy to understand that nations not aligned with Western interests suffer retaliation, threats and damage from a financial system that is controlled by Euro-American interests.

  The pressure imposed on nations like Iran, Russia and China in recent years has increased significantly, jeopardizing global stability. The real possibility of proposing an alternative economic system that is not so easily manipulable by the West has allowed not only Beijing, but especially Moscow and Tehran, to respond in a very effective manner to Western geopolitical intimidation. The Western reaction to the development of the Iranian nuclear program, as well as the Crimean issue, demonstrated clearly the consequences that come with defending strategic interests.

  Initially it was Iran. With the acquired nuclear capability, Israel poses a direct strategic threat to the existence of the Islamic Republic. Tehran has decided to give priority to its own national interests by developing its own nuclear program. The objective is the production of a nuclear device to use as a deterrent, effectively creating a balance of power. Of course the decision sparked a vehement response from the West, and once the military option was discarded, an economic strangulation of the country commenced. Iran’s expulsion from the global banking system (SWIFT), as well as international sanctions, especially in 2007-2013, have had serious repercussions for the Iranian state in terms of profits from imports and exports, especially in the area of oil and gas.

  The economic burden has been high, the country facing difficulties financing internal growth. This pushed Tehran to try and change the situation to their advantage by bypassing impediments and penalties. This decision forged important partnerships, especially with Russia, China and India, and strongly contributed to the implementation of an alternative economic channel. Tehran's move was strongly appreciated in the region by small countries seeking opportunities for mutual gains. Important Chinese and Indian investments in the Islamic Republic, Moscow’s constant military exports to Iran, and the selling and buying of gas and oil in different currencies rather than the dollar created a context in which, for the first time, the international economic pressure fueled by Washington was not able to change the course of events.

  Iran, thanks to the assistance and financial support of its main allies, managed to render irrelevant the sanctions and banking restrictions imposed on it. It is this aspect more than any other that led to the nuclear negotiation process initiated by the West. Iran was found in the revolutionary situation of being able to pursue its strategic objectives (nuclear weapons as a deterrent to a nuclear Israel) without succumbing to economic pressure. The importance of this outcome can never be stressed enough. For the first time in a long time, a nation not aligned with Western wishes was able to defend its strategic interests without suffering the negative effects of an adverse international system, with its arsenal of speculation, penalties, or simply illegal actions like the removal from the SWIFT system.

  When confronting geopolitical and economic interests, it is hard not to mention the two giants such as China and Russia. Both countries, as global superpowers, necessarily need to constantly balance strategic objectives, often geopolitical, with international economic cooperation. The Ukrainian coup, with the reunification of Crimea, or the construction on the “Spratly Islands” in the South China Sea, are two forward-looking examples of how geopolitical interests have become a main priority for Beijing and Moscow. The power that China has accumulated in economic terms gives it a great advantage: Western nations are unable to apply economic aggression. This leaves China free to pursue its main political objectives, such as establishing security on its maritime boundaries, enforcing national integrity, and expanding its influence and commercial facilities across the continent, without fear of incurring economic punishment. The West is already unable to sanction China let alone apply any vetoes from the private banking sector, or even worse, a possible embargo. China is the factory of the world, and any economic pressure would end up producing unacceptable losses for the West.

  After years of disagreements over Chinese territorial claims in the South China Sea, all that Washington managed to do was obtain an irrelevant judgment from an international tribunal thousands of miles away from the disputed area. China pursues its claims without much caring for the actions and rhetoric of the West, focusing instead on ensuring its strategic focal points.

  The coup in Ukraine, and the subsequent reunification of Crimea, showed unequivocally how Russia’s nuclear weapons deter American aggression. The possibility of NATO actively participating in the war Kiev started against the east of the country amounted to zero, due to the conventional military power of the Russian Federation. Nevertheless in such a scenario, we cannot overlook the effect of sanctions, and the attempts of international isolation, that Russia is subjected to. Moscow, during the Ukrainian crisis, took the difficult but necessary decision to preserve its geopolitical interests at the expense of its economic interests. The stakes were too high to be able to give preference to financial calculations. Sevastopol and the Black Sea Fleet are fully part of the strategic deterrent that has saved the world from a possible confrontation between NATO and Russia in Ukraine. In such a scenario, even the collapse in oil prices has not affected Moscow’s decisions even as it is damaging to the Russian economy.

  Like with Iran, for Russia the choice to defend at all costs its national interests has forced a policy of “looking towards the east”. The multiple, all-encompassing agreements with Beijing have proven that Western economic power is increasingly frail and can be ignored.

  The events involving Iran, China and Russia are an epilogue in international relations. They convey an uplifting message to countries with less capacity to resist Western military aggression or withstand financial aggression. It is still too early to appreciate the effects of this change on small nations and their policies, since they are still reliant on assistance from their strong allies. In scenarios like this, the economic impact is not negligible and is often the decisive factor in balancing priorities. It is difficult to imagine a country that places geopolitical interest ahead of the nation's economy.

  Some recent examples of this Western arrogance can be seen in energy transit through pipelines. The Middle East suffered untold death and destruction in Iraq and Syria because of plans to disrupt the construction of a pipeline connecting Iran and Europe that passed through Syria and Iraq. A similar situation was seen in the discussed links between South Stream, North Stream or Turkish Stream. In this case all the transit countries (Bulgaria, Greece, Hungary, Serbia and Slovenia) had enormous problems fulfilling their agreements. Unfortunately, it is in such circumstances that Western economic blackmail reaches its peak, often managing to block or slow down such strategically important gas or oil corridors. Smaller countries are forced to give up important sources of development in order to avoid running the gamut of economic restrictions or even international sanctions.

  One way to resist international finance is through a national economic system that is in many respects highly independent. This is how the world should view the alternative international systems of the likes of the BRICS Bank and the Asian Infrastructure Investment Bank (AIIB). In the near future, countries vulnerable to international speculative attacks will be able to embark on politically favorable projects through the AIIB or BRICS Bank. The multipolar future is not just for superpowers like China and Russia but also represents a huge opportunity to raise Third World countries up from unacceptable levels of poverty. The aim of Sino-Russian relations is nothing less than providing the necessary tools to other nations to resist international pressures from traditional financial channels (World Bank, IMF). Allowing these nations to pursue their own national strategic interests opens possibilities that only a multipolar world can offer.

  The transition from a unipolar to a multipolar reality has already changed many aspects of international relations. Military options for superpowers against one another have become a less viable option thanks to economic ties and the nuclear balance. Some of the ultimate tools to influence events, namely manipulation and financial terrorism, have less and less effect on superpowers and tend to actually favor the creation of an alternative economic system.

  The evolution of these events is easily predictable. With more integration of the world’s nations, the dollar's influence will gradually be reduced, but the decline of the United States’ unipolar moment will accelerate. The effects will be increasing international cooperation and a transformation that will guide our world toward a full multipolar age.

  A revolution that will change everything like nothing in recent history is taking place, forever altering the delicate balance upon which international relations hitherto rested.

  

  

• Olympic Gold Medals Have Almost Zero Gold In Them

  The 2016 Rio Summer Olympic Games are already 51% over budget, with the total cost expected to be in the $4.6 billion range. With that in mind, Visual Capitalist's Jeff Desjardins notes that the organizers have tried their best to cut costs.

  One area of compromise?

  The Olympic gold medals, which weigh 500g (1.1 lbs) and are 85mm (3.3 in) in diameter, are gold in name only.

  OLYMPIC GOLD MEDALS HAVE ALMOST ZERO GOLD IN THEM

  Today’s infographic comes from JM Bullion and it shows the real amount of metal in gold, silver, and bronze medals, along with the hypothetical cost of awarding solid gold to winning athletes.

  

  Courtesy of: Visual Capitalist and JMBullion

  

  

• The Fed Launches A Facebook Page… And The Result Is Not What It Had Expected

  While it is not exactly clear what public relations goals the privately-owned Fed (recall Bernanke’s Former Advisor: “People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned“) hoped to achieve by launching its first Facebook page last Thursday, the resultant outpouring of less than euphoric public reactions suggest this latest PR effort may have been waster at best, and at worst backfired at a magnitude that matches JPM’s infamous #AskJPM twitter gaffe.

  Here are some examples of the public responses to the Fed’s original posting: they all share a certain uniformity…

  

  

  

  

  

  

  We wonder how long the Fed pulls a “blogger Ben Bernanke”, and starts moderating, if not outright blocks, all Facebook comments.

  

  

• "I Don't Give A Shit About Them" – Philippines President Threatens To Quit "Son Of A Bitch" United Nations

  While the US media is obsessing over what could happen to the US if the diplomatic debacle that is Donald Trump becomes president (as opposed perhaps to the pathological liar and State Department-for-hire that is HIillary Clinton), the Philippines has a living, breathing example of the worst that a person who has zero regard for the status quo or the establishment, can unleash. Or perhaps the best. We are talking about the country’s new president, Rodrigo Duterte, who most recently made headlines for calling the US ambassador to his country an “annoying, homosexual, son of a bitch“, yet whose policies, unorthodox as they may be, are working when after some 400 drug dealers were killed in the Philippine government’s “war on narco-politics”, reportedly another 500,000 turned themselves in.

  

  In Duterte’s latest outburst, the Philippine president has threatened that the country could leave the UN, after the organization urged the Philippines to stop executing and killing people linked to drug business and threatened that “state actors” could be punished.

  “Maybe we’ll just have to decide to separate from the United Nations. If you’re that rude, son of a bitch, we’ll just leave you,” Duterte told reporters in Davao, quoted by Bloomberg.

  “I don’t give a shit about them,” he added. “They are the ones interfering. You do not just go out and give a shitting statement against a country.”

  Calling the UN “inutile”, Duterte said the Philippines could invite China, African nations and other countries to create a rival international body. He went further, slamming the UN’s response to other global issues.

  Cited by RT, Duterte said “Look at the iconic boy that was taken out from the rubble and he was made to sit in the ambulance and we saw it,” Duterte said. The picture of Omran Daqneesh, a five-year-old Syrian boy has recently gone viral around the globe. “Why is it that [the] United States is not doing anything? I do not read you. Anybody in that stupid body complaining about the stench there of death?”

  The Philippine leader also slammed the US for its own human rights record, citing the string of shootings involving police and black men that have sparked protests in the U.S. “Why are you Americans killing the black people there, shooting them down when they are already on the ground?” he asked. “Answer that question, because even if it’s just one or two or three, it is still human rights violations.”

  The angry tirade at the news conference in Davao City came after the UN’s special rapporteur on summary executions, Agnes Callamard, urged the Philippines to stop extrajudicial executions and killings, saying “state actors” could be punished for the “illegal killings.”

  In many ways, Duterte’s response to the UN report is comparable to that by Turkey’s president Erdogan, who has not taken kindly to European (and US) criticism for cracking down on, firing or arresting nearly 100,000 people following July’s failed Turkish coup.

  Meanwhile, in the Philippines, about 900 people have been killed by unidentified attackers since May, when Duterte was elected, and another 665 died at the hands of security forces, according to the national police chief.

  Duterte, however, has vehemently denied these accusations, and said that the police only fired in self-defense, while he also lashed out at the UN. He shrugged off the prospect of repercussions that could follow as a result of his remarks.

  “I don’t give a shit about them. They are the ones interfering,” Duterte said. He also wondered whether UN officials were indeed threatening to jail him and repeated that he was ready to sacrifice his life and presidency for his country.

  Needless to say, Duterte has developed a reputation for being very outspoken. As such, we, for one, would be quite entertained by the prospect of an unfiltered and uncut real time summit between Duterte and Trump, should the latter be elected on November 8. We are confident millions of others would too.

  

  

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• For Sale: The World's First $1+ Billion Dollar House

  Exactly two years ago, we reported about what we dubbed at the time was “absolute bubble insanity” – a double skyscraper called the Tour Odeon, located in the French Riviera, which would house a 3,300 square-meter (35,500 square-foot) penthouse with a water slide connecting a dance floor to a circular open-air swimming pool. While the description was nice, it was the bottom line that was mindblowing: that appartment was priced to sell for more than 300 million euros ($400 million at the time) when it went to market the following year. That made it the world’s most expensive penthouse, according to broker Knight Frank LLP.

  Below are some images of the nearly half a billion dollar penthouse in question (including the water slide into the pool).

  

   

  

  

  

   

  And while we don’t know if and at what price the Odeon’s penthouse ended up selling for, we did predict that it was only a matter of time before this nearly half a billion price tag would be eclipsed by a full, round billion.

  Two years later, the forecast has come true: as the Mail reports, the most expensive house in the world has been offered for sale at a price of over €1billion ($1.1 billion), located yet again in the south of France. The address in the billionaire’s playground of Saint-Jean-Cap-Ferrat, Les Cedres, is owned by Suzanne Marnier-Lapostolle, a member of the Grand Marnier dynasty who is supposedly seeking to “downsize.” 

  

  Saint-Jean-Cap-Ferrat has a population of just over 2000

  
  

  Cap Ferrat was named in 2012 as the second most expensive place to buy a
  home in the world after Monaco

  While the French economy is struggling under the weight of both a collapse in tourism as a result of a recent surge in terrorist attacks, and the destructive influence of a socialist government, Nice Matin on Friday reported that the former home of Belgium King Leopold II can be yours (assuming you are a multi-billionare, of course) for “one billion euros.”

  

  

  The former home of Belgium King Leopold II, Les Cedres

  

  The monthly gardening bill alone is said to be in the hundreds of thousands.

  What does $1.1 billion buy you in Nice these days? The 10-bedroom property, which comes with an Olympic size swimming pool, is located in a coastal enclave close to Nice. Its garden includes 35 acres of manicured lawns, 15,000 plants, and some 20 greenhouses containing rare tropical vegetation. The palatial home features a ballroom and also stables for up to 30 horses.

  Close neighbors include British composer Andrew Lloyd Webber and US tech tycoon Paul Allen.

  According to the French newspaper, Les Cedres was last owned by Suzanne Marnier-Lapostolle, part of the Grand Marnier liquor dynasty. However after the company was bought by Campari in March, the home was also transferred over by the Italian group.

  
  The swimming pool at Les Cedres pictured in September 1973

  Campari has decided to sell the home so the heiress is said to be downsizing and looking for a buyer who will care for a house that has been in the family since 1924. Some 15 professional gardeners are currently employed by her full time, and she hopes all will be kept on.

  But, as often happens in the rather insane world of multi-billionaires,  there are fears that speculators will move in, and build new hugely expensive properties in the gardens.

  Until that happens, however, finding a buyer may be tricky now that oligarchs from China, Russia and Saudi Arabia no longer are burning cash around the globe on real estate.

  A real estate agent in Moncaco, cited by the Mail, said that  “we have not received instructions to sell. These kind of properties tend to be marketed very discreetly.” Still, “despite France’s problems, there should be a buyer around. The billionaire market does not have much to do with countries – there will be international interest.”  It just won’t be coming from any Vancouver “flippers” any time soon: that particular housing bubble just burest.

  * * *

  Saint-Jean-Cap-Ferrat, which currently has a population of just over 2000, has attracted celebrities and royalty from all over the world throughout its history. Regulars have included actors Charlie Chaplin and David Niven, writer William Somerset-Maugham, movie stars Elizabeth Taylor and Richard Burton, and Prince Rainier III of Monaco. The most high profile property transaction in the stretch of Riviera around Nice came in 2008, when Russian oligarch Mikhail Prokhorov offered 320 million to buy Villa Leopolda.

  The mansion in Villefranche-sur-Mer, next door to Saint-Jean-Cap-Ferrat, was owned by Lily Safra, who had inherited it from her banker husband, Edmond Safra. Prokhorov pulled out of the sale following the 2008 financial crisis, leading to Mrs Safra successfully suing him to keep the deposit of £33million.

  A huge fan of the desirable coastal area, King Leopold II once owned the entire west side of the Cap Ferrat. In 1904 he purchased Villa Pollonnais, built in 1830, and its 15 acres of land and after extensive renovation renamed it Le Cedres.  The property was principally used as his holiday home. The man who designed the gardens of the Eiffel Tower and Champs Elysees was responsible for the impressive design of Le Cedres’ grounds and pool area.

  
  The man who designed the gardens of the Eiffel Tower and Champs Elysees was
  responsible for the design of Le Cedres’ grounds and pool area

  Cap Ferrat was named in 2012 as the second most expensive place to buy a home in the world after Monaco, with residents enjoying a pleasant climate and a popular yachting scene. That alone may be sufficient to find the world’s biggest fool, if not outright idiot. Sure enough, after Grand Marnier was bought by Italy’s Campari spirits group’s and they took ownership of the historic villa, Campari CEO Bob Kunze-Concewitz told Bloomberg he has already received approaches from Middle Eastern and North American buyers.

  And because nothing screams guillotines louder than one billionaire paying another billionaire more than a billion dollars for a seaside villa, we are confident the buyer’s identity will remain a well-guarded secret.

  

  

• How Beverly Hills Billionaires Built A Water Empire In California With Taxpayer Money

  Beverly Hills Billionaires Stewart and Lynda Resnick control an agricultural empire in the Central Valley of California which Forbes values at $4.2BN.  According to an article recently published by Mother Jones, the Beverly Hills based couple bought their first acres of ag land in 1978 as an inflation hedge.  Within 20 years the Resnicks had grown to be the largest producer/packager of almonds and pistachios in the world with 130,000 acres of land in the Central Valley and nearly $5BN in annual sales.  You’re all probably familiar with some of their brands:

  

   

  But 130,000 acres of permanent crops requires a lot of water…about 120 billion gallons a year, in fact.  At that level of consumption, Mother Jones points out that the Resnicks consume more water than all the homes in Los Angeles combined. 

  So in a state plagued by constant drought one might ask how the Resnicks built such a “thirsty” empire?  Well, at lease according to Mother Jones, they got a lot of help from taxpayers.

  

   

  The Resnicks received their first taxpayer-funded water windfall in 1995 when they were effectively “gifted” the Kern Water Bank by the State of California (i.e. taxpayers).  Ironically, the State had just purchased the Kern Water Bank 7 years prior for $148mm (in current terms) to serve as an emergency water supply for Los Angeles.  We guess the threats that had led the State to seek out an emergency supply of water disappeared over the course of those 7 years.

  As you might suspect, California taxpayers have always been a little suspect of the massive wealth transfer inherent in the Kern Water Bank deal.  As pointed out by the Los Angeles Times,
  the Kern Water Bank transfer has been the subject of decades of litigation with local water agencies and environmental groups that say “the Kern Water Bank transaction was essentially a gift of public property to private interests and therefore violates the state constitution.“

  “By giving this resource away, not only have we lost money on the deal, but we’ve lost a mechanism to use this water for the most beneficial purposes,” Adam Keats of the Tucson-based Center for Biological Diversity, the lead attorney on the lawsuit, told me recently.

   

  The storage facility is the Kern Water Bank, a complex of wells, pumps and pipelines on a 20,000-acre parcel of abandoned farmland southwest of Bakersfield. The water bank was initially part of the $1.75-billion bond-funded State Water Project, which provides water for 25 million Californians and irrigates 750,000 acres.

  To be fair, the Resnicks did have to make “concessions” before being gifted the water bank…fortunately for them they gave up a whole lot of nothing.  According to the Los Angeles Times, the Resnicks gave up “junior water rights” associated with the State Water Project which the Times pointed out were “from a portion of the State Water Project that will never be built and therefore has no value.”  In fact, according to lawsuit documents, the Resnicks likely saved money by forfeiting their State Water Project allocation because it saved them from paying annual dues to the project.   

  To add insult to injury, Mother Jones points out that the story doesn’t end there.  The land that came along with the Kern Water Bank gave the Resnick’s access to water from California’s State and Federal Water Projects which could be purchased at attractive rates.  According to an analysis by the Contra Costa Times, between 2000-2007, the Resnicks were able to pocket $30mm by buying State and Federal Water allocations at $28 per acre foot and then selling to the State of California (taxpayers) for as much as $196 per acre foot.  So if we understand correctly, the Resnicks were gifted a $150mm project courtesy of taxpayers and then made an incremental $30mm selling the water they were gifted by taxpayers back to those very same taxpayers.  Genius.

  Lest you thought there was something “fishy” going on, Lynda Resnick confirmed to Mother Jones that they have no political influence on water issues in California, saying:

  “We have no influence politically—I swear to you.  Nobody has political influence in this. Nor would we use it.“

  But as bad as that all sounds, at least from the perspective of California taxpayers, the current Resnick-supported, taxpayer-funded water grab by the Beverly Hills Billionaires puts the Kern Water Bank deal to shame.  Of course we’re talking about the “Delta Tunnels” project which is estimated to cost taxpayers up to $65 billion (this is a topic we recently wrote about in a post called “FishLivesMatter: California To Decide If Saving ‘Delta Smelt’ Is Worth $65 Billion Of Taxpayer Money“). 

  We’ll spare you all the gory details behind the project, but, in summary, when environmentalists effectively shut down water shipments flowing through the California Delta and into State and Federal Water Project canals in the northern part of the state the Resnicks, along with Governor Jerry Brown, floated the idea of building the “Delta Tunnels.”  The project contemplates building 30 miles of massive underground pipes to connect existing water canals to the Sacramento river in an effort to bypass the California Delta and all the environmental issues that come along with it.  The pipes could carry 67,000 gallons of water per second transporting the water to canals that would then flow to the Resnick’s farms in the southern part of the Central Valley.

  But the original launch of the “Delta Tunnels” got push-back as taxpayers saw it as just another taxpayer-funded case of corporate welfare benefiting wealthy Central Valley corporate farming interests, like the Resnicks.  So what do you do if you’re a billionaire with limitless influence and taxpayers balk at giving you $65 billion for a pet project?  Well you put together coalitions like the “Californians for Water Security” and you poll 100s of “focus groups” to figure which buzz words work best to sway the hearts and minds of taxpayers.  Turns out, buzz words like “water security” and “fragile water infrastructure” combined with fear tactics incorporating risks from earthquakes is way more convincing to taxpayers than “massive taxpayer-funded wealth redistribution to Beverly Hills Billionaire farmers“…that just doesn’t have as good a ring to it.

  Per Restore the Delta:

  Public Records Act documents received from the Santa Clara Valley Water District show how Stewart Resnick’s Paramount Farms led the charge to create Californians for Water Security. They spent piles of money on focus groups with people from urban water districts, led by ratepayer-funded water district officials, to discover public fears and create messaging to sell the tunnels. This week, they are continuing by running from business chamber to business chamber to scare them into supporting the tunnels, falsely making the earthquake threat in the Delta somehow greater than the threat to the water system in Los Angeles. They forget, however, that time and time again in California, the majority of people do not see issues in the same way that dated, out-of-touch business chambers do.

  So, with polling data in hand and an arsenal of buzz words from the focus groups, a new ad campaign was launched to convince Californians that they were going to die of thirst after the next earthquake wipes out California’s water infrastructure…that is, unless, the Resnicks get their $65BN.

   

   

  And wouldn’t you know it, shortly thereafter, Governor Jerry Brown also coincidentally re-branded the project the California Water Fix and the fight goes on.

  But we certainly don’t want to imply that the Resnicks have received all of these “perks” for nothing.  They have spent handsomely on political contributions over the years with funds flowing to Republicans and Democrats.  As Mother Jones points out, the Resnicks have contributed money to every Californian Governor since Pete Wilson (who just happens to have been the Governor during that “questionable” transfer of the Kern Water Bank that we discussed above…but contributions to him were “small” at only ~$240,000 according the Center for Investigative Reporting):

  They’ve given six-figure sums to every California governor since Republican Pete Wilson. They donated $734,000 to Gray Davis, including $91,000 to oppose his recall. Then they gave $221,000 to his replacement, Arnold Schwarzenegger, who has called them “some of my dearest, dearest friends.” The $150,000 they’ve sprinkled on Jerry Brown since 2010 might not seem like a lot by comparison, but no other individual donor has given more. The Resnicks also have chipped in another $250,000 to support Brown’s pet ballot measure to fund education.

  Data from the Center for Investigative Reporting on the Resnick’s political contributions over the years seems to support the Mother Jones data.  While California Governors seem to have benefited the most from the Resnick’s generosity, the DNC/RNC, state senators, congressmen and mayors all collected their fair share of the pie. 

  

   

  Meanwhile, contributions have been spread out across the political parties.

  

   

  While it is unclear whether the Delta Tunnels will ever be built we’re quite certain that the best interests of taxpayers will not get in the way of whatever decision is ultimately made. 

  

  

• Former Soviet Leader Gorbachev Has A Message The World Needs To Hear

  Submitted by Alice Salles via TheAntiMedia.org,

  In August of 1991, members of the Soviet Union’s government — who were also hard-line members of the Communist Party of the Soviet Union (CPSU) — attempted to take control of the country. What many call a coup attempt failed in just two days.

  This month marks the 25th anniversary of the failed effort. During a conversation with Interfax, former Soviet Union president Mikhail Gorbachev spoke openly about the situation of the Soviet Union at the time. But he also seized the opportunity to take a stab at what many in America believe to be one of their country’s worst traits: foreign interventionism.

  When the collapse of the Soviet Union seemed imminent, Gorbchev told Interfax,

  “I told the Americans: you are trying to impose your democracy on the people of different countries, spreading it around like coffee in bags, but we must give the people a chance to make their own choice.”

  The “one-legged solutions” imposed by American governments against other nations, Gorbachev added, are inevitable and beyond the president’s power. “Even President Obama,” the former Soviet president said, “democratically elected and enjoying in this regard a significant authority in the country, could not change this course.”

  His discontent seems to be rooted in how America reacted to the collapse of the Soviet Union, noting “[t]hey did not want the Soviet Union to become a powerful democratic state.”

  According to Gorbachev, reforms and changes were already underway, and decentralization of the Soviet Union was only a matter of time. At the time, U.S. officials feared their country’s “policy of unilateral measures … [or] the policy of US domination in global affairs” would not work, Gorbachev added, prompting U.S. officials to push for a total collapse as opposed to letting the country take its own course.

  He continued:

  “And then, when they made a bid for Boris Yeltsin, their goal was the same – to prevent the emergence of Russia as a powerful democratic state. Remember, when the [Soviet] Union collapsed, what was the West’s reaction to this tragic event? They said, ‘this is a gift from God.’ And when Russia was on its back, the US president openly applauded the Russian leadership of the time.”

  During the interview, RT confirms, Gorbachev admitted that the union’s downfall was not mainly due to foreign intervention. Instead, he declared, “the country’s authorities and he himself were late with reforms which were strongly needed.” Said reforms included the replacement of “the centralized government planning that had been a hallmark of the Soviet system with a greater reliance on market forces.”

  But Gorbachev defended his position by saying that, once the country was getting ready “to launch [reforms], reshaping the entire system of managing the [Soviet] Union … our opponents also knew that tomorrow would be too late” — meaning members of the Western world, including the United States. The former Soviet leader claimed they knew “there were contradictions, that the old shape of the Union no longer” met the needs of the country, and that the USSR “had to be reformed, decentralized, but not destroyed.”

  He also added that, by then, he thought “only a fool would try to break it all.” But once he allowed confidence to grow into arrogance, Gorbachev told reporters, things got out of his control.

  Twenty-five years after the failed coup, Gorbachev appears to admit that domestic intervention is just as bad as foreign intervention, providing those who are listening with a great opportunity to learn from his own mistakes as a statesman.

  While the Soviet Union had a long history of perpetrating crimes against humanity that are often hard to compare to any other brutal dictatorship in history due to their devastating outcome, it’s also important to consider that many may have learned from this tragic episode in history. As a result, many now have a better grasp of human nature and voluntary exchange.

  Hopefully, his words on the dangers of intervention — domestic or abroad — will resound with the Russian people, and maybe even with Americans.

  

  

• America's "Humanitarian War" Against the World

  Via Strategic-Culture.org,

  The following  text is a point by point thematic summary of Prof. Michel Chossudovsky‘s presentation at the Science for Peace Conference, Academy of Sciences, Malaysia. Kuala Lumpur, 15-16 August 2016

  Introduction

  Historically, science has supported the development of the weapons industry and the war economy. “Science for Peace” indelibly requires reversing the logic whereby commissioned  scientific endeavors are directed towards supporting what President Eisenhower called “The Military Industrial Complex”.

  What is consequently required is a massive redirection of science and technology towards the pursuit of broad societal objectives. In turn, this requires a major shift in what is euphemistically called “US Foreign Policy”, namely America’s global military agenda.

  Military Affairs: The Current Global Context 

  The world is at a dangerous crossroads.  The United States and its allies have launched a military adventure which threatens the future of humanity.

  Under a global military agenda, the actions undertaken by the Western military alliance (U.S.-NATO-Israel) in Afghanistan, Libya, Yemen, Pakistan, Palestine, Ukraine, Syria and Iraq are coordinated at the highest levels of the military hierarchy. We are not dealing with piecemeal military and intelligence operations. Major military and covert intelligence operations are being undertaken simultaneously in the Middle East, Eastern Europe, sub-Saharan Africa, Central Asia and the Asia Pacific region.

  The current situation is all the more critical inasmuch as a US-NATO war on Russia, China and Iran is part of the US presidential election debate. It is presented as a political and military option to Western public opinion.

  The US-NATO military agenda combines both major theater operations as well as covert actions geared towards destabilizing sovereign states. America’s hegemonic project is to destabilize and destroy countries through acts of war, support of terrorist organizations, regime change and economic warfare.

  U.S. and NATO forces have been deployed in Eastern Europe including Poland and Ukraine. In turn, military maneuvers are being conducted at Russia’s doorstep which could potentially lead to confrontation with the Russian Federation.

  The U.S. and its allies are also threatening China under President Obama’s “Pivot to Asia”.

  The U.S. led airstrikes initiated in August 2014 directed against Iraq and Syria under the pretext of going after the Islamic State are part of a scenario of military escalation extending from North Africa and the Eastern Mediterranean to Central and South Asia.

  * * *

  THE HISTORY OF NUCLEAR WAR AND “COLLATERAL DAMAGE” 

  “We have discovered the most terrible bomb in the history of the world. It may be the fire destruction prophesied in the Euphrates Valley Era, after Noah and his fabulous Ark…. This weapon is to be used against Japan … [We] will use it so that military objectives and soldiers and sailors are the target and not women and children. Even if the Japs are savages, ruthless, merciless and fanatic, we as the leader of the world for the common welfare cannot drop that terrible bomb on the old capital or the new. …  The target will be a purely military one… It seems to be the most terrible thing ever discovered, but it can be made the most useful.” (President Harry S. Truman, Diary, July 25, 1945)

   

  “The World will note that the first atomic bomb was dropped on Hiroshima a military base. That was because we wished in this first attack to avoid, insofar as possible, the killing of civilians..” (President Harry S. Truman in a radio speech to the Nation, August 9, 1945).

  [Note: the first atomic bomb was dropped on Hiroshima on August 6, 1945; the Second on Nagasaki, on August 9, on the same day as Truman's radio speech to the Nation]

  (Listen to Excerpt of his speech, Hiroshima audio video)

  

  Hiroshima after the bomb

  Is Truman’s notion of “collateral damage” in the case of nuclear war still relevant? Publicly available military documents confirm that nuclear war is still on the drawing board  of the Pentagon.

  Compared to the 1950s, however, today’s nuclear weapons are far more advanced. The delivery system is more precise. In addition to China and Russia, Iran and North Korea are targets for a first strike pre-emptive nuclear attack.

  US military documents claim that the new generation of tactical nuclear weapons are harmless to civilians.

  Let us be under no illusions, the Pentagon’s plan to blow up the planet using advanced nuclear weapons is still on the books.

  War is Good for Business:

  Spearheaded by the “defense contractors” (Lockheed Martin, Northrop Grumman, Boeing, British Aerospace  et al), the Obama administration has proposed a one trillion dollar plan over a 30 year period to develop a new generation of nuclear weapons, bombers, submarines, and intercontinental ballistic missiles (ICBM) largely directed at Russia and China.

  War with Russia: From the Cold War to the New Cold War

  Blowing up Russia, targeting Russian cities is still on the Pentagon’s drawing board.  In the words of Hillary Clinton, the nuclear option is on the table.  Preemptive nuclear war is part of her election campaign.

  

  Source: National Security Archive

  According to 1956 Plan, H-Bombs were to be Used Against Priority “Air Power” Targets in the Soviet Union,China, and Eastern Europe.

   

  Major Cities in Soviet Bloc, Including East Berlin, Were High Priorities in “Systematic Destruction” for Atomic Bombings.  (William Burr, U.S. Cold War Nuclear Attack Target List of 1200 Soviet Bloc Cities “From East Germany to China”, National Security Archive Electronic Briefing Book No. 538, December 2015

  

  Excerpt of list of 1200 cities targeted for nuclear attack in alphabetical order. National Security Archive

   

  GLOBAL WARFARE

  The US has formulated a global war scenario, which is defined in military documents.

  There are three major regional deployments of US-NATO which threaten Global Security:

  1. Eastern Europe on Russia’s Western Frontier, with the deployment of US-NATO military hardware on Russia’s doorstep

  2. “The Pivot to Asia” largely directed against China

  3. The Middle East and North Africa, extending to Central Asia

  In the above regions, the use of nuclear weapons on a preemptive basis is contemplated against both nuclear and non-nuclear states.

  In other regions of the World including Latin America and sub-Saharan Africa, non-conventional forms of warfare are envisaged including destabilization,  ”regime change”,  covert support to terrorist organizations, economic warfare.

   

  1.  THREATENING RUSSIA ON ITS WESTERN FRONTIER

  Russia is threatened on its Western frontier with the US-NATO deployment of the so called missile defense system.

  A pro-US regime has been installed in Kiev which integrates two prominent Neo-Nazi Parties.

  Neo-Nazis are heavily integrated in Ukraine’s National Guard and military. The US government is channeling financial support, weapons and training to a Neo-Nazi entity –which is part of The Ukraine National Guard– The Azov Battalion (????????? ????) is  under the jurisdiction of the Ministry of Internal Affairs, the equivalent of America’s Homeland Security.

  

  Kill the Russians: The New Cold War is no longer Cold

  A former CIA Official is calling for the “Killing of Russians”.  The US media and the the State Department applaud:

  

  CBS News, Charlie Rose

   

  2. “PIVOT TO ASIA”:  SOUTH CHINA SEA

  China is threatened by the US military in the South China Sea

  WAR WITH CHINA IS CURRENTLY ON THE DRAWING BOARD OF THE PENTAGON AS OUTLINED IN A RAND REPORT COMMISSIONED BY THE US ARMY

  

  

  Washington is actively involved in creating divisions between China and its neighbours.

  The objective is to draw South East Asia and the Far East into a protracted military conflict by creating divisions between China and ASEAN countries, most of which are the victims of Western colonialism and military aggression: Extensive crimes against humanity have been committed against Vietnam, Cambodia, Korea, the Philippines, Indonesia. In a bitter irony, these countries are now military allies of the United States.

  Bilateral economic relations with China are destabilized. The Trans Pacific Partnership (TPP) is a US hegemonic project which seeks to control trade, investment, intellectual property, etc in the Asia Pacific region.

  THAAD MISSILE DEPLOYMENT IN SOUTH KOREA DIRECTED AGAINST CHINA

  THAAD missiles are deployed in South Korea, against China, Russia and North Korea.  Washington states that THAAD is solely intended as a Missile Shield against North Korea.

  

  THAAD System

  The Jeju island military base is also directed against China. 

  Less than 500km from Shanghai

  

   

  3. US-NATO WAR IN THE MIDDLE EAST AND NORTH AFRICA (MENA)

  Meanwhile, under the pretext of  waging a “war on terrorism”, US-NATO are intervening militarily in the broader Middle East Central Asian region extending from the Mediterranean to Central Asia: Afghanistan, Iraq, Libya, Syria and Yemen, resulting in several million civilian deaths.

  THe objective is to destabilize and destroy sovereign countries and to displace secular governments under regime change.

  The next stage of the Middle East war is Iran.

  The Global War on Terrorism is a Big Lie. Al Qaeda is a Creation of US Intelligence

  From the outset of the Soviet-Afghan war in 1979 to the present, various Islamic fundamentalist paramilitary organizations became de facto instruments of US intelligence and more generally of the US-NATO-Israel military alliance.

  The US has actively supported Al Qaeda affiliated terrorist organizations since the onslaught of the Soviet Afghan War.  Washington has engineered the installation of Islamist regimes in Afghanistan and Pakistan. It has destroyed the fabric of secular societies.

  Confirmed by Israeli intelligence media,  the Al Qaeda opposition fighters in Syria are recruited by US-NATO and the Turkish high command.

  They are the foot-soldiers of the Western military alliance, with special forces in their midst. The Al Qaeda affiliated “moderate” terrorist organizations in Syria are supported by Saudi Arabia and Turkey.

  The counter-terrorism agenda is bogus. It’s a criminal undertaking. What is being bombed is the civilian infrastructure of a sovereign country.

  The Historical Origins of al Qaeda

  In this video-footage President Carter’s National Security Advisor Zbigniew Brzezinski (1979) arrives in a helicopter and speaks to a translator in front of a seated crowd of Mujahedeen:

  ‘We know of their deep belief in god – that they’re confident that their struggle will succeed. – That land over-there is yours – and you’ll go back to it some day, because your fight will prevail, and you’ll have your homes, your mosques, back again, because your cause is right, and god is on your side.’

  The video-footage can be found in the documentary series “Cold War” (Episode #24, Soldiers of God, 1975-1988), Turner Original Productions (Time Warner), 1998. Speaker Kenneth Branagh.

  
  Front row, from left: Major Gen. Hamid Gul, director general of Pakistan’s Inter-Services Intelligence Directorate (ISI), Director of Central Intelligence Agency (CIA) Willian Webster; Deputy Director for Operations Clair George; an ISI colonel; and senior CIA official, Milt Bearden at a Mujahideen training camp in North-West Frontier Province of Pakistan in 1987. (source RAWA)

  

  Referred to as “Freedom Fighters”, president Reagan meets Afghan Al Qaeda Mujahideen leaders at the White House 

  The Central Intelligence Agency using Pakistan’s ISI as a go-between played a key role in training the Mujahideen. In turn, the CIA-sponsored guerrilla training was integrated with the teachings of Islam. The madrasahs were set up by Wahabi fundamentalists financed out of Saudi Arabia:

  “[I]t was the government of the United States who supported Pakistani dictator General Zia-ul Haq in creating thousands of religious schools, from which the germs of the Taliban emerged.”(Revolutionary Association of the Women of Afghanistan (RAWA), “RAWA Statement on the Terrorist Attacks in the U.S.”, Centre for Research on Globalisation (CRG), 16 September 2001)

  Destroying National Sovereignty and Secular Societies, Installing an Islamic State (Made in America)

  What has been the fate of Afghanistan.

  A progressive secular state in the 1970s and early 1980s has become a US failed State integrated by US supported Al Qaeda terrorists. This is the model that US-NATO want to impose on Syria, Iraq, Libya: Destroy national sovereignty and replace it with an Islamic State which conforms to Washington’s demands.

  

  Kabul University in the 1980′s

  

  Unknown to the American public, the US spread the teachings of the Islamic jihad in textbooks “Made in America”, developed at the University of Nebraska:

  … the United States spent millions of dollars to supply Afghan schoolchildren with textbooks filled with violent images and militant Islamic teachings, part of covert attempts to spur resistance to the Soviet occupation.

   

  The primers, which were filled with talk of jihad and featured drawings of guns, bullets, soldiers and mines, have served since then as the Afghan school system’s core curriculum. Even the Taliban used the American-produced books,..

   

  The White House defends the religious content, saying that Islamic principles permeate Afghan culture and that the books “are fully in compliance with U.S. law and policy.” Legal experts, however, question whether the books violate a constitutional ban on using tax dollars to promote religion.

   

  … AID officials said in interviews that they left the Islamic materials intact because they feared Afghan educators would reject books lacking a strong dose of Muslim thought. The agency removed its logo and any mention of the U.S. government from the religious texts, AID spokeswoman Kathryn Stratos said.

   

  “It’s not AID’s policy to support religious instruction,” Stratos said. “But we went ahead with this project because the primary purpose . . . is to educate children, which is predominantly a secular activity.”

   

  … Published in the dominant Afghan languages of Dari and Pashtun, the textbooks were developed in the early 1980s under an AID grant to the University of Nebraska -Omaha and its Center for Afghanistan Studies. The agency spent $ 51 million on the university’s education programs in Afghanistan from 1984 to 1994.” (Washington Post, 23 March 2002)

   

  

  CONCLUDING REMARKS 

  War is not an inevitable process. War can be prevented through mass action.

  War criminals occupy positions of authority. The citizenry is galvanized into supporting the rulers, who are “committed to their safety and well-being”. Through media disinformation, war is given a humanitarian mandate.

  The legitimacy of the war must be addressed. Antiwar sentiment alone does not disarm a military agenda.

  The corporate backers and sponsors of war and war crimes must also be targeted including the oil companies, the defense contractors, the financial institutions and the corporate media, which has become an integral part of the war propaganda machine.

  There is a sense of urgency. Today, the antiwar movement is virtually defunct.

  What is the Truth

  The real threat to global security emanates from the US-NATO-Israel alliance, yet realities in an inquisitorial environment are turned upside down: the warmongers are committed to peace, the victims of war are presented as the protagonists of war.

  The homeland is threatened.

  The media, intellectuals and the politicians, in chorus, obfuscate the unspoken truth, namely that the US-NATO led war destroys humanity.

  When the lie becomes the truth there is no turning backwards.

  When war is upheld as a humanitarian endeavor, Justice and the entire international legal system are turned upside down: pacifism and the antiwar movement are criminalized. Opposing the war becomes a criminal act. Meanwhile, the war criminals in high office have ordered a witch hunt against those who challenge their authority.

  The Big Lie must be exposed for what it is and what it does.

  It sanctions the indiscriminate killing of men, women and children.

  It destroys families and people. It destroys the commitment of people towards their fellow human beings.

  It prevents people from expressing their solidarity for those who suffer. It upholds war and the police state as the sole avenue.

  It destroys both nationalism and internationalism.

  Breaking the lie means breaking a criminal project of global destruction, in which the quest for profit is the overriding force.

  ACTIONS

  1. The role of media disinformation in sustaining the military agenda is crucial.

  We will not succeed in our endeavours unless the propaganda apparatus is weakened and eventually dismantled. It is essential  to inform our fellow citizens on the causes and consequences of the US-led war, not to mention the extensive war crimes and atrocities which are routinely obfuscated by the media. This is no easy task.  It requires an  effective counter-propaganda program which refutes mainstream media assertions.

  It is essential that the relevant information and analysis reaches the broader public.   The Western media is controlled by a handful of powerful business syndicates. The media conglomerates which control network TV and the printed press must be challenged through cohesive actions which reveal the lies and falsehoods.

  2. There is opposition within the political establishment in the US as well as within the ranks of the Armed Forces.

  While this opposition does not necessarily question the overall direction of US foreign policy, it is firmly opposed to military adventurism, including the use of nuclear weapons. These voices within the institutions of the State, the Military and the business establishment are important because they can be usefully channeled to discredit and ultimately dismantle the “war on terrorism” consensus.  The broadest possible alliance of political and social forces is, therefore, required to prevent a military adventure which in a very real sense threatens the future of humanity.

  3. The structure of military alliances must be addressed. A timely shift in military alliances could potentially reverse the course of history.

  Whereas France and Germany are broadly supportive of the US led war, there are strong voices in both countries as well as within the European Union, which firmly oppose the US led military agenda, both at the grassroots level as well within the political system itself.

  The weakening of the system of alliances which commits Western Europe to supporting the Anglo-American military axis, could indeed contribute to reversing  the tide. Washington would hesitate to wage a war on Iran without the support of France and Germany.

  4. The holding of large antiwar rallies is important and essential. But in will not in itself reverse the tide of war unless it is accompanied by the development of a cohesive antiwar network.

  What is required is a grass roots antiwar network, a mass movement at national and international levels, which challenges the legitimacy of the main military and political actors, as well as their corporate sponsors, and which would ultimately be instrumental in unseating those who rule in our name. The construction of this type of network will take time to develop.

  Initially, it should focus on developing an antiwar stance within existing citizens’ organizations (e.g. trade unions, community organizations, professional regroupings, student federations, municipal councils, etc.).

  Close down the weapons factories and the military bases.

  Bring home the troops.

  Members of the armed forces should disobey orders and refuse to participate in a criminal war.

  

  

• Losing Louisiana: Shocking Images Of Life After A 1000-Year Flood

  Floods ravaged the state of Louisiana, leaving at least 11 people dead and 30,000 more forced to flee rising waters after days of catastrophic rainstorms. Bloomberg's Brendan Smialowski captured these images of the aftermath…

  A boy rides his bike inside the flood-damaged Life Tabernacle Church…

  

   

  John Booth (left) sits with Angela Latiolais's (second from left) family while helping them save belongings after flooding…

  

   

  A dump truck stranded in a flooded construction site…

  

   

  A boat full of dogs makes its way through a flooded neighborhood…

  

   

  Volunteers move cages at a temporary animal shelter inside the Lamar Dixon Expo Center near a flood victims' shelter after flooding…

  

   

  A family of deer makes its way through flood waters…

  

   

  People carry computer parts from a boat after flooding…

  

   

  A car partially submerged in flood waters…

  

   

  The Gold-N-Guns pawn shop seen in flood waters…

  

   

  Rubble burns after flooding…

  

   

  Of course, on the bright side, now economists have an excuse for weak Q3 GDP data.

  *  *  *

  And finally – after all that devastation- there is this… The Aqua Dam…

  The Aqua Dam sounds truly nuts. A giant inner-tube around your house to protect you from floods? And it costs more than $8,000? That's some serious prepper stuff, and surely crazy. Well, this one worked magnificently during the Louisiana and Texas floods. Private enterprise comes through again!

  

  This is exactly the kind of thing that can only emerge in a free society where people can experiment and try out all kinds of different ways of solving problems. It's something that clearly a lot of people would think is ridiculous or too expensive, not practical, etc., yet it's the very thing that saved Randy Wagner's house.

  If we were all forced to leave it up to a one-size-fits-all state enforced solution to flooding, you know what would have happened: Wagner would have been forcibly evacuated from his home and would have had to watch as it got destroyed.

  But in a world where entrepreneurs can offer a variety of different products, and where buyers are free to take a chance on things they may not know for sure are going to work out, a family home survived a flood.

  

  

• The 10 Worst Places In America To Start A Business

  Anywhere you start a business, it's going to be a gamble.

  More new businesses fail than succeed, according to the Kauffman Foundation. And, as CNBC notes, U.S. Small Business Administration data shows that it's only a matter of time before at least half of all businesses go under: Nearly two-thirds of businesses with employees survive at least two years, but only about 50 percent survive at least five years.

  So it's important to set up in an area where the odds are in your favor. Some cities are more hospitable to business formation than others. Regulatory hurdles, tax rates, ease and cost of hiring, and cost of real estate are just some of the factors. Cities across the country are also dealing with demographic challenges, including population growth, an aging workforce and economic stagnation.

  The new CNBC Metro 20: America's Best Places to Start a Business ranking identified metro areas where the likelihood of business success is highest. For that ranking, CNBC reviewed data on the 107 largest metro areas in the United States.  

  Here's a look at the bottom 10 – the metro areas where social, economic and government hurdles to success could plague business owners.

  10. Jackson, Mississippi

  

  Jackson, the capital of the Magnolia State, is weighed by an array of issues that work together to keep entrepreneurs at bay.

  With a population of nearly 171,000, Jackson battles higher-than-average unemployment and a poverty rate of nearly 30 percent, according to the most recent U.S. Census Bureau data.

  The city's chief issues include dilapidated properties and potholes, thanks to frequent flooding and decades of poor infrastructure management.

  Jackson is trying to fix the issue. In 2014 the city approved a 1 percent sales-tax increase to fund infrastructure repairs. The measure is a crucial part of Jackson's mission to transform itself into a destination city that is "safe and conducive to entrepreneurial endeavors," according to the city's official website.

  • Jackson population growth rate: 2.06 percent
  • Jackson average hourly wages: $21.37
  • Jackson unemployment rate: 5.4 percent
  • Jackson cost of living: Low

  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  9. Albuquerque, New Mexico

  

  One of New Mexico's eight state-designated arts and cultural districts, Albuquerque is known for its historic buildings, old churches and wealth of handcrafts shops, making it a go-to destination for cultural tourists. But heavily reliant on volatile oil and gas revenues, New Mexico's economy struggled to recover from the Great Recession, and the labor force has stagnated.

  In June, Albuquerque's unemployment rate rose to 6.4 percent, the highest level since August 2015, according to the Bureau of Labor Statistics (average annual unemployment was used for the Metro 20 ranking). In addition, annual income growth per capita rose a dismal 0.3 percent in 2013, the most recent data available, trailing the national average of 1.1 percent, according to Albuquerque's most recent progress report.

  The city said it plans to make small business a big part of its economy resurgence. It now offers entrepreneurial support resources, including Innovate ABQ, a hub for researchers, investors and entrepreneurs.

  • Albuquerque population growth rate: 2.28 percent
  • Albuquerque average hourly wages: $20.97
  • Albuquerque unemployment rate: 6.2 percent
  • Albuquerque cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  8. Louisville, Kentucky

  

  Louisville may be home to big market-cap companies, like YUM! Brands, Papa John's and Lexmark, but more than 18 percent of the city's estimated 615,370 residents live in poverty. Meanwhile, the median household income is just $44,806, well below the U.S. average of $53,482, according to government data.

  Still, the city claims that small business accounts for about two-thirds of jobs.

  A plan called Louisville Forward aims to accelerate the economy through start-up resources, including five business accelerators, five co-working hubs and more than 20 networking partners. The city is also promoting a "buy local" initiative.

  • Louisville population growth rate: 3.46 percent
  • Louisville average hourly wages: $23.24
  • Louisville unemployment rate: 4.7 percent
  • Louisville cost of living: Low
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  7. Providence, Rhode Island

  

  Providence is an epicenter of academia, with eight college and university campuses anchored in the city, including the prestigious Brown University, Johnson & Wales University and Providence College. However, many students flee after graduation, resulting in a severe case of brain drain.

  As a result, the city's workforce has been hit hard. Providence's population grew just 1.1 percent between 2010 and 2015, dragging behind the country's growth of 4.1 percent over the same period, according to U.S. Census data.

  Rhode Island as a whole has business-friendliness issues. It was recently named America's Bottom State for Business in CNBC's 10th annual state-level ranking, and it's not the first time the state has been at the bottom of the list.

  • Providence population growth rate: 0.76 percent
  • Providence average hourly wages: $24.78
  • Providence unemployment rate: 6 percent
  • Providence cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  6. Fresno, California

  

  With a poverty rate that is nearly double the national average and a median household income of just $41,455, Fresno is one of California's poorest communities. But the city has tax incentives in place that are designed to boost income growth and business.

  As a part of the state's Economic Development Initiative program, businesses in Fresno receive a tax credit when they hire qualified employees for wages paid between 150 percent and 350 percent of the minimum wage.

  Because Fresno was designated as one of three pilot program areas in the state, the qualifying wage threshold in Fresno is lower than the program standard of $15, at $10/hour for pilot cities, resulting in a larger tax credit for firms in the area.

  • Fresno population growth rate: 4.77 percent
  • Fresno average hourly wages: $20.13
  • Fresno unemployment rate: 10.2 percent
  • Fresno cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  5. Santa Rosa, California

  

  Located about 55 miles north of San Francisco, Santa Rosa should get some of the benefits of the tech boom, but it is weighed down in the ranking by expensive costs of living and above-average hourly wages.

  Indeed, the city touts itself as the North Bay's premier location for technology and entrepreneurial businesses, and it is trying to live up to the title. Santa Rosa has placed a renewed focus on entrepreneurship, and it now hosts a portal for local business owners on its official municipal website.

  It's also involved in a joint venture with the Santa Rosa Chamber of Commerce and the North Bay Angels, a seed capital firm. The partnership, called the North Bay Growth & Innovation Forum, aids local start-ups by creating a larger pool of available angel and private-equity financing.

  • Santa Rosa population growth rate: 3.78 percent
  • Santa Rosa average hourly wages: $27.15
  • Santa Rosa unemployment rate: 4.5 percent
  • Santa Rosa cost of living: Very high
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  4. Allentown, Pennsylvania

  

  Allentown, Pennsylvania's third-largest city, started down a financial spiral a few decades ago (remember the Billy Joel tune?) when nearby big employers folded or fled and its retail sector collapsed. Now Allentown officials say it is undergoing a renaissance and the city wants to make entrepreneurs vital to the plan's success.

  The city partners with two business incubators — Bridgeworks Enterprise Center and Velocity — both located in the Lehigh Valley area of Allentown. The former focuses predominantly on manufacturing and manufacturing-related technology start-ups, while the latter provides affordable office space, advisory services and networking sessions to founders who are dedicated to urban renewal.

  • Allentown population growth rate: 1.36 percent
  • Allentown average hourly wages: $23.24
  • Allentown unemployment rate: 5.2 percent
  • Allentown cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  3. San Bernardino, California

  

  With nearly 34 percent of the population living below the poverty line, San Bernardino is the most impoverished city in California.

  The city declared bankruptcy in 2012, with a $46 million budget deficit, forcing it to make serious cuts in services.

  Unlike some of the other American towns in this bottom 10 that are making efforts to boost business, San Bernardino is now considering legislation that could make the business climate even worse. An amendment proposed in June would eliminate development funding for the city's small business assistance program, saving the city $150,000 for the current fiscal year. The amendment would also reduce funding for the Center for Employment Opportunities by 60 percent.

  But the city also states that it plans to offer an aggressive business incubator program to support entrepreneurial development.

  • San Bernardino population growth rate: 6.26 percent
  • San Bernardino average hourly wages: $21.48
  • San Bernardino unemployment rate: 6.6 percent
  • San Bernardino cost of living: High
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  2. Modesto, California

  

  Yep, yet another city from the Golden State relegated to this bottom 10 (the fourth thus far if you're keeping count). California may have the world's start-up mecca in Silicon Valley, but it isn't the best climate for business owners, in general. The state usually does poorly in CNBC's Top States for Business ranking due to lofty costs of living, high tax rates and high hourly wages. It came in No. 32 in the 2016 Top States ranking.

  Modesto has a population of about 211,270, with nearly 21 percent of residents living below the poverty line, compared to the statewide poverty rate of 16 percent, according to U.S. Census data. The college graduation rate is much lower that the state average, too — more than 80 percent of residents lack college degrees.

  Companies may struggle to find qualified job applicants, but the city is working to mend the education gap by connecting businesses and education leaders and encouraging social service. Earlier this month, the Modesto Chamber of Commerce held its sixth annual State of Business & Education gathering to show businesses ways to improve the local workforce.

  • Modesto population growth rate: 4.65 percent
  • Modesto average hourly wages: $22.92
  • Modesto unemployment rate: 9.5 percent
  • Modesto cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

   

  1. Stockton, California

  

  The seventh-poorest city in California, Stockton has the dubious distinction of the worst city in which to start a business. Median household income of $45,347 is about $16,000 less than the statewide average. The city's college graduation rate is also much lower than the state and national averages, according to federal data.

  The city is aware of its challenges.

  In its most recent planning report, the city said it wanted to become more business friendly and make it easier for developers to acquire licenses and fulfill permit requirements. Business issues, such as cost of permits and fees, have become a major talking point in this year's mayoral election. Stockton's often complicated and expensive permitting and licensing process is a top concern for local business owners and developers.

  • Stockton population growth rate: 5.95 percent
  • Stockton average hourly wages: $21.42
  • Stockton unemployment rate: 8.9 percent
  • Stockton cost of living: Average
  • Median population growth rate, all metro areas: 4.77 percent
  • Median average hourly wages, all metro areas: $23.77
  • Median unemployment rate, all metro areas: 5.1 percent

  *  *  *

  So 50% of America's worst 10 cities for starting a business are in California… which should not be a surprise since we noted with three simple charts why businesses are fleeing California.

  Source: CNBC

  

  

• "There's Going To Be A Massive Run On Firearms" If A Hillary Win Is Imminent

  Submitted via Mac Slavo via SHTFplan.com

  Survival Expert James Rawles Warns: “There’s Going To Be A Massive Run On Firearms… Bigger Than Anything We’ve Ever Seen Before” If Hillary Win Is Imminent

  James Wesley Rawles is a former intelligence officer of the United States Army, prolific author and one of the top survival experts in the world. In his best-selling book series Patriots he paints a terrifying picture of a post-collapse America where food is scarce, currency is worthless, law and order have broken down, and survival is a daily struggle. It’s a fictional tale, of course, but one that is grounded in real-world possibilities.

  In his latest interview with SGT Report, the SurvivalBlog.com founder breaks down the probability of such a scenario and explains that should it come to pass, where hyperinflation destroys our currency or a world war ravages America, the most important thing to have in your possession will be essential tangible assets.

  Further, Rawles notes that as we get closer to the possibility of a Hillary Clinton Presidency, we may soon see panic buying of firearms, ammunition and gun-related accessories.

  Venezuela is a microcosm of a centrally planned government and currency run amok… and we need to learn from their example.

   

  If you notice the things that people are clamoring for are tangibles… they’re looking for food and they’re looking for currencies that are inflation proof and that usually means precious metals.

   

  So if we’re going to learn anything from Venezuela it’s tangibles, tangibles, tangibles.

   

  …Wake up… watch what’s happening in Venezuela… you need to get your beans, bullets and band aids squared away… Those tangible items are going to be what pulls your family through the hard times ahead. And regardless of what happens to currencies, if you have a honest one year supply of food, preferably two years, and a good core position in physical precious metals that you hold at home… hidden… not in a bank because banks are vulnerable to banking holidays where they would limit or eliminate access to your safe deposit box…

   

  If you have those tangibles… food, silver and my other favorite is common caliber ammunition… that’s the other thing you should really stock up on heavily.

   

  I have a feeling that as we get closer to the election and if it looks like the poll numbers are leaning to Hillary winning there’s going to be a massive run on firearms… bigger than anything we’ve ever seen before… and along with that people are going to be rushing to buy any ammunition they can, reloading components and full capacity magazines.

  If you want to survive a collapse scenario this is a must-listen interview:

  

  

• A Silver Lining For Ryan Lochte?

  The ability to look straight down the lens of a camera and lie to American faces… can be quite lucrative…

   

  

   

  Source: MichaelPRamirez.com

  

  

• The Definitive Answer To Whether The Oil Market Has Rebalanced

  By EconMatters

  
  

  

  Introduction:

   

  There has been much debate in this oil industry regarding this subject with a lot of poor analysis, no analysis at all, opinions, raw speculation, pure conjecture and every investment bank in the world talking their book on this subject. So we thought we would settle this question once and for all so that everybody is on the same page. We analyzed the Oil Market to determine this question definitively by checking the actual data. The only valid way of determining this matter in a rational and constructive manner.

   

  Exhibit #1: U.S. Ending Stocks Excluding SPR of Crude Oil:

   

  2016       5/6         539,984 (Million Barrels of Oil)    8/12       521,093 (Million Barrels of Oil)

   

  We drew down 18.9 Million of Oil Stocks during summer driving season in 2016.

   

  2015       5/8         484,839 (Million Barrels of Oil)    8/14       456,213 (Million Barrels of Oil)

   

  We drew down 28.6 Million of Oil Stocks during summer driving season in 2015.

   

  Conclusion:

   

  We drew down more oil in 2015 versus 2016 for the same strong season of the market, and we are sitting with an extra 65 Million more barrels of oil in storage year over year with less of a drawdown this year during the Summer Driving Season. Therefore: Oil Market Not Rebalanced.

  

   

  Exhibit #2: U.S. Stocks of Total Gasoline:

   

  2016       5/6         240,564 (Million Barrels of Gasoline)        8/12       232,659 (Million Barrels of Gasoline)

   

  We drew down 7.9 Million of Gasoline Stocks during summer driving season in 2016.

   

  2015       5/8         226,710 (Million Barrels of Gasoline)        8/14       212,774 (Million Barrels of Gasoline)

   

  We drew down 13.9 Million of Gasoline Stocks during summer driving season in 2015.

   

  Conclusion:

   

  We drew down more gasoline in 2015 versus 2016 for the same strong season of the market, and we are sitting with an extra 20 Million more barrels of gasoline in storage year over year with less of a drawdown this year during the Summer Driving Season. Therefore: Gasoline Market Not Rebalanced.

  

   

  Exhibit #3: U.S. Stocks of Distillate Fuel Oil:

   

  2016       5/6         155,332 (Million Barrels of Distillate Oil)  8/12       153,135 (Million Barrels of Distillate Oil)

   

  We drew down 2.2 Million of Distillate Stocks during summer driving season in 2016.

   

  2015       5/8         128,270 (Million Barrels of Distillate Oil)  8/14       148,400 (Million Barrels of Distillate Oil)

   

  We built 20.1 Million of Distillate Stocks during summer driving season in 2015.

   

  Conclusion:

   

  We built more Distillate Stocks in 2015 versus 2016. However, we are sitting with 5 Million more barrels of Distillates year over year. Furthermore, we were coming from such lower levels of Distillates last year there was more room to fill up storage facilities, and like Cushing this year once Oil Capacity reaches limits the Oil gets moved to the Gulf Coast. Well similarly for Distillates once inventories reach this level of overall capacity, refiners no longer want to produce extra supplies, so they have found other alternative products to process excess oil into product for available storage capacity. Therefore: Distillate Market Not Rebalanced.

  

   

  Exhibit #4: U.S. Stocks of Propane and Propylene:

   

  2016       5/5         73,176 (Million Barrels of Propane)          8/12       93,744 (Million Barrels of Propane)

   

  We built 20.6 Million of Propane Stocks for this time period in 2016.

   

  2015       5/8         68,459 (Million Barrels of Propane)          8/14       93,866 (Million Barrels of Propane)

   

  We built 25.4 Million of Propane Stocks for this time period in 2015.

   

  Conclusion:

   

  We built more Propane Stocks in 2015 versus 2016. However, we basically have the same levels of overall stocks (Which are at Record Historical Levels) as this time last year. The big takeaway is that over the last two years a lot of oil has been processed into this category for the sole purpose of doing something with the existing oil glut. Therefore: The Propane and Propylene Market Not Rebalanced.

  

   

  Exhibit #5: U.S. Stocks of Crude Oil and Petroleum Products:

   

  2016       5/6         1,369,395 (Million Barrels of Product)      8/12       1,393,563 (Million Barrels of Product)

   

  We built 24.1 Million Barrels of Oil and Petroleum Products during summer driving season in 2016.

   

  2015       5/8         1,244,572 (Million Barrels of Product)      8/14       1,280,261 (Million Barrels of Product)

   

  We built 35.7 Million Barrels of Oil and Petroleum Products during summer driving season in 2015.

   

  Conclusion:

   

  We built 11.5 Million more Total Crude Oil & Petro Stocks in 2015 versus 2016. However, we still added another 24 Million to total overall stocks this year during the Summer Drawing and Driving Season. Moreover, we are sitting at 1,393,563 versus 1,280,261 for last year, for the highest ever Recorded Reading of this Metric by a large margin. Therefore: Oil & Petroleum Products Market Not Rebalanced.

  

   

  Exhibit #6: U.S. Stocks of Other Oils:

   

  2016       5/6         252,979 (Million Barrels of Oil)                    8/12       291,808 (Million Barrels of Oil)

   

  We built 38.8 Million Barrels of Other Oil Stocks during summer driving season in 2016.

   

  2015       5/8         239,763 (Million Barrels of Oil)                    8/14       268,971 (Million Barrels of Oil)

   

  We built 29.2 Million Barrels of Other Oil Stocks during summer driving season in 2015.

   

  Conclusion:

   

  We built more Other Oils in 2016 versus 2015, but both years saw substantial builds, and my guess is that with Distillates Inventories at Record Levels, refiners needed to find other available storage capacity to move excess oil into refined product and chose this category “Other Oils”. We built 22.8 Million Barrels to this Other Category year over year, and is just another sign the oil market is in fact getting worse during the strongest demand part of the season. Therefore: Other Oils Market Not Rebalanced.

  

   

  Conclusion:

   

  The oil market is not rebalancing as some have suggested, in fact it appears to be still oversupplied by a large measure when taking into account the year over year additions to Total Stocks and comparing them to last year`s additions. Plus when you add in the effects of floating storage, the additions to alternative products for refined product there seems a desperate effort by the oil industry to move the commodity around from Cushing to the Gulf Coast, Gasoline Refining to Other Product Refining Categories to find any available storage capacity.

  

   

  The Oil Market again moved up above $50 a barrel on the forward curve allowing more hedging for Oil Producers, and the reason the oil market hasn`t rebalanced is not enough producers went out of business. In fact the oil market is in such a state of denial that even if Saudi Arabia and OPEC agreed to a Production Freeze, or a Production Cut this would just allow more U.S. Production to come online in the form of the Completed Wells Category. There is still way too much Oil Supply, and the Oil Market is massively oversupplied, and actually getting worse as opposed to rebalancing. Just for context, the high end of the Five Year Average Total Oil Stocks used to top out at 250 Million Barrels of Oil each year, we are now more than double that level at 521,093 Million Barrels of Oil in storage.

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• AN EXTReMeLY CaReLeSS MiSTaKe…

  

  

• President Obama Violated The Law With His Ransom Payment To Iran

  Submitted by Andrew McCarthy via NationalReview.com,

  The president hoped to camouflage what he knew to be against the law in his dealings with Iran. Did it ever occur to President Obama to ask why he couldn’t just cut a check to the Iranian regime?

  Outrage broke out this week over the revelation that Obama arranged to ship the mullahs piles of cash, worth $400 million and converted into foreign denominations, reportedly in an unmarked cargo plane. The hotly debated question was whether the payment, which the administration attributes to a 37-year-old arms deal, was actually a ransom paid for the release of American hostages Tehran had abducted.

  It is a waste of time to debate that point further. The Iranians have bragged that the astonishing cash payment was a ransom — and Obama has been telling us for months that we can trust the Iranians. The hostages were released the same day the cash arrived. One of the hostages has reported that the captives were detained an extra several hours at the airport and told they would not be allowed to leave until the arrival of another plane — inferentially, the unmarked cargo plane ferrying the cash. The reason American policy has always prohibited paying ransoms to terrorists and other abductors is that it only encourages them to take more hostages. And, as night follows day, Iran has abducted more Americans since Obama paid the cash. No matter how energetically the president tries to lawyer the ransom issue, if it looks like a duck, and quacks like a duck…

  More worth examining is why the transaction took the bizarre form that it did. To cut to the chase, I believe it was to camouflage — unsuccessfully — the commission of felony law violations.

  The Wall Street Journal has reported that the Justice Department strongly objected to the cash payment to Iran. As we shall see, that should come as no surprise. What is surprising is the Journal’s explanation of Justice’s concerns: Department officials, it is said, fretted that the transaction looked like a ransom payment. I don’t buy that. It is not a federal crime to pay a ransom; just to receive one. Our government’s stated disapproval of paying ransoms is a prudent policy, not a legal requirement. The Justice Department’s principal job is to enforce the laws, not to ensure good policy in foreign relations. It seems far more likely that Justice was worried that the transaction was illegal.

  If they were, they had good reasons.

  At a press conference Thursday, Obama remarkably explained, “The reason that we had to give them cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran.” Really Mr. President? The whole point of sanctions is to prohibit and punish certain behavior. If you — especially you, Mr. President — do the precise thing that the sanctions prohibit, that is a strange way of being “so strict in maintaining” them.

  Now, the sanctions at issue exclude Iran from the U.S. financial system by, among other things, prohibiting Americans and financial institutions from engaging in currency transactions that involve Iran’s government. Contrary to the nuclear sanctions that Obama’s Iran deal (the “Joint Comprehensive Plan of Action” or JCPOA) attempts to undo, the sanctions pertinent here were imposed primarily as a result of Iran’s support for terrorism. That is significant. In pleading with Congress not to disapprove the JCPOA, Obama promised lawmakers that the terrorism sanctions would remain in force.

  Terrorism-related sanctions against Iran trace back to the early 1980s, shortly after the jihadist regime overthrew the shah, stormed the American embassy, took hostages, and triggered Hezbollah’s killing sprees. But the sanctions most relevant for present purposes stem from President Clinton’s 1995 invocation of federal laws that deal with national emergencies caused by foreign aggression.

  Clinton concluded that Iran had caused such an emergency by, among other things, “its support for international terrorism.” Note that this was even before Iran killed 19 members of the U.S. Air Force in the 1996 Khobar Towers bombing in Saudi Arabia.

  To this day, Iran remains on our government’s list of state sponsors of terrorism. Clinton’s state-of-emergency declaration has been annually renewed ever since. Let that sink in: Notwithstanding Obama’s often shocking appeasement of Tehran, he has been renewing the state of emergency since 2009 — most recently, just five months ago. Indeed, it is worth noting what the Obama State Department’s latest report on “State Sponsors of Terrorism” has to say about Iran. This is from the first paragraph:

  Designated as a State Sponsor of Terrorism in 1984, Iran continued its terrorist-related activity in 2015, including support for [Hezbollah], Palestinian terrorist groups in Gaza, and various groups in Iraq and throughout the Middle East. In 2015, Iran increased its assistance to Iraqi Shia terrorist groups[.] . . . Iran used the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to implement foreign policy goals, provide cover for intelligence operations, and create instability in the Middle East. The IRGC-QF is Iran’s primary mechanism for cultivating and supporting terrorists abroad.

  It is due to this atrocious record that Congress pressed Obama to maintain and enforce anti-terrorism sanctions, which the administration repeatedly committed to do. This commitment was reaffirmed by Obama’s Treasury Department on January 16, 2016, the “Implementation Day” of the JCPOA. Treasury’s published guidance regarding Iran states that, in general, “the clearing of U.S. dollar- or other currency-denominated transactions through the U.S. financial system or involving a U.S. person remain prohibited[.]” (See here, p.17, sec. C.14.) I’ve added italics to highlight that it is not just U.S. dollar transactions that are prohibited; foreign currency is also barred. Obama’s cash payment, of course, involved both — a fact we’ll be revisiting shortly.

  Treasury’s guidance cites to what’s known as the ITSR (Iranian Transactions and Sanctions Regulations), the part of the Code of Federal Regulations that implements anti-terrorism sanctions initiated by President Clinton under federal law. The specific provision cited is Section 560.204, which states:

  The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran is prohibited. [Emphasis added.]

  The regulation goes on to stress that this prohibition may not be circumvented by exporting things of value “to a person in a third country” when one has “knowledge or reason to know that” such things are “intended specifically for supply, transshipment, or reexportation, directly or indirectly, to Iran or the Government of Iran.”

  To summarize, the anti-terrorism sanctions are still in effect, a fact the administration has touted many times. Obama conceded at his press conference both that these sanctions are still in effect and that they applied directly to his $400 million pay-out to our terrorist enemies. But here’s the president’s problem: While he is correct that the sanctions barred him from sending Iran a check or wire transfer, that is not all they forbid — not by a long shot. They also make it illegal to do what he did.

  As noted above, the sanctions prohibit transactions with Iran that touch the U.S. financial system, whether they are carried out in dollars or foreign currencies. The claim by administration officials, widely repeated in the press, that Iran had to be paid in euros and francs because dollar-transactions are forbidden is nonsense; Americans are also forbidden to engage in foreign currency transactions with Iran.

  Obama had our financial system issue U.S. assets that were then converted to foreign currencies for delivery to Iran. Both steps flouted the regulations, which prohibit the clearing of currency of any kind if Iran is even minimally involved in the deal; here, Iran is the beneficiary of the deal.

  The regs further prohibit supplying things of value to Iran, regardless of whether it is done “directly or indirectly.” Expressly included in the “indirect” category are transfers of assets to another country with knowledge that the other country will then forward the assets, in some form, to Iran. That’s exactly what happened here, with Obama pressing the Swiss and Dutch into service as intermediaries.

  Although these regulations leave no room for doubt that their point is to prevent and criminalize things like sending $400 million in cash to the world’s leading sponsor of terrorism, the ITSR adds another reg for good measure. Section 560.203 states:

  Evasions; attempts; causing violations; conspiracies: . . . Any transaction . . . that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this part is prohibited. . . . Any conspiracy formed to violate any of the prohibitions set forth in this part is prohibited.

  By his own account, President Obama engaged in the complex cash transfer in order to end-run sanctions that prohibit the U.S. from having “a banking relationship with Iran.” The point of the sanctions is not to prevent banking with Iran; it is to prevent Iran from getting value from or through our financial system — the banking prohibition is a corollary. And the point of sanctions, if you happen to be the president of the United States sworn to execute the laws faithfully, is to follow them — not pat yourself on the back for keeping them in place while you willfully evade them. The president’s press conference is better understood as a confession than an explanation.

  Oh, and there is also Section 560.701, which makes clear that willful violations of the regulations constitute serious felony offenses under federal criminal law — punishable by up to 20 years’ imprisonment.

  I hope you’re not lawed out, because there are a couple of other criminal statutes to consider.

  The first is the law against providing material support to terrorists, Section 2339A of the federal penal code. It says that anyone who provides resources — including “currency or monetary instruments” — to a person or entity with knowledge that they are to be used in the preparation or carrying out of terrorism offenses is guilty of a serious felony. I’ve italicized “knowledge” to underscore that intent is not required; to be guilty, you just need to know.

  As we note above, the Obama administration has just reaffirmed that Iran remains a state sponsor of terrorism. Moreover, as our editors recounted in Friday’s National Review editorial:

  [Secretary of State] John Kerry even admitted in January that funds channeled to Iran as part of the nuclear deal would “end up in the hands of the IRGC [Iran’s Revolutionary Guard Corps] or other entities, some of which are labeled terrorists.”

  No doubt: The IRGC’s Quds Force is a formally designated terrorist organization, as, of course, is Hezbollah, Iran’s forward jihadist militia with which the IRGC colludes. And as Tom Joscelyn recently pointed out, Iran continues to harbor members of al-Qaeda (three of whom were just formally designated as terrorists).

  In sum, the Obama administration has provided Iran with $400 million under circumstances in which it well knows that at least some of this cash will be used for terrorism. Indeed, as the editors point out, by providing the money in cash, Obama makes it more likely that it will be used for terrorism: Iran likes to deny its complicity in jihadist acts; so now, flush with cash, it can fund atrocities without leaving a paper trail.

  The second law involves money laundering, criminalized by Congress in Section 1956 of the penal code. There are several prohibited varieties of money laundering. It can be a crime, for example, to conduct a financial transaction involving money used to facilitate unlawful activity. And if money is transferred outside the United States, it can be illegal to use it to promote criminal activity.

  As we’ve seen, both currency transmissions to Iran and the provision of material support to terrorism are unlawful activities. The administration has conducted a financial transaction (in fact, several transactions: the issuance of the assets, their conversion into foreign currency, and the transmission to Iran) which facilitated both currency transfers to Iran and Iran’s certain use of the money to support terrorism. Plus, the money was shipped outside the United States before being transferred to Iran and before Iran will use it to promote terrorism. Money-laundering cases often boil down to proof of intent; but there clearly are multiple grounds on which to investigate whether the laws have been transgressed.

  The circumstances of Obama’s enormous cash transfer to our terrorist enemies raise serious questions about whether American policy against paying ransoms to terrorists has been flouted. But that should not obscure a more fundamental issue: The president has violated the law.

  

  

• Cathay Pacific Crushed As Chinese Corporate Travel Collapses

  Cathay Pacific announced earnings earlier this week which paint a fairly ominous picture for China.  The airline posted a 9.3% YoY drop in revenue and an 82% decline in net profit which they attributed to, among other things, "weak passsenger demand, particularly in the premium class".  Comments from the Cathay's press release clearly indicate weak corporate travel with the company pointing out that corporate enplanements in Hong Kong declined for the first time since 2009:

  • The slowdown in the Mainland China economy and economic fragility elsewhere caused restrictions to be placed on corporate travel. This adversely affected premium class demand, particularly on long-haul routes.
  • Yield was further affected by strong competition, adverse currency movements and a significant reduction in premium corporate travel.
  • Demand for travel originating from Hong Kong was strong in the first two months of the year, but weakened thereafter. Corporate travel originating in Hong Kong was well below expectations, particularly to London and New York. Numbers travelling declined for the first time since 2009, when business was affected by the financial crisis.
  • Tourism from Mainland China to Hong Kong is weak.

  A couple of tables from Cathay's earnings presentation help sum up the story.

  Passenger yields tanked in 1H16 on lower corporate travel…

  

   

  Marking the lowest yields since 2009…

  

   

  While cargo yields plunged through 2009 levels…

  

   

  Unfortunately, Chairman John Slosar doesn't expect things to improve in the back half of 2016:

  We expect the operating environment in the second half of the year to continue to be impacted by the same adverse factors as in the first half. The overall business outlook therefore remains challenging. We expect passenger yield to remain under pressure. Overcapacity and economic fragility will dampen cargo demand.  We will also continue to be vigilant on costs.

  Meanwhile, the company's earnings presentation noted the following for 2H16 outlook: 

  • The challenging business environment is expected to continue.
  • Yields are expected to continue to be under intense pressure.
  • Lower Hong Kong traffic with more 6th Freedom travel.
  • The cargo business will continue to be adversely affected by overcapacity and economic fragility.

  And, of course, Mr. Market was not happy…

  

   

  

  

  

• Not All Americans Have The Right To Bear Arms

  No matter which side of the gun debate you fall on, we can all agree that gun laws are confusing. As ValueWalk.com notes, there are federal laws, state laws, and local municipal laws, all of which can be contradictory.

  There is still debate as to whether the Second Amendment is intended to give individuals the right to keep and bear arms or whether that right was meant as a collective to protect the state, though rulings in the last decade have upheld an individual’s right to bear arms.

  The United States is #1 for personal firearms ownership per capita by a longshot- the U.S. has 5% of the world’s population and owns an estimated 50% of the civilian owned guns in the world. That said, there are still millions of Americans who are federally prohibited from owning personal firearms. For starters, anyone under 18 years of age is prohibited from owning firearms- that’s nearly 71 million people. Also, anyone convicted of a felony- another nearly 6 million people- are prohibited from owning firearms. Illegal aliens, who make up nearly 12 million of the people in the United States, are also prohibited from owning firearms. Also prohibited from owning firearms are fugitives from justice, persons deemed to be dangerously mentally ill, drug addicts, dishonorably discharged military personnel, anyone who has renounced their U.S. citizenship, and anyone who has been indicted for or convicted of crimes punishable by over 1 year in prison.

  There are also limits to the types of firearms that can be owned by individuals without special licenses. Semi-automatic handguns and rifles are legal to own, but fully automatic weapons are only legal for police, the military, and persons with special licenses. In addition there are limits to the type of ammunition that can be owned by private individuals. Learn more about federal gun laws as well as laws that vary by state from this infographic!

  (click image for large legible version)

  

  Source:FederalCharges.com

  

  

• "Markets Are Ripe For A Black Swan Event" – Why Most 'Well Hedged' Funds Won't Survive

  George Sokoloff, founder and CIO of Carmot Capital, recently explained why typical asset allocation strategies, including those employed by most "sophisticated" hedge fund managers, end up getting slaughtered during market shocks despite perceptions of being "well hedged".  One has to look no further than the last "great recession" to get a glimpse of just how well the typical "hedged" portfolios fared during the last "Black Swan" event. 

  Unfortunately, large pools of institutional capital have grown increasingly accustomed to making allocation decisions based on short-term returns and relative performance rather than absolute returns over extended periods of time.  Therefore, massive losses are ok as long as everyone is losing money at the same time, right?  Absolute returns only matter to the suckers that are actually planning to use those pension assets to retire at some point.  And, as for the hedge fund manager, don't worry if your relative returns suffer as that's not such a big deal either…simply shut your fund down…go on a really long vacation then come back and raise even more assets than before.  But we digress. 

  In an interview with International Business Times, Sokoloff points out that most investment strategies follow a Taleb distribution that provide the appearance of low risk and steady returns but in reality offer investors a high probability of a small gain and a small probability of a devastating loss.  Unfortunately, as Sokoloff points out, the majority of institutional capital across the globe is levered to such strategies.  Just like in the "great recession," funds that rely on "diversification" as a hedging strategy have a rude awakening during Black Swan events as correlations converge to 1 and the benefits of such diversification are erased.  

  "You could be making 5% per year but then there could come a year that you lose 30% or maybe more, and that's kind of the big nature of the Taleb distribution," said Sokoloff.

   

  "Unfortunately most investment strategies actually follow that, including very sophisticated hedge funds, risk parity funds etc. Essentially the whole endowment model, big endowments, family offices and institutions, all of them have investments and their portfolios unfortunately follow the Taleb distribution and they do have a fat left tail.

   

  "They try to hedge it as much as they can just by purely diversifying. But liquidity events are so insidious that your benefits are gone simply because your correlations start converging to one."

  Sokoloff uses a very simple analogy to illustrate the risks of typical portfolio allocation strategies by looking at what would have happened to a prudent money manager, based in 1912 Geneva, who constructed a diversified portfolio of developed and emerging market stocks and bonds:

  Imagine being a wealth manager out of Geneva in 1912, trying to create a nice diversified portfolio of developed market bonds, and emerging market bonds, says Sokoloff.

   

  Say 39% of client assets would be split between stocks of Great Britain, France, German Empire, Austria-Hungary and Italy: truly mature, developed markets.

   

  Some 21% of assets would go into stocks of the two fastest growing economies: Russian Empire and North American United States. The wealth manager might also put a smidge into emerging economies like Argentina, Brazil or Japan.

   

  In bonds, allocation would be somewhat similar. Gilts with sub-3% yield would be the benchmark, with the rest of developed and emerging bonds trading at a spread.

   

  Alternatives investment could be in anything ranging from arable land in central Russia or the Great Plains, to shares of new automotive or aeroplane startups in Europe and America, to Japanese manufacturing ventures.

  As Sokoloff points out, this "prudent" portfolio would have faced drawdowns of as much as 80% over the next decade.   People tend to rely on historically stable relationships between bonds and stocks, and when that relationship breaks down – as often happens in a liquidity event – even complicated strategies involving some arbitrage, essentially blow up.

  The typical problem with strategies designed to profit during Black Swan events is that funds that are genuinely hedged against systemic risk tend to under-perform during periods of relative market stability due to the costs of hedging.  And given the focus on short-term performance in today's market, most institutional capital does not have the patience to stick with fund managers that consistently under-perform during stable markets even if the payoff could be huge during a down cycle.  But, Sokoloff notes there are strategies that provide minimal returns during "normal" market periods and stellar returns during "Black Swan" events, strategies which he refers to at the "Holy Grail." 

  There are a number of types of strategies which make good candidates for the Holy Grail. Many derivatives like conditions when volatility jumps. During a stockmarket crisis credit spreads between different quality bonds start increasing as people see higher chance of default on lesser quality bonds. This is where you can play on the derivatives space that hinges on the credit spreads; so credit default swaps for instance.

   

  Commodity trading advisors (CTA), or people looking into the movement of futures of different kinds and taking bets on either side, would be another candidate class of assets for this type of hedging.

   

  Another interesting hedge would be the sub-class of macro managers, the much maligned macro investors that are really contrarians. They believe there will be will be some economic shocks going forward, especially with emerging markets like China and others; or that Japan's unusual policy will backfire. The best-known in this camp are the likes of Hugh Hendry at Eclectic and Kyle Bass of Hayman Capital.

   

  Sokoloff said: "Those are the managers that use a lot of macro instruments that are convex in nature and they are just trying to time when things start going south. They have not really been good performers; they have been hated in last seven years and have lost assets as well. But still, they are a very good hedge."

   

  The last candidate would be algorithmic traders that benefit from prevalence of fear in the market. When fear strikes markets people start acting in very chaotic fashion. Sokoloff points out that the human psyche is really tuned in a certain way, which makes humans very predictable when they panic. That makes a ripe field to harvest with algorithmics.

   

  "There are algorithmic traders that also provide convex returns, tail risk hedging returns and that allows you to also benefit very strongly from any sort of collapse, slide or risk situation. And that is the camp we are in."

  Finally, Sokoloff points out that our current environment is ripe for a Black Swan event while the only thing missing is the proper catalyst.

  "What we are seeing right now, unfortunately, is stagnation. The growth rate is zero for developed markets. That is the precipice. That is the trigger point for the financial system to start suffering shocks.

   

  "Global trade volumes in the past 18 months have gone nowhere. Pure import and export trade is not growing. It's at zero, which kind of tells you that if trade is flat where does the GDP really grow on? And most of the time it's just gathering expenditures. That is obviously a non-sustainable situation.

   

  "A non-sustainable situation needs a trigger point or a flash point before it can really erupt. There's plenty flash points; political, military, economic, social. They are just not triggering yet. But they will at some point.

   

  "Frankly, the situation that we have right now could be just like 1912."

  

  

• Students Fight Back Against Political Correctness – The Rise Of "Cultural Libertarianism"

  Submitted by Harith Armstrong and Kassy Dillon via HeatSt.com,

  HARITH ARMSTRONG:

  In both the United States and the United Kingdom, conservative and libertarian viewpoints have endured censorship on the Internet and on college campuses.

  This has given rise to a new generation of animated and impassioned students keen on partaking in what’s been aptly described as the “cultural libertarian” movement.

  Young millennials engaged in this movement come from a variety of backgrounds but are able to unite based on a fervent disdain for those that believe there are boundaries to what’s deemed “acceptable” speech – a hatred of authority; and a love of freedom and mischief.

  As a conservative writer and student at King’s College London, I have been actively campaigning against political correctness.

  

  I was recently temporarily suspended from Facebook for announcing a series of speeches I wanted to give at universities in London questioning the place of Islam in the modern world.

  I believe social media companies like Twitter and Facebook actively seek to censor those who talk about the link between Islam and the behavior of jihadists, those who want to put a halt to immigration and those who criticize the Black Lives Matter and feminist movements.

  The victims of their failure to entertain nuance are solely of one political persuasion. My public support of Donald Trump at college was an exercise in differentiating between those who cared about freedom of expression and those who were willing to discard it in favor of a feeling-based approach to learning.

  I think being provocative and adopting a contrarian-like demeanor to intellectual discourse is mistakenly associated with populism and a lack of integrity in our culture.

  Pushing the boundaries is an integral part of upholding the pillars that help maintain a healthy civilization—so long as my university infantilizes students by no- platforming politicians like Boris Johnson, condones the harassment of those who support the Israeli state, and perpetuates the idea that safe spaces are necessary.

  I will continue to make my voice heard.

  KASSY DILLON:

  As a free-speech activist, journalist and student. I felt obliged to join the fight to reinstate Milo Yiannopoulos after his permanent ban from Twitter. I did this by highlighting the partiality of his ban and seeking support from others through keeping the “FreeMilo” hashtag alive.

  

  This resulted in me being harassed and receiving death threats from accounts that were reported by dozens of people yet escaped suspension.

  As reported by Heat Street, shortly after Yiannopoulos’ ban, I sought to reveal the implicit bias of political correctness on Twitter by re-posting the hateful tweets by Leslie Jones, the actress from the new Ghostbusters who is credited with getting Yiannopoulos suspended.

  Twitter temporarily suspended me within hours, and decided to take no action against Jones. Both Harith and I are students at overwhelmingly liberal schools, and we’ve encountered professors and students who dismiss our opinions by virtue of our political affiliation. The majority of lecturers and academics view the world through the prism of one ideology.

  I remain hopeful that universities will eventually begin to promote intellectual diversity. The increased presence of organizations supporting conservative and libertarian students such as Right2Debate, Leadership Institute, Young Americans for Freedom and Young Americans for Liberty will act as a voice for those students facing discrimination.

  By having these organizations offer training, conferences and financial support, students are now equipped to challenge the misrepresentations by the left.

  I carried out a social experiment last semester at my school, Mount Holyoke College, that showed how much freedom of speech has diminished as a principle worth defending by young students on the left. I hung a Trump campaign sign on my door, it was thrown into the garbage bin. After hanging the Trump sign back up, it was yet again thrown in the garbage, but this time ripped to shreds.

  This illustrated not only the deep political divide on my campus, but the reactionary and juvenile behavior of my fellow students.

  JOINT CONCLUSION:

  Uniting to give a voice to those students facing censorship or discrimination for holding respectable views is the way forward. The internet remains a place where young “cultural libertarians” have a chance to speak out against the hypocrisy of the left. News websites  have provided us with the opportunity to expose the way in which freedom of expression has been curtailed to appease the liberal-majority.

  We both realize that university administrations cave to the will of those who are most organized. This is what gives us both hope and encouragement. Conservatives and libertarians need to unite to win this culture war.

  We vow to do all we can to challenge the authoritarians at universities in the UK and USA. If we continue fighting, we’ll eventually become the majority.

  History testifies that freedom always prevails.

  

  

• Which States Have The Most Millennials Living At Home With Mom

  We've written frequently over the years about the legions of "safe space" seeking Millennials moving back in with mom (see "More Young Americans Live With Their Parents Than At Any Time Since The Great Depression").  As the Pew Research Center reported back in May, for the first time ever more 18-34 year olds are living at home with mom than are "married or cohabiting in their own households."  According to Pew research the biggest reason for Millennials moving back home is their inability find jobs to support their independence.  Take, for example, "young" Lisa Jacobs:

  Lisa Jacobs holds two bachelor’s degrees, one in photography and one in graphic design. But work has been sporadic, so this year she moved back in with her parents in Somerset, New Jersey.

  “My parents have a lovely home, but nobody’s happy to be living at home at 32,” Jacobs said, adding that she needs to make at least $20 an hour to afford an apartment. “There are plenty of places that would pay me $15 an hour. But that’s not getting me any closer to moving out.”

  Frankly, we're shocked that someone with TWO uselessamazing bachelor degrees wouldn't be able to find a job in such a robust economy.  But don't strain yourself, young Lisa Jacobs, with a $15 per hour job that is beneath your level of enlightenment…no you just move in with mom and wait for your dreams to come true!

  For parents who might find themselves in similar situations, the University of Minnesota has developed a very helpful map to assess the risk of your over-educated, entitled, self-indulging offspring moving back home.  Unsurprisingly, parents are most at risk in the states with large, expensive metropolitan cities where recently-educated, residentially-challenged young adults like to return to indulge their "social" desires but can't necessarily afford to live.  The states with the highest percentage of Millennials living at home were New Jersey (43.9%), Connecticut (38.8%), New York (37.4%) Florida (37.2%) and California (36.7%). 

  If you're the parent of a Millennial and just want to be left alone might we suggest a nice "fly-over" state like North Dakota where only 15.6% of Millennials are found to be living at home.  Sure it's a little cold but the remote, barren landscapes are amazing Millennial deterrents.

  (click on map below to be redirected to interactive version with additional stats)

  

  

  

• Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month – "The Market Is Devastated"

  Three weeks ago, when we looked at the long-overdue sudden change in the Vancouver housing market, long a receptacle for Chinese hot and laundered money, we found that as a result of the implementation of the 15% property tax implemented by British Columbia (something we recommended over a month earlier), that the Vancouver housing bubble has burst.

  We concluded this based on anecdotal evidence by local real estate professionals: “As a new dawn breaks in Metro Vancouver’s real estate market, realty companies and real estate boards are reporting the first anecdotes of deals falling through as foreign buyers forfeited deposits on binding deals rather than pay the new tax. Worse, if only for the unprecedented local housing bubble, and certainly better for potential local homeowners who were locked out from the massively overpriced market, they report evidence of local buyers withdrawing offers in expectation that the market will soften.”

  Less than a month later, there is also hard evidence to confirm this assessment. According to Global News, evidence from realtors and MLS data is showing the Vancouver real estate market is in the midst of a major slow down, with prices dropping and sales plummeting. 

  While August is typically one of the slowest months for real estate transactions, MLS sales data from the first two weeks of the month shows what many have been hoping for during the last few years of escalating prices. According to realtor Brent Eilers, using MLS listing data, there were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94%.

  

  Global News obtained MLS sales data from several key Metro Vancouver markets and found the number of homes sold during the first two weeks of August in Greater Vancouver dropped by 85% on average. Richmond experienced a 96% drop in the number of sales and Burnaby North fell by 95%. Vancouver’s West Side, West Vancouver, and Coquitlam also took major hits.

  It appears that the Vancouver housing market has slammed shut.

  Which is hardly a surprise: virtually everyone saw it coming, the only question was when. Eilers says he’s been warning of a real estate slow-down for at least a year due to the region’s unsustainable and unsupportable prices. West Vancouver, where he does a large part of his business, had a benchmark detached home price of almost $3.4 million in July according to the Real Estate Board of Greater Vancouver.

  “The market in West Van is up 450 per cent since 2001. So is everyone making 600 per cent more income than they were so they can pay their taxes and buy their houses? Of course not. So how is this inflation been financed? By off-shore money and record debt.” Precisely what we said at the start of the year when we first heard horror stories about Chinese buyers paying cash, sight unseen, for any and every local luxury, and not so luxury home.

  It appears that it is not just the 15% luxury tax implemented on on July 25 that has burst the bubble: according to Eilers sales were dropping even before the tax. According to the data, July was another slow month in West Vancouver with only 44 sales, down from 80 in 2015. June saw 74 sales, also down from 102 the year before.

  The pattern has left the market “devastated”, Eilers adds.

  While it may be too early to make a definitive conclusion, after all while earlier this month, the REBGV released its statistics for the month of July, saying the data showed the market had slowed down to “normal levels”, there was still no official August data available, and thus no actual indication of the slowdown. Fortunately for buyers, real-time data proves otherwise.

  Zolo, a Canadian real estate brokerage, keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price” used by the REBGV. It currently shows a major correction underway in most Metro Vancouver markets. According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7% over the last 28 days and down 24.5% over the last three months. The average detached home is $2.6 million, down 7% compared to three months ago. 

  

  Still, it may be too early to call the time of death of the market. “It’s only slowing down at the top where there is uncertainty,” Zolo CEO Barry Allen said. And that uncertainty is “diabolically dangerous”, according to Eilers, who has sold real estate during four different correction periods in Vancouver. “When the market changes, it typically changes over night or within a couple of weeks, but it often takes two to three months for everybody to figure it out. That’s why it can be so scary,” he said.

  According to the realtor, often sellers have their houses appraised months before they put them on the market, meaning in the climate we are currently witnessing, sellers are expecting to list their homes at record-high prices, even though the number of sales and listings indicate prices should be lowering.

   

  “Typically what happens when the market starts to flip is all the buyers go into hibernation and all the listings come on. What are the odds on getting that seller to price his home at a fraction of where the market is now? It’s zero,” Eilers said.

   

  What causes prices to lower is “urgency, anxiety, and fear,” according Eilers. He says a climate of financial overexposure, a treadmill of buying and selling and flipping homes, owning multiple properties, and buying before selling will test how long sellers can hold on without selling in desperation.

  If the bubble has indeed burst, things are about to get very ugly. Eilers says that in the 1980 housing crash, prices dropped by 40 to 60% within a year and took six years to recover. “So your $2 million house became $800,000 in five months. There’s a lot of economists and a lot of wise people that believe that our financial structure is much closer to that structure from a corrections’ point of view,” Eilers explained.

  One thing, however, appears certain: the foreign money influx has stopped. Zolo’s CEO says the foreign buyer tax has certainly stopped speculative buyers. This has caused many other buyers to take on a “wait and see” approach, which has essentially frozen the market.

  News of the foreign buyer tax has spread to China, where Chinese real estate website Juwai now promotes other Canadian cities as foreign capital destinations. The website used to promote Vancouver as one of the best places for wealthy Chinese to invest, but has now switched to publicizing Calgary and Alberta due to the tax.

  Which means that while one bubble is bursting, another is about to start, even if it is smack in the middle of Canada’s bleeding oil patch.

  That said, this is good news for ordinary Vancouver residents. NDP MLA David Eby says the tax has caused a lot of people to hit the pause button on buying homes, but all those people might come back into the market in September. Despite his reservations on how the tax was implemented – he would have preferred an incrementally-increasing tax – he says a market slow down is good news.  

  “A lot of people have said to me quietly that they hope there is a substantial housing crash.”

  Well, it appears they got what they wanted. Now the only question is what happens once Vancouver “corrects” by 30%, 40% or more – will the Chinese buyers stay away permanently or, like a good S&P500 algos, simply BTFD. We will have the answer in a few months.

  

  

• Leaked Memo Shows Soros Pushed Greece To Support Ukraine Coup, Paint Russia As Enemy

  Submitted by Alex Christoforou via TheDuran.com,

  Last week we reported on the DC Leaks hack of what was over 2,500 documents detailing how George Soros and his NGOs influence world leaders, drive foreign policy, and help to create unrest in sovereign nations, that many times leads to chaos and civil war.

  One country of particular focus for George Soros and his NGOs is Ukraine.

  It is now accepted fact that Soros was deeply involved in the Maiden protests in 2014 and the violent coup, that saw a democratically elected government overthrown in the name of “EU values”.

  What is even more troubling, as revealed by the DC Leaks hack, is how Soros and his network of “non-profit organisations” worked to lobby EU member states into not only buying his Ukraine “Maidan” narrative, but to also disavow any ties and support for Russia.

  Leaked documents show that George Soros was active in mapping out the Greek media landscape with generous grants, so as to further his Ukraine project, while also using his deep pockets to get Greek media to turn against the Russian Federation…in what can only be described as a well-funded and orchestrated smear campaign.

  In one document entitled: “Open Society Initiative For Europe (OSIFE). Mapping the Ukrainian debate in Greece” (Ukraine and Europe-greece-tor ukraine debate mapping  greece.docx), Soros offers a consultant a remuneration of $6,500 (gross) for “at least 15 full working days in carrying out this task” plus all expenses paid.

  The aim of this task:

  The consultant is expected to chart the main players in the Greek debate on Ukraine, outline the key arguments and their evolution in the past 18 months. Specifically, the report will take stock of any existing polling evidence provide a ‘who is who?’ with information about at least
  – 6 newspapers,
  – 10 audiovisual outlets (TV and radio),
  – 6 internet sites,
  – About 50 opinion leaders and trends in social networks[1].

   

  Categorize the main strains of discussion and eventually identify different sides / camps of the discussion.

   

  Provide a brief account of how Russia has tried to influence the Greek debate on Ukraine through domestic actors and outlets

   

  Include a section with recommendations on
  – What are the spaces OSF should engage and would most likely to have impact?
  – What are the voices (of reason or doubt) that should be amplified?

  Open Society Initiative For Europe (OSIFE) selected Iannis Carras for the Greek media mapping grant. The justification why he was chosen…

  All contracts were for the same amount. We needed to find highly specialized researchers to map the debate on Ukraine in Europe, therefore we identified a shortlist of candidates in consultation with colleagues in the Think Tank Fund, OSEPI and in consultation with members of the OSIFE board and chose the most qualified who could produce the report in the time allowed. In the case of Greece we agreed that Iannis Carras, an economic and social historian of Balkan and Russian relations with expert knowledge of Greece’s NGOs and social movements, was the best suited to the task.

  What is even more interesting is not the grant from OSIFE, but a letter from grant winner Carras to a person named Mathew (another Greek speaker???), outlining his plan in detail for pushing Soros’ Ukraine agenda in Greece.

  Of significance is how Carras tells Mathew about Greek society’s overall suspicion of The Open Society after the roll in played in seeding unrest in Yugoslavia. Carras even tells Mathew to not mention The Open Society in Greece.

  “Do you want your name to appear alongside mine on the paper?  Do make comments on all of the below.

   

  In general, and at your discretion, do not say you are doing this for Open Society because it is likely to close down doors. There’s a lot of suspicion about Open Society in Greece, mainly because of its positions vis-à-vis the former Yugoslavia. As I am simultaneously writing an article for Aspen Review Eastern Europe that can be used as the organisation for which research like this is taking place.”

  Carras then goes on to outline his approach in manipulating Greek society, covering topics such as:

  1.     Media.
  2.     Political parties and think tanks
  3.     Opinion polls.
  4.     Business relations.
  5.     Religious and cultural ties.
  6.     Migration and diaspora.
  7.     Greece and Ukraine in the context of Greece’s economic crisis.
  8.     Greece, Ukraine and the Cyprus issue.
  9.     Names and brief description of significant actors: a ‘who is who?’ with information on at least 50 opinion leaders

  Carras notes how Russia has much goodwill in Greece, exercising “signifiant soft power”.  Carras notes that Greece is, at this moment, a weak player in the Ukraine debate and the Greek Foreign Minister Kotzias realises this.

  Summary: I am working on the hypotheses largely born out by the interviews carried out so far that Russia has significant soft power in Greece though this does not easily convert into hard power (e.g. vetoing EU sanctions).Greeks are basically not very interested in Ukraine and the crisis there. They reflect and understand that conflict through their own economic crisis and their relations with Europe (nowadays primarily Europe and not US). To the extent that relations with Europe remain the focus and do not go off the rails, Greece will bark but will not bite. If they improve, Greece might not even bark (as can be seen with Greece’s policy on Israel, Kotzias can be very much a realist).

  Carras does warn that should Greece’s economic situation deteriorate further, than Greece may very well look to Russia for support, and this has implications on the Ukraine plan.

  If they deteriorate however, Greece will be looking to Russia for increased support and will alter its Ukraine policies accordingly. Do you agree with these hypotheses? Can you find confirmation for or against them in the media outlets examined?

  Carras places extra emphasis on influencing the media in Greece, citing various large news outlets that the Soros NGO can target, including approaching left wing and right wing blogs.

  This is the bulk of the work (we have to think about how to divide the work up). We have to provide a ‘who is who?’ with information about at least 6 newspapers, 10 audio-visual outlets (TV and radio) and 6 internet sites. Some of these will be obvious, but, even in these cases, change over time (at least eighteen months) is an important consideration. Here are some suggestions for newspapers: Kathimerini, Avgi, Ta Nea, Vima, Efymerida Syntakton, Eleutherotypia, Proto Thema, Rizospastis? etc. What else? Protagon? Athens Review of Books? (info on Kotzias). As for TV, we’ll just do the main ones. What about left wing blogs? What about commercial radio stations? I think we should cover Aristera sta FM. Sky. What else? Anything from the nationalist and far right? My choice would be Ardin (already looking at this) which at least tries to be serious. Patria is even more unsavoury. I’ll deal with the religious web sites in the culture and religion appendix. I think we should interview Kostas Nisenko (http://www.kathimerini.gr/757296/article/epikairothta/kosmos/viaih-epi8e…) and Kostas Geropoulos of New Europe to get into the issues involved… not at all sure though that it’s advisable to talk to the Russia correspondents Thanasis Avgerinos, Dimitris Liatsos, Achileas Patsoukas etc. (I know all of them). Also if we come across articles with interesting information on any one of the topics, we should mail them to one another.

  Attention is placed on influencing political parties. Carras sees this as a more difficult task, as parties in Greece would not be warm towards turning their back on Russia.

  Who if anyone deals with Russia / Ukraine within each of the political parties? How important are political parties in formulating policies? (my hunch is totally unimportant). I must admit I have little idea of how to proceed with this one, but I have written to the academic Vassilis Petsinis and I hope I’ll get to skype with him soon. Think-tanks are easier, and, I think, more important. I have already interviewed Thanos Dokos (director Greek foreign policy institute, ELIAMEP) in person.

  Carras notes how he has approached various religious leaders, academics and actors, to gauge a sense of how deep Russia’s influence and “soft power” runs in Greek society and culture.

  So far I have interviewed by telephone Metropolitan John of Pergamum (one of the top figures in the inner circle of the Istanbul based Ecumenical Patriarchate). I have read Metropolitan Nektarios of the Argolid’s recent book (2014), “Two bullets for Donetsk”. I have tried but so far not succeeded in contacting Metropolitan Nektarios himself, and have started work on two of the main religious news websites romfea.gr and amen.gr .

   

  With respect to culture I intend to contact Georgos Livathinos, leading director of Russian and other plays and Lydia Koniordou, actress. Also the management of the Onassis Centre, particularly Afroditi Panagiotakou, the executive vice-director who is quite knowledgeable in this field having travelled to both Ukraine and Russia.

   

  In 2016 Greece and Russia will be hosting each other as the focus of cultural events in the two respective countries. I will be looking to understand the extent to which Russia’s unparalleled cultural soft-power might translate into Greek policy making.

  Greek military is the final point of influence, with Carras interviewing Ambassadors and policy decision makers.

  Foreign policy and the Greek military. So far I have interviewed in person Ambassador Elias Klis (formerly ambassador of Greece to Moscow, advisor to the current Foreign Minister, advisor to the Greek Union of Industrialists. He is perhaps the single most important person for understanding Greek-Russian diplomatic relations at present). Ambassador Alexandros Philon (formerly ambassador of Greece to Washington, to whom I am related). Captain Panos Stamou (submarines, extensive contacts in Crimea, also secretary and leading light of the Greek-Russian historical association) who emphasised the non-political tradition of the Greek armed forces. Tempted to talk to Themos Stoforopoulos for a nationalist left wing view. I have also read foreign minister Kotzias’ latest book. All of this has provided me with useful insights for appendices 7 and 8, and particularly for the connection to the Cyprus issue (which at the moment Greece is very keen to downplay).

  Carras places an emphasis on Cyprus, perhaps recognising the islands affinity to support Russia and its large Russian diaspora community.

  The recommendations will be for the medium and the short term, cited here based on interviews carried out so far. Medium term recommendations will include a cultural event (to be specified later) and a one-day conference on Ukraine and international law, citing precedents for dealing with the situation in Ukraine (particularly Cyprus). Recommendations may include capacity building for local Ukrainian migrant spokesperson(s). Short term recommendations will include an action pack on what Greece has at stake in Ukraine, and ways to narrate parallels in interactions between nation and empire vis-à-vis Greece / Ukraine. Think about whether these work / what else we might recommend?

  Both of the documents are below:

  

  

  

  Document from Iannis Carras… “Ukraine and Europe-greece-carras tsimitakis greece ukraine mar 2015.docx”

  

  

  

  *  *  *

  Finally we note that the incredible furore being raised about Paul Manafort's 'exposure' to Ukraine is a joke when one considers it was George Soros (above) and Hillary Clinton (see chart below) that was really pulling all the strings behind the scenes…

  

   

  And in case you thought it was just a right-wing conspiracy… Hillary's best buddy The Podesta Group has hired outside counsel in Ukraine…

  SCOOP: Podesta Group has hired outside counsel in Ukraine lobbying controversy. Kimberly Fritts stmt: pic.twitter.com/r6AeSCw93u

  — Rosie Gray (@RosieGray) August 19, 2016

  

  

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• Could Trump Pull Off A Post-Party Coalition?

  Authored by Pepe Escobar, originally posted Op-Ed at SputnikNews.com,

  Hillary Clinton, Queen of Chaos, Queen of War, Golden Goldman Girl, for all practical purposes is by now the official bipartisan candidate of US neocons and neoliberalcons alike.

  Certified add-ons include Wall Street; selected hedge funds; TPP cheerleaders; CFR (Council on Foreign Relations) interventionists; media barons; multinational corporate hustlers; in fact virtually the whole exceptionalist US establishment, duly underwritten by the bipartisan, mega-wealthy 0.0001%.

  That does leave Donald J. Trump in the astonishing position of egomaniac billionaire outsider who somehow dreams he can game the whole system on his own, moved by his inexhaustible chutzpah.

  It’s under this dynamic that Trump has been demonized with medieval fervor by US corporate media. His non-stop motormouth – and motortweet – certainly does not help, conveying the impression he’s in the business of antagonizing multitudes non-stop. For the establishment, his billions mean nothing; he’s treated like a bum. He may be impervious to empathy; on the other hand that kind of treatment keeps earning him widespread sympathy among the angry, semi-destitute, non-college educated white masses.

  A US industrial renaissance?

  Underneath all this sound and fury, something else is (quietly) going on. Powerful business interests discreetly supporting Trump – and away from the media circus — are convinced he’s got the road map to victory. The question is whether he may be able to tame his erratic behavior to seal the deal.

  His key message, according to these backers, must revolve around the destruction of US industries by rigged currencies, and the “destruction of the wages of American workers by importing illegal cheap labor from dollar-a-day wage nations.”

  And that comes with an all-important military angle as a surefire selling point. As Trump’s backers outline it, “the Pacific Ocean cannot be used for transporting the vital and essential components of our military industrial complex, for in the event of war with Russia or China their advanced silent submarines equipped with advanced anti-ship weapons will block all of our ocean transport, collapsing our military industrial production in any war with catastrophic consequences. These component factories for Intel and others must be repatriated at once through currency adjustments or tariffs.”

  So Trump should hammer the message that all new bank credit must be tied to rebuilding destroyed US industries, “either by ending currency rigging or applying tariffs.” Bank credit, Trump backers argue, “should not be used for currency manipulation, or for cash settlement market rigging. There should be no bank credit for speculation and absolutely none for hedge funds. Let’s wipe these speculative vehicles out by huge taxes on short-term trading profits, ending tax concessions on borrowing, and ending all bank credit for speculation. Let these people go to do real work.”

  That, in a nutshell, explains Wall Street’s visceral aversion to Trump – from the Bloombergs to the Lloyd Blankfeins. Anyone familiar with Wall Street knows every market, commodity and indexes are rigged by cash settlement manipulations. As a New York-based Trump backer puts it, “This alone is sufficient reason to support Donald J. Trump. We should make the Carl Icahans and George Soroses do real work by taxing away their speculative profits. We need Henry Fords in this nation who create and build industries, and not Wall Street looters, where they rig everything as in 2008 then used their political power over bought politicians for bailouts, after throwing tens of millions of American out of their homes.”

  According to this road map, which is already on Trump’s desk – but no one knows whether he read it in full, or will implement it – fighting illegal immigration and rigged currencies side by side would create nothing less than an industrial renaissance in the US to rebuild the devastated Detroits. Essentially, the road map calls for replacing millions of illegal immigrants with millions of unemployed US citizens; Trump’s backers consider the real unemployment rate to be a whopping 23% today, based on the 1955 Bureau of Labor Statistical Methodology, “and not the rigged statistics of today.”

  The bottom line is this road map calls for Trump, if elected, to create a cross-party, or trans-party coalition – as once happened in the House and Senate when Jesse Helms on one side and John Conyers and Chuck Schumer on the other side actually did real business.

  This all implies Trump should become well versed in the national economy ideas of Friedrich List – whose tariff-protected Zollverein League was essentially the founding method of Prussia to build the German nation.

  Some of the above has already filtered out in Trump’s announced economic agenda. Now comes the hard part for a man with an exceedingly short attention span who gets into the groove by tweets and sound bites; to coherently sell the plan without picking up unnecessary fights along the way.

  But Vlad has already won it anyway

  Polls at the moment seem to be pointing to a Hillary landslide. Trump’s backers though “would not rely on the polls. Everything is rigged.”

  And then there’s the all-enveloping “Russian aggression” hysteria. Hillary went as far as equating President Putin to Hitler. Trump insists he’s ready to do business with Moscow – starting with a joint operation to end ISIS/ISIL/Daesh for good.

  Why bother? The Stupidity-o-Meter as applied to US mainstream media has gone on interstellar overdrive anyway – as the presidential election winner has already been christened: it’s – who else? – the omniscient Vladimir Putin.

  A business source familiar with the designs of the real Masters of the Universe cuts seriously to the chase: “As far as Russia is concerned, the issue is decided from above, and that is where the battle has been. The decision is above Hillary and Donald, and Hillary will be ordered to create a rapprochement if she is elected, if that is what is decided. If Trump wins, it is easy; and if he doesn’t, then the fact he brought it up will be used as a catalyst for policy changes toward Russia. The fight is behind the scenes now.”

  As much as currency rigging “will be ended, as we already saw Jack Lew give out the orders to Germany and Japan”, a new geoeconomic  map – possibly under Trump — would swing towards the end of the oil price war as well. As a Trump backer puts it, “this is a national objective of the United States, as a higher price will make the United States energy independent. This is part of the significance of the Trump revolution.”

  According to a source close to the House of Saud, Saudis and Russians are already involved in tortuous pre-negotiations on the possibility of engineering an oil price around $100.00 a barrel; “There should be enough mutuality of interest between the Saudis betrayed by the US under the neocons, and to be destroyed by the neocons eventually, and the Russians who can prevent that.”

  An end to the oil price war may be something the Pentagon won’t be able to argue about. As a Trump backer notes, “it is in the vital interest of the military-industrial complex to achieve complete energy independence, and repatriate all its military industries to the shores of the United States.”

  Compared to the current, 24/7 mud-wrestling match, all this may seem straight from Alice in Wonderland. There’s no evidence such an ambitious – and contentious – agenda can be sold to movers and shakers from JP Morgan to the Koch brothers. Trump creating a cross-party, trans-party or even post-party movement will only succeed if substantial players in the Power Elite are behind it, and there are no signs of this happening.

  What proceeds relentlessly is a massive disinformation campaign – a ghastly remix of those good ol’ Cold War anti-USSR avalanches. The Clinton Media Machine is even vilifying Michael Flynn, former head of the DIA, who supports Trump. Trump was conceptually right when he said Obama and Hillary were the founder and co-founder of ISIS/ISIL/Daesh. That’s exactly what Flynn admitted in that notorious interview when he stressed that the expansion of the phony Caliphate was a “willful decision” taken in Washington.

  The bottom line, as it stands, is that Trump is not raising enough cash to offset the formidable Clinton cash machine. Now comes the time when he must really take no prisoners to gain maximum exposure – while trying to sell the road map outlined above, one tweet at a time.

  And of course there will be a surprise – October and otherwise. Nothing has been decided – yet. Disraeli’s Coningsby was never more appropriate; “So you see, my dear Coningsby, that the world is governed by very different personages from what is imagined by those who are not behind the scenes.”

   

  

  

• In The Next Emergency These "Key Items Will Be Completely Gone" From Shelves

  America has become crisis prone, SHTFPlan.com's Mac Slavo explains, the pressure points have been identified, and provoked.

  Civil unrest could be triggered on any given day – police killings, or stock market collapse. Maybe something to do with elections.

   

  After the initial 72 hours of confusion and the fog of war, people will be left stranded, hungry, and either ready to turn to government for help or on each other. Holdouts and hoarders are treated as criminals, and shortages on numerous essentials will make everyone desperate. You may need to barter to survival, or learn to store and conceal what you have from intruders, etc.

   

  

   

  With luck, you won’t be like those in Venezuela or worse.

  So, Which Items Will Disappear First During A Major National Emergency? The Economic Collapse blog's Michael Snyder explains…

  One day in the not too distant future, a major emergency will strike this nation, and that will set off a round of hoarding unlike anything we have ever seen before.  Just think about what happens when a big winter storm or a hurricane is about to hit one of our major cities – inevitably store shelves are stripped bare of bread, milk, snow shovels, etc.  Even though winter storms and hurricanes are just temporary hurdles to overcome, they still cause many people to go into panic mode.  So what is going to happen when we have a real crisis on our hands?

  We can get some clues about which items will disappear first during a major national emergency by taking a look at where such a scenario is already playing out.  One recent survey found that over 80 percent of all basic foodstuffs are currently unavailable in Venezuela, and about half the country can no longer provide three meals a day for their families.  Thankfully, some stores still have a few things that they are able to offer, but other key items are completely gone.  The following comes from USA Today…

  Oh, there are some things to buy. Besides salt, there are fresh vegetables and fruits, dairy products but no milk, some cereal, lots of snacks and a few canned goods.

   

  The only meat is sausages; there are three kinds of cheese. The only problem: A kilogram of each costs more than a fourth of our monthly minimum wage of 15,050 bolivars.

   

  But basic foodstuffs – the things most Venezuelans want to eat  such as corn meal, wheat flour, pasta, rice, milk, eggs, sugar, coffee, chicken, mayonnaise, margarine, cooking oil and beef – are conspicuous by their absence. And there is no toilet paper, no sanitary napkins, no disposable baby diapers, no shampoo, no toothpaste, no hand soap and no deodorant.

  Do you have plenty of the items in bold above stored up?

  If not, you may want to stock up while you still can.

  Venezuela was once the wealthiest nation in all of South America, but now lines for food often begin as early as three in the morning.  Some people have become so desperate that they are actually hunting cats, dogs and pigeons for food, and there are even a few very sick people that have been killing and eating zoo animals.

  Someday similar things will happen in the United States and Europe too.

  When that day arrives, will you be prepared?

  One of the things that got my attention from the article quote above was the lack of milk.  My wife is always telling me that we should store up more dried milk, and I believe that she is right.

  Just imagine not having any milk and not being able to get any more.

  What would you do?

  Another thing that really stood out to me in the article was the fact that there is a severe shortage of personal hygiene items.  Most people don’t really think of those as “prepper goods”, but the truth is that life will become very uncomfortable without them very rapidly.

  What would you do if there was no more toilet paper?

  And if you have a little one, how are you going to manage without any diapers?

  In general, it is wise to always have an extra supply of just about everything that you use on a daily basis stored away somewhere in your home.  The generation that went through the Great Depression of the 1930s understood this concept very well, but most of us that are younger have had it so good for so long that we don’t even really grasp what a real crisis looks like.

  Another thing that we are seeing happen right now in Venezuela is the rise of a barter economy…

  Many of my urban friends are now planting vegetables in their outdoor spaces – if they have any – or in pots. Another friend, who is a hairdresser, is charging clients food to do their hair. For a shampoo and dry, she charges a kilo of corn meal, saying that she doesn’t have time to stand in line like some of her clients.

  As you prepare for what is ahead, you may want to consider stocking up on some items that would specifically be used for bartering in a crisis situation.

  For example, you may not drink coffee, but there are millions upon millions of people that do.  In a crisis situation, there will be many that will be extremely desperate to get their hands on some coffee, and so any coffee that you store away now may become a very valuable asset.

  We live in a world where one out of every eight people already goes to bed hungry each night, and where one out of every three children is underweight.  As global weather patterns become more extreme, as natural disasters continue to become more frequent and more intense, and as terror and war continue to spread, it is inevitable that the stress on the global food system is going to continue to grow.

  Today you can waltz into Wal-Mart and buy giant cartloads of very inexpensive food, but it will not always be that way.

  Unfortunately, more than half the country is currently living paycheck to paycheck, and most Americans do not have any emergency food stored up at all.

  In addition to food and personal hygiene supplies, here are some other items that are likely to disappear very rapidly during a major national emergency…

  -Flashlights

  -Batteries

  -Generators

  -Propane

  -Can Openers

  -Water Filters

  -Water Containers

  -Anything Related To Self-Defense

  -Axes

  -Knives

  -Sleeping Bags

  -Tents

  -First Aid Kits

  -Matches

  -Candles

  -Firewood

  -Shovels

  -Bottled Water

  -Warm Clothing

  -Lanterns

  -Portable Radios

  So in addition to food and personal hygiene items, you may want to do an inventory of the items that I have listed above and see where you may have some holes in your preparation plans.

  I understand that there will be some people that will read this article and think that all of us “preppers” are being just a tad ridiculous.

  But when a major emergency strikes this nation and you haven’t done anything to prepare, you will dearly wish that you had bothered to take action while there was still time remaining to do so.

  

  

• Trump Stuns Skeptics With "Regret For Causing Personal Pain"

  While we eagerly await news of the Clinton Family Foundation being “unexpectedly” hacked (after today’s Reuters prep piece), with a trove of documents revealing even more shocking crony kickbacks, “favors” and corruption, we are sad to report that should Hillary become president, said foundation will no longer accept foreign and corporate donations, and will bring an end to its annual Clinton Global Initiative meeting regardless of the outcome of the November election.

  Well, of course: once Hillary is president, she will no longer need a backdoor way of legally receiving Saudi money: at that moment, billions in Saudi dollars will be perfectly acceptable for passage through the front door, mostly in exchange for weapons and ammo (fine, and the occasional favor), used to kill and maim innocent civilians and to supply the occasional Doctors Without Borders hospital bombing raid (which, oddly enough, has received zero coverage in the US media… how odd).

  

  Bill Clinton made the announcement at an afternoon meeting with foundation staff members, according to participants who spoke to The Associated Press on condition of anonymity ahead of the formal announcement. Clinton said the foundation plans to continue its work, but intends to refocus its efforts in a process that will take up to a year to complete. The former president, who turns 70 on Friday, said he will resign from the board, and the foundation will only accept contributions from U.S. citizens and independent charities.

  But why, Bill, if – as you and most of the media claim – there is nothing wrong with accepting bribes, pardon, donations from countries that have, in their own words, created ISIS?

  Rhetorical questions aside, according to Clinton the foundation will no longer take money from any foreign entity, government, foreign or domestic corporations, or corporate charities.

  Additionally, a Clinton spokesman said the former president will also refrain from delivering paid speeches until the November election and will no longer give paid speeches if Hillary Clinton is elected president. Again: we wonder – why? Is there some stigma associated with getting paid $250K-$500K bribes from corporations when your wife is in the White House?  Granted we are confident that the $237 million the Clinton family has collected, mostly from speeches, since 2001 will help the pain.

  

   

   At the staff meeting, AP adds, Clinton said he and his daughter, Chelsea Clinton, did not face any external pressure to make the changes, but wanted to avoid any potential issues or second guessing for Hillary Clinton should she move into the White House. The future of the Clinton Foundation has been one of the overarching questions shadowing Clinton’s campaign.

  While Hillary Clinton stepped down from its board after launching her 2016 campaign, her husband and daughter have remained in leadership roles, prompting questions about the ability of the organization to continue its work should Clinton win the White House.

  To be sure, questions have persisted about the relationship between the Clintons and donors for years, mostly among Republicans. The Republican National Committee (RNC) on Thursday criticized the Clinton Foundation for stalling on changes to its donation guidelines. “This effort to shield Hillary Clinton and the Clinton Foundation after more than a year of controversy is too little, too late,” chairman Reince Priebus said in a statement.

  Priebus added that the Clinton Foundation’s activities had already raised red flags during Clinton’s campaign. “The fact that the Clinton Foundation and its entities continue to accept foreign donations while Hillary Clinton runs for the White House is a massive, ongoing conflict of interest that gets bigger by the day,” he said.

  In the last week, prominent voices have called for the organization to be disbanded if Hillary Clinton won the presidency. Former Gov. Ed Rendell (D-Pa.), a supporter of the Clintons, on Wednesday said the charitable organization should close up shop if Clinton wins.

  “It’d be impossible to keep the foundation open without at least the appearance of a problem,” the former chairman of the Democratic National Chairman (DNC) told The New York Daily News.

  Fair enough, but it wasn’t a “problem” to keep it open for years heading into the election? After all, the concern is influence peddling, and much more influence goes to those who have money in the foundation’s early days rather than now, when it is already a $2 billion behemoth.

  The Boston Globe’s editorial board on Tuesday also called for disbanding the Clinton Foundation, saying that doing so would remove “a political — and actual — distraction.”

  According to the AP, Bill Clinton denied that the changes were brought about by outside pressure, but said they were motivated by the need to eliminate any concerns if his wife wins the White House.

  Finally, there was just one outstanding question:

  And if she is not elected? https://t.co/xZci9TX5Qn

  — zerohedge (@zerohedge) August 18, 2016

  * * *

  Meanwhile, in tonight’s other key political news, in what many have said is a first for Donald Trump, the presidential candidate expressed regret on Thursday afternoon during a rally in Charlotte, N.C. and apologized for any damage he inflicted with his blunt rhetoric on the campaign trail as the candidate and his revamped campaign staff look to recover from a rough few weeks.

  “As you know, I am not a politician. I have worked in business, creating jobs and rebuilding neighborhoods my entire adult life. I’ve never wanted to learn the language of the insiders, and I’ve never been politically correct – it takes far too much time, and can often make it more difficult to achieve total victory.”

   

  “Sometimes, in the heat of the debate and speaking on a multitude of issues, you don’t choose the right words or you say the wrong thing. I have done that, and I regret it, particularly where it may have caused personal pain. Too much is at stake for us to be consumed with these issues.”

  WATCH: @realDonaldTrump says he “regrets” some comments he’s made during campaign https://t.co/wTPAov2ZrB pic.twitter.com/kFBtndiqOA

  — CBS News (@CBSNews) August 18, 2016

   

  The speech came less than two days after Trump shook up his campaign leadership, naming pollster and former adviser Kellyanne Conway as campaign manager and Breitbart executive Steve Bannon campaign CEO. 

  Trump’s expression of regret has come as a shock to those – mostly liberal pundits – who expected Bannon to reject any efforts by other advisers to polish Trump’s message in home stretch of the general election. Conway said she didn’t want Trump to lose his “authenticity.” Then again, ultimately Trump’s biggest “advisor” has always been Trump, both with and without surprises, and the man behind today’s stunning pivot, was most likely Trump himself.

  In his Thursday speech, Trump attacked Clinton’s honesty and promised to never lie and always put voters’ interests first. “In this journey, I will never lie to you,” he said. “I will never tell you something I do not believe myself. I will never put anyone’s interests ahead of yours.

  And then he pivoted once more, contrasting his brutish political correctness with Hillary’s endless lies.

  “Aren’t you tired of the same old lies and the same old broken promises?” Trump asked. Trump said that Clinton “has proven to be one of the greatest liars of all time.”

  “So while sometimes I can be too honest, Hillary Clinton is the exact opposite: she never tells the truth. One lie after another, and getting worse each passing day,” he said. Trump continued to criticize the media for focusing on his controversial remarks rather than the problems facing voters. 

  “The establishment media doesn’t cover what really matters in this country, or what’s really going on in peoples’ lives,” he said. “They will take words of mine out of context and spend a week obsessing over every single syllable, and then pretend to discover some hidden meaning in what I said,” Trump added.

  “Just imagine if the media spent this much time investigating the poverty and joblessness in our inner cities. Just think about how much different things would be if the media in this country sent their cameras to our border, or to our closing factories, or to our failing schools.”

  Trump added he would not stop ruffling establishment feathers, even if it means conflict with fellow Republicans.  “I am glad I make the powerful a little uncomfortable now and again – including some powerful people in my own party. Because it means I am fighting for real change. I am fighting for you.”

  Who knows, maybe this particular expression of “regret” is all America wanted to hear to give Trump a second chance. After all, if there is one thing all Americans can agree on, is they love each and every underdog story…

  

  

• One Simple Chart Illustrates The Absurdity Of College Cost Inflation

  The simple chart below from the American Enterprise Institute beautifully illustrates the absurd inflation of college tuition and textbooks over the past 20 years.  In real terms, the cost of college has effectively doubled over that time period.  Now what would cause such massive inflation?  Could it be our government tripping over itself to provide cheap student loans for children to spend on vacations, iPads and kegs (i.e. "college"; see "What Student Loans Are Used For: Vacations, iPads, Kegs, Entertainment").  Or, per the Daily Caller, perhaps the issue is administrative bloat at our institutions of higher education:

  The exact reason prices have increased so much has been hotly debated, but one critical factor at most schools is administrative bloat. While student to faculty ratios have remained relatively steady over time, the number of administrators and other non-teaching staff has exploded at schools across the country.

  But we don't want to stress out our young Millennials too much.  We're quite sure the debt burden associated with your $200,000 anthro degree will be socialized very soon. 

  

  

  

• Why A Deutsche Bank Whistleblower Turned Down A $8.25 Million Reward: In His Own Words

  At the height of the financial crisis, when risk assets were imploding and counterparties were in danger of overnight collapse, Deutsche Bank avoided failure and nationalization by fabricating the value of its $130 billion derivative portfolio of “leveraged super senior” trades.

  Some history: back in 2005, these trades were seen as “the next big thing” in the world of credit derivatives, something which DB at the time was building a massive position in. They were designed to behave like the most senior tranche of a typical collateralised debt obligation, where assets such as mortgages or credit default swaps are pooled to give investors varying degrees of risk exposure. Deutsche became the biggest operator in this market, which involved banks buying insurance against the possibility of default by some of the safest companies, the FT writes.

  There was just one problem: when it was building up its portfolio, Deutsche never accounted for the possibility of the financial world nearly collapsing. Which is why as the illiquid portfolio was careening, instead marking it to market – an act that would have resulted in the bank’s insolvency – DB’s risk managers misstated the value of the positions by anywhere from $1.5bn to $3.3bn.

  Several years later, in 2012, the SEC found out about this, and in 2015 slapped a $55 million fine on Deutsche Bank for this criminal fabrication (nobody went to jail). “At the height of the financial crisis, Deutsche Bank’s financial statements did not reflect the significant risk in these large, complex illiquid positions,” said Andrew Ceresney, director of the SEC’s enforcement division. “Deutsche Bank failed to make reasonable judgments when valuing its positions and lacked robust internal controls over financial reporting.”

  The reason why the SEC learned about DB’s massive mismarked derivative exposure, is because two former employee whistleblowers, Matthew Simpson and Eric Ben-Artzi, told it: the duo alleged that if Deutsche had accounted properly for its positions, its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bailout to survive. The highest estimate for the unaccounted loss was $12bn. Which explains why Deutsche Bank was desperate to manipulated the numbers.

  End result: DB got its wristslap with a token fine, the SEC came out looking like it knew what it was doing, and – as we learned today – the two whistleblowers got major awards for helping the SEC collected the $55MM fine, amounting to 15% each. 

  Only, something unexpected happened: as the FT writes, one of the whistleblowers who helped expose the false accounting at Deutsche Bank turned down a multimillion-dollar award from the Securities and Exchange Commission in protest against the agency’s failure to punish executives at the bank.

  Eric Ben-Artzi, the former Deutsche risk officer, told the SEC he is declining his share of a $16.5 million payout — the third largest in the whistleblower program’s history — which represents 30% of the $55 million Deutsche Bank fine.

  But why turn down enough money that most people, even ex-Wall Streeters, could comfortably retire on?  Ben-Artzi said the fine should be paid by individual executives, not shareholders, and suggested the “revolving door” of senior personnel between the SEC and Germany’s largest bank had played a role in executives going unpunished (understandably he had no comment about the spike in Deutsche Bank suicides in 2013-2014, particularly those emanating from its legal department).

  “This goes beyond the typical revolving-door story,” Mr Ben-Artzi wrote in an opinion article for the Financial Times. “In this case, top SEC lawyers had held senior posts at the bank, moving in and out of top positions at the SEC even as the investigations into malfeasance at Deutsche Bank were ongoing,”

  Which, incidentally, reminds us of a post we wrote back in May 2010, explaining why former Deutsche Bank General Councel, and then-SEC Director of Enforcement, “Robert Khuzami Stands To Lose Up To $250,000 If He Pursues Action Against Deutsche Bank.” We were right: neither Khuzami, nor the SEC, nor anyone else, pursued any charges against Deutsche Bank in the early years after the financial crisis. In retrospect, now that the German bank has been revealed to have manipulated literally everything, such oversight on behalf of the SEC was even more criminal than what DB did over the years.

  Six years later, the FT comments on this too:

  “Robert Khuzami, director of enforcement at the SEC between 2009 and 2013, was Deutsche’s former general counsel for the Americas. Between 2004 and 2013 Robert Rice was a senior lawyer at Deutsche Bank, where he led an internal investigation into the valuation claims; he then went to the SEC as chief counsel.  Both Mr Khuzami and Mr Rice were recused from the investigation. Dick Walker was enforcement director at the SEC between 1998 and 2001 and then joined Deutsche, later becoming general counsel; he left the bank this year. All three declined to comment. “

  Needless to say, there is zero risk to Khuzami’s current job as partner in Kirkland’s Government & Internal Investigations Practice Group, which he joined in 2013. But hopefully, one day there will be, and if so it will be partially thanks to op-eds such as the one – written by Eric Ben-Artzi, who is currently a vice-president of risk analytics at BondIT – published in today’s FT and republished below.

  

  For all those wondering why someone would turn down a $8.25 million whistleblower award, here is the explanation, straight from the source.

  * * *

  We must protect shareholders from executive wrongdoing 

  Eric Ben-Artzi 

   

  I turned down a whistleblower award, writes former Deutsche Bank employee Eric Ben-Artzi

   

  I just got word from the Securities and Exchange Commission that I am to receive half of a $16.5m whistleblower award. But I refuse to take my share. My award, which comes from a fund allocated by Congress, amounts to 15 per cent of the $55m fine the SEC imposed on Deutsche Bank in May 2015 after I informed regulators that my colleagues at the bank had been inflating the value of its massive portfolio of credit derivatives.

   

  I was a risk officer at the bank, and one of the three whistleblowers who in 2010-11 reported the improper accounting internally and to regulators around the globe.

   

  The SEC attorney who oversaw the investigation told the New York Times: “It’s the only enforcement action where we allege that a major financial institution failed to properly value a significant portion of its portfolio of complex securities.”

   

  But Deutsche did not commit this wrongdoing. Deutsche was the victim. To be precise, the bank’s shareholders and its rank­-and­-file employees who are now losing their jobs in droves are the primary victims.

   

  Meanwhile, top executives retired with multimillion­-dollar bonuses based on the misrepresentation of the bank’s balance sheet. It is therefore especially disappointing that in 2015, after a lengthy investigation helped by multiple whistleblowers, the SEC imposed a fine on Deutsche’s shareholders instead of the managers responsible.

   

  Compare this outcome with a contemporaneous SEC enforcement action against the less connected executives of a smaller firm, Trinity Capital, and its subsidiary Los Alamos National Bank. The violations at Trinity seem similar to Deutsche, but orders of magnitude smaller. Five executives at Trinity were charged, the chief executive settled and paid a fine, and litigation continued against two senior officers.

   

  “We will hold senior executives liable when they misstate the company’s performance and fail to come clean with shareholders,” explained Andrew Ceresney, director of the SEC’s Division of Enforcement.

   

  So why did the SEC not go after Deutsche’s executives? The most obvious concern is that Deutsche’s top lawyers “revolved” in and out of the SEC before, during and after the illegal activity at the bank. Robert Rice, the chief lawyer in charge of the internal investigation at Deutsche in 2011, became the SEC’s chief counsel in 2013. Robert Khuzami, Deutsche’s top lawyer in North America, became head of the SEC’s enforcement division after the financial crisis. Their boss, Richard Walker, the bank’s longtime general counsel (he left the bank this year) was once head of enforcement at the SEC.

   

  This goes beyond the typical revolving door story. In this case, top SEC lawyers had held senior posts at the bank, moving in and out of top positions at the regulator even as the investigations into malfeasance at Deutsche were ongoing.

   

  This took place on the watch of Mary Jo White, the current chair of the SEC, whose relationship with Mr Khuzami and Mr Rice dates back 20 years. She bears ultimate responsibility for the Deutsche fine. In 2010 I joined Deutsche from Goldman Sachs as a vice­-president in the market­-risk department. I am a mathematician and had worked in risk­-modelling at other banks. When I joined Deutsche I was not made aware that an internal “investigation” was already under way into the inflated valuation of the bank’s $120bn portfolio of exotic credit derivatives.

   

  Within a few months, though, I realised something was very wrong, and I called the internal hotline. That is when I met Mr Rice. He was then Deutsche’s top lawyer for compliance and regulatory affairs, and asserted that our conversations were subject to “attorney-client” privilege and could not be disclosed. I did not agree and was fired. My Wall Street career was ruined.

   

  When I first helped the SEC investigation, the whistleblower award was a powerful incentive. My lawyers and ex-wife have a claim on a portion of my award, which I am not at liberty to reject.

   

  Although I need the money now more than ever, I will not join the looting of the very people I was hired to protect. I never intended to turn a job in risk management into a crusade, but after suffering at the hands of the Deutsche executives I will not join them simply because I cannot beat them.

   

  I request that my share of the award be given to Deutsche and its stakeholders, and the award money clawed back from the bonuses paid to the Deutsche executives, especially the former top SEC attorneys.

   

  I would then be happy to collect any award for which I am eligible.
  
  

  

  

• State Department Admits Obama Lied – $400 Million Payment To Iran Was Contingent On Prisoner Release

  If you define "ransom" as "a payment exchanged contingent on the release of a hostage" then you find yourself forced to admit that President Obama lied last week when he aggressively denied (and was irked at the question) that he paid Iran a $400 million ransom for the return of 4 hostages.  Today, The State Department's spokesperson John Kirby told the truth that the Iran payment was contingent on the prisoner release… but of course spun this 'ransom' payment as masterful diplomacy "deliberately leveraging the moment."

  As Bloomberg reports,

  The U.S. withheld a $400 million cash payment to Iran earlier this year as leverage to ensure that American prisoners would be released as the country had promised, State Department spokesman John Kirby said.

   

  “We were able to conclude multiple strands of diplomacy within a 24-hour period,” Kirby told reporters in Washington on Thursday. “We deliberately leveraged that moment.”

   

  Kirby was responding to a report in the Wall Street Journal that the U.S. wouldn’t let Iran take control of the money — which the country was owed as part of a $1.7 billion settlement over a long-running dispute — until a plane carrying the American prisoners had left Iran in January.

   

  Disputes over the timing of the payment have fueled criticism of the administration’s nuclear deal with the Islamic Republic. While the U.S. has said talks over the release of the prisoners were held separately from last year’s negotiations on the payment and the nuclear deal, Kirby’s comments represented an acknowledgment that those two matters eventually converged.

  Previously, US official stated on the record that the $400 million payment to Iran was separate from the hostages. This is what State Dept. spokesman John Kirby told the WSJ two weeks ago:

  “As we’ve made clear, the negotiations over the settlement of an outstanding claim… were completely separate from the discussions about returning our American citizens home,” State Department spokesman John Kirby had told the Wall Street Journal.

  Which should serve as a reminder: if lying, especially as a president, don't leave a trail, and definitely don't get caught.

  *  *  *

  Simply put – The Administration just could not keep track of the lies and the facts leaked out. And now the fact is – The US President lied directly to the American people… no matter how much lipstick is applied to this disgusting pig.

  And finally, why should anyone cast aspersions at Ryan Lochte (who will likely be ruined by his l'ies') when the nation's Commander-in-chief has trouble keeping the truth straight (and will likely suffer no consequences whatsoever)?

  *  *  *

  As a reminder of how we got here, The Hill reported last week that, President Obama chastised the press for their coverage of the payment, noting that the deal with Iran was announced months ago as part of a larger diplomatic settlement.

  "This wasn’t some nefarious deal," Obama said.

   

  “It’s been interesting to watch this story surface,” the president said. “Some of you may recall, we announced these payments in January. Many months ago. There wasn’t a secret, we announced them to all of you.”

   

  "What we have is the manufacturing of outrage on a story that we disclosed in January,” he added later.

   

  "The notion that we would somehow start now in this high-profile way, and announce it to the world, even as we’re looking in the faces of other families whose loved ones are being held hostage and say to them, ‘we don’t pay ransom,’ defies logic," Obama said.

  Defies logic indeed – because having slammed the press for suggesting this was a "ransom payment," we discovered that is exactly what The Justice Department warned…

  

  In his remarks, the president didn’t mention the objections raised by his own appointees within the Justice Department, where, according to people familiar with the discussions, many officials raised alarms that the timing of the cash payment would look like ransom. (via WSJ)

  The head of the national security division at the Justice Department was among the agency’s senior officials who objected to paying Iran hundreds of millions of dollars in cash at the same time that Tehran was releasing American prisoners, according to people familiar with the discussions.

   

  John Carlin, a Senate-confirmed administration appointee, raised concerns when the State Department notified Justice officials of its plan to deliver to Iran a planeful of cash, saying it would be viewed as a ransom payment, these people said. A number of other high-ranking Justice officials voiced similar concerns as the negotiations proceeded, they said.

   

  The U.S. paid Iran $400 million in cash on Jan. 17 as part of a larger $1.7 billion settlement of a failed 1979 arms deal between the U.S. and Iran that was announced that day. Also on that day, Iran released four detained Americans in exchange for the U.S.’s releasing from prison—or dropping charges against—Iranians charged with violating sanctions laws. U.S. officials have said the swap was agreed upon in separate talks.

   

  The objection of senior Justice Department officials was that Iranian officials were likely to view the $400 million payment as ransom, thereby undercutting a longstanding U.S. policy that the government doesn’t pay ransom for American hostages, these people said. The policy is based on a concern that paying ransom could encourage more Americans to become targets for hostage-takers.

  Of course, the denials kept on coming from The White House.

  However, just this week, as The Wall Street Journal now reports, new details of the $400 million U.S. payment to Iran earlier this year depict a tightly scripted exchange specifically timed to the release of several American prisoners held in Iran, based on accounts from U.S. officials and others briefed on the operation…

  U.S. officials wouldn't let Iranians take control of the money until a Swiss Air Force plane carrying three freed Americans departed from Tehran on Jan. 17, the officials said.

   

  Once that happened, an Iranian cargo plane was allowed to bring the cash back from a Geneva airport that day, according to the accounts.

   

  President Barack Obama and other U.S. officials have said the payment didn’t amount to ransom, because the money was owed by the U.S. to Iran as part of a longstanding dispute linked to a failed arms deal from the 1970s. U.S. officials have said that the prisoner release and cash transfer took place through two separate diplomatic channels.

   

  But the handling of the payment and its connection to the release of the Americans have raised questions among lawmakers and administration critics.

   

  …

   

  One of the Americans released in January as part of the prisoner exchange, a Catholic pastor named Saeed Abedini, said he and other American prisoners were kept waiting at Mehrabad airport for more than 20 hours from Jan. 16 to the morning of Jan. 17.

   

  He said in an interview that he was told by a senior Iranian intelligence official at the time that their departure was contingent upon the movements of a second airplane.

  Just as Trump had suggested (before oddly retracting his suggestion), the exchange did take place and as the BBC reported. a video did indeed exist of the events, referring to a documentary called "The Rules of the Game" which was broadcast on Iranian state TV in February. In the clip, one can see shots of an airport are accompanied by commentary which references 17 January in Tehran's Mehrabad Airport.

  Specifically, the video shows a loaded crate, partially blurred out, which allegedly shows the money in question.

  

  

   

  And another version:

  A translation of the commentary with the pictures, per BBC, reads as follows.

  "Early hours of 17 January 2016, Mehrabad Airport (Tehran), $400m cash was transported to Iran by an airplane.

   

  "A little bit later, part of the interest money was also paid to Iran, and the US government made a commitment to pay the rest of Iran's money."

  While it is not clear if this is intended to be a literal description or whether the shots are just general views of the airport.

  The video is shown below, and the pettets of cash appear at the 11:00 mark.

  The video It can also be found on YouTube, and was also hosted and discussed by MEMRI tv at one point, and was also in a BBC Journalist twitter feed.  Here are the links to the short and the full version of the Iranian Documentary. Finally here is another version.

  It is unclear where Donald Trump might have caught the clip of the video, and whether or not the cash disclosed is what Iran claims it is (in light of the WSJ revelations it is very likely that this is indeed the alleged payment in question) but the footage was widely discussed several months ago when the hostages were released.  The Iranian TV ran it with a title “The Rules of The Game." It was released on BBC TV during a segment discussing the release of the prisoners.

  In other words, it did exist.  

  *  *  *

  So to summarize – Obama lied; the administration did indeed make a $400 million in exchange for the release of four hostages (if it walks like a ransom, and talks like a ransom, it is a ransom), and Trump was right.

  Finally, this is far from over, as The Wall Street Journal concludes, Republican lawmakers have charged that the $400 million payment equated to a ransom paid by the White House to gain the release of the Americans.

  Republican leaders said they are preparing to hold hearings on the $400 million transfer once Congress returns from its summer break in September. Rep. Sean Duffy (R., Wis.), chairman of a House investigative body, sent letters to the Justice and Treasury Departments, as well as the Federal Reserve, on Aug. 10 requesting all records related to the Iran exchange.

   

  Mr. Duffy asked Attorney General Loretta Lynch to identify all “persons within the Department authorizing or otherwise taking steps to carry out the payment.”

  Obama administration officials have confirmed that they have paid the remaining $1.3 billion to Iran as part of the settlement reached in January on the failed arms deal. This marked the interest accrued over the past 37 years on the original $400 million paid by Iran. U.S. officials, however, have refused to disclose how the Obama administration made this additional payment. Lawmakers are seeking to determine whether this money was also paid in cash or if the Treasury Department was able to wire it electronically.

  

  

  

• Yes They Exist – Meet The Democrats For Trump

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  

  We’ve all heard the rumors of lifelong Democrats who support Trump in 2016. It’s time to meet a few of them.

  The Washington Post reports:

  WEIRTON, W.Va. — The Ohio Valley is filled with registered Democrats, the kind that hung portraits of Franklin D. Roosevelt and Harry S. Truman and John F. Kennedy on their living room walls. It is made of coal and steel towns and union workers, and stretches from the Pittsburgh exurbs across West Virginia’s panhandle into Ohio.

   

  But here in Weirton — where Weirton Steel Company employed 12,000 people and now only 900 — many say they will cast their ballots for Republican presidential nominee Donald Trump. They talk about him over beers at local taverns and at church socials. For many of those in the unions, he’s the first Republican for whom they’ll vote — even as national unions, including the United Steelworkers and the AFL-CIO, have endorsed Democratic nominee Hillary Clinton.

   

  “When the steel industry was going good and the coal was good, it was blue,” said George Psaros, 76, a retired Weirton Steel engineer who voted for President Obama in 2008 and 2012. “Well, the world has changed.”

   

  Now even one of the most reliably Democratic groups — union members — may be turning red, drawn by Trump’s free-trade bashing and resentful of Clinton’s past support for certain international trade agreements.

   

  “I don’t know what Trump would do if he’s elected,” said Mark Glyptis, president of the United Steelworkers Local 2911 and a Trump supporter, who voted for Obama in the past two elections. “But I know what Hillary would do.”

   

  Nationally, union households have increasingly voted for conservative candidates, data show. In 1996, only 30 percent of union households voted for Republican candidates. In 2012, that increased to 40 percent, and political analysts expect that rise this election cycle.

   

  And increasingly, these distressed workers are associating free trade with the Democrats. In Glyptis’s office hangs a poster that says “Free Traders are Traitors.” To many this election season, that means Democrats.

   

  “You have to get a decent-paying job, that’s the first step of anything,” said John Balzano, 78, and the Local 2911 benefits coordinator, who said he is undecided about for whom to vote. He has worked at the mill since age 21. “And it branches out, whether you’re going to be a good family man, whether you’re going to get a divorce, whether you’re going to live in the community, whether you’re going to become a good, community-minded person, the job will dictate that. We don’t have them around here.”

   

  During his election bid, he felt the same anger voters are taking out now on Clinton. They feel spurned by trade deals, he said as he sipped coffee at the union hall.

   

  “We didn’t see a damn thing in return,” he said of the North American Free Trade Agreement. China’s 2000 admission to the World Trade Organization and the 2004 Dominican Republic-Central American Free Trade Agreement inundated U.S. markets with cheap foreign metal.

  They are absolutely right not to trust Hillary when it comes to the TPP. Here’s why:

  Nobody Knows Who’s Paying for the Privately Funded Democratic National Convention

  Obama Administration Delays Release of Hillary Clinton TPP Emails Until After the Election

  Where Does Hillary Stand on the TPP? 45 Public Statements Tell You Everything You Need to Know

  

  

• Uber Determines Pittsburgh Lives Most Expendable; Plans To Unleash Autonomous Vehicles There Within Weeks

  Uber just announced plans to introduce autonomous, well semi-autonomous anyway, vehicles to carry passengers in Pittsburgh later this month.  Per an interview with Bloomberg, in a plan described as "audacious, even reckless," Uber CEO Travis Kalanick says autonomous cars are "going commercial" because they "cant' just be about science." 

  Even though the long-term plan is to have completely autonomous vehicles, for now cars in Pittsburgh will have engineers in the driver seat ready to take over at any moment while simultaneously monitoring for "bugs" in the system.  As one Uber engineer pointed out, there's a need to keep human drivers in the cars for now as his "autonomous" vehicle suddenly went "un-autonomous" earlier this week while crossing the Allegheny River…but, as he points out, "bridges are really hard."  Who cares about bridges?  If your car happens to go tumbling off the edge there's usually water below to soften your fall.    

  On a recent weekday test drive, the safety drivers were still an essential part of the experience, as Uber’s autonomous car briefly turned un-autonomous, while crossing the Allegheny River. A chime sounded, a signal to the driver to take the wheel. A second ding a few seconds later indicated that the car was back under computer control. “Bridges are really hard,” Krikorian says. “And there are like 500 bridges in Pittsburgh.”

  As we pointed out in a post earlier this week, to the extent the technology works consistently, avoiding the nasty consequences of death and mayhem in the event of failure, autonomous vehicles are worth big money to Uber and consumers…though not so much for the automotive OEMs (see "Ford Announces Plans To Self-Destruct Starting In 2021").  As we pointed out, the cost of paying drivers is a substantial portion of the ~$1.00 per mile charge paid by Uber riders.  To the extent that cost can be removed from the equation then fares charged by companies like Uber will decline materially.

  In the long run, Kalanick says, prices will fall so low that the per-mile cost of travel, even for long trips in rural areas, will be cheaper in a driverless Uber than in a private car.

  Unfortunately, for the auto OEMs the story is the exact opposite.  In theory, truly autonomous cars could result in substantial increases in passenger car utilization rates and, therefore, declines in annual car sales.  But apparently, Volvo CEO Hakan Samuelsson isn't worried (yes, we can sense the pure optimism in the quote below):

  “That could be seen as a threat,” says Volvo Cars CEO Hakan Samuelsson. “We see it as an opportunity.”

  But still, even if the technology works, the question remains how quickly consumers will adopt it, if at all.  There certainly has been no shortage of gruesome videos hitting Youtube lately of Tesla vehicles crashing while driving in autopilot mode.  As pointed out by an Uber engineer, the sheer statistics of operating vehicles in an uncontrolled environment means that accidents are inevitable. 

  Although Kalanick and other self-driving car advocates say the vehicles will ultimately save lives, they face harsh scrutiny for now. In July a driver using Tesla’s Autopilot service died after colliding with a tractor-trailer, apparently because both the driver and the car’s computers didn’t see it. (The crash is currently being investigated by the National Highway Traffic Safety Administration.) Google has seen a handful of accidents, but they’ve been less severe, in part because it limits its cars to 25 miles per hour. Uber’s cars haven’t had any fender benders since they began road-testing in Pittsburgh in May, but at some point something will go wrong, according to Raffi Krikorian, the company’s engineering director. “We’re interacting with reality every day,” he says. “It’s coming.”

  While we're sure autonomous vehicles will be commonplace at some point in the future we have our doubts as to whether they're ready for prime-time just yet.  It should be interesting to monitor Uber's success in Pittsburgh.

   

  

  

• The Benefits (And Hazards) Of Trumpism

  Submitted by Justin Raimondo via AntiWar.com,

  Donald Trump’s most recent foreign policy speech, in which he explained how he would deal with the Islamic State (ISIL) and the Middle East in general, contained multitudes – everything good and everything questionable about his brand of “America First” nationalism. Here is Trumpism on full display, the common-sensical and the nonsensical intertwined. While I realize a presidential election campaign is not the time for nuance, it behooves us to pull apart these disparate strands if we want to understand this moment in our history.

  He starts out by defining the problem: the series of attacks that have horrified the world and flummoxed our law enforcement agencies. And what’s notable here is that he just doesn’t talk about what’s going on overseas, as you might expect in a speech ostensibly about foreign policy: he talks about San Bernardino and Orlando alongside Paris and Brussels. In short, he brings it all home.

  This underscores his entire orientation: it’s what “America First” is all about. Why should Americans care about ISIL? Well, folks, says Trump, it’s because they’re attacking us right here on the home front. Contrast this with the usual neocon-Hillaryite politically correct gobbledygook: we have to spread Democracy and Goodness throughout the Middle East! They don’t have gay rights in Afghanistan! We must defend the “international order”!

  There’s the problem: ISIL. So what caused it? Trump’s answer:

  “The rise of ISIS is the direct result of policy decisions made by President Obama and Secretary Clinton.”

  What? I seem to remember some guy named George W. Bush – didn’t he invade Iraq or something? – who vowed to pursue the goal of “ending tyranny in our world.” Why, as I recall, he even invoked Doestoevsky’s novel about revolutionary nihilism, The Possessed, and pledged to ignite “a fire in the mind” throughout the Middle East – and the world! And the fire is still burning….

  In fairness, Trump gets to the Iraq war later on in the speech, but this omission is telling, although it probably says more about who’s advising him than it does about the candidate himself.

  In any case, Trump goes on to denounce the disastrous military interventions that empowered ISIL in Syria and Libya: so far so good. He also notes US support for the Muslim Brotherhood’s revolution in Egypt, another aspect of the post-“Arab Spring” turn in US policy that ended badly. Then we get the Fox News version of history: the Iran deal put Tehran “in a dominant position of regional power and, in fact, aspiring to be a dominant world power.”

  This makes zero sense, especially after his long peroration about the horrors of ISIL: does he not know that Iran is fighting ISIL in Syria? Does he not realize that Iranian-backed militias in Iraq are fighting alongside Iraqi government forces to defeat the pro-ISIL pro-al Qaeda Sunni insurgency?

  Does he know anything?

  We get yet more Fox News revisionist history with his description of President Obama’s Cairo speech as an “apology tour,” followed by this:

  “The failure to establish a new Status of Forces Agreement in Iraq, and the election-driven timetable for withdrawal, surrendered our gains in that country and led directly to the rise of ISIS.”

  He blames Obama, but this is false: it was the Bush administration that negotiated the Status of Forces Agreement and established the withdrawal timetable. President Bush signed a memorandum of understanding that stipulated all US troops must leave Iraq by December 31, 2011. The withdrawal wasn’t “election-driven” – it was Bush-driven.

  Surely the Bush administration wanted to keep US troops in Iraq: to do otherwise would be to admit, in deeds if not in words, that the invasion had been a disastrous mistake. The sticking point was the question of immunity of US soldiers from Iraqi law: given the horrific history of Abu Ghraib, and other numerous instances of US troops committing war crimes in Iraq, the Iraqis insisted that any US soldiers accused of engaging in such acts would have to be subject to trial in Iraqi courts. The US, which has a policy of not allowing its soldiers to be tried in foreign courts, refused to go along with this. And that was the end of that.

  While it’s true that the Obama administration tried to resurrect the agreement, the US prohibition on foreign legal jurisdiction over our troops was considered nonnegotiable.

  What comes next is the under-appreciated sight of a Republican candidate for President trying to prove that he was against the Iraq war from the beginning. Trump cites an interview with Neil Cavuto in which he said the economy is a bigger problem and we shouldn’t “be going in yet.” (Yet?) He cites a fuller and more definitive statement made to Esquire magazine in 2004:

  “What was the purpose of this whole thing? Hundreds and hundreds of young people killed. And what about the people coming back with no arms and legs? Not to mention the other side. All those Iraqi kids who’ve been blown to pieces. And it turns out that all of the reasons for the war were blatantly wrong. All this for nothing.”

   

  So, if it was all “for nothing,” then it was a good thing we pulled out, and indeed we should’ve pulled out sooner. Right? Of course not!

   

  “So I have been clear for a long time that we should not have gone in. But I have been just as clear in saying what a catastrophic mistake Hillary Clinton and President Obama made with the reckless way in which they pulled out.

   

  “After we had made those hard-fought sacrifices and gains, we should never have made such a sudden withdrawal – on a timetable advertised to our enemies. Al Qaeda in Iraq had been decimated, and Obama and Clinton gave it new life and allowed it to spread across the world.”

  The myth of Victory Denied is a longstanding right-wing trope that refuses to die: they say the same thing about the Vietnam war. If these people had their way, US troops would still be fighting in the Mekong delta. “We weren’t allowed to win!” is the one point where neoconservatism and Trumpian nationalism intersect. Except it has nothing to do with reality. The Iraqis kicked us out – and in Vietnam we were militarily defeated. Neither war was winnable.

  Indeed, every war we’ve fought on the Asian landmass has ended in, at best, a stalemate, as in Korea, and at worst a complete rout, as in Vietnam. Iraq is no different: and neither, for that matter, is Syria, or Libya, or any of the other interventions Trump denounces. The choice we faced in all of these wars was: either permanent occupation, or else withdrawal. There’s no in-between. Our troops are still in Korea, more than half a century after the fighting ended, a fact that Trump complains about. Does he want Iraq to turn into another Korea?

  He slyly acknowledges this contradiction when he goes into his unbelievably stupid “we-should’ve-kept-the-oil” riff:

  “This proposal, by its very nature, would have left soldiers in place to guard our assets. In the old days, when we won a war, to the victor belonged the spoils. Instead, all we got from Iraq – and our adventures in the Middle East – was death, destruction and tremendous financial loss.”

  What this means, in effect, is that we’ll be in the Middle East forever, guarding “our assets.” And, by the way, the “old days” Trump refers to are really ancient times: when the Romans sacked cities and lugged the loot back to Rome. America’s wars didn’t involve us collecting anything but the war debts of our shiftless allies: after World War I, we effectively canceled the war debts owed by Great Britain and France. After World War II, the Marshall Plan subsidized the nations of devastated Europe, and the Brits didn’t pay off their debt to us until 2006 (after multi-year suspensions of payments).  These wars, and indeed all the wars waged by us in modern times, resulted in nothing but “death, destruction, and tremendous financial loss.”

  Trump then turns around and declares “The era of nation-building will be ended.” Great! But we’ll still be fighting in Iraq, and god knows where else.

  So how will Trump deal with the Islamic State? Well, beyond calling “an international conference,” we don’t know. He doesn’t want to “telegraph” his Grand Plan to “our enemies.” And he also doesn’t want to tell the American people what he plans to do – but we can glean the implications from what he does say. And I have to say it’s not encouraging.

  Trump’s immigration proposals – “ideological vetting” of potential immigrants, a “temporary” ban on immigrants from countries rife with terrorism, a “Commission on Radical Islam” to study the problem – are vague placebos in place of a real policy. France has a large Muslim population. So does Britain. So does Germany. Are these countries, all of which have been the scenes of homegrown terrorist activities, among those he wants to impose his “temporary” ban on? He never tells us which countries he’s talking about. As for the “vetting” process: will any would-be terrorist answer truthfully when asked if he or she believes in Sharia law, as opposed to the US Constitution? Grow up!

  If Trump were serious about using immigration policy as a weapon in the “war on terrorism,” he would advocate an immigration moratorium. He used the word “extreme” a half a dozen times when he talked about who should be allowed to enter the country, but apparently this is too extreme even for him – and yet it’s the only realistic approach to take. I’m not saying I would endorse such a proposal, but at least it has the virtue of being both practical and honest.

  To sum up: on the plus side we have Trump denouncing the Iraq war and the interventions in Libya, Syria, and Egypt that gave ISIL a pathway to prominence. That a Republican candidate for President is saying these words is more significant than anyone is willing to admit: it represents a sea change for the GOP, and it means there’s no going back to the neoconservative nostrums of the past. There’s also his willingness to cooperate with Russia, which would mark a decisive break with the new cold warriors who inhabit the Beltway and infest both parties. And you’ll note that, when listing our Muslim allies in the Middle East, Trump didn’t mention the Saudis or the Gulf emirates. They surely noticed this glaring omission, although no one else did.

  On the negative side, we see that Trump is a captive of the ridiculous idea that once we’re in we have to stay in and fight until we achieve “victory.” What he doesn’t realize is that when you’ve dug yourself into a hole the way out is to stop digging – and his failure to understand this simple principle is surely replicated by the way he’s conducted his campaign so far.

  What Trump’s critics don’t understand is that his victory in the primaries represents a break with Bush Republicanism, which is why the neoconservatives have been his most vocal and embittered opponents. He really does oppose the first principle of interventionism, which is that “American leadership” is the singular answer to the world’s problems. What he doesn’t get, however, is that we can’t allow ourselves to get sucked back into the Middle East maelstrom under the pretext of cleaning up the mess made by the globalists.

  

  

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• Banks Ponder Vault Cash In Response To Negative Rates: Lending Reality In A Nutshell

  Submitted by Michael Shedlock via MishTalk.com,

  Under guise of preventing fraud the ECB voted to kill the €500 note.

  Fraud was not the real reason. The real reason was to make it more difficult for banks to store physical cash to avoid negative interest penalties… but it's not working.

  Cash Under the Mattress

  

  Please consider Banks Seek Cheap Way to Store Cash Piles as Rates Go Negative.

  The idea of keeping piles of cash in high security vaults may sound like something from an old movie plot, but some banks and insurers have recently started considering the idea as interest rates sink below zero across much of Europe.

   

  After the European Central Bank’s most recent rate cut in March, private-sector banks are paying what amounts to an annual levy of 0.4 per cent on most of the funds they keep at the eurozone’s 19 national central banks. This policy, which has cost banks around €2.64bn since ECB rates became negative in 2014, is intended to spark economic growth by giving banks the incentive to lend money out to businesses instead of holding on to it.

   

  European central bankers say they could cut rates again should economic conditions worsen, but private bankers and insurers are already thinking of creative ways to avoid those charges altogether.

   

  One way is by turning the electronic money they keep at central banks into cold, hard cash. Munich Re has experimented successfully with storing a double-digit million sum of euros in cash at what the insurer describes as a manageable cost. A few other German banks, including Commerzbank, the country’s second-biggest lender, have also considered taking the step. But when a Swiss pension fund attempted to withdraw a large sum of money from its bank in order to store it in a vault, the bank refused to provide the cash, according to local media reports.

   

  If this practice becomes widespread, it would have big economic implications. If banks are not paying central bank interest charges, then they will not be as affected by further official interest rate cuts. They therefore would not be spurred to lend out more money.

  Lending Reality

  1. Lending is a function of the willingness and ability of banks to lend, and the willingness of creditworthy (or deemed by the bank as creditworthy) borrowers to take on loans. Banks can make mistakes in regards to credit worthiness as they did in the housing bubble, but if banks believe they will be paid back (or bailed out by rising asset prices), enough to compensate for the risk of lending, they will lend.
  2. Capital impaired banks cannot or will not lend, regardless of what stress tests show.
  3. It is impossible for banks to lend excess reserves in a way that reduces excess reserves except to another bank that is short of reserves and needs them. Otherwise, loans just get redeposited somewhere. It’s the size of central bank balance sheets that has created the massive pile of excess reserves.
  4. If banks aren’t lending, they are either capital impaired or they do not have creditworthy customers willing to borrow.
  5. Negative interest rates add to banks expenses, eating at bank profits, making them less likely to lend.

  Counterproductive Central Bank Actions

  It’s a mystery why central banks think making banks more unprofitable will spur lending, especially when excess reserves cannot be lent. To top it off, Low interest rates punish savers who have less money to spend than they would have at higher interest rates.

  For further discussion please see Self-Defeating Central Bank Interest Rate Policies.

  

  

• Why You Should Ignore Federal Reserve Policy Statements in Your Wealth Preservation Strategy

  Later today, at 2PM New York time, US Federal Reserve bankers will release minutes from their last meeting and traders may move some markets sharply in a knee-jerk reaction to what is contained in these minutes, but don’t let any irrational responses to Federal Reserve bankers steer your focus away from reality. I’ve been discussing the absurdity of planning an investment and wealth preservation strategy around Federal Reserve banker policy statements for a long time now. Just check out my entry here from nearly a year ago, in which I discussed how Federal Reserve bankers absurdly rehashed the same statement for six straight years without ever stating anything new, and then in 2015, started placing interest rate hikes on the table again, but again, absurdly have since issued identical statements with slightly different language that virtually state nothing. Just visit their website and pull any of the archived statements from the past two years and you will encounter, in every statement, language that discusses “possible” interest rate hikes if sufficient progress has been demonstrated in the US economy towards their realized and expected objectives of “full employment and 2% inflation”.

   

  If the Fed Reserve bankers really desired (1) fundamental growth in the economy, (2) sustainable stock market growth instead of artificial bubbles comprised of grossly distorted stock prices, (3) inflation that was really 2% or lower, and (4) anything close to full employment (none of which exist by the way), they would have voluntarily dissolved themselves in 1913 and let free markets set interest rates instead of artificially manipulating interest rates for Machiavellian purposes ever since. In fact, I also posted commentary a year ago about how one can insulate oneself against falling victim to the lies of Central Bankers in their production of absurd “official” inflation and unemployment rates. In any event, in the absence of the liberating dissolution of Central Banks worldwide and allowing free market interest rates to exist, if Fed Reserve bankers were sincere about any of their proclaimed objectives of low inflation, full employment, sustainable economic growth, etc., they would have needed to start raising interest rates many moons ago. But they haven’t.

   

  In terms of silver and gold assets, we were consistent last year in stating that prices would continue to fall all year after a January spike to $1,308 an ounce gold and $18.50 an ounce silver, and because of our year-long negative outlook on gold and silver in 2015, we entered and quickly exited after short runs higher, and we were still able to return a positive, healthy 31.6% yield on our junior gold and silver mining stocks in our Platinum portfolio despite huge losses in the HUI gold bugs index of more than 50% from January 2015 to January 2016. In fact, you can follow this link to see how I warned back then, after the January gold and silver spike in 2015, that “even though gold [was] above $1211 an ounce now and silver ha[d] risen 1.96%…don’t get too excited, because Western bankers [were] waiting nearby to hammer gold back below $1,200 again later [that] month.“  However, unlike last year, I have been likewise consistent in our belief that this year would produce a year-long rising gold and silver price trend, and instead of selling all gold and silver price spikes, as I advocated in 2015, I believe that all dips in PM asset prices should be bought this year, even those dips that may be created by absurd Central Banker policy statements.

   

  For example, this past June, I explicitly stated that “much higher gold and silver prices [were] still ahead” and immediately after I wrote that article, in less than two weeks, gold surged 8.4% and and silver rocketed higher by 23.5%. Since then, both PMs have been consolidating in price, but whereas it was my belief in 2015 that all price spikes in gold and silver stocks should be sold, it is my belief that in 2016, all dips in gold and silver stocks should be bought. In fact, I reiterated this belief in this 26 July article I released after gold had fallen $67 an ounce in and silver had fallen $1.87 an ounce that month, by stating that the fall in gold and silver prices back then would “prove to be just a temporary lull in a strong continuing uptrend” that started at the end of last year, and discussed, how gold and silver stocks were still in a state of undervaluation last month. (In fact, you may visit that link to see that 18 of the stocks in our Platinum portfolio have surged by 100% to 400%+ by mid-year this year and also that we were able to duplicate similar returns in our Platinum junior mining stock portfolio in 2010. Despite this, we still feel that the largest gains in this asset class are ahead of us, after maintaining a negative outlook on the same asset class for all of 2015.)

   

  In conclusion, even if the Federal Reserve bankers raise interest rates again at some point in the future, as the title of my article states, we have traveled well beyond the point of no return for a long time now regarding interest rate policy solutions, and any knee-jerk reactions of immediate falling gold and silver prices in response to more hollow “hawkish” Federal Reserve minutes or even too-little, too-late, actual small interest-rate increases should be completely disregarded, with all eyes kept firmly on the big picture of the inevitable continuing fiat currency purchasing power destruction. No matter if Central Bankers raise interest rates or not in the future, they have firmly set the course for further and inevitable fiat currency purchasing power destruction, and this should be the unwavering focus of one’s wealth preservation strategy.

   

   

  About SmartKnowledgeU: To learn when to buy the dips that develop during this continuing gold and silver price uptrend for all gold and silver assets, including gold and silver stocks, consider our Crisis Investment Opportunities newsletter and our Platinum Membership. Special 24-hour flash sale, today only. Visit smartknowledgeu.com for more details about discount Coupon Codes, valid today only, on our annual retail Crisis Investment Opportunities Membership, Limited Edition Platinum Membership, and full Platinum Membership.

  

• How The Globalists Will Attempt To Control Populations Post-Collapse

  Submitted by Brandon Smith via Alt-Market.com,

  There is an interesting disconnect with some people when discussing the concept of global centralization. Naturally, the mind reels in horror at the very idea, because many of us know, deep down at our core, that centralization is the root of tyranny.  We know that when absolute power is granted into the hands of an elite few over the lives of the masses, very bad things happen.  No small group of people has ever shown itself trustworthy, rational, empathic or wise enough to handle such a responsibility.  They ALWAYS screw it up, or, they deliberately take advantage of their extreme position of influence to force a particular ideology on everyone else.

  This leads to resistance, resistance leads to sociopolitical crackdown and then great numbers of people are imprisoned, enslaved or even murdered.  This leads to even more resistance until one of two possible outcomes emerges — chaos and revolution or complete totalitarianism and micro-managed collectivism.

  There is no way around this eventual conflict.  As long as the centralists continue to pursue total power, men and women will gather to fight them and the situation will escalate.  The only conceivable way that this fight could be defused is if the elites stop doing what they do.  If they suddenly become enlightened and realize the error of their ways, then perhaps we could escape the troubles unscathed.  Or, if those same elites all happen to meet an abrupt end and their influence is neutralized, then the world might have a chance to adjust and adapt in a more organic fashion.

  Unfortunately, there are people who refuse to believe that a fight is unavoidable.  They desperately want to believe there is another way, and they will engage in an amazing display of mental gymnastics in order to justify this belief.

  First, I think it is important to note that I have always argued that the globalists will eventually fail in their pursuit.  I find that some folks out there misinterpret my position when I outline the strategies of globalists and they assume I am presenting global centralization as a “sine qua non.”  I do not argue that the elites will win the fight, I only argue that there is no way to avoid the fight.

  Those that want to know my views on why globalist defeat is a certainty can read my article The Reasons Why The Globalists Are Destined To Lose.

  The rhetorical question always arises:  “How could the globalists ever hope to secure dominance over the entire world; isn’t that an impossible task?”

  I believe according to my knowledge of history and human psychology that it IS an impossible task, but that is NOT going to stop the globalists from trying.

  This is what the cynics just don’t seem to grasp; we are dealing with a group of narcissistic psychopaths organized around a cult ideology and with nearly unlimited resources at their fingertips.  These people think they are rising man-gods, like the Egyptian pharaohs of old.  They cannot be persuaded through superior logic or emotional appeal.  They will not be deterred by mass activism or peaceful redress.  They only understand one thing — the force of arms and the usefulness of lies.

  Such people are notorious for taking entire civilizations down with them rather than ceding their thrones.  It is foolish to plan a response to them on the assumption that a fight can be avoided.  When I say that the globalists are “destined to lose,” this is predicated on my understanding that a certain percentage of human beings will always have an inherent capacity for resistance to tyranny.  The globalists will be defeated because there is no way to quantify every single threat to their utopian framework.  As long as people continue to fight them, physically and with information, regardless of the personal cost, their weaknesses will be found and they will fall.

  This will not be accomplished, however, without considerable sacrifice.

  When I talk about "collapse", I am talking about a process.  Collapse is not an singular event, it is an ongoing series of events.  The U.S. has, for example, been in the middle of a collapse since 2008.  The end of this collapse will come when the final economic bubble propping up our system has burst and the process of rebuilding begins.  The most important questions is, WHO will do the rebuilding?  The globalists with their power agenda, or common people seeking freedom and prosperity?

  I have outlined in numerous articles the reality that an ongoing destabilization of large portions of the global economic framework will be used by the elites as leverage to convince the public that greater centralization is necessary, including global economic management through the IMF and BIS, a global currency using the IMF’s Special Drawing Rights as a bridge and global governance through the United Nations or a similar body not yet developed.  This plan is becoming more and more openly discussed by globalists within the mainstream media.  It’s hardly a secret anymore.

  Many people will undoubtedly support this centralization out of fear of instability.  That said, many people will also refuse to support it.

  Here is how I believe, according to historical precedence and the globalist’s own writings, that they will attempt to assert global centralization post-collapse and enforce compliance.

  Resource Management And Distribution

  As I point out in many of my articles on the necessity for localism, without ample food, water and shelter self-maintained by groups of like minded citizens, no resistance can be mounted against a centralizing force.  If you cannot supply your own logistics, then you must resort to stealing them from the enemy.  Obviously, it is less risky to supply yourself if possible.

  Post-collapse, when rule of law in many places has broken down and resources can no longer be transferred safely from region to region, the name of the game will be control of necessities and the producers of necessities.  This is also used by totalitarians when the danger of unrest is present.  A prime example of this method in action was the Stalinist consolidation of the Soviet Union.

  The fact is, successful rebellions in occupied nations tend to grow in rural surroundings.  Cities are often strongholds for totalitarians because they offer more means of surveillance, a more passive population and, once taken over, they are easier to secure and defend.  I call this the “green zone doctrine;” the use of locked down cities as pivot points to launch attacks on rural people.

  Stalin used this very model, sending troops from controlled cities to plunder resources from outlying farming communities.  He then stored these supplies for “redistribution;” the people deemed most useful to the regime were fed, the people deemed not useful or potential threats were not fed.  In the end, Stalin killed off many potential rebels simply by denying them food production or food access.

  The elites do not need to own every inch of ground in order to launch an effective campaign of martial law.  All they need to do is own key cities through surveillance technology and troop presence, then use these cities as staging grounds to confiscate resources in surrounding areas from people they do not like.  If you think the government would not pursue that kind of tactic in the U.S., I highly suggest you look into Executive Order 13603, signed by Barack Obama in 2012.  This order gives the president authority during a “national emergency” to take any private property or resources if it is deemed “necessary to national defense.”

  It should be noted that starvation as a weapon has been extremely useful for the elites in the past.

  The Malaysian Model Of Control

  If the elites are anything, they are rather predictable.  This is because they have a habit of consistently using strategies that have worked for them before.  In my article When The Elites Wage War On America, This Is How They Will Do It, I examine the writings of Council On Foreign Relations member Max Boot on methods for quelling insurgencies.  In the U.S., insurgency is a given post-collapse.  The only question is whether it will be a large insurgency or a small one.

  I do not hold out much hope for most of the rest of the world in terms of generating a useful rebellion.  Most citizens in Europe and Asia are unarmed and untrained.  Any resistance in these regions will be very small and cell structured if it is going to survive.

  The methods Max Boot describes tend toward larger threats to the establishment.  Boot mentions specifically the great success by the British in Malaysia from 1948-1960 against highly effective communist guerillas and terrorists.  This success can be attributed to several factors:

  1) The British used large-scale concentration camps to separate production centers from rebel influence.  These were massive camps surrounded by barbed wire fences and guard towers, primarily used to house farmers and other workers and their families.  This stopped the guerillas from hiding among the working class and recruiting from them.  This follows the “green zone doctrine” I described above.

  2) The British implemented a sophisticated identification system for all Malaysian citizens including fingerprinting.  They then set up numerous checkpoints across the country at which citizens had to produce their paperwork.  Anyone who did not have their papers was held on suspicion of being an insurgent.  The rebels in Malaysia attempted to counter this by forcefully taking over busy buildings and buses, then burning everyone’s IDs.  This would not be a very effective tactic in a digitized world where identification is accomplished through advanced biometrics.

  3) Instead of fielding massive lumbering military brigades in a useless effort to cover large stretches of ground, the British used spies and informants to locate rebel strongholds, then sent special forces units in to neutralize them.  Again, they did not need to control every inch of ground; they used military assets wherever the rebels were, then left.  Their goal was not to control a lot of ground, but to kill rebels.  The British used considerable brutality in their efforts, including a mobile gallows that traveled the country, and the public display of rotting corpses to strike fear in the insurgency.

  4) The political elites in Britain fought the psychological war by offering promises of peace and prosperity to the Malaysian commoners if they supported the effort against the insurgency.  They did not necessarily need to follow through on these promises, all they needed to do was create a few examples of reward for cooperation, and sell this to the public in a convincing manner.  Once enough of the population was in the hands of the British, the insurgency lost supply resources and also had to worry about informants.

  Technology Grid For Tyranny

  Malaysia was an example of a competent strategy to uproot insurgents, but there were also many failures and pitfalls.  The elites are trying to mitigate any future unknown quantities when fighting against rebellions through the use of new technologies.

  The green zone doctrine could only be successful today with the use of biometric surveillance.  Restriction of movement could be accomplished, but only in cities with extensive surveillance grids.  The insurgents of a post-collapse future would be hard pressed to infiltrate or exfiltrate from a green zone with currently available facial recognition, gait and walk recognition, retina and thumbprint scanning, etc.  Facial recognition has even gone into the realm of thermal imaging; cameras can use the unique heat signature from blood vessels within the human face to identify a person from a relative distance.  Make-up and prosthetics would not counter this.  Thermal masking would be the only solution.

  Beyond that, an insurgency would have to be technologically savvy. Cyber warfare would have to be integral to their methodology.  This is not something any other rebellion in history has had to deal with.

  An Uneducated And Bumbling Insurgency

  The globalist’s strategy to trigger economic and social chaos, then lock down certain regions and offer centralization as a solution to the population, is far easier to accomplish when the opposition they face lacks insight, patience, planning and initiative.

  The British were partially successful in Malaysia because the guerillas were ignorant of public perception. While they were effective and ruthless fighters, their viciousness resulted in lack of public support.  Though wide public support is not needed for victory, it certainly helps.

  Multiple revolutions against Stalin’s power, some of them very large, were put down because of poor planning.  Rebels massed sizable forces in tight areas, such as a single mountain or mountain ranges.  Stalin simply dropped poisonous gasses on insurgents that had put all their eggs in one basket and forgot to stockpile gas masks.  It is vital to recognize that in a post-collapse world governments and elites may no longer be subject to public scrutiny, and are thus free to act as maliciously as they want.  All contingencies have to be considered.

  Rebels in the Soviet Union also had a bad habit of ignoring logistics.  Many were armed with mismatched rifles and a rainbow selection of ammunition instead of arming all their men with the same rifle and the same ammo for redundancy.  Rebellions have been lost in the past merely because the fighters armed with too wide an array of weapons ran out of enough ammo to feed any of them.

  Insurgents have also historically suffered from an inability to strike the leadership centers of the empires they fought.  Primarily because they did not know who the real leadership was.  Only in our modern era do we have the information available to identify the elites and their organizations.  Globalists are often very vocal today in media about who they are and what they want.  This is why the elites seek to make the next insurgency the LAST insurgency.  Never before have they been so vulnerable.

  I believe the globalists will use their standard strategy of disinformation and division first to acquire centralization, but eventually they will turn to a Stalin/Malaysian model for control on the ground.  I will have to save the specific counter-strategies to these tactics for another article.  Some of them I probably cannot legally discuss at all.  The most important thing to remember, though, is that the globalists’ job is harder than our job.  They have to control people, property, resources, and mass psychology.  They have thousands of variables to take into account, and thousands of situations that could go wrong.

  All we have to worry about is our own local organization, our own moral compass, our own survival and removing the top globalists from the picture.

  

  

• Subprime Auto Loans Go Mainstream: Exposing The Shady Practices For "Everyday" Americans

  While the pending subprime auto loan bubble pop is nothing new for our readers, it may be a shocking revelation for the average American who would fall victim of these scams. British comedian John Oliver has prepared a video that places in evidence the rampant fraud that currently takes place in the auto lending sector. The similarities between this industry and the mortgage industry pre-2007 are striking.

  The video compiles some of the current TV ads for the segment, including one from Viers Auto Sales, that should strike fear down your spine. Even a clown can get approved.

  While the Obama administration has created the Consumer Financial Protection Bureau, we have yet to see any action from them or other social justice warriors like Elizabeth Warren on cracking down on these predatory practices.

  Some of the video highlights include:

  1. A woman asking for a maximum $3,000 car loan ends up on the hook for a $13,000 loan (paying ~30% interest).
  2. A car who leaves her baby in the car, and then gets her car repossessed with said baby inside.
  3. A 2003 Kia Optima car that gets loaned and repossessed at least 8 times, each times valued at 2-3x its previous estimate.
  4. Approximately 31% of subprime auto loans are currently non-performing

  Evidently, we have learned nothing from the 2008 crisis.

  

  

• Brazil Escalates: Authorities Pull 2 US Olympic Swimmers From Rio Flight

  It appears Brazilian officials are not simply going to let this one go. With Ryan Lochte reportedly back in the US (and teammate James Feigen unaccounted for) following the Brazilain judge's search-and-seizure warrant, CNN reports that two fellow swimmers involved in the alleged robbery – Jack Conger and Gunnar Bentz – were removed by Brazilian authorities on Wednesday night from their flight before it departed Rio de Janeiro to the United States, according to US Olympic Committee spokesman Patrick Sandusky.

  

  As a reminder, Lochte, a gold-medal winner, said his wallet was stolen as he and three of his American teammates — Bentz, Conger and James Feigen — were returning to Rio’s Olympic Village in a taxi. They said they were robbed by men posing as police officers, adding that the group initially didn’t contact the U.S. Olympic Committee because they were “afraid (they’d) get in trouble.” The story made quick waves Sunday, especially after Lochte, 32, detailed the alleged encounter on the “Today” show. Lochte’s account has come under increased scrutiny since then. Embarrassed Rio police said they have found little evidence to support the accounts, and a police source said they are unable to find the taxi driver or witnesses.

  And now as NBC reports,

  Multiple sources told NBC Sports that Conger and Bentz cleared security and were in their seats on the plane when authorities came on to the aircraft shortly before takeoff and removed the swimmers.

   

  They are being held at the airport but are being treated well and cordially, the sources said.

   

  Authorities have indicated they don't want to hold the swimmers long, but do want to know what happened during the early morning robbery, the sources said.

   

  "We can confirm that Jack Conger and Gunnar Bentz were removed from their flight to the United States by Brazilian authorities," U.S. Olympic Committee spokesman Patrick Sandusky said. "We are gathering further information."

  Lochte's lawyer Ostrow said Lochte gave police a statement as representatives from the U.S. State Department, United States Olympic Committee and the FBI observed. Lochte signed the statement to attest to its truthfulness, Ostrow said.

  Police have not asked Lochte for more information, and they did not ask him to remain in Brazil, Ostrow said.

   

  "They never said, 'Stay around,'" Ostrow said. "Otherwise, I would have advised Ryan to stay."

   

  He accused Brazilian authorities of trying to "save face" after allowing the incident to become "a circus."

  *  *  *

  Of course, if one were truly wearing their tin foil hat, one might wonder if this is somehow retribution for Washington's alleged hand in Rousseff's downfall…

  

  

• Dr. Drew Pinsky Says He Is "Gravely Concerned" About Hillary Clinton’s Health

  Submitted by Joseph Jankowski of PlanetFreeWill

  Board-certified medicine specialist and TV personality Dr. Drew Pinsky has come out and said that he is “gravely concerned” about presidential candidate Hillary Clinton’s health, pointing out that treatment she is receiving could be the result of her bizarre behaviors.

  Appearing on KABC’s McIntyre in the Morning, Pinsky said he and his colleague Dr. Robert Huizenga became “gravely concerned….not just about her health but her health care,” after analyzing what medical records on Hillary had been released.

  Pinsky pointed out that after Clinton fainted and fell in late 2012, she suffered from a “transverse sinus thrombosis,” an “exceedingly rare clot” that “virtually guarantees somebody has something wrong with their coagulation system.”

  “What’s wrong with her coagulation system, has that been evaluated?” asked Dr. Drew.

  Dr. Drew, known as “America’s most trusted physician,” added that the “weird” medication Clinton has been receiving could be exacerbating her health problems.

  “So the very medicine doctors are using may be causing this problem and they’re using an old fashioned medicine to treat it – what is going on with her health care?” asked Pinsky.

  Pinsky described the situation as “bizarre,” and said that Hillary’s medical condition was “dangerous” and “concerning”.

  Dr. Drew also went on to add that it was a sign of “brain damage” when Hillary had to wear prism glasses after her fall.

  

  Although the Clinton Campaign has said that the controversy over Hillary’s health has been debunked and while the media feverishly attempts to paint any questioning of the medical condition of the Democratic party’s nominee as a “conspiracy theory,” it certainly says something when “America’s most trusted physician,” who regularly appears on mainline television, comes out and says he is deeply concerned about Hillary.

  

  

• Obama Lied: New Details Confirm $400 Million Given To Iran Was Indeed "Hostage Ransom"

  For the self-described "most transparent administration ever" it appears keeping the lies straight is becoming harder and harder. Having slammed the press, Donald Trump, and anyone who dare mention the "lack of logic" in paying a $400 million ransom for 4 Iran hostages, WSJ reports that Treasury officials have confirmed that Obama lied and in fact, the tightly scripted exchange of cash was specifically timed to the release of several American prisoners held in Iran. Trump was right again.

  As a reminder, The Hill reported that, President Obama chastised the press for their coverage of the payment, noting that the deal with Iran was announced months ago as part of a larger diplomatic settlement.

  "This wasn’t some nefarious deal," Obama said.

   

  “It’s been interesting to watch this story surface,” the president said. “Some of you may recall, we announced these payments in January. Many months ago. There wasn’t a secret, we announced them to all of you.”

   

  "What we have is the manufacturing of outrage on a story that we disclosed in January,” he added later.

   

  "The notion that we would somehow start now in this high-profile way, and announce it to the world, even as we’re looking in the faces of other families whose loved ones are being held hostage and say to them, ‘we don’t pay ransom,’ defies logic," Obama said.

  Defies logic indeed – because having slammed the press for suggesting this was a "ransom payment," we discover that is exactly what The Justice Department warned…

  

  In his remarks, the president didn’t mention the objections raised by his own appointees within the Justice Department, where, according to people familiar with the discussions, many officials raised alarms that the timing of the cash payment would look like ransom. (via WSJ)

  The head of the national security division at the Justice Department was among the agency’s senior officials who objected to paying Iran hundreds of millions of dollars in cash at the same time that Tehran was releasing American prisoners, according to people familiar with the discussions.

   

  John Carlin, a Senate-confirmed administration appointee, raised concerns when the State Department notified Justice officials of its plan to deliver to Iran a planeful of cash, saying it would be viewed as a ransom payment, these people said. A number of other high-ranking Justice officials voiced similar concerns as the negotiations proceeded, they said.

   

  The U.S. paid Iran $400 million in cash on Jan. 17 as part of a larger $1.7 billion settlement of a failed 1979 arms deal between the U.S. and Iran that was announced that day. Also on that day, Iran released four detained Americans in exchange for the U.S.’s releasing from prison—or dropping charges against—Iranians charged with violating sanctions laws. U.S. officials have said the swap was agreed upon in separate talks.

   

  The objection of senior Justice Department officials was that Iranian officials were likely to view the $400 million payment as ransom, thereby undercutting a longstanding U.S. policy that the government doesn’t pay ransom for American hostages, these people said. The policy is based on a concern that paying ransom could encourage more Americans to become targets for hostage-takers.

  Of course, the denials kept on coming from The White House. However, as The Wall Street Journal now reports, new details of the $400 million U.S. payment to Iran earlier this year depict a tightly scripted exchange specifically timed to the release of several American prisoners held in Iran, based on accounts from U.S. officials and others briefed on the operation…

  U.S. officials wouldn't let Iranians take control of the money until a Swiss Air Force plane carrying three freed Americans departed from Tehran on Jan. 17, the officials said.

   

  Once that happened, an Iranian cargo plane was allowed to bring the cash back from a Geneva airport that day, according to the accounts.

   

  President Barack Obama and other U.S. officials have said the payment didn’t amount to ransom, because the money was owed by the U.S. to Iran as part of a longstanding dispute linked to a failed arms deal from the 1970s. U.S. officials have said that the prisoner release and cash transfer took place through two separate diplomatic channels.

   

  But the handling of the payment and its connection to the release of the Americans have raised questions among lawmakers and administration critics.

   

  …

   

  One of the Americans released in January as part of the prisoner exchange, a Catholic pastor named Saeed Abedini, said he and other American prisoners were kept waiting at Mehrabad airport for more than 20 hours from Jan. 16 to the morning of Jan. 17.

   

  He said in an interview that he was told by a senior Iranian intelligence official at the time that their departure was contingent upon the movements of a second airplane.

  Just as Trump had suggested (before oddly retracting his suggestion), the exchange did take place and as the BBC reported. a video did indeed exist of the events, referring to a documentary called "The Rules of the Game" which was broadcast on Iranian state TV in February. In the clip, one can see shots of an airport are accompanied by commentary which references 17 January in Tehran's Mehrabad Airport.

  Specifically, the video shows a loaded crate, partially blurred out, which allegedly shows the money in question.

  

  

   

  And another version:

  A translation of the commentary with the pictures, per BBC, reads as follows.

  "Early hours of 17 January 2016, Mehrabad Airport (Tehran), $400m cash was transported to Iran by an airplane.

   

  "A little bit later, part of the interest money was also paid to Iran, and the US government made a commitment to pay the rest of Iran's money."

  While it is not clear if this is intended to be a literal description or whether the shots are just general views of the airport.

  The video is shown below, and the pettets of cash appear at the 11:00 mark.

  The video It can also be found on YouTube, and was also hosted and discussed by MEMRI tv at one point, and was also in a BBC Journalist twitter feed.  Here are the links to the short and the full version of the Iranian Documentary. Finally here is another version.

  It is unclear where Donald Trump might have caught the clip of the video, and whether or not the cash disclosed is what Iran claims it is (in light of the WSJ revelations it is very likely that this is indeed the alleged payment in question) but the footage was widely discussed several months ago when the hostages were released.  The Iranian TV ran it with a title “The Rules of The Game." It was released on BBC TV during a segment discussing the release of the prisoners.

  In other words, it did exist.  

  *  *  *

  So to summarize – Obama lied; the administration did indeed make a $400 million in exchange for the release of four hostages (if it walks like a ransom, and talks like a ransom, it is a ransom), and Trump was right.

  Finally, this is far from over, as The Wall Street Journal concludes, Republican lawmakers have charged that the $400 million payment equated to a ransom paid by the White House to gain the release of the Americans.

  Republican leaders said they are preparing to hold hearings on the $400 million transfer once Congress returns from its summer break in September. Rep. Sean Duffy (R., Wis.), chairman of a House investigative body, sent letters to the Justice and Treasury Departments, as well as the Federal Reserve, on Aug. 10 requesting all records related to the Iran exchange.

   

  Mr. Duffy asked Attorney General Loretta Lynch to identify all “persons within the Department authorizing or otherwise taking steps to carry out the payment.”

  Obama administration officials have confirmed that they have paid the remaining $1.3 billion to Iran as part of the settlement reached in January on the failed arms deal. This marked the interest accrued over the past 37 years on the original $400 million paid by Iran. U.S. officials, however, have refused to disclose how the Obama administration made this additional payment. Lawmakers are seeking to determine whether this money was also paid in cash or if the Treasury Department was able to wire it electronically.

  

  

  

• Ford Announces Plans To Self-Destruct Starting In 2021

  Ford CEO, Mark Fields, sat down with Bloomberg to discuss plans to introduce a completely autonomous car by 2021.  The only real problem we see with that plan is that it pretty much ensures their own demise.  That said, they're pretty much doomed anyway so might as well go for it.  

  The company said it plans to have a fully autonomous vehicle — no steering wheel, no gas or brake pedals — available by 2021 for ride-hailing services.

   

  “We see the autonomous car changing the way the world moves once again,” Chief Executive Officer Mark Fields said today at Ford’s research lab in Palo Alto, California. “They address a whole host of safety, social and environmental issues.”

   

  Like Alphabet Inc.’s Google, Ford will skip the interim steps of driver-assisted technology as a way to evolve toward full autonomy. Its plan to deploy self-driving cars in ride-hailing and ride-sharing fleets is similar to what General Motors Co. aims to do with Lyft Inc. Ford’s 2021 scheduled start matches BMW’s ambitious timeframe.

   

  “We believe in our plan that taking the driver out of the loop is really important,” Fields said in an interview with Bloomberg Television. The automaker couldn’t find a sensible way through the “no-man’s land” — determining exactly when a robotic car should to try to re-engage a human driver in an emergency.

  So what do we mean when we say an autonomous car pretty much ensures Ford's demise?  To be clear, we're not specifically targeting Ford…the whole auto industry is in serious trouble when truly autonomous driving arrives.  Below is a little math to help illustrate the point. 

  Right now there are roughly 250mm light-duty passenger cars on the road in the U.S. (that's about 1 car per driving age person, btw, which is fairly astounding by itself).  American's travel roughly 3 trillion miles per year in aggregate which which means that each car travels an average of 12k miles per year.  Now if you assume the average rate of travel is 45 miles per hour then you'll find that each car is implied to be on the road for an average of about 45 minutes per day.  That's a capacity utilization of about 3% (see table below for quick math).

  

   

  A 3% capacity utilization ratio is, needless to say, fairly terrible.  We don't imagine too many CFOs would model capital allocation decisions based on a 3% capacity utilization for fixed assets.  That said, individuals are forced to underwrite car purchases to a 3% capacity utilization because they have no choice.  People have to get to work and 100% reliance on public transit options as just not feasible for most people in this country. 

  That is, until the arrival of completely autonomous vehicles.  The problem with mass transit is that people still need a car to get back and forth to the train station or bus stop.  The problem with Ubers/Taxis is that they're expensive for daily use due primariliy to the labor overhead that's built into your per mile rate.  But fully autonous vehicles solve both those problems.  Now, people will have the option of a vehicle at their beck and call without having to fund the upfront capital cost of a purchase and/or the per unit human capital costs inherent in taking an Uber.  In other words, the per mile rental rate of a fully autonomous car should be competed down to a level that provides an adequate return solely on the cost of the vehicle…no wages, no benefits, none of the typical hassles associated with employing people.  Or, said another way, taking an Uber is going to get really freaking cheap.

  But the best part is that capacity utilization with fully autonomous cars can skyrocket driving per unit costs even lower for passengers.  For example, when you drive to work right now your car sits there all day until you drive home.  In the autonomous car world, that car will drive you to work then go pick up multiple other poeple to do the same thing.  Now, if capacity utilization doubles from just 3% to 6% all of sudden half the number of cars are required in the US which means annual SAAR goes from ~17mm to ~8.5mm…which means Ford and GM likely find themselves in another bailout situation.

  

   

  So goodluck with that fully autonomous car.  We wish you the best.

  

  

• "Weak" Walmart Security Enables Rampant Crime-Wave, Costs Taxpayers $5 Billion

  You don’t have to search that hard on the internet to find an endless supply of stories and videos about violent crimes and/or ludicrous behavior at Walmart stores around the country. 

  Who can forget the recent meth lab discovered under a Walmart parking lot in Amherst, NY?

  ICYMI: Meth lab found under Walmart parking lot https://t.co/KyRWYeYV7f pic.twitter.com/aclQVg8h0h

  — WYFF News 4 (@wyffnews4) August 13, 2016

   

  Or the recent hostage situation in Amarillo, TX that left Mohammad Sadegh Moghaddam dead…

  WATCH: New video from the Amarillo Walmart hostage situation shows the eerie last moments of the suspect’s life https://t.co/aar48QbyIq

  — ABC 7 Amarillo (@ABC7Amarillo) July 7, 2016

   

  Or the 3 Florida Walmart employees that now face murder charges after subduing a shoplifter in the parking lot who subsequently died…

  Three Florida Walmart employees are facing charges after subduing a shoplifting suspect who later died. #KOBI5Newshttps://t.co/bX028JpQbs

  — KOBI-TV NBC5 News (@KOBITV) August 3, 2016

   

  In fact, more than 200 violent crimes, including kidnappings, stabbings, shootings, and murders, have occurred at Walmarts across the country this year, or about one a day.  According to Bloomberg, turns out the level of criminal activity is forcing police officers to spend a fairly substantial portion of their time at Walmarts.  That’s a burden many officers and public servants say is the direct result of Walmart scrimping on their own security expenditures and instead outsourcing those obligations to taxpayer funded police forces.  According to one Police Department in Tulsa:

  The call log on the store stretches 126 pages, documenting more than 5,000 trips over the past five years. Last year police were called to the store and three other Tulsa Walmarts just under 2,000 times. By comparison, they were called to the city’s single Target store 44 times. Most of the calls to the northeast Supercenter were for shoplifting, but there’s no shortage of more serious crimes, including five armed robberies so far this ear, a murder suspect who killed himself with a gunshot to the head in the parking lot last year, and, in 2014, a group of men who got into a parking lot shootout that killed one and seriously injured two others.

   

  His squad’s sergeant, Robert Rohloff, a 34-year police veteran who has to worry about staffing, budgets, and patrolling the busiest commercial district in Tulsa, says there’s nothing funny about Walmart’s impact on public safety. He can’t believe, he says, that a multibillion-dollar corporation isn’t doing more to stop crime. Instead, he says, it offloads the job to the police at taxpayers’ expense. “It’s ridiculous—we are talking about the biggest retailer in the world,” says Rohloff. “I may have half my squad there for hours.”

  Meanwhile, Target stores in Tulsa don’t have the same problem.  The difference, of course, being that Targets are typically located in strip malls and actually spend money on store security.

  “Target doesn’t have these problems,” says Ferguson. “Part of it may be the lower prices at Walmart or where Walmart is located, but when I walk into Target I see uniformed security or someone walking around up front. You see no one at Walmart. It just seems like an easy target.”

  Meanwhile, experts say the security issues at Walmart have a simple to fix but would come at the detriment of operating margins…leaving many to question whether Walmart is intentionally ignoring a dangerous environment to preserve margins

  Flickinger says getting dramatic results wouldn’t be complicated. It would just cost a lot. He, like many other Walmart watchers, thinks McMillon is heading in the right direction with the changes he’s making, including spending $2.7 billion on higher wages and training to boost morale and attract higher-caliber employees. It just isn’t nearly enough, he says. He estimates the number of crimes at Walmart’s U.S. stores could be halved with the addition of 250,000 part-time employees on top of the more than 1 million full-time and part-time retail workers the company already has. Even that much new hiring wouldn’t get the company to the number of employees per square foot it had in 2006. The cost would be about $3.25 billion a year, or about a quarter of Walmart’s profit last year of $14 billion.

   

  Security experts say there’s another way to reduce crime: Hire much more security, including more off-duty, uniformed police. At $35 an hour, a typical rate in many cities, 12 hours of police coverage a day would cost each store about $150,000 a year. Multiply that by the company’s 3,500 Supercenters—the largest stores and the sites of most of the serious crime—and it would cost half a billion dollars a year.

  Despite calls for Walmart to step up internal security efforts from police departments and city councils across the country, many have found Walmart’s response to be “lacking” to say the least.  So Dennis Buckley, mayor of Beech Grove, Indiana, decided to take a different tactic force Walmart into action after being embarrassed by a video recorded at his local store that immediately went viral (see below):

  Enraged by the circus atmosphere around the video, he denounced Walmart on Facebook and in the local media. “The Beech Grove Walmart is NOT a good corporate partner,” he posted. The YouTube video “was embarrassing to the City of Beech Grove and the people who live in our beautiful city. Walmart should be ashamed of itself once again for failing to control the people who enter their store.”

   

  While Dennis’ public shaming got him a quick meeting with Walmart executives nothing really changed for his local store in the long run.  With Walmart being able to offload $3-$4 billion of annual security expenses to taxpayers we suspect that not much is going to change anytime soon.

  

  

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• Turkish Turmoil: Let The Politics Begin

  Submitted by Eugen von Bohm-Bawerk via Bawerk.net,

  A month on from Turkey’s failed coup attempt, and you’ll find endless op-eds opining the supposed strategic implications of Erdogan’s rear-guard offensives. In a nutshell, it breaks down into four key arguments…

  • The first is that Erdogan will oversee a ‘brutal crackdown’ to consolidate power wherever and whenever possible out to 2019 against any form of political opposition (Gulenist or not). The net result supposedly secures Erdogan’s tenure towards 2023 ‘Ataturk’ landmarks, and beyond.
  • The second facet is that Mr. Erdogan will continue to inflict collateral Kurdish damage to secure internal gains along the way. PKK-Ankara relations basically go back to square one, while the slightly more politically savvy HDP gets caught in Erdogan’s crossfire, undermining consistent Kurdish supplies through Turkey.
  • The third factor is Ankara turning towards Russia as a new ‘strategic’ axis against NATO interests, and indeed Turkey’s vexed relations with the transatlantic military body. A relationship that’s likely to go from bad to worse given Mr. Erdogan’s underlying belief that ISIS gains remain the lesser of two evils compared to Kurdish consolidation on his Southern border. Not to mention the minor fact that most AKP members think the US was all in on the ‘Gulenist’ plot to oust the sitting President.
  • Beyond other blindingly obvious points that Turkey’s now subject to far more terror attacks by failing to ride two competing ‘ISIS / Kurdish camels’, that doesn’t really leave us much beyond point four: The failed Turkish mutiny still supposedly portends a major trigger point for another ‘Arab Autumn’, where MENA states are susceptible to enhanced political risk on the back of depressed benchmark prices. While all these arguments have elements of truth, our position is they don’t constitute a serious discussion of the Turkish question, at least without significant caveats raised across all four points. Those same caveats also happen to have sharp resonance for how tangible any KSA-Turkish relations are in future.

  But enough with all the pre-amble stuff, what about the political facts here? The first point to raise on ‘internal political consolidation’, is although Erdogan will continue to wield heavy sticks – probably with fresh elections in 2017 to ram through a two-thirds AKP parliamentary majority to pave the way for a strong arm executive branch on the back of Constitutional reforms – Mr. Erdogan’s not in a credible position to oversee ‘total crackdowns’ across the board. This is still a political game he has to play in a politically sensitive manner to get the consolidation he wants. Part of that’s to prevent another ‘coup 2.0 scenario’ that remains a real concern in Turkey. Hence, while the AKP has locked up vast numbers of military staff and public servants (50,000 and counting), the President wasn’t allowed to resurrect military barracks in Gezi park despite declaring ‘emergency rule’ to do so. Erdogan’s also been forced to play nicer with opposition MHP and CHP factions to present a united ‘anti-Gulenist’ front. The longer Erdogan keeps opposition consent in play, the further anti-Gulenist purges can go, in what’s basically going to be a long term cycle of ‘part of reconciliation, part crackdown’ for secular (long term) consolidation. Ultimately Mr. Erdogan will get his way, creating a strong executive to dominate all branches of government into 2017-18. But that’s not driven by crude ‘crackdowns’, but far more politically intricate games the President will play. Presidential apotheosis yes, but secured through politically nuanced means.

  Unsurprisingly, the same nuances play into Kurdish questions, and especially with the PKK. Recent attacks in the South East were probably inspired by Ocalan to highlight just how weak a post-purge Turkish army has become. Yet that’s not necessarily with a ‘hard-baked’ view of returning to violence for violence sake, but purely to start playing the political game with Erdogan instead. Although very poorly understood by Western analysts, the PKK remains sharply opposed to Gulenist nationalist trappings, and actually holds them responsible for some of the blunter military tactics deployed in South East Turkey last year. To be clear, we’re not saying that anti-Gulenist positions are anywhere enough to consistently bring Ankara and Ocalan to the table for long term accommodation, but it’s probably still sufficient for both sides to play the political game of tactical ‘on-off’ discussions to secure proximate political aims. The PKK wants to remain the ‘go to’ Kurdish group to eclipse growing HDP influence, and more importantly, keep one step ahead of intra-Kurdish contests between the KRG (KDP, Goran and PUK), and YPG / PYD (Rojava) in Syria for regional leadership. Speaking to Erdogan helps secure that status on ‘diplomatic paper’, with ongoing attacks on the Iraq-Turkey (Kirkuk-Ceyhan) the parallel ‘physical insurance policy’ to remind Ankara’s who’s ultimately calling the transit shots, not to mention keeping the KDP in a very difficult spot trying to monetise Kurdish crude. Exactly like our internal crackdown commentary, expect Ankara-PKK relations to keep shifting between ‘jaw-jaw’ and ‘war-war’ calculations on this, purely depending on where the political points can be scored.  Even though the long term ‘Presidential’ prognosis is anything but good for the PKK.

  Turn to Russia and that’s where the entire ‘Turkish thesis’ becomes far more tenuous. Despite the clear political aesthetics of Erdogan’s first ‘post-coup’ trip to St Petersburg, this is ultimately a relationship that both Presidents’ want to dominate on key strategic issues, not share. Don’t forget, from President Putin’s perspective, Turkey was always ear marked as a ‘Eurasian Union’ state that basically relegates Ankara to a Russian satellite interest, while Mr. Erdogan clearly thinks Turkey has far more regional clout in the Levant when it comes to shaping Middle East results. With that said, both sides understand that Russia is increasingly well placed to prevent the emergence of a Kurdish state in Norther Syria, given Washington doesn’t have any other anti-Assad cards to play. But whether Russia and Turkey ever truly see eye to eye on Damascus is a less certain prospect. Erdogan won’t like it, but if he genuinely wants Russia on-board as a consistent ‘partner’, that probably means toning down the anti-Assad rhetoric in Syria; it certainly means being more ‘flexible’ over Russian naval presence in the Black Sea. It means scaling down residual support for Crimean Tatars; but most of all, it means increasing Turkish import dependence on Russian energy supplies, where gas is the most politically tradable commodity in play. Putting Turk Stream back on the table with Ankara (as a footnote for our readers, it’s basically a modest version of previous South Stream designs) tries to kill two birds with one pipeline for President Putin.

  a) It regains the political initiative over Ukraine, where Mr. Putin’s long lost the Donetsk war, but could still win the political peace ahead of 2018 Presidential polls in Russia, provided he can cut Kiev out of Wester European transit routes.

   

  b) It makes life far harder for President Aliyev to bring competing Azeri gas to European markets, reducing Baku to its historical status of a Russian outpost. BP merely raises the ‘red flag’ over SOCAR HQ on a daily basis by Caspian / Rosneft proxy.

  

  But unfortunately for Ankara, that rather reinforces the fundamental problem they have with Russia here. This is all one-way political traffic for President Putin to gain the upper hand over Mr. Erdogan, where Moscow rightly sees that a post-coup Turkey is absolutely prime for ‘political plucking’. Whether Erdogan is willing to be stripped to the ‘bare bones’ remains highly unlikely. At best, Turkey and Russia make for politically promiscuous ‘frenemies’. At worst, they’re at strategic cross-purposes on all points of the map, with mismatching vectors inexorably starting to show. In a truly worst case scenario, Mr. Erdogan might even find himself caught in collateral NATO-Russia crossfire, where everyone decides if Turkey can’t be part of a regional ‘solution’, it’s much easier to make them part of the ‘problem’.

  On that final note, nobody’s quite said it yet, but that’s precisely what’s already on Erdogan’s mind. Behind all the ‘CIA’ coup bluster, the President’s real concern is how many regional players might have played a part in the coup antics. GCC states are undoubtedly on his ‘list’ of suspects, where Turkish realignment hasn’t exactly played through the way major Sunni states hoped over the past few months. Whatever your particular take on that one, the fourth (and final) analytical point to register over any supposed ‘Arab Autumn’ ideas here, isn’t so much that military leaders start getting nervous to make internal MENA moves in a low price environment, but whether regional power grabs start destabilising internal political interests as a new trend. Admittedly, that’s normally the stuff off Iranian intrigues, but in the current political environment, any wrong moves – or perceived wrong moves – will assuredly come with very high political costs.

  Bottom line, Mr. Erdogan will be around for a long time to come in Turkey. But his interim answers don’t look particularly convincing right now. If anything, they’re merely laying the ground for more costly mistakes in future. Probably circa 2023, when Turkey celebrates 100 years from its modern incarnation, but before Erdogan gets ‘quite that far’, he has the minor issue of growing external debt problem to deal with.

  As everyone knows, Turkey has relied on FX denominated debt, a large tranche of which happens to be short term to fund its persistent current account deficit.

  

  While the debt load may seem sustainable in ‘boom times’, calculations from the IMF shows that a 30 per cent depreciation of the lira would push Turkey’s external debt stock to more than 80 per cent of GDP by 2020. In 2016 Turkey’s gross financing need is likely to exceed 25 per cent of GDP and could quickly spiral out of control if the FX mismatch carried by Turkey’s banks becomes acute. Right on cue, with tanks rolling down the streets of Istanbul, who in their right mind would willingly fund Mr. Erdogan’s adventure toward more red ink and inexorable Turkish turmoil.

  

• Obama Wants A Third Term And This Is How He Could Make It Happen

  Submitted by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFPlan.com,

  Yes, we are all well aware the Constitution limits the Presidency to two consecutive four-year terms of office.  Then again, if you weigh the track record of the Obama administration, the Constitution is nothing more than a challenge that he bypasses and circumvents with every given opportunity.  Small wonder that he may very well do the same thing with the upcoming presidential elections.  Already a sham, the presidential elections are actually a vehicle he can use to grab that “Third Term” for himself.

  

  First we’re going to quote straight out of the Huffington Post, an article from August 9, 2016, entitled “Does He Deserve a Third Term?  Obama is S.T.U.P.I.D!”  The acronym “STUPID” is supposed to stand for Super Human, Tough, Unequalled, Proactive, Ingenious, and Demi-god.

  No, your eyes did not deceive you: that last was “Demi-god,” this article from a “Contributor” to the Huffington Post.  The last paragraph is very alarming, and here it is:

  “D         –           Demi-god

   

  What more can qualify a man as god?  A loving father to his children, best friend to his wife, a friend to his subordinates, a mentor to growing young men, hope to the hopeless, a victor in his challenges, the most powerful man on earth, yet a simple man in all his ways.  You will forever live in hearts of all as a god among men.”

  A “god” among men, eh?

  Akin to a professional boxing match, the slow and careful buildup in words by the media has begun.  Those sentiments are not a trumpet call, however; they are an echo of the mind of a narcissistic, soft-dictator that has systematically destroyed the United States over the past 7 years.  If you want the source of the reverberations, feast your eyes on this.  David Feherty of the Golf Channel conducted an interview with Obama and asked him some questions about his golf game.  Obama replied to the questions, and added:

  “But I’m not quitting my day job.”

  Feherty’s response: “Actually you are quitting your day job fairly shortly,” referring to Obama leaving the White House in January.  Obama’s next reply gives it all away.  In the first part, he suggests his golf game might improve.  Then he talks about the presidency (the underlined portion), leaving no guesswork about his true feelings on the matter.

  “Then I may get good. I’m being forced out, I didn’t quit,” Obama said.

  How do you like that one?  So how could this potentially happen?  Firstly, the states are the ones with either state-enacted provision to suspend elections or emergency powers to do so.  We saw an example of this with the September 11, 2001 attacks where a New York judge suspended primary elections.  We also saw it with “Superstorm Sandy,” where several states either postponed elections or re-stationed polling locations.

  Barring such actions or state constitutional provisions, a governor can use emergency powers to postpone an election.  Feasibly under some “extraordinary” circumstance, Obama could direct the 18 Democratic state governors to jump on board and postpone the election.  This is secondary, however, and probably wouldn’t be needed.  Why?

  Because Obama has the power to declare Martial Law, reinforced by the NDAA that declares the U.S. in a perpetual state of war against terror.

  A false flag is the stimulus that Obama would use in order to suspend the elections and the Constitutional rights.  Make no mistake: there is no “love” for Hillary from Obama, and the election is a sham.  It either comes down to Hillary or Obama, and the entire decision is based upon what the globalists want.

  The Posse Comitatus Act (18 USC 1385) was effectively nullified by the Warner Defense Act of 2006, and then it was further shredded and burned with the NDAA and this, out of United States Code 332 (10 U.S. Code § 332) as such:

  10 USC 331. When a state is unable to control domestic violence and they have requested federal assistance, the use of the militia or Armed Forces is authorized.

   

  10 USC 332. When ordinary enforcement means are unworkable due to unlawful obstructions or rebellion against the authority of the United States, use of the militia or Armed Forces is authorized.

   

  10 USC 333. When a state cannot or will not protect the constitutional rights of the citizens, due to domestic violence or conspiracy to hinder execution of State or Federal law, the use of the militia or Armed Forces is authorized.

  And this is augmented as such, here:

  House Joint Resolution 1292. This resolution directs all departments of the U.S. government, upon request of the Secret Service, to assist in carrying out its statutory duties to protect government officials and major political candidates from physical harm.

  Looking at the situation in the U.S. and the turmoil in the world it will be astonishing if we even make it to the “elections” this November.  Obama does not want to leave the office.  He has not completed his “fundamental transformation” and there are several avenues available to him that have not yet been pursued.  All of them involve a dramatic event that will enable him to suspend elections and remain in office until the end of the emergency (therefore indefinitely).

  

  

• Bank Of Japan Buying Sends Nikkei 225 To Richest Since Dot-Com Crash

  Having noted the farcical share ownership of The Bank of Japan (biggest shareholder in 55 companies) as Kuroda's ETF-buying goes to '11', we thought it interesting that the distortion caused by these "pick a winner" purchases has sent Japan's Nikkei 225 to its richest relative to Japan's Topix index in 17 years.

  As Bloomberg notes, Japan’s two major equity benchmarks have moved mostly together over the years. That changed this month following the latest meeting by the Bank of Japan, which boosted its purchases of exchange-traded funds as part of its easing program.

  

  The BOJ’s heavier allocation to ETFs tracking the Nikkei 225 has helped push the gauge to its highest level versus the Topix index in 18 years.

  

   

  Which – as we noted previously – leaves one big question… just how will the BOJ ever unwind its unprecedented holdings of not only bonds, which are now roughly 100% of Japan's GDP, but also of stocks, without crashing both the bond and the stock market. And then we remember, that the BOJ will simply never unwind any of its "emergency" opertions just because nobody actually thought that far, plus the whole point of the exercise is hyperinflation or bust, as the sheer lunacy of Japan's authorities is exposed for the entire world to see, leading to the terminal collapse of faith in the local currency. With every passing day, we get that much closer to said terminal moment.

  "probably nothing"

  

  

• Soros Hack Reveals Plot Behind Europe's Refugee Crisis; Media Manipulation; Cash For "Social Justice"

  In the two days since the Soros Open Society Foundation hack by the DCLeaks collective, several notable revelations have emerged among the data dump of over 2,500 documents exposing the internal strategy of the organization, which expose some of Soros’ tactics to influence and benefit from Europe’s refugee crisis, the opportunistic funding and influence of media organizations, providing cash for assorted “pro-democracy” groups including the infamous La Raza, Soros’ funding of various “social justice” organizations while paying to track unfavorable media coverage including that of Pamela Geller.

  One particular leaked memo, profiled earlier by the Daily Caller, argues that Europe’s refugee crisis should be accepted as a “new normal,” and that the refugee crisis means “new opportunities” for Soros’ organization to influence immigration policies on a global scale. OSF program officer Anna Crowley and program specialist Katin Rosin co-authored the May 12 memo, titled “Migration Governance and Enforcement Portfolio Review.”

  The nine-page review makes three key points: OSF has been successful at influencing global immigration policy; Europe’s refugee crisis presents “new opportunities” for the organization to influence global immigration policy; and the refugee crisis is the “new normal.”

  As the authors write in the introduction, one of the purposes of the review “consider the effectiveness of the approaches we have used to achieve change at the international level.” A section of the review titled “Our Work” describes how America’s least transparent think tank has worked with “leaders in the field” to “shape migration policymaking and influence regional and global processes affecting the way migration is governed and enforced.”

  This may be of particular interest to Germans, the majority of whom are displeased with Merkel’s “open door” policies in the aftermath of the recent terrorist attacks on German soil.

  In a section titled, “Our Ambitions,” the authors explain: “Our premise for engaging in work related to governance was that, in addition to mitigating the negative effects of enforcement, we should also be supporting actors in the field proactively seeking to change the policies, rules, and regulations that govern migration.”

  They write that “we also believed that advances at the regional or international levels could create impetus for policy change or implementation of existing norms at the national level. We deliberately avoided the term ‘global governance’ because there is no single system at the global level for managing migration.”

  The same section later states that IMI “has had to be selective and opportunistic, particularly at the global level, in supporting leaders in the field to push thinking on migration and better coordinate advocacy and reform efforts. We have supported initiatives, organizations, and networks whose work ties directly to our aims in the corridors.”

  “Early on, IMI identified a handful of organizations able to engage on migration globally and transnationally, elevating IMI’s corridor work beyond the national level,” reads another section of the memo, entitled “Our Place.”

  “These included key think tanks such as the Migration Policy Institute (MPI) and advocacy networks such as the International Detention Coalition (IDC).” (The authors later note that MPI, a strong advocate of amnesty for illegal immigrants in America, “is sometimes criticized for its closeness to governments, [but] flexible funding from OSF has allowed it to maintain some independence from the governments it advises.”)

  The memo also notes that “IMI played a central role in establishing and influencing the goals of two new [European Programme for Integration and Migration] sub-funds on the Common European Asylum System (CEAS) and immigration detention.

  More importantly, the memo explains how Europe’s refugee crisis is opening doors for Soros’ organization to further influence global immigration policy.

  The authors note that “the current refugee crisis is creating space to reconsider the governance of migration and the international refugee regime.” One reason for this is that the developing countries that make up the Group of 77 at the United Nations were motivated by the refugee crisis to keep immigration issues on the “global agenda,” the memo states. “The refugee crisis and the fear that the interests of migrants fleeing poverty, climate change, generalized violence, or natural disaster would be overlooked at these fora have generated a push from G77 countries to ensure other migration issues remain on the global agenda.”

  They also explain that the current crisis provides “new opportunities” for influencing immigration policy on a global scale.

  “The current climate presents new opportunities for reforming migration governance at the global level, whether through the existing multi-lateral system, or by bringing together a range of actors to think more innovatively. Our long-standing interest and investment in global work means we have many of the right partners and are positioned to help others navigate this space.”

  The review states, “The refugee crisis is opening new opportunities” for “coordination and collaboration” with other wealthy donors.

  It is almost as if Europe’s refugee crisis was planned and prepared, not just by the Soros organization, but others who would benefit from a shift in the change of regional “migration governance”, i.e., the reimposition of sovereignty terms, as Greece found out the hard way several months ago when its sovereignty was relegated to the country’s willingness to participate in Europe’s refugee scheme.

  It will hardly come as a surprise that according to the review, immigration policy-makers need to accept the refugee crisis as a “new normal.” One of the conclusions listed in the memo is, “Accepting the current crisis as the new normal and moving beyond the need to react.”

  “Observing our partners as they respond and adjust to the new reality in light of the crisis in Europe and the Mediterranean, we see little attention given to long-term planning or fundamentally new approaches to advocacy.”

  The conclusion also stresses the need to fight back against “growing intolerance toward migrants.” It is unclear just how Soros plans on “fighting back.”

  * * *

  Needless to say, in order to promote its European refugee agenda, the Soros organization needs close European allies. Conveniently, it has a memo prepared just for that titled “Reliable allies in the European Parliament (2014 – 2019)” in which it notes the importance of building “lasting and trustworthy” relationships with European MEPs “likely to support Open Society’s work.“

  This mapping provides the Open Society European Policy Institute and the Open Society network intelligence on Members of the 8th European Parliament likely to support Open Society values during the 2014–2019 legislature.

   

  It spans 11 committees and 26 delegations, as well as the European Parliament’s highest decisionmaking bodies: 226 MEPs who are proven or likely Open Society allies.

   

  The presence of an MEP in this mapping indicates that they are likely to support Open Society’s work. They should be approached with an open mind: although they will most likely want to work on areas they’re already interested in, they could also welcome hearing about new issues.

   

  Beyond discussing individual topics, Open Society should seek to build lasting and trustworthy relationships with these European lawmakers.

  Much more in the full 177 page memo.

  * * *

  Aside from Europe’s refugee crisis, the data leak provides other important glimpses in Soros’ influence of global affairs.

  One memo, which is an overview of the “Ukraine Media Project”  exposes how Soros influences media coverage of events in Ukraine, something previously touched upon in a June 2015 post titled “Hacked Emails Expose George Soros As Ukraine Puppet-Master.”

  In the memo which reveals how Soros hopes to “cover” events in Ukraine, the authors admit that “this isn’t proper independent journalism and we may damage our credibility with journalists”  and admit that “journalists may produce stories that have no relevance for the narrative we seek to inform or stories that are counterproductive (enforcing narratives of fascism etc.)“

  Investigative Journalism:Select journalists from the 5 target countries (Germany, France, Spain, Italy, Greece) and

   

  offer them long stay reporting trips in Ukraine. Rather than specify what they should write about they should make suggestions for articles; we retain a veto on stories we think are counterproductive. Suggestion that we liaise directly with journalists to determine interest.

   

  Pros:

   

  Similar approach to what we have done for other press trips
  Opportunity to build relationships with journalists and news outlets
  Opportunity to diversify reporting on Ukraine into longer form content examining non-breaking news angles

   

  Cons:

   

  Credibility: the “veto” approach means this isn’t proper independent journalism and we may damage our credibility with journalists
  Control: Journalists may produce stories that have no relevance for the narrative we seek to inform or stories that are counterproductive (enforcing narratives of fascism etc.)
  Interference: however nuanced this is packaged, we may enforce the narrative of GS/OSF manipulation
  Placement: publication of the articles is not guaranteed and presents a significant barrier to success

  * * *

  We then turn our attention to the US, where we we find a memo that “provides a brief overview of state/local funding by U.S. Programs in the last three years.”

  Throughout its 15-year history, U.S. Programs has complemented its national work with state and local grantmaking. The Emma Lazarus Fund, the Southern Initiative, the Program on Reproductive Health and Rights, and the Youth Initiative all had a strong presence in states like Louisiana, North Carolina, Texas, New York, and California. In this way, U.S. Programs has not only advanced core priority issues at the national level, but it has also worked to enable local and state actors to play a more critical role in shaping discussions around criminal justice, drug policy, immigrants’ rights, government security, and other key issues at the state level.

  The memo indirectly hints at Soros funding for BLM:

  To provide support to the Baltimore Education Research Consortium, including for the creation of an executive director position/$196,000/OSI-Baltimore/2009

  To support the American Journalism Review’s series of articles on the crisis in American journalism with a focus on, among other things, coverage of federal agencies and state governments, including Maryland /$200,000/Strategic Opportunities Fund/2009

  Furthermore, here is confirmation of Soros’ funding and support for Social Justice organizations, taken from a memo revealing the “Democracy and Power Fund“, which explains its desire for building “state-based power”

  Advance social justice in critical states through state-based issue advocacy and organizing where the opportunities to advance (or the threats to) open society are particularly significant.

  It is almost surprising how cheap control over SWJ causes is.

  

  * * *

  Another memo provides further details on the funding of an additional five organizations, including the infamous La Raza.

  

  * * *

  Among the leaks we also find a document on the Center for American Progress, or CAP, whose purpose is “To support the Examining Anti-Muslim Bigotry Project.” We are confident various conservative organization will be curious about this because as part of its activities the CAP is expected to “research and track the activities of the most prominent drivers of Islamophobia” including Pamela Geller, Frank Gaffney, David Howoritz, Robert Spencer, Cliff May, Liz Cheney and so forth:

  1. Outreach to Subject Experts

   

  CAP’s first step will be to interview and engage in the Project the journalists, researchers, academics, and leaders in the anti-hate movement who are researching and writing on Islamophobia, and to develop a roster of knowledgeable and credible experts to whom journalists and policymakers can turn for information. As part of this process, CAP will reach out to Media Matters for America, FAIR, the Muslim Public Affairs Council, the American Muslim Civic Leadership Institute, Muslim Advocates, the Interfaith Center of New York, the Southern Poverty Law Center, and the cohort of emerging Muslim leaders in CAP’s Young Muslim American Voices Project that is run by CAP’s Faith and Progressive Policy Institute.

   

  2. Audit of Islamophobic Activities and Strategy Convening

   

  CAP will research and track the activities of the most prominent drivers of Islamophobia, including Stop Islamization of America, led by Pamela Geller; the Center for Security Policy, led by Frank Gaffney; David Horowitz’s Freedom Center, which sponsors Robert Spencer’s Jihad Watch; the Middle East Forum, led by Daniel Pipes; the Foundation for Defense of Democracies, led by Cliff May; and Keep America Safe, led by Liz Cheney. In addition, CAP will examine the role played by right-wing media, the Tea Party movement, prominent politicians, pundits, and conservative donors in spreading anti-Muslim hysteria. This research will form the basis of a CAP audit of Islamophobic activities that will inform a strategy convening of around two dozen researchers and advocates, including representatives of progressive organizations and the AMEMSA community. Participants will be asked to formulate strategies for combating anti-Muslim bigotry. The convening is planned for the first quarter of 2011.

  We continue to dig through the filings for further ties, financial or otherwise, between Soros and the various branches of the US government as well as the 4th estate.

  

  

  

• How Bloomberg Spun Its Own Poll Data To Make Hillary Clinton Seem Inevitable

  Submitted by Michael Krieger via Liberty Blitzkrieg blog,

  2014 Time Magazine Cover

  

  A couple of days ago, investigative journalist Sharyl Attkisson published a very interesting article which examined how Bloomberg News egregiously spun the results of its recent presidential poll.

  She notes:

  Is Hillary Clinton squashing Donald Trump into oblivion in the polls? Or is her lead over him perilously shrinking? One thing we know is: there are countless ways to spin a poll. Consider the case of selective reporting on the most recent Bloomberg national poll.

   

  On Aug. 10, Bloomberg reported “Clinton up 6 on Trump in Two Way Race.” But looking at the actual poll, Trump has moved so close to Clinton, the results are within the margin of error.

   

  In the most recent poll, the spread between Clinton and Trump in a two-person race was down to just 3 percentage points, Clinton at 45% and Trump at 42%. That’s within the margin of error. When Libertarian and Green Party candidates are put in the mix, it’s Clinton 42% and Trump 40% –again within the margin of error.

   

  But this notable trend isn’t reflected in the Bloomberg write-up here. Instead, the reporter chose to use the poll numbers that look better for Clinton: ones that added in “leaners.” What are leaners? Respondents who were first asked who they’d vote for, then answered they didn’t plan to vote or didn’t know who they’d vote for, and then were pressed to pick a candidate they were leaning toward, anyway. This is how Bloomberg got to the 6-point spread cited in its headline…double the actual spread of 3%.

   

  The graphic Bloomberg used in its news story appears somewhat misleading in this context. It depicts the 6-point spread as the result of the question “…for whom would you vote?” It doesn’t disclose that the graphic adds in “leaners” who were asked a followup question.

  It’s simply another reminder that what you read in the news often comes through a filter.

  So here’s the primary thing Sharyl is calling out in the above paragraphs.

  From Bloomberg’s polling data:

  

  While I’ll give Bloomberg the benefit of the doubt and assume that they’ve always included the “lean” category in their totals (they did for June, unclear if they did prior to that), is adding this category to the total really justified? Moreover, Bloomberg should make this meaningful choice clear in the text of their article (they don’t), particularly when the tone of the article is unabashedly promoting the idea that Clinton is doing incredibly well.

  All you need to do is take a look at the article’s heading to see how biased it is.

  

  Does this seem in any way appropriate considering her lead when not including the “lean” category is a measly 3 points? Moreover, what does Bloomberg’s own polling data tell us about the race when Gary Johnson and Jill Stein are included (as they should be since they will appear on most ballots).

  

  So with the four options that appear on most ballots, Clinton is in a pretty tight race with Trump. These are the facts, but as you saw, the article’s headline was incredibly misleading and skewed to make it seem as if a Hillary victory is inevitable.

  But it’s not just the headline. The entire article reads like PR for team Hillary. A few more paragraphs of note:

  Hillary Clinton has retained most of the bounce she received after the Democratic National Convention and now enjoys a 6-point lead over Donald Trump in a two-way contest among likely voters.

   

  The findings suggest damage has been done to one of Trump’s main calling cards, his business expertise, with 61 percent of likely voters saying they’re less impressed with the Republican nominee’s business acumen than when the campaign started.

   

  Clinton’s lead over Trump of 50 percent to 44 percent in a two-way contest is boosted by a greater consolidation of support among Democrats than Republicans have shown for their candidate. She wins 94 percent of the Democratic vote, including 93 percent of Democrats who backed Senator Bernie Sanders in the primary race, while Trump gets 87 percent of the Republican vote.

  Does the above sound like fair coverage of a poll that shows a 2 point spread between Clinton and Trump in a four person race? While Bloomberg does acknowledge that the results are within the margin of error in a four person race, it is mentioned as an aside as opposed to being the focal point of the piece. Instead, the writer chooses to focus his attention on how strong Hillary’s position is relative to Trump. A fact that doesn’t seem to be confirmed by the actual poll results.

  Here’s some more “analysis” from the article.

  The poll confirms Clinton emerged from the noisy campaign week that followed her convention in a stronger position than Trump. That edge could prove valuable, if she can maintain it, during a period when there are no major events on the political calendar until the first debate on Sept. 26.

   

  “The question following a convention bounce is how much of it will stick, as memory of the event and excitement fades,” said pollster J. Ann Selzer, whose Iowa-based firm Selzer & Co. oversaw the survey. “For Clinton, the contest is far from settled, but she is on solid ground.”

   

  Clinton’s voters are more positive about her candidacy than those backing Trump are about his, with 56 percent saying their alignment with her is more an act of support than to stop Trump. His fans, meanwhile, are more motivated by their disdain for her, with 56 percent saying their backing of Trump is more a vote against her than support for him.

  So what’s my point? My point is this race is a lot closer than people think, and media headlines re:polls are probably being spun across the board. Most people just read headlines and never bother to actually read articles, let alone dig into the underlying poll data to see what’s really going on. As such, people are being manipulated by the media into thinking that Clinton is inevitable when she isn’t.

  This explains a lot. I’ve been shocked by the visceral hatred being spewed by pro-Clinton henchmen at Jill Stein and her followers over the past few weeks. Such attacks make no sense unless Clinton people:

  1) Know the election is much closer than the media is claiming.

  2) Recognize Sanders supporters are not backing her to the extent media implies.

  Which brings me to the final point. In its article, Bloomberg claims 93% of Democrats who backed Sanders support Hillary. This is a clever slight of hand because many Sanders supporters are not registered Democrats. A casual reader will come away thinking that 93% of Sanders supporters back Hillary, which is unquestionably untrue. Telling readers what percentage of Democratic Sanders supporters back Clinton tells you absolutely nothing. I’ve said for months that anywhere between 25%-33% of Sanders supporters will either vote Jill Stein or stay home. I stick to that prediction.

  While we’re at it, I just launched a Twitter poll. Here are the very unscientific results so far (don’t forget to vote).

   

  This poll is for Bernie Sanders supporters only.
  Will you be voting for Hillary Clinton?

  — Michael Krieger (@LibertyBlitz) August 16, 2016

   

  For related articles, see:

  How California’s Primary was Rigged Against Independent Voters

  As Expected, New York’s Primary is Already a Pathetic Mess

  Hillary Clinton Will Win New York, Because New York is Running a Banana Republic Primary

  American Democracy – Allegations of Voter Suppression Emerge from the Arizona Primary

  This is how elections are really rigged. Far before people ever get to the voting booths.

  

  

• Michael Moore: "Trump Never Wanted To Be President, I Know This For A Fact"

  Despite proclaiming five reasons why Trump will win just a month ago, Michael Moore has apparently had a change of heart and has posted an op-ed in the Huffington Post today describing, in detail, why he believes Trump is blowing up his own campaign and it's only a matter of time before he exits the race.  In short, Moore points out that he knows "for a fact" that Trump "never actually wanted to be President of the United States."  After all, as Moore points out, being President is "WORK" and you have to live in the "GHETTO" of Washington DC in a small, two-story house…and "a "second floor" is not a penthouse!"

  Instead, Moore says the whole thing was a stunt to get more money out of NBC for his TV show, "The Apprentice."  Why else, Moore asks, would someone launch a Presidential campaign with no major staff commitments or campaign infrastructure in place unless they had no intention of ever winning.

  So, on June 16 of last year, he rode down his golden escalator and opened his mouth. With no campaign staff, no 50-state campaign infrastructure — neither of which he needed because, remember, this wasn’t going to be a real campaign.

  But the plan all blew up when Trump went "off the rails" and NBC responded, not by offering him more money, but by cancelling his shows instead.

  …he went off the rails at his kick-off press conference, calling Mexicans “rapists” and “drug dealers” and pledging to build a wall to keep them all out. Jaws in the room were agape. His comments were so offensive, NBC, far from offering him a bigger paycheck, immediately fired him with this terse statement: “Due to the recent derogatory statements by Donald Trump regarding immigrants, NBCUniversal is ending its business relationship with Mr. Trump.” NBC said it was also canceling the beauty pageants owned by Trump: Miss USA and Miss Universe. BOOM.

  Unfortunately, according to Moore, Trump was forced to stay in the race and actually win the Republican nomination because it just took longer for the electorate to turn on him than he expected.  But soon his "karma caught up with him":

  Calling Mexicans “rapists” should have disqualified him on Day One (or for saying Obama wasn’t born here, as he did in 2011). No, it took 13 months of racist, sexist, stupid comments before he finally undid himself with the trifecta of attacking the family of a slain soldier, ridiculing the Purple Heart and suggesting that the pro-gun crowd assassinate Hillary Clinton.

  And now Moore believes Trump will do whatever necessary to blow up his chances of ever being President because he would rather look like a fool now than to be declared a "LOSER" on election day.

  Because, unless he is just “crazy,” the only explanation for the unusual ramping up, day after day, of one disgustingly reckless statement after another is that he’s doing it consciously (or subconsciously) so that he’ll have to bow out or blame “others” for forcing him out. Many now are sensing the end game here because they know Trump seriously doesn’t want to do the actual job — and, most importantly, he cannot and WILL NOT suffer through being officially and legally declared a loser — LOSER! — on the night of November 8th.

   

  Trust me, I’ve met the guy. Spent an afternoon with him. He would rather invite the Clintons AND the Obamas to his next wedding than have that scarlet letter (“L”) branded on his forehead seconds after the last polls have closed on that night, the evening of the final episode of the permanently cancelled Donald Trump Shit-Show.

  And finally, not one to forego taking one last shot at the Republican Party, Moore offers some comfort to Trump explaining that none of this is actually his fault but rather he is just the "logical conclusion to a party that has lived off the currency of racism and bigotry and fellating the 1 percent for decades."

  

  

• Global Economic Bellwether Cisco Reportedly Fires 20% Of Workforce

  It's easy to shrug off the sharpest productivity decline in 40 years and the worst non-recessionary industrial production contraction in US history because… well it's the new economy, stupid and you just don't get it. But when 'new economy' networking giant Cisco is reportedly set to announce it is laying off a record number of employees – 14,000 representing 20% of its global workforce – surely it is time to question the "everything is awesome" narrative.

  As CRN reports,

  Cisco Systems is laying off upward of 14,000 employees, representing nearly 20 percent of the networking giant’s global workforce, according to multiple sources close to the company.

   

  San Jose, Calif.-based Cisco is expected to announce the cuts within the next few weeks, as many early retirement package plans have already been offered to employees, said sources.

  The excuse for the heavy cuts, which sources said will range between 9,000 and 14,000 employees worldwide, is that they stem from Cisco’s transition from its hardware roots into a software-centric organization…

  "They need different skill sets for the software-defined future than they used to have," said one source familiar with the situation, who declined to be identified.

   

  "In theory the addressable market could be higher and margins richer, but it will take some time to make this transition."

  Cisco declined to comment, and is set to announce its fourth fiscal quarter results after the market closes tomorrow. 

  The networking leader has a history of announcing layoffs at the end of its fiscal year each summer. In August 2014, Cisco revealed plans to cut 6,000 jobs, roughly 8 percent of its total workforce at the time. In August 2013, the company cut 4,000 employees, about 5 percent of its global workforce at the time. Cisco also cut 1,300 positions in July 2012. One of Cisco’s largest layoffs came in July 2011, when the company cut 6,500 employees, representing about 9 percent its global workforce. Cisco had no layoffs in the summer of 2015, coinciding with Chuck Robbins' ascension to CEO that July.

  But this massive layoff is the company's largest ever…

  

   

  And, as everyone who has traded markets and followed global economic trends knows, Cisco is among the clearest global economic recession indicators (combining the real economy and imaginary-tech economy) there is… and this is the biggest collapse in Cisco's headcount… ever.

  Cisco is trading back at its highest since Nov 2007…

  

  Charts: Bloomberg

  

  

• This Week In 1971: President Nixon Closes the Gold Window

  Submitted by Paul-Martin Foss via The Mises Institute,

  45 years ago this week, on August 15, 1971, President Richard Nixon officially closed the gold window.

  While US citizens had been forbidden from owning gold or from redeeming their gold certificates for gold coins since the early 1930s, foreign governments still had the privilege of redeeming their dollars for gold.

  Due to the Federal Reserve’s inflationary monetary policy during the 1960s, foreign governments began to redeem more and more dollars for gold. Attempts to encourage other governments (especially France) not to redeem their dollar holdings were unsuccessful, and there was a very real threat that US gold holdings might eventually be exhausted.

  So President Nixon decided to close the gold window, thus severing the final link between the US dollar and gold.

   

  The removal of the restraint of gold redemption freed the Federal Reserve to engage in more inflationary monetary policy than ever. The effects of that on money supply and official price inflation figures are readily apparent.

  

  The demonetization of silver in the Coinage Act of 1873 was widely assailed by its critics as the “Crime of ’73.”

  Isn’t it about time that Nixon’s closing of the gold window be known as the Crime of ’71?

  *  *  *

  Bonus Video… sound familiar?

  

  

• Is Trump's "Extreme Vetting" That Far Off Existing US Policies

  While the MSM has gone out of its way to question every plausible unintended consequence(s) of Donald Trump’s new "extreme" vetting for immigrants, perhaps it is worth looking at some of the current questions the US Immigration Services asks and compare those to Trump’s proposals. They may not be that far off.

  To recap, Trump proposed an ideological test of “Islamic sympathizers” to be admitted, focusing on issues including religious freedom, gender equality and gay rights.

  And while some have questioned the validity of a test, and whether a presumed terrorist would even be honest in said test, the experts and political pundits should take a look at what the US currently asks individuals.

  • Have you ever been involved in, or do you seek to engage in, money laundering?
  • Are you coming to the United States to engage in prostitution or unlawful commercialized vice or have you been engaged in prostitution or procuring prostitutes within the past 10 years?
  • Have you ever committed or conspired to commit a human trafficking offense in the United States or outside the United States?
  • Do you seek to engage in terrorist activities while in the United States or have you ever engaged in terrorist activities?
  • Are you a member or representative of a terrorist organization?
  • Have you ever ordered, incited, committed, assisted, or otherwise participated in genocide?
  • Have you ever committed, ordered, incited, assisted or otherwise participated in torture?
  • Have you, while serving as a government official, been responsible for or directly carried out, at any time, particularly severe violations of religious freedom?
  • Have you ever been directly involved in the coercive transplantation of human organs or bodily tissue?

  Evidently, if any of the US allies (e.g. Saudi Arabia) answered these questions honestly, they would not be admitted to the US. But, perhaps the best question still being asked to all immigrants is as follows:

  • Have you ever been or are you now involved in espionage or sabotage; or in terrorist activities; or genocide; or between 1933 and 1945 were involved, in any way, in persecutions associated with Nazi Germany or its allies?

  If the US government currently engages in these and other questionings, is it that far off to ask  if you are anti gay rights, anti Semitic or pro sharia law?

  

  

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• The Glue Holding America Together Is No Longer Binding

  Authored by Ben Tanosborn,

  Often cited as an important reason for US success as a global power, our diversity has finally come home to roost, and it’s taking a destructive, cruel toll. A unique magic glue that we somehow thought would keep myriad groups in America working at unison with a common goal forever, has unhardened, lost both its adhesive properties and cohesive strength, leaving us with a divided America.  No; not as a simplistic two-part nation, but as a fragmented Humpty Dumpty beyond the conservative-liberal political fray.

  Almost two centuries ago, French political theorist Alexis de Tocqueville in his book “Democracy in America” (1835) not only gave us a sociological perspective on America’s equality and individualism but what might be construed as a study on economic success. His travels in 1831 along geographically-expanding America, in the midst of an agrarian evolution, as well as an industrial revolution, gave him an insight that we might consider preluding today’s globalization.  Tocqueville saw a surging nation without any apparent geographical borders [that could be readily enforced by other nations]; a very rapidly increasing immigrant population fleeing the economic woes in Europe; and the lack of commercial barriers (duties) imposed by small governmental units.

  And within a century of Tocqueville’s travels, the United States did become a miracle, colossus-nation that combined an enormous contiguous land mass; a productive large population; and a government which provided 80-plus percent of the population with what could be described as reasonable socio-economic mobility and, yes, freedom.

  By virtue of these gigantic, multi-faceted economies of scale, the United States was able to create a sizeable economic middle class, and thus become the microcosmic model for later multi-nation common markets and our present “big bang” globalization – what is becoming the ultimate global economy of scale, although we may still be a generation or two away from reaching its apex.

  It was this economic advantage over most other countries in the world that created a much higher standard of living, the glue that kept the diversity that was America united.  The United States of America became an economic and geopolitical success, a phenomenon of modern times that some social scientists described, and most politicians exploited, with an illusionary and adulatory jargon that bred self-pride and patriotism: American exceptionalism, the American dream; now fading mythical terms.   

  As globalization is starting to show a leveling impact throughout much of the world, the more advanced economies are left with the irrefutable reality that their middle class will have to subsidize, at least in part, the increase in the standard of living of the surging, less-advanced economies.  That although globalization has a synergistic effect, such effect is small relative to the transfer of productive wealth in the middle classes; and that transfer has affected the United States, quantitatively and qualitatively, far more negatively than any other advanced economy.  And “we ain’t seen nothing yet,” as 80+ percent of our population has been, or will be, thrown by our Tweedledee-Tweedledum career politicians, and America’s imperial power-elite, under the bus.

  The worst socio-economic woes are still ahead, as the magic glue slowly disappears and we are left naked in our diversity… each group pulling in a self-serving direction, keeping us fragmented without common, mutually-beneficial goals; and, what’s worse, with a government concerned with one-fifth of the population, letting the other four-fifths join their pariah-peers in the world.

  Now that there is little magic glue left to bind us, to keep us strong, we are left with a political-economic life preserver: our vote.  Except that the life preserver appears as the ultimate joke, offering two undesirable options from which to choose: a deceiving, chameleonic neoliberal woman; and an insane, ignorant bully-man.  Yet, these two characters, Hillary Clinton and Donald Trump, have been given monopolistic imprimatur by a corporate press that appears more interested in entertaining buffoonery than addressing the political crises that beset the United States in aspects that will determine its very existence: crisis in a flawed foreign policy; crisis in the economic well-being of its people; crisis in a racial divide that is continuously unaddressed; and crisis in the very future of this nation as it tries to compete, non-militarily, in a very competitive world.

  Both ruling parties, Democrats and Republicans, appear unwilling, or incapable, to draft a plan for 21st Century America, as shown by the leaders they have chosen to represent the unheard voices of 80 percent of us.  And the powerful corporate media refuses to become the only logical catalyst for change… megaphoning other voices, such as those of Greens and Libertarians, to compete on equal terms as democracy intends, such as incorporating them in the debates.  In this 48th presidential election, as anger and discontent have become pandemic, we shouldn’t have to go to the polls forced to vote for the lesser-evil.

  

  

• Japanese Stocks Tumble As USDJPY Plunges To Post-Brexit Lows

  Following last night’s disappointing GDP data and amid an illiquid summer holiday in Japan, USDJPY is extending its losses nearing 100.00 once again following weaker than expected US macro data (and a weaker USD)…

  Yen is the strongest in 6 weeks – with USDJPY getting close to post-Brexit lows…

  

   

  Nikkei 225 is getting slammed tick for tick…

  

   

  Luckily, the US equity market is in a world of its own… for now…

  

   

  Maybe this week’s minutes will change that?

  

  

• The Ugly Truth About Millennials

  Authored by Jenna Abrams,

  Today I asked my followers how would they describe Millennials and this is what I got:

  “lazy”, “thin-skinned”, “spoiled”, “selfish”, “undisciplined”, “self-absorbed”, ”fragile”, “oblivious”, etc.

  …and I can agree on this. This generation is really what you call it. But there was one description that is the most accurate.

  “Raised by neglectful, over-compensating for inadequacy, self-serving parents.”

  You’re in charge. You insisted your children and grandchildren have to get higher education instead of taking a blue-collar job or just entering the workforce after school like your generation did. Most of you pay for that (often unnecessary) higher education. You are overprotective and prevent your children from playing outside and making mistakes you had a chance to make to gain that thick skin. You don’t let your 12-year-old kid stay at home alone because they are too young. And who is wrong when your child has a conflict at school? I bet you always blame the other side, not your “special snowflake”. And how you get surprised that the whole generation gets offended by facing the truth: they are not special. It must hurt, right?

  

  They have never been taught how to debate and formulate an argument, as another follower noticed. Now you may start shouting about terrible school education, but it’s the family which is to blame.

  Millennials are the product of your parenting. You spoiled your child and now you’re asking why they are demanding everything for doing nothing. See the correlation here?

  And if you’re reading this and you’re not a parent yet, please, do some research on raising a responsible person and let your child make mistakes, it will help them in the future. I bet you don’t want your child to be triggered by “manspreading”. Do yourself a favor, raise your child right.

  

  BONUS for Millennials:

  1) You shouldn’t be offended if it was not intended to offend you.

   

  2) Being offended is a choice you make. Nobody is responsible for that choice but you.

   

  3) Even if it was intended, functioning adults understand that they must move on and not cry over a rude comment on the Internet

   

  4) You should stop whining on the Internet. It’s too annoying.

  

  

• GoldMoney = Gold as Money?

  

  Open letter to the CEO of GoldMoney-BitGold, Roy Sebag

   

  Dear Roy,

  
  

  Recently viewed your presentation during a panel discussion about the Nature of Money.  First off, I’d like to take this opportunity to compliment your delivery, very professional.

  
  

  Although you presented your thesis very well, I do have a few straightforward reservations for your consideration.

  
  

  You began your talk by skillfully articulating the following three maxiums, which most should agree with:

  
  

  
  

  1)  Gold is unequivocally the most genuine, the most trusted and the most honest form of real money.  (This fact is categorically obvious for any thinking person.)

  
  

  2)  Gold is the surest store of value for one’s hard earned labor.   (No man nor apparatus can alter its inherent standard of value, which even includes nature as we know it.)

  
  

  3)  Since 1 & 2 are empirically true, by default Gold is the most objective unit of accounting. 

  
  

  However, as a means of exchange in the modern world of finance, the GoldMoney platform will always fall short.  Here is why……………..

  For the GoldMoney model to directly compete with the minimal transactional costs of today’s digitized fiat based government issued currency, it would require economies of scale which could only be achieved through the mass adoption of its platform.  A most challenging task indeed, even for someone as formidable as yourself, as this would necessitate near universal understanding and acceptance of the credibility of gold as a more honest means of exchange.  We must also keep in mind that unlike fiat paper currency, GoldMoney will always have physical storage costs associated with it.

   

  Moreover, the Libertarian quest for gold backed currency will continue to be unequivocally repressed by any and all governing authority, which completely covets and never relinquishes the absolute power of monetary control.  To wit, in the modern world, every collapsed fiat based currency has inevitably and invariably been replaced by another fiat based money, even those that were momentarily backed by gold, which in it of itself should tell you something. This would even hold true for a global currency, as all authority inherently requires and imposes monetary control.  One need only look to the IMF’s idealistic SDR, even if it eventually adds some measure of gold to the so called basket.

  Due to the fundamental certainties previously stated, your business model is inherently flawed, completely unadaptable to 21st century monetary exchange regimes. As such, your innovative firm GoldMoney in its noble and courageous quest to democratize gold will inevitably fail, simply by running out of advertising/promotional dollars over time.  Yours is a cause not a business. You can’t pay your way with fiat currency to establish hard currency, just can’t get there from here.

  The one and only essential benefit of the hard asset class to modern finance lies in its imperative as wealth protection insurance during periods of monetary uncertainty, disruption and/or geopolitical strife.  In the modern money world, Gold plays a vital role as a long standing store of value, which is particulalrly important during transitional monetary periods.  

   

  That’s it my friend, and please feel free to correct me should I have entirely missed something.

  
  

  
  

  
  

  Best regards,

  Bruno de Landevoisin

  

  

• Obamacare Sticker Shock: Average 2017 Premium Surges 24%

  Two weeks ago, we asked readers to spot the “odd inflation out” when looking at the map below.

  

   

  The reference, of course, was to the state by state surge in proposed 2017 Obamacare premiums, contrasted with what the government contends is a modest 1.0% inflation rate.

  Now, courtesy of a new study by independent analyst Charles Gaba – who has crunched the numbers for insurers participating in the ACA exchanges in all 50 states – we can also calculate what the average Obamacare premium increase across the entire US will be: using proposed and approved rate increase requests, the average Obamacare premium is expected to surge by a whopping 24% this year.

  As Politico notes, Cigna and Humana recently revised their rate requests in Tennessee, and the new filings are dramatically higher. Cigna is now asking for a 46% average increase, up from 23%, and Humana is requesting a 44% increase, up from 29%, The Tennessean reported on Friday. Expect these numbers to rise even more as insurance companies exit even more states.

  So far, the average approved rate increase is roughly 17% according to weighted averages across just five states, Mississippi, New York, Oregon, Rhode Island and Vermont, Gaba reports. “Combined, all [five states] only make up around 6.3 percent of the total population,” Gaba writes. “The numbers will no doubt jump around quite a bit as additional, larger states are plugged into the mix.”

  Here is what Charles Gaba calculated:

  [I] noted that since I originally crunched the numbers for some states as far back as April, the situation in some states has likely changed somewhat due to carriers dropping out, joining in or re-submitting their rate request filings.

   

  There have been significant changes to the requested rate filings in at least four states: Arizona, Connecticut, Maryland and Tennessee. In all four cases, I’m afraid the statewide weighted average has increased, either due to resubmitted filings, a carrier dropping out or both.

   

  As a result of these updates, the national average increase requested now stands at 23.9%, up from the previous average of 23.3%.

  Gaba will have to redo his numbers again, as moments ago Aetna announced that in 2017 it would exit 11 of 15, or more than two thirds, of Obamacare state exchanges in which it was a participant as of this calendar year. The only states in which Aetna will continue to provide Obamacare, are Delaware, Iowa, Nebraska and Virginia. Here is what CEO Mark Bertolini said in a statement:

  “Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward. More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states. As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision.

   

  Aetna will reduce its individual public exchange participation from 778 to 242 counties for the 2017 plan year, maintaining an on-exchange presence in Delaware, Iowa, Nebraska and Virginia. The company will continue to offer an off-exchange individual product option for 2017 to consumers in the vast majority of counties where it offered individual public exchange products in 2016.

  And while as a result of this latest exit, rates are set to go up even more, here is how much more citizens in various US states can expect to pay for their health insurance.

  

  

  

• The Greatest Threat To Our Freedoms: A Government of Scoundrels, Spies, Thieves, And Killers

  Submitted by John Whitehead via The Rutherford Institute,

  “There is nothing more dangerous than a government of the many controlled by the few.”—Lawrence Lessig, Harvard law professor

  The U.S. government remains the greatest threat to our freedoms.

  The systemic violence being perpetrated by agents of the government has done more collective harm to the American people and our liberties than any single act of terror.

  More than terrorism, more than domestic extremism, more than gun violence and organized crime, the U.S. government has become a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us.

  This is how tyranny rises and freedom falls.

  As I explain in my book Battlefield America: The War on the American People, when the government views itself as superior to the citizenry, when it no longer operates for the benefit of the people, when the people are no longer able to peacefully reform their government, when government officials cease to act like public servants, when elected officials no longer represent the will of the people, when the government routinely violates the rights of the people and perpetrates more violence against the citizenry than the criminal class, when government spending is unaccountable and unaccounted for, when the judiciary act as courts of order rather than justice, and when the government is no longer bound by the laws of the Constitution, then you no longer have a government “of the people, by the people and for the people.”

  What we have is a government of wolves.

  Worse than that, we are now being ruled by a government of scoundrels, spies, thugs, thieves, gangsters, ruffians, rapists, extortionists, bounty hunters, battle-ready warriors and cold-blooded killers who communicate using a language of force and oppression.

  Does the government pose a danger to you and your loved ones?

  The facts speak for themselves.

  We’re being held at gunpoint by a government of soldiers—a standing army. While Americans are being made to jump through an increasing number of hoops in order to exercise their Second Amendment right to own a gun, the government is arming its own civilian employees to the hilt with guns, ammunition and military-style equipment, authorizing them to make arrests, and training them in military tactics. Among the agencies being supplied with night-vision equipment, body armor, hollow-point bullets, shotguns, drones, assault rifles and LP gas cannons are the Smithsonian, U.S. Mint, Health and Human Services, IRS, FDA, Small Business Administration, Social Security Administration, National Oceanic and Atmospheric Administration, Education Department, Energy Department, Bureau of Engraving and Printing and an assortment of public universities. There are now reportedly more bureaucratic (non-military) government civilians armed with high-tech, deadly weapons than U.S. Marines. That doesn’t even begin to touch on the government’s arsenal, the transformation of local police into extensions of the military, and the speed with which the nation could be locked down under martial law depending on the circumstances. Clearly, the government is preparing for war—and a civil war, at that—but who is the enemy?

  We’re being robbed blind by a government of thieves. Americans no longer have any real protection against government agents empowered to seize private property at will. For instance, police agencies under the guise of asset forfeiture laws are taking property based on little more than a suspicion of criminal activity. In one case, police seized $53,000 from the manager of a Christian rock band that was touring and raising money for an orphanage in Thailand. Despite finding no evidence of wrongdoing, police kept the money. Homeowners are losing their homes over nonpayment of taxes (for as little as $400 owed) and municipal bills such as water or sewer fees that amount to a fraction of what they have invested in their homes. And then there’s the Drug Enforcement Agency, which has been searching train and airline passengers and pocketing their cash, without ever charging them with a crime.

  We’re being taken advantage of by a government of scoundrels, idiots and cowards. American satirist H.L. Mencken calculated that “Congress consists of one-third, more or less, scoundrels; two-thirds, more or less, idiots; and three-thirds, more or less, poltroons.” By and large, Americans seem to agree. When you’ve got government representatives who spend a large chunk of their work hours fundraising, being feted by lobbyists, shuffling through a lucrative revolving door between public service and lobbying, and making themselves available to anyone with enough money to secure access to a congressional office, you’re in the clutches of a corrupt oligarchy. Mind you, these same elected officials rarely read the legislation they’re enacting, nor do they seem capable of enacting much legislation that actually helps rather than hinders the plight of the American citizen.

  We’re being locked up by a government of greedy jailers. We have become a carceral state, spending three times more on our prisons than on our schools and imprisoning close to a quarter of the world’s prisoners, despite the fact that crime is at an all-time low and the U.S. makes up only 5% of the world’s population. The rise of overcriminalization and profit-driven private prisons provides even greater incentives for locking up American citizens for such non-violent “crimes” as having an overgrown lawn.  As the Boston Review points out, “America’s contemporary system of policing, courts, imprisonment, and parole … makes money through asset forfeiture, lucrative public contracts from private service providers, and by directly extracting revenue and unpaid labor from populations of color and the poor. In states and municipalities throughout the country, the criminal justice system defrays costs by forcing prisoners and their families to pay for punishment. It also allows private service providers to charge outrageous fees for everyday needs such as telephone calls. As a result people facing even minor criminal charges can easily find themselves trapped in a self-perpetuating cycle of debt, criminalization, and incarceration.”

  We’re being spied on by a government of Peeping Toms. The government is watching everything you do, reading everything you write, listening to everything you say, and monitoring everything you spend. Omnipresent surveillance is paving the way for government programs that profile citizens, document their behavior and attempt to predict what they might do in the future, whether it’s what they might buy, what politician they might support, or what kinds of crimes they might commit. The impact of this far-reaching surveillance, according to Psychology Today, is “reduced trust, increased conformity, and even diminished civic participation.” As technology analyst Jillian C. York concludes, “Mass surveillance without due process—whether undertaken by the government of Bahrain, Russia, the US, or anywhere in between—threatens to stifle and smother that dissent, leaving in its wake a populace cowed by fear.”

  We’re being ravaged by a government of ruffians, rapists and killers. It’s not just the police shootings of unarmed citizens that are worrisome. It’s the SWAT team raids gone wrong that are leaving innocent citizens wounded, children terrorized and family pets killed. It’s the roadside strip searches—in some cases, cavity searches of men and women alike carried out in full view of the public—in pursuit of drugs that are never found. It’s the potentially lethal—and unwarranted—use of so-called “nonlethal” weapons such as tasers on children for “mouthing off to a police officer. For trying to run from the principal’s office. For, at the age of 12, getting into a fight with another girl.”

  We’re being forced to surrender our freedoms—and those of our children—to a government of extortionists, money launderers and professional pirates. The American people have been repeatedly sold a bill of goods about how the government needs more money, more expansive powers, and more secrecy (secret courts, secret budgets, secret military campaigns, secret surveillance) in order to keep us safe. Under the guise of fighting its wars on terror, drugs and now domestic extremism, the government has spent billions in taxpayer dollars on endless wars that have not ended terrorism but merely sown the seeds of blowback, surveillance programs that have caught few terrorists while subjecting all Americans to a surveillance society, and militarized police that have done little to decrease crime while turning communities into warzones. Not surprisingly, the primary ones to benefit from these government exercises in legal money laundering have been the corporations, lobbyists and politicians who inflict them on a trusting public.

  Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly no friend to freedom.

  To our detriment, the criminal class that Mark Twain mockingly referred to as Congress has since expanded to include every government agency that feeds off the carcass of our once-constitutional republic. In fact, there’s a very good reason you don’t hear much in the way of specifics about the government’s tyranny from politicians: it’s because they can’t afford to upset the apple cart (i.e., jeopardize their posh lifestyles).

  So no matter which party wins the White House, controls Congress or appoints future Supreme Court justices, rest assured that the menace of the shadow government—the permanent, unelected bureaucracy that operates beyond the reach of the Constitution, the courts and the citizenry—will continue uninterrupted.

  Our backs are against the proverbial wall.

  The government and its cohorts have conspired to ensure that the only real recourse the American people have to express their displeasure with the government is through voting, which is no real recourse at all. The penalties for civil disobedience, whistleblowing and rebellion are severe. If you refuse to pay taxes for government programs you believe to be immoral or illegal, you will go to jail. If you attempt to overthrow the government—or any agency thereof—because you believe it has overstepped its reach, you will go to jail. If you attempt to blow the whistle on government misconduct, there’s a pretty good chance you will go to jail.

  For too long, the American people have been made to act like puppets dancing to a tyrant’s tune.

  We have obeyed the government’s dictates, no matter now extreme. We have paid its taxes, penalties and fines, no matter how outrageous. We have tolerated its indignities, insults and abuses, no matter how egregious. We have turned a blind eye to its indiscretions and incompetence, no matter how imprudent. We have held our silence in the face of its lawlessness, licentiousness and corruption, no matter how illicit.

  We have suffered.

  How long we will continue to suffer depends on how much we’re willing to give up for the sake of freedom.

  America’s founders provided us with a very specific explanation about the purpose of government and a roadmap for what to do when the government abuses its authority, ignores our objections, and establishes itself as a tyrant.

  We must choose between peaceful slavery (in other words, maintaining the status quo in servitude to the police state) and dangerous freedom. That will mean carving out a path in which we begin to take ownership of our government, starting at the local level, challenging the status quo, and raising hell whenever a government official steps out of line.

  

  

• Is "Special Government Employee" Huma Abedin The Smoking Gun In Hillary's "Pay-To-Play" Scheme?

  Having previously warned that Hillary "is often confused," Clinton's top aide, Huma Abedin – previously best known for standing by her husband Anthony Weiner after his sexting scandal – is now at the center of the Clinton Foundation – State Department debacle. As Bloomberg reports, for the final eight months of Clinton's reign as Secretary of State, Abedin worked for both The Clinton Foundation and as a "special government employee" at The State Department.

  Huma Abedin was previously most infamous as the "good wife" standing by her sexting scandal husband Anthony Weiner…

  

   

  And then, as we previously noted, Abedin gained some more infamy for admitting about Hillary that "she's often confused"…

  

  Source: Judicial Watch vs State emails

  But, as Bloomberg now reports, Abedin's overlapping jobs bring a renewed focus on Clinton's conflicts of interest while at the State Department…

  Huma Abedin stepped down from her post as deputy chief of staff at the State Department and Hillary Clinton’s ever-present personal assistant on June 3, 2012. Only she didn’t really leave.

   

  Instead, in a reverse twist on a program intended to bring talented outsiders into government, Abedin was immediately rehired as a “special government employee.” She also took paying jobs with the Clinton Foundation and Teneo Holdings, a consulting firm with international clients that was co-founded by a foundation official who also was Bill Clinton’s long-time personal aide.

   

  Abedin’s multitasking in the final eight months of Hillary Clinton’s time as the top U.S. diplomat — and her role as intermediary for some of the same players before that — are drawing renewed scrutiny after a conservative watchdog group’s release last week of a new batch of e-mails to and from Clinton aides. Abedin has become the personification of an election-year debate over whether the nonprofit foundation will create conflicts of interest if Clinton wins the White House.

  Clinton was rated trustworthy by just 41 percent of likely voters in a Bloomberg Politics national poll conducted Aug. 5-8. More than half said that the Clinton Foundation’s acceptance of foreign contributions while she was secretary of state bothers them “a lot.”

  “The Clinton Foundation for Hillary Clinton is kind of a walking conflict-of-interest problem,” Meredith McGehee, policy director for the nonpartisan Campaign Legal Center, said in an interview. “Clearly this notion that it could continue to operate while she was secretary of state — it was a built-in problem. If you’re really looking at what should happen if she’s elected, neither her husband nor her daughter, certainly no relative, should have any connection with the foundation.”

   

  …

   

  When Clinton was awaiting confirmation as President Barack Obama’s secretary of state in 2009, she wrote a letter to the State Department’s chief ethics officer promising that she wouldn’t “participate personally and substantially in any particular matter that has a direct and predictable effect upon this foundation, unless I first obtain a written waiver or qualify for a regulatory exemption.”

   

  But that “did not preclude other State Department officials from having contact with the Clinton Foundation staff,” just as they “are regularly in touch with a wide variety of outside individuals and organizations,” department spokeswoman Elizabeth Trudeau told reporters last week.

  That’s where Abedin came in.

  Abedin’s arrangement as a “special government employee” has been challenged since 2013 by Republican Senator Chuck Grassley of Iowa, who has questioned whether she was overpaid and wrote her that “you allegedly sent or received approximately 7,300 emails on your official Department of State address that involved Mr. Douglas Band,” the Bill Clinton aide and Clinton Foundation official who co-founded Teneo.

   

  In a 2013 letter to State Department officials, Abedin said she left her full-time post because “the birth of my son in December 2011 led me to decide to spend the bulk of my time in New York City where my family lived.” She said she stayed on as an hourly employee working for “the Secretary of State in her personal capacity to help prepare for her transition from public service.”

   

  Abedin wrote that she provided “strategic advice” to Teneo’s management team but never did “any work on Teneo’s behalf before the department” nor provided information from government sources to help its clients make investment decisions, as Republicans had suggested.

   

  Abedin’s arrangement was questioned in a 2013 civil lawsuit by Judicial Watch, the conservative watchdog group, which pressed for documents under the Freedom of Information Act. After Clinton’s use of a private e-mail server when she was secretary of state became public, the group got the the case reopened and has been obtaining — and publicizing — a steady barrage of e-mails and deposition transcripts on the e-mail system and other topics.

   

  Last week, Judicial Watch produced e-mails including a 2009 exchange in which Band wrote Abedin that it was “important to take care of” an individual, whose name was redacted. Abedin replied that “personnel has been sending him options.”

   

  In another 2009 exchange, Band asked Abedin and Cheryl Mills, Clinton’s chief of staff, to put Lebanese-Nigerian billionaire Gilbert Chagoury in touch with a State Department "substance person" on Lebanon. The Chagoury Group co-founder has given between $1 million and $5 million to the Clinton Foundation, according to a list of donors posted online.

  The debate over the Clinton Foundation simply shows “the way Washington works,” said Scott Amey, general counsel at the Project on Government Oversight.

  “It’s instances like this that cause the public to have a negative view of how our government works, and it really gives people the impression that deals are done in back rooms and based on who you know rather than what you know,” Amey said in an interview.

  While Abedin hasn’t said whether she’d return to Washington and the White House to serve again in a Clinton administration, the Clintons have acknowledged that they would have to forge a new relationship with the foundation they started. But they haven’t provided details.

  

  

• House Republicans Push Justice Department To Open Clinton Perjury Probe

  Despite trustworthiness levels that would make Nixon blush, Hillary Clinton remains ahead in the polls and while we detailed the five potential scenarios that could crimp her lead, there is one word that looms large over her campaign: perjury. Just when you thought the whole lying-under-oath thing was yesterday's news, The Hill reports, leading House Republicans on Monday laid out detailed instructions for the Justice Department to file perjury charges against the Democratic presidential nominee.

  

   

  Following news that the department would not indict Clinton, multiple Republicans noted apparent contradictions between what she said in public and what the FBI discovered to be true. In particular, The Hill notes that they pointed to statements that Clinton had made under oath before the Benghazi Committee last October.

  For one, Clinton repeatedly claimed that none of the material she sent or received via her personal email account was marked as classified. The FBI later declared that at least three emails on her machine contained some classified markings, although they were incomplete and apparently done in error.

   

  Additionally, Clinton previously claimed that her lawyers had gone through each of her emails individually; that all of her work-related emails were given back to the State Department in 2014; and that she used only one server throughout the course of her tenure as the nation’s top diplomat. Each of those points was proven incorrect, the GOP lawmakers claimed.

   

  "The four pieces of sworn testimony by Secretary Clinton described herein are incompatible with the FBI’s findings," they wrote. "We hope this information is helpful to your office’s consideration of our referral."

  And now, as The Hill details, more than a month after first requesting the department open a criminal probe into Clinton for alleged misstatements she made under oath, the GOP heads of the House Judiciary and Oversight committees told a federal prosecutor specifically where they believed Clinton had lied to Congress about her email setup at the Department of State.

  In at least four separate occasions during a marathon appearance before the House Select Committee on Benghazi, the lawmakers alleged, the former secretary's claims were at odds with what the FBI has now discovered to be the truth about her private server.

   

  "Although there may be other aspects of Secretary Clinton’s sworn testimony that are at odds with the FBI’s findings, her testimony in those four areas bears specific scrutiny in light of the facts and evidence” provided by FBI Director James Comey, Reps. Bob Goodlatte (R-Va.) and Jason Chaffetz (R-Utah) told the U.S. attorney for the District of Columbia, Channing Phillips. Goodlatte leads the Judiciary Committee and Chaffetz runs the Oversight Committee.

   

  Monday’s letter is a sign that Republicans are committed to pressuring the Justice Department to act against Clinton, even after it notably declined to prosecute her for mishandling classified information.

  The GOP chairmen also appear to be making a public case for an indictment, perhaps building off widespread unease with the decision not to prosecute the former first lady, as the Oversight Committee also released a 2.5-minute video detailing apparent inaccuracies in Clinton’s testimony…

  

  

• Is California Farmland Overvalued By $70 Billion?

  Six years ago we wrote a post entitled "Is TIAA-CREF Investing In Farmland A Harbinger Of The Next Asset Bubble?" in which we predicted that "farms (or "real assets" as they are known in polite company) are about to become the next big bubble."  Turns out we were right as Midwest farm prices are starting to crash (see our recent post "Farmland Bubble Bursts As Ag Credit Conditions Crumble"). 

  But the Midwest is not the only place where farmland has bubbled over.  California farmland has been bubbling up for years now with unplanted farm ground with "decent" access to water currently selling for $20,000 – $30,000 per acre.  Land with mature almonds, California's cash crop, is more likely to trade at $30,000 – $40,000 per acre.  This bubble, like so many others, has been caused in large part by institutional capital "reaching for yield" in a low interest rate environment…yet another Fed bubble lurking under the surface.

  The plan was relatively simple, in the absence of attractive fixed income yields, large asset managers (like TIAA mentioned above with $850BN of AUM) decided to purchase hard assets like farmland instead.  Farmland could then be planted with the highest value crop, which just happens to be almonds in California, to drive attractive ROICs on invested capital.  A few simple charts illustrate perfectly how the story played out. 

  Per the chart below, planted almond acreage in California nearly doubled from 2003 – 2016… 

  

   

  Similarly, almond production doubled over the same time period while the industry worked to open up new markets in China and India to adsorb the excess supply.

  

   

  And it all worked really well right up until China stopped buying and almond inventories skyrocketed…

   

   

  …causing almond prices to crash…Turns out if you "grow it" they won't necessarily "buy it."

  

   

  Now with almond prices at $2.50 per lbs, down from $5.00 per lbs in 2015, land owners are lucky if they're earning a 4% ROIC, down from 16%, on land they likely purchased for north of $35,000 per acre.

  

   

  We don't know about you but we're not sure about underwriting California farmland to a 4% return particularly in light of that "minor" little drought issue they're facing.  We would be looking for ROICs closer to 8% – 10%, at a bare minimum, which, at current almond prices, implies that acreage needs to come down around 45%-55% from the $35,000 per acre level. 

  

   

  But the story doesn't end with almond acreage which only represents about 1mm of the total 8mm acres of irrigated farmland in California (see data from the United States Department of Agriculture).  So if we assume that California's 8mm acres are worth $25,000 per acre on average that implies roughly $200BN worth of farmland in total.  Now, even if that number is only inflated by 35% (and not the more draconian 45%-55% we suggested above) it implies that farmland owners, many which are New York institutional buyers, in California alone are sitting on $70BN worth of losses.

  

  

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