- Rotten To The Core
Submitted by Robert Gore via Straight Line Logic blog,
Coercion is inseparable from corruption. When a group coerces with impunity, it steals from, lies to, defrauds, and enslaves the subjugated. The dominant group invariably develops a morally comforting ideology of its superiority and the subjugated’s inferiority. Such relationships are the essence of corruption.
Every square inch on the planet is subject to the jurisdiction of one or more coercive regimes, with their attendant corruption and fraud. Trillions of dollars, euros, pounds, and yen, et al., are extracted from the productive and diverted to governments, who buy political support. Trillions more are borrowed. Central banks issue fiat debt units backed only by laws mandating their acceptance and extract funding for governments via the hidden tax of debt depreciation and the hidden theft of debt monetization and interest rate suppression. Regulation allows governments to reward cronies and extort and terrorize the unfavored. Perpetual wars benefit militaries and those who supply the armaments, with part of their profits recycled to those championing war. This is pervasive, legal corruption. One can only guess at the extent of sub rosa criminality, which may dwarf it.
Last week’s Brexit vote, in particular financial markets’ reaction, underscore the corruption and fraud, and the inevitability of its failure. Brexit is a victory for Britain’s honest producers; those who work in districts far removed from The City, London’s financial precinct. They will be freed from onerous European Union mismanagement, bureaucracy, regulations, and taxes that have contributed to Europe’s economic stagnation, dearth of innovation, and persistently high unemployment, especially among its youth. The European Central Bank’s debt monetization and negative interest rates, while obscuring the sorry state of the European economy, have only made it sorrier. Chronic debt issuance has left many European governments, and their banks, which own much of that debt, one economic or financial crisis away from insolvency.
British voters chose to free themselves from the EU albatross, although they will still be plagued by numerous home-grown albatrosses. The pound, euro, equity markets, and oil plunged, while perceived safe havens gold, the dollar, yen, and US Treasury debt rose. (The yen is not really a safe haven, but much of the world’s “carry” trades—borrowing to fund nominally higher yielding, but risky speculations—are funded at low Japanese interest rates. When those highly leveraged trades go south, margin calls create a demand for yen to repay the underlying loans.) There were telling details amidst the carnage. Continental equity markets, particularly those of Spain and Italy and their banks, suffered far larger percentage drops than the British stock market. The British, were they to remain in the EU, would be expected to help support the Europe’s southern tier.
When the high and mighty sing the same tune—Great Britain needs the EU more than the EU needs the British—the opposite is assuredly true. The British economy has outperformed most of Europe’s sluggards. Trying to get a fix on large banks is always a crap shoot—their financial statements are usually next to useless—but it appears that British banks and their regulators took more steps to address the problems exposed by the last financial crisis than their continental counterparts and may better withstand the coming stresses. Then again, British banks were hit just as hard as continental ones in the two days after the vote.
Never underestimate the petulance of humiliated Eurocrats, or other poobahs for that matter. What terrifies the Eurocrats is the virtual certainty that the British economy will outperform Europe’s after the Brexit. They may cut off their constituents’ noses to spite their own faces, erecting trade barriers against British goods and services, for which Europe’s consumers will pay the price. However, trade barriers are a two-way street. Britain is an important export market, especially for the de facto leader of the EU, Germany, so cooler heads may prevail, a hope expressed by Nigel Farage in a remarkable speech to the European Parliament.
Can anything be more corrupt than the desire to gratuitously harm another to preserve one’s power? Such corruption is the rotten core of the global economic and financial system. Its pilots are determined to fly it into a mountain, but will fight to the death any attempt to wrest away the controls. The financial markets’ reaction to Brexit has been appropriate, but anyone expecting asset prices to take one-way rides down or up in the directions they were pushed by Brexit will be disappointed.
Global finance and global statism are Siamese twins joined at the brain, a fact made abundantly clear during the last financial crisis. Heavily indebted governments depend on the machinations of central banks and the acquiescence of markets to perpetuate their economic misrule. Governments, in turn, coddle and succor their indispensable allies. Too big to fail, bail outs, and deposit insurance are their backstops for the inherent risks of fractional reserve banking, turning it into a heads-we-win, tails-the-taxpayers-lose proposition. Central banks provide emergency fiat liquidity on preferential terms—financial market “puts”; promote cartelization, and serve the constituent banks they were meant to regulate, acting as the banks’ agents within governments.
Brexit is a shot across the bow, but it is only a shot across the bow. Financial asset prices will continue to be supported or suppressed as the powers see fit. There is not one price in the entire firmament of markets and finance that is not pegged to continuing regimes of corruption and fraud. To transact based on such prices is a bet that a rigged game will stay rigged.
The belief that it will is understandable, but a house of cards must fall. Political winds—Brexit and what’s sure to follow—may blow this one over; it may collapse due to its structural deficiencies, or, most likely, some combination of the two will render it rubble. The important point is that rotten-to-the-core economies and finances, resting on foundations of coercion, corruption, and fraud, have to be rendered rubble before freer, more honest, and more durable structures can be erected.
- 71% of Americans Think the Economy is “Rigged” … They’re RIGHT
A new poll by Marketplace-Edison finds that 71% of Americans – including “Americans from across the economic and political spectrum” – think the economy is rigged.
They’re also right about how broken and totally corrupt our political system has become …
- "The British Woke Up!" Paul Craig Roberts Asks "Can The Americans?"
Authored by Paul Craig Roberts,
In our time to be truthful is to be provocative. To write provocatively leaves little room for error or mistatement as today’s euphemism terms it. I could shill for the establishment and be wrong 98% of the time and nothing ever would be said about it. But there is no forgiveness for a provocative truth-teller.
You have open inquiring minds and you want to know. Your motives are not to protect your illusions and delusions or to reinforce your emotional needs. This is why I write for you.
If no one knows or respects truth, the world is lost. But it only takes a few to change the world. The cultural anthopologist Margaret Mead said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
Change can be for better or worse. President Reagan and a committed few overcame the resistance of the CIA and military-security complex and reduced tensions among nuclear powers by negotiating the end of the Cold War with Soviet leader Gorbachev. During the reign of the last three US presidents, a few neoconservatives resurrected the nuclear tensions and took them to a higher level than at the peak of the Cold War.
There are hopeful signs that the neoconservative drive to World War III can be derailed. It seems that finally the Russians have caught on that America is not the Holy Grail but a government reminiscent in its aggression of Nazi Germany. Hopefully, Russian countermeasures will make even the crazed neocons think twice.
The British people, or rather a majority of those who voted, surprised the Establishment, which was confident of the success of its propaganda, by voting to save their ancient and distinguished country, the font of liberty, from disappearing into the EU, a dictatorship ruled by unaccountable appointees. The British had enough of that with kings and decided that the future did not lie in going backward. The British vote to exit the EU could bring the unintended consequence of unravelling the EU and NATO, thus reducing Washington’s ability to foment war.
Americans need to decide that they, like the British, do not appreciate being led backward to worse times.
The Clintons and the Republican Senator from Texas, Phil Gramm, led America back to Robber Baron days by deregulating the financial system. http://content.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877330,00.html
The senator was rewarded with a multi-million dollar banking job for overturning Great Depression era legislation that made financial capitalism workable. Americans need to understand that capitalists do not care if capitalism works for you as long as it works for them.
The collapse of the Soviet Union, due to the arrest of Gorbachev by hardline elements in the Communist Party, gave rise to the American Neoconservatives, a double handful of people closely tied to the Israeli government. These few people have involved America, for Israel’s benefit, in 15 years of warfare that has destroyed seven counries, with the cost to Americans of approximately $7 trillion dollars, according to Joseph Stiglitz and Linda Bilmes.
The obviously false excuse for this destruction of peoples and resources is the myth of “terrorism.” Most “terrorist events” in the US have been sting operations organized by the FBI in order to collect the multi-billion dollar bounty that Congress gives for preventing terrorist events. How best to keep this bounty flowing than to organize a terrorist event and prevent it? It is debatable whether such events as 9/11, the Boston Marathon bombing, Sandy Hook, San Bernandino, and Orlando are false flag events or drills staged by crisis actors and presented to the public as real.
The debt associated with 15 years of Washington’s wars is now being used to attack Social Security and Medicare. The One Percent and their “free market” apologists are determined that the elderly will pay for the wars that enabled Israel to reduce Palestine to a ghetto and for the wars that enriched the profits and power of the military-secutity complex, while inflicting a massive refugee problem on Europe.
If the British, or enough of them, woke up, perhaps something similar can happen in America.
From many of you I hear your frustrations with family, friends, and associates who are content with what they hear from the BBC, Fox “News,” CNN, and the New York Times. Obviously, if everyone was intelligent and could think for themselves or even had time to consider what they are told, we would not be in the state that we are in.
Our job is to get enough people into the habit of thinking for themselves that we have the few required to change the world. (“Few” is relative. In a country of 300 million people, “few” is probably several million.)
Arguing with friends doesn’t work. Arguments generate hostility and competitiveness. Avoid arguing. Your friends and family do not know anything. They sit in front of Fox “News” and CNN. They are brainwashed.
Perhaps one way to approach friends and family is to ask questions. For example, how can there be 103 casualties in Orlando and no visible evidence of the massive number of ambulances and EMT personnel necessary to deal with such a massive number of casualties? I asked my readers to help me prove the official story line, and no one could come up with convincing visible evidence. How can there be such a massive event without abundant evidence?
How can powerfully constructed skyscrapers, built to withstand airplane collisions, suddenly explode allegedly as a result of minor asymmetrical damage and scattered low temperature office fires? How can the entire contents of the towers be pulverized when there is insufficient gravational energy to accomplish such pulverization?
How is it possible that WTC 7 came down in free fall acceleration in the absence of controlled demolition? Why doubt that there was controlled demolition when the owner of the WTC said on TV (still available online) that “the decision was made to pull the building?”
In case you have forgotten, you “pull” a building with controlled demolition. It takes a long time to wire a building for demolition. Obviously, Building 7 was not wired on September 11, 2001.
We are constantly informed by the President, Vice President, Secretary of State, numerous senators and representatives, by NATO commanders, by EU politicians, by presstitutes, and others, that “Russia has invaded Ukraine.”
Take a minute and think about this extraordinary lie. Clearly, evidence is no longer a factor in determining what is occuring. Assertion only rules. Take a second to look outside The Matrix. Is it really possible that Ukraine would still exist if Russia invaded? I would bet my life that within 60 hours of a Russian invasion of Ukraine, Ukraine would again be part of Russia.
Remember August 2008 when the US and Israeli trained and equipped Georgian army invaded the peacekeeping realm of South Ossetia, killing Russian peace-keeping troops and Ossetian civilians. Putin was at the Beijing Olympics, but Russian armed forces quickly smashed the American/Israeli trained and equipped Georgian army. Putin held Geogia in his palm.
What did Putin do after delivering this lesson in the superiority of Russian arms? He released Georgia and returned home.
So how is it that Putin, according to the entirely of the Western political establishment and media whores, is determined to rebuild the Soviet Empire? Putin held Georgia. No power on earth could have forced him to release Georgia. But Putin withdrew Russia’s forces and released the country. The former Georgian president is now an American operative in Ukraine.
If you consider the number of outsiders, including US citizens and the former president of Georgia, who serve in the Ukrainian government, it raises questions about the so-called “Maidan Revolution” in February 2014. If this really was a popular uprising, and not a Washington orchestrated coup, why is there such a shortage of Ukrainians to form the new government that foreign citizens have to be brought in to rule the country?
Do not believe any official explanation of anything. Things are not true just because the government and presstitutes say so. Keep in mind that official explanations can be cover for hidden agendas. If Washington and the media have their way, we will live in a world constructed out of lies designed to hide from us the real interests being served.
That is not the kind of world that any of us want to live in.
- Trump Plans To Have Tyson, Ditka, & Bobby Knight At GOP Convention
Earlier this month the mainstream media was wondering how it was going to be possible for Donald Trump to defeat Hillary Clinton, especially given all of the well known political figures that Clinton was going to be able to trot out throughout the campaign.Trump is now beginning to answer that question.
In contrast to the Clinton political machine, Donald Trump's campaign aides are lining up some well known sports figures to appear at the GOP convention in Cleveland next month. As Bloomberg reports, Trump's convention list includes boxing legend Mike Tyson, Super Bowl winning coach Mike Ditka, former Indiana University basketball icon Bobby Knight, and NASCAR chief Brian France. Organizers said that a broad slate of other celebrities are being lined up as well.
At an event in Virginia earlier this month, Trump told the crowd that he wants the convention to be a "winners evening" of sports celebrities and champions rather than fill the evening with politicians. "We're going to do it a little different, if it's OK. I'm thinking about getting some of the great sports people who like me a lot." Trump said.
Trump said he'd rather sports greats address the convention as opposed to "these people, these politicians who are going to get up and speak and speak and speak." Adding that "our country needs to see winners. We don't see winners anymore. We have a bunch of clowns running this country. We have people who don't know what the hell they're doing running our country."
Bloomberg notes that musical guests include Journey, Poison frontman Bret Michaels, Rick Springfield, and country acts Martina McBride, Rascal Flatts, and The Band Perry.
* * *
This should come as no surprise to anyone, as Trump has always done things his own way throughout the campaign, and The Donald clearly wants to make the race about two completely different candidates. By lining up recognizable sports figures to address the convention instead of the typical political insiders, Trump is executing the plan as intended.
The Donald has made it clear that Tyson endorses him, and that he's just fine with that: "Mike Tyson endorsed me, I love it. You know, all the tough guys endorse me." Trump responded to the Bloomberg article by saying that Mike Tyson hadn't been asked to speak at the convention however.
- Brexit Aftermath – Here's What Will Happen Next
Submitted by Brandon Smith via Alt-Market.com,
In my article 'Brexit: Global Trigger Event, Fake Out Or Something Else?', published before the U.K. referendum vote, I outlined numerous reasons why I believed the Brexit was likely to pass. As far as I know, I was one of very few analysts that stuck to my call of a successful Brexit right up until the day of the referendum instead of slowly backing away as the pressure of conflicting polls increased. My prediction was verified that evening.
In my post-Brexit commentary, which can be read here, I then outlined why so many analysts in the mainstream and even in the liberty movement were caught completely unaware by the referendum results. Today, however, I now see hundreds of analysts using the same talking points I argued before the Brexit, but still missing the first and most VITAL underlying truth. The core reason why I was able to discern the Brexit outcome was because I accepted the reality that the Brexit does not hurt globalists — in the long run, it actually helps them.
Now, I fully understand the excitement surrounding this event. For many people it was a complete surprise because they assumed that international financiers and the ever-pervasive global elites would do anything to stop it from happening. It feels like a kind of revolution; a pointy stick in the eye of the beast. While I applaud the people of the U.K. for their ongoing battle for sovereignty, I can assure you that the Brexit is NOT an obstacle to the plans of globalists.
What is rather amazing to me is the number of people that, before the referendum vote, were arguing that the elites would "never allow" the Brexit to continue and were thoroughly convinced they would use their influence to disrupt it. Now, in the face of a successful vote, those same people now argue that the elites had no influence over the Brexit, and do not benefit from its passage.
I would remind readers that it was actually "pro-EU" globalist puppet David Cameron himself that presented the prospect of a referendum to exit the EU. While some may argue this was bungling on the part of Cameron, I think this is a rather foolish notion. Cameron does what he is told like every other elitist owned politician. Furthermore, the behavior of internationalists leading up to the Brexit was rather strange, hinting to me that they were preparing for a Brexit surprise.
Globalist financiers like George Soros jumped into the markets and bet in favor of stocks going negative, indicating prior knowledge. Hilariously, Soros' advisers are now playing damage control by claiming that Soros "lost money" on bets on the English Pound. While they admit he did "make profits" on all of his other investments due to the Brexit, they will not say what the magnitude of those investments were, nor have they provided evidence supporting any of the information they have given to the media on his losses on the Pound. Truly, a slapdash lazy play at spin control.
The Federal Reserve’s Janet Yellen used the Brexit as the primary reason for the latest rate hike delay, mentioning that such conditions may have influence "for some time to come". This indicates she may have had prior knowledge of its coming passage.
And the world’s central bankers all convened in Basel, Switzerland to take marching orders from their masters at the Bank for Internationals Settlements right before Brexit voting commenced, something they most likely would not do if the Brexit was destined to fail rather than prevail.
Not only did the globalists through David Cameron originally introduce the concept of the Brexit vote, they also apparently knew that the U.K. referendum would succeed.
As I originally stated in my prediction article:
“…the failure of the EU does not necessarily mean a failure for the internationalists. For groups of globalists that promote an ideology of Fabian Socialism, a breakdown of the EU, whether partial or total, can be used as leverage for a larger and more centralized global power structure in the long term. Mark my words, when the system comes crashing down (whether after the Brexit or after another trigger event), internationalists will say that the EU failed not because it was centralized, but because it was not centralized ENOUGH.”
“If the Brexit succeeds, the globalists can allow the market systems they have been inflating for years to finally crash (at the speed they choose). They can then blame those dastardly “far-Right extremists” in the U.K. for triggering a domino effect within the global financial system, conveniently scapegoating British conservatives, moderates and sovereigns for a breakdown that was going to happen eventually anyway. Their solution will once again be to argue for the end of “barbaric” conservative principles and install complete centralization and socialism as the cure.”
Already, this narrative is being presented by internationalists in the aftermath of the referendum.
Bloomberg writes that the Brexit “casts a dark shadow on the world’s great move to openness,” as if globalism is a bastion principle of free markets rather than the murderer of free markets and the outright tyrannical socialization and centralization of everything. European elites are out in droves admonishing the Brexit as a move towards dangerous nationalism and isolationism. The Chinese premier is in the media warning of a “butterfly effect” in global markets caused by instability in “certain countries,” obviously referring to the U.K. and the EU. His solution? He wants even more “enhanced coordination” among all the economies of the world (Interpretation: more centralization).
EU officials only continue to strengthen my predictions by calling for an EU superstate in response to the Brexit; in other words, a completely centralized Europe.
And, Bloomberg has reported on Mario Draghi's recent call for a "new world order" in response to the UK referendum in which central bank policies around the globe are completely coordinated. Bloomberg removed the word "NEW" from the article's title an hour after it was published. Go figure; I guess mentioning the "new world order" was just a little too honest.
Of course, Draghi does not mention that all central banks are ALREADY coordinated through the Bank for International Settlements, which is why numerous central bank heads were at the BIS when the Brexit vote was underway. What Draghi is pushing for is open centralization among the world's central banks – the next step towards a single global central bank and a single global currency system.
For more information on why the elites desire an economic crisis and what they hope to gain from it, read my article 'The Economic End Game Explained'.
In my prediction article I also stated in part reference to the Jo Cox murder:
“…the goal may only be to perpetuate a longer term narrative that conservatives in general are a destructive element of society. We kill, we’re racists, we have an archaic mindset that prevents “progress,” we divide supranational unions, we even destroy global economies. We’re storybook monsters.”
“The murder of Jo Cox has had a minimal effect on Brexit polling numbers. In the end, the elites may find Thomas Mair more useful as a mascot for the Brexit after the vote, rather than before the vote.
So now the Brexit movement, which is conservative in spirit, is labeled a “divisive” and “hateful group”, and if the referendum is triumphant, they will also be called economic saboteurs.”
The concept of a dangerously volatile and destructive populist movement for sovereignty is being heavily pushed in the mainstream media. The racist angle is now being implemented, with the MSM warning that racism is on the rise in the U.K. due to the Brexit campaign.
Most if not all of the developments I warned of when I predicted the Brexit are also coming true. So, if I am as correct about the motives behind the Brexit as I was correct about the outcome of the Brexit, here is what will probably happen in the coming months as the drama unfolds.
Federal Reserve Catch-22
All eyes will soon be on the Fed to see if the central bank behind the world reserve currency will take some kind of action to mitigate the possible negative effects of the Brexit. The problem is, the Fed has created a catch-22 scenario here; not for them, they are happy to instigate an equities crisis as long as the timing is right. Rather, they have created a catch-22 for the markets.
If the Fed raises rates to prove they can, stock markets will see this as a shock move and initiate a sell-off. If the Fed lowers rates or institutes negative rates, the public will see this as an act of desperation and a loss of credibility. Really, the only safe measure the Fed can take from now on is to do nothing. I highly doubt that they will do nothing. In fact, even in the face of the Brexit I still believe the Fed will raise rates a second time before the end of the year. Why? This is what the Fed has always done as recession takes hold. Historically, the Fed raises rates at the worst possible times. As with the Brexit, I am going to have to take the contrary position to most analysts on this.
Referendum Catch-22
The globalists have conjured an interesting paradox with the UK referendum. Look at it this way; even if you believe that the globalists were "caught off guard" by the Brexit, one must admit that it is still in their best interest to initiate a crash.
First, the elites spent so much time warning of the doom that would befall the world if a Brexit vote succeeded, they must now fulfill their own prophecy or appear foolish and impotent.
Second, if globalists and the central banks they control act too aggressively to stall a market plunge, they are sending a message to all other EU nations that they should not worry about seeking their own referendums, because the central banks will save the day if they do. More referendums mean exponential crisis in equities. So, markets will crash if the central banks don't act, and they will crash if central banks do act.
This is all an academic discussion, though, because central bankers fully intend for the existing system to at least partially crash. They simply want to decide the pace of the implosion. Most will do this through jawboning and minor policy maneuvers, but not much else. The Federal Reserve is the only wild card in this equation.
Slow Grind Towards The U.S. Elections
While the Brexit vote is a considerable shock to global markets, and there is a likelihood of referendums in other European nations, I do not believe the Brexit alone is enough to cause the kind of economic crisis the elites are seeking. There needs to be a one-two punch combo here, and the second punch has not arrived yet.
What form will it take? I have no idea. I do believe that with the Brexit drama in full swing, the timing is perfect for certain unstable EU banks, including Deutsche Bank, to announce insolvency. This could be the next moment of shock. That said, there are hundreds of possible trigger events ready and waiting to be exploited.
So far it would appear that equities markets in particular are in for a slow grind down (with sporadic but short lived rallies) going into the U.S. elections. I would not expect much to happen until the Fourth of July holiday has passed and I would expect low trading volume to persist until then. I believe that by the time November arrives the global economy will be in a clear and visible recessionary mode. This does not mean a "collapse" in the Hollywood sense will be in full swing, but our fiscal structure will be visibly worse off to even the most oblivious citizens.
A Trump Presidency
In light of the Brexit I’m going to have to call it here and now and predict that the most likely scenario for elections will be a Trump presidency. Trump has consistently warned of a recession during his campaign and with the Brexit dragging markets lower over the next few months, he will probably be proven “prophetic.”
Those who read my articles regularly know that I do not trust Trump and that I think his behavior signals that he is controlled opposition, but this is really beside the point. Even if Trump is a legitimate anti-establishment conservative, his entry into the Oval Office will seal the deal on the economic collapse, and will serve the globalists well. The international banks need only pull the plug on any remaining life support to the existing market system and allow it to fully implode, all while blaming Trump and his conservative supporters.
If Hillary Clinton, a clear establishment puppet, is the chosen one, and markets crash after her inauguration, then the establishment gets the blame. However, if Trump becomes president, and markets crash, then conservative and freedom movements get the blame.
The mainstream media has been consistently comparing Trump supporters to Brexit supporters, and Trump himself has hitched his political wagon to the Brexit. This fits perfectly with the globalist narrative that populists and conservatives are killing the global economy and placing everyone at risk.
Sovereignty Is The Villain
Imagine that the economic and political events of our world are for the most part a cleverly staged piece of cinema. The globalists are writing a screenplay for that cinema and we are all supposed to believe that the movie we are watching is real life rather than an engineered fantasy. The Brexit in our story is an act of “evil sovereignty activists” and “right wing extremists” who lure ignorant people away from the light of globalism using “emotion” rather than logic.
These conservatives and populists promote barbaric principles of nationalism that no longer serve humanity in our age of “reason” and multicultural “civility.” Globalism is the future and pro-sovereigns are holding the world back from “progress.”
This will be the narrative pressed in politics and social discussions from now on. The story the globalists are writing is one of the terrorism of selfish freedom movements, how they brought the planet to the verge of complete collapse, and how globalism and collectivism finally “triumphed” and saved humanity.
Divisions Between Young And Old
An interesting and very manipulative propaganda campaign being put in motion around the Brexit is the idea that the U.K. referendum represents a division between older generations and younger generations. The mainstream media argues that older generations in the U.K. that have already benefited from the EU are now “taking it away” from the younger generations and essentially screwing them out of their futures.
Anyone who understands the root failings of the EU and the fact that it has been on the edge of collapse for the past several years knows that such arguments are patently ridiculous. The EU has been beneficial to no one except in minor part to perpetually insolvent nations and peoples. The EU aids these folks by stealing from solvent nations and peoples. The Scottish were extremely anti-Brexit, for example, exactly because they have become a welfare dependent society and they know where their bread is buttered. Most Muslim refugees aren’t flooding into the EU on the premise that they plan to start from scratch and work their way towards prosperity. They march into the EU on the promise of free goodies.
Yes, according to recent polls around 73% of voters 18 to 24 years old supported the EU, but around 27% did not. Does this 27% not count? People aged 25 to 34 voted 38% in favor of Leave. Anyone over age 35 was increasingly more likely to vote Leave. Are people in their late 30's now considered "old"? This is hardly an example of the "old" destroying the precious collectivist futures of the young.
To claim that the Brexit was about young versus old is clearly a lie, but we should expect that this narrative will be pushed further. The globalists need to own the minds of the next generation, and they hope to do so by blaming all their future economic woes on the kinds of sovereignty movements that voted for the Brexit. The young are often desperate to believe that they are wiser than the old, desperate to assert their place in a world they don't yet understand because they have little experience in it, and desperate to prove that new ideas (usually old failed ideas rehashed) are better than traditional ideas. The elites know this, and are quick to con the young with the concepts of futurism.
The Long Game
The great weakness among economic analysts and many independent analysts is their refusal to examine the long game of the elites. They become so obsessed with the day to day parade of stock tickers and the month to month central bank policy meetings that they miss the greater trends. We can focus intently on each drop of water that makes up a tidal wave and forget that we are at the edge of the beach staring down death.
The Brexit is part of a globalist long game that is designed to finally and completely demonize sovereignty movements.
Think about it for a moment — what better way to remove the only obstacle in their path? The globalists create an economic crisis and then foster conditions by which their primary opponents (liberty activists) get BLAMED for it. They then swoop in as the heroes of their little cinema after the damage is already done and offer their solution: complete globalization. With enough people destitute from a global financial calamity, they may very well be begging the elites for help. This is not to say that the elites will ultimately succeed (I believe they will fail), but that does not stop them from making the attempt.
I realize this is not what many in the liberty movement want to hear, but this is reality. This does not diminish the value of a British movement for sovereignty, but it does demand that we temper our celebration and recognize when we are being targeted with fourth-generation warfare. If we accept the fact that the Brexit is an event the elites plan to exploit for their own ends, then we can identify the threat and deal with it. If we continue the delusion that the Brexit is some kind of slap in their face when it is not, then we allow them yet another weapon in their arsenal of propaganda.
- Teachers Unions Vs Hedge Funds: The Battle Over Billions
Randi Weingarten is the president of the American Federation of Teachers, and is a name that hedge fund managers and those on Wall Street are beginning to learn quite well.
About a decade ago, some liberals joined conservatives in pushing to expand charter schools. As the WSJ reports, those efforts received financial support from hedge fund managers including Dan Loeb, Paul Singer and Paul Tudor Jones, who together kicked in millions of dollars toward the effort. Some involved in the effort to push for the expansion of chartered schools portrayed public school teachers and their unions as obstacles to improving education, and thus the reputation of unions took a beating.
Enter Randi Weingarten. Weingarten was elected president of the American Federation of Teachers in 2008, and her aim was to restore public trust in public school teachers and their unions. Weingarten's federation represents about two dozen teachers unions whose retirement funds have a total of $630 billion in assets, a large portion of the more than $1 trillion controlled by all teachers unions according to the WSJ. Although the unions themselves control where the money is invested, Weingarten can make recommendations.
Weingarten instructed investment advisers at the federation's Washington headquarters to sift through financial reports and examine the personal charitable donations of hedge fund managers, focusing on those who want to end defined benefit pensions, and entities backing charter schools and the overhauling of public schools. In early 2013, the union federation published a list of roughly three dozen Wall Street asset managers it says donated to organizations that support causes opposed by the union, and the federation wanted union pension funds to use the list as a reference guide when deciding where to invest (or not invest) their money.
Said otherwise, if asset managers don't support unions, the unions won't invest with the funds.
The Manhattan Institute for Policy Research, a think tank that supports increasing school choice and replacing defined benefit pension plans with 401(k)-type plans is one of the groups that wound up on the list. Lawrence Mone, its president, said the tactics amount to intimidation, and that "I don't think that it's beneficial to the functioning of a democratic society."
To signify the importance of Weingarten's list, after KKR & Co. president Henry Kravis made the list in 2013, Weingarten received a call from Ken Mehlman, an executive at KKR. Mehlman said KKR had a record of supporting public pension plans, and Weingarten agreed – KKR was then taken off the list. Cliff Asness of AQR Capital Management went as far as hiring a friend of Weingarten and paying $25,000 to be a founding member of a group KKR was starting with Weingarten to promote retirement security. Asness was removed from the list.
Asness continued to serve on the board of The Manhattan Institute, however in September of last year an aide to Weingarten spoke to a California State Teachers' Retirement System (Calstrs) official about Asness's continued service – one phone call later and Asness said that he was stepping down from the Manhattan Institute board.
One hedge fund manager has been more combative however – Dan Loeb. The founder of Third Point is a donor to the Manhattan Institute and chairman of the Success Academy, which operates a network of charter schools in New York City.
A bit more combative is an understatement – Loeb pushed back on Weingarten, and didn't seem to care about the influence she had over where funds were directed.
As the WSJ explains
In a March 2013 letter to Mr. Loeb, Ms. Weingarten noted his support of a group “leading the attack on defined benefit pension funds” and said she was “surprised to learn of your interest in working with public pension plan investors.” Seeking business from union pension funds while donating to the group, she wrote, “seem to us perhaps inconsistent.”
The two agreed to meet.
Mr. Loeb emailed Ms. Weingarten, noting his fund’s average annual return of 21% over 18 years. “I completely respect the political considerations you may have and understand if other factors dictate how funds are allocated,” he wrote.
A week later, Ms. Weingarten wrote back to reiterate that unions were wary of investing with Mr. Loeb “given the political attack on defined benefit funds.”
In response, Mr. Loeb asserted that it must be “frustrating” for unions to invest with funds that “have different political views or party affiliations.” He added: “At least we can rejoice in knowing that as Americans we share fundamental values that elevate individual opportunity, accountability, freedom, fairness and prosperity.”
The meeting was called off, and Mr. Loeb was added to the list.
At a fundraising dinner that May for his charter-school group, Mr. Loeb stood up and said: “Some of you in this room have come under attack for supporting charter-school education reform and freedom in general.” He called Ms. Weingarten the “leader of the attack” and pledged an additional $1 million in her name.
“Both Randi and I believe America’s children deserve a 21st century education, and I hope the day comes when she embraces the positive change created by public charter schools,” Mr. Loeb said recently in a written statement.
As part of the punishment, Loeb eventually lost $75 million from a Rhode Island pension fund. Around that same time, a giant billboard appeared above Times Square that was not kind to Weingarten – perhaps not a coincidence.
"We all guessed it had to be people like Dan Loeb" Weingarten said.
After the billboard, Weingarten and the union group launched an advocacy group called Hedge Clippers, that lobbied against proposed New York legislation to increase the charitable deduction for donations to public and private schools. The group also published a report called "All That Glitters Is Not Gold," that among other things, claimed that the high fees charged by hedge funds made them unattractive investments. Furthermore, the union group is funding a campaign to eliminate the carried interest tax rate on investment income earned by asset managers, as well as filing a class action lawsuit accusing 25 Wall Street firms of violating antitrust law and manipulating Treasury bond prices.
Other large pension funds such as an Illinois public pension fund and one of New York City's public pension funds have cut hedge fund investments. However, Loeb may have had the last laugh, as when Weingarten tried to convince a large Ohio fund to follow suit, it voted to remain invested in hedge funds, including Loeb's.
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Regardless of a stance on this topic, this battle between Weingarten and the targeted hedge funds such as Third Point will remain an epic story to watch unfold. Also, as readers know, pension funds are severely underfunded, and given that NIRP and other insane central bank policies have created an environment where risk assets are a necessity if one wants to generate higher target returns, hedge funds may be one avenue that pension funds need to consider, whether the funds support charter schools or not.
- One American's True Story: "How I Went From Middle Class To Homeless"
Meet Joe. He used to make a steady income in manufacturing, but the work has disappeared. Now, he is selling everything and moving into his van.
Joe is one of the 71% of Americans who think the U.S. economic system is “rigged in favor of certain groups,” according to a new poll by Marketplace and Edison Research. The poll asked a simple question: Which of the following comes closer to your opinion on the economic system in the U.S. People could select between three options:
- The economic system is rigged in favor of certain groups
- The economy system is fair to all Americans
- Don’t know
Most selected rigged economy.
As CNN adds, it didn’t matter if the person was white, black or Hispanic or whether they identified as Republican, Democrat or Independent. The majority feel the American Dream comes with huge asterisk that reads “only for the favored few.”
Americans have good reason to think this way. The typical middle class family is earning about the same amount of money adjusted for inflation, just under $54,000, as they did in 1996.
That means that as the rich get richer, the middle class hasn’t seen an improvement in its way of life in 20 years. On top of that, the Great Recession knocked out many people’s safety net savings as they lost jobs or homes or both. Even people who have jobs say they feel one step away from financial ruin. They fear a life of “dead-end crap jobs with crap wages.”
People like Joe, 60, who lives in a mobile home ith his mother outside of Philadelphia and is desperate. He last held a job in early 2013: “The first seven weeks I was there we were busier than I’ve ever seen a small company be, and then like someone flipped a switch. The work just stopped.”
“I would like to work” he says. “I still have skills and abilities and I still know how to use them. I have two associate degrees, one’s in electrical engineering, one’s in mechanical engineering.”
He then discusses the impossible dream for the lower middle class of which he would like to be part of: “I consider $15/hour to be lower middle class. If i had been able to go permanently with a company, probably I would have reached middle class in a few years. I’d settle for lower middle class right now but even that’s almost the impossible dream.”
So what does Joe’s future hold? “If I don’t hear back from any of these applications, if I’m not working I’ll be out of here. With out last couple of thousand dollar we got the minivan. I’ll have enough room for a sleeping back and some clothes. My mom said if you ever have to sell the house, I want you to take the lamp. I can’t take the lamp either.”
And his morbid conclusion: “Poor people have significantly shorter lifespans than more affluent people. In fact I keep having this argument with my doctor. He keeps telling me ‘you have another 30 years.’ I tell him no, I don’t expect to make it past seventy.” In other words, Joe thinks he has another 10 years of working class purgatory before he can finally rest.
In the video below, he is wearing sunglasses to disguise his identity.
- "Deutsche Bank Poses The Greatest Risk To The Global Financial System": IMF
Over three years ago we wrote “At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World” in which we introduced a bank few until then had imagined was the riskiest in the world.
As we explained then “the bank with the single largest derivative exposure is not located in the US at all, but in the heart of Europe, and its name, as some may have guessed by now, is Deutsche Bank. The amount in question? €55,605,039,000,000. Which, converted into USD at the current EURUSD exchange rate amounts to $72,842,601,090,000…. Or roughly $2 trillion more than JPMorgan’s.”
So here we are three years later, when not only did Deutsche Bank just flunk the Fed’s stress test for the second year in a row, but moments ago in a far more damning analysis, none other than the IMF disclosed that Deutsche Bank poses the greatest systemic risk to the global financial system, explicitly stating that the German bank “appears to be the most important net contributor to systemic risks.”
Yes, the same bank whose stock price hit a record low just two days ago.
Here is the key section in the report:
Domestically, the largest German banks and insurance companies are highly interconnected. The highest degree of interconnectedness can be found between Allianz, Munich Re, Hannover Re, Deutsche Bank, Commerzbank and Aareal bank, with Allianz being the largest contributor to systemic risks among the publicly-traded German financials. Both Deutsche Bank and Commerzbank are the source of outward spillovers to most other publicly-listed banks and insurers. Given the likelihood of distress spillovers between banks and life insurers, close monitoring and continued systemic risk analysis by authorities is warranted.
Among the G-SIBs, Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse. In turn, Commerzbank, while an important player in Germany, does not appear to be a contributor to systemic risks globally. In general, Commerzbank tends to be the recipient of inward spillover from U.S. and European G-SIBs. The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime.
The IMF also said the German banking system poses a higher degree of possible outward contagion compared with the risks it poses internally. This means that in the global interconnected game of counterparty dominoes, if Deutsche Bank falls, everyone else will follow.
Notwithstanding moderate cross-border exposures on aggregate, the banking sector is a potential source of outward spillovers. Network analysis suggests a higher degree of outward spillovers from the German banking sector than inward spillovers. In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spillovers as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country.
The IMF concluded that Germany needs to urgently examine whether its bank resolution, i.e., liquidation, plans are operable, including a timely valuation of assets to be transferred, continued access to financial market infrastructures, and whether authorities can ensure control over a bank if resolution actions take a few days, if needed, by imposing a moratorium:
Operationalization of resolution plans and ensuring funding of a bank in resolution is a high priority. The authorities have identified operational challenges (e.g., the timely valuation of assets to be transferred, continued access to financial market infrastructures) and are working to surmount them. In some cases, actions to effect resolution may require a number of days to implement, and the authorities should ensure they can maintain control over the bank during this period, including by using their powers to impose a more general moratorium for a specific bank.
Here is the IMF’s chart showing the key linkages of the world’s riskiest bank:
And while DB is number 1, here are the other banks whose collapse would likewise lead to global contagion.
Considering two of the three most “globally systemically important”, i.e., riskiest, banks just saw their stock price scrape all time lows earlier this week, we wonder just how nervous behind their calm facades are the executives at the ECB, the IMF, and the rest of the handful of people who realize just close to the edge of collapse this world’s most riskiest bank (whose market cap is less than the valuation of AirBnB) finds itself right now.
- Revenge Of The Rubes – Why The Days Of The Financial Elite's Rule Are Numbered
Submitted by David Stockman via Contra Corner blog,
Talk about not waiting for the body to get cold. The establishment oracles are out in force today proclaiming that Brexit has already been cancelled. Apparently, like in the case of the first negative vote on TARP, two days of currency and stock market turmoil have taught the rubes who voted for it the errors of their ways.
The argument is that the unwashed masses outside of Greater London have shot themselves in the foot economically based on some atavistic fears of immigrants and cultural globalization. Racism even.
But those are just momentary emotional outbursts. Right soon they will get back to where their bread is buttered, and demand a second referendum in order to re-board the EU’s purported economic gravy train.
Thus, Gideon Rachman, one of the Financial Times’ numerous globalist scolds, professed that his depression about the Brexit vote has already given way to a worldly vision of relief:
But then, belatedly, I realised that I have seen this film before. I know how it ends. And it does not end with the UK leaving Europe.
Any long-term observer of the EU should be familiar with the shock referendum result. In 1992 the Danes voted to reject the Maastricht treaty. The Irish voted to reject both the Nice treaty in 2001 and the Lisbon treaty in 2008.
And what happened in each case? The EU rolled ever onwards. The Danes and the Irish were granted some concessions by their EU partners. They staged a second referendum. And the second time around they voted to accept the treaty. So why, knowing this history, should anyone believe that Britain’s referendum decision is definitive?
But of course Rachman’s dismissive meme is exactly why Brexit happened. The international financial apparatchiks, who have been controlling the levers of power at the central banks, finance ministries and supra-national official institutions for several decades now, have become so accustomed to not taking no for an answer that they can’t see the handwriting on the wall.
To wit, the rubes are feed up and are not going to take it anymore. In voting to flee the domineering EU superstate domiciled in Brussels, they saw right through and properly dismissed the establishment’s scary bedtime stories about the economic costs.
After all, the UK is a net payer of $10 billion per year in taxes into the EU budget and gets an economically wasteful dose of continental style regulatory dirigisme in return. And that is to say nothing of the loss of control at its borders and the de facto devolution of its law-making powers and judicial functions to unelected EU bureaucracies.
At the same time, increased trade is generally a benefit, but it is not one that requires putting up with the statist tyranny of the EU. That’s because the EU-27, and especially Germany, need the UK market for their exports far more than the other way around.
So after Brexit is triggered, the EU will come to the table for a new trade arrangement with the UK because these faltering socialist economies desperately need the exports. At the same time, the British negotiators will be free for the first time to seek more advantageous trade arrangements with the US, Canada, Australia and others.
It doesn’t take too much investigation to see that the UK has come out on the short end of the trade stick. And contrary to globalist apologists——-persistent and deepening trade deficits are a big problem. If coupled with a weakening savings rate, they mean that a country is getting ever deeper into international debt.
The UK economy exhibits that dual disability to a fare-the-well. Its current account has been plunging further into the red for 20 years. At 5% of GDP its current account deficit—-which includes the favorable benefits of service exports from the City of London and earnings on foreign investments—-is among the highest in the DM world.
To put it bluntly, the UK is slowly going bankrupt.
Moreover, the source of the abysmal overall current account trend shown above is absolutely attributable to its one-sided trade imbalance with the EU-27. As shown in the graph below, its EU deficit has been widening ever since 2000, while its trade surplus with the rest of the world has actually been steadily growing.
This point is not about mercantilism. The bilateral balance with any particular country or trading bloc does not ultimately matter if the overall current account trend is healthy.
Instead, the point is that the EU-27 needs British markets to the tune of a net $65 billion surplus annually. And more than half of that surplus is attributable to Germany, which earns upwards of 40% of its trade surplus with the rest of the EU from the UK.
Continuation of an open trade arrangement, therefore, does not require the sacrifice of British democracy and home rule to the statist overlords of Brussels; it only requires a trade deal that provides mutual economic benefits and no entangling engagements with the socialist infrastructure of the continent.
These negative trade trends are not ameliorated by a domestic savings frenzy that could finance the outflow in a healthy manner. To the contrary, the British household savings rate has been heading dangerously south for the last quarter-century.
Domestic savers are not financing the UK’s current account; foreign lenders and central banks are.
The same is true of the public sector. The UK has run chronic, deep budget deficits since the early 1990s. Since then, its public debt to GDP ratio has soared from 35% to nearly 85%.
These data make crystal clear, of course, that the UK has a giant problem of living far beyond its means, and that all of the leftist kvetching about the conservative government’s so-called “austerity” policies is a lot of political balderdash.
In fact, the Cameron government has buried British taxpayers in debt, even as it proclaimed its adherence to fiscal rectitude. As is evident from the chart, the only reduction in the spending share of GDP on its watch is due to the end of the global recession. At nearly 44%, state outlays still take a larger share of the economic production than they did under the Labour governments which preceded.
Here’s the point. Staying in the EU can not help ameliorate the UK’s real economic and fiscal problems in the slightest. What it needs is lower taxes, less welfare, and a dramatic reduction of government regulatory intervention. These are not policy directions that stir the juices in Brussels.
So today’s noisy meme that the Brexit voters have done themselves irreparable economic harm is patent nonsense. By contrast, whether they fully understood it or not, they have liberated the UK from what will be the economic disaster of “more Europe”.
Indeed, if there ever was a phrase that encapsulated the idea of an incendiary contradiction, “more Europe” is surely it. What it means to the French and Mediterranean Left is debt mutualization and a common treasury from which to expropriate German prosperity.
By contrast, to the Germans it means the imposition of ever more onerous EU fiscal controls so that it can continue to kick the can of its giant liabilities for the EU bailouts and the ECB’s “Target2” balances down the road.
These German exposures are enormous——with upwards of $75 billion already drawn on the ESM and EFSF bailout funds and Target2 balances of $700 billion at the present time.
Indeed, the latter is a ticking financial bomb and the real reason that Germany’s historic monetary orthodoxy has given way to Draghi’s money printing madness. To wit, Germany cannot afford to permit the euro and ECB’s central banking system to blow-up.
As a consequence, Germany has acquiesced in an insane fiscal transfer system conducted by the ECB in the guise of monetary policy.
But Draghi’s $90 billion per month rate of QE purchases is really not about “low-flation”, private sector credit stimulation, job growth or any of the other macroeconomic variables, anyway. To the contrary, its not so hidden purpose is to flat-out monetize the debt of Italy, Spain, Greece, Portugal, France and the rest of the bankrupts at negligible interest rates, thereby gifting them with deeply subsidized cost of carry on their massive public debts.
Needless to say, these Draghi confected bond rates could never be remotely attained in an honest bond market. Yet they are absolutely necessary to maintain the charade of fiscal solvency in these woebegone practitioners of welfare state socialism.
So the doomsday machine rolls on. Currently Greece’s Target2 balance is negative $100 billion, while Spain’s is negative $325 billion and Italy’s is negative $300 billion. In short, the rest of the EU-18 owes Germany so much that permitting any country to leave is unthinkable in Berlin.
The call for “more Europe”, therefore, does not arise from cosmopolitan enlightenment, as the mainstream media avers; it is a desperate gambit to keep alive an utterly flawed and contradiction-ridden monetary, fiscal and political union that never should have been concocted in the first place, and that is now several decades past its “sell by” date.
By the same token, the forces of Brexit and their populist counterparts throughout the continent are not simply an instance of the rubes venting nationalistic, xenophobic, racist and other dark impulses. To the contrary, the rubes simply want their governments back, and in that impulse they are on the right side of history.
The truth is, it is the “European Project” which represents the darker impulses. The Brussels/Frankfurt rule of the financial elite has little to do with free trade or the maintenance of peaceful relationships among the states of Europe, and nothing at all to do with furthering capitalist prosperity.
Instead, it is a tyranny based on a muddled brew of globalism, statism, financialization and the cult of central banking. It’s days are numbered because even the rubes can see that it doesn’t work, and that its massive internal contradictions are heading for a spectacular implosion.
The British voters have decided to get out of harms’ way. Hopefully, there will soon be many other cases of the rubes in revolt.
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We have now entered a global period of bailouts heaping up against the back of earlier bailouts and attempted recovery coming on the back of already failed recovery. Why? Because it is all the same Great Recession, and as I’ve maintained since I began this blog several years ago the “recovery” is nothing but a prop under the Great Recession’s monstrous belly. That prop, I said would fail this year, and we would slide into the abyss of an economic apocalypse in a series of jolting plunges and rallies.
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