• 51% Of U.S. Muslims Want Sharia

  Submitted by Richard Spencer via JihadWatch.org,

  Really, what did you expect?

  A considerable portion of U.S. domestic and foreign policy is based on the assumption that Islam in the U.S. will be different: that Muslims here believe differently from those elsewhere, and do not accept the doctrines of violence against and subjugation of unbelievers that have characterized Islam throughout its history. But on what is that assumption based?

  Nothing but wishful thinking. And future generations of non-Muslims will pay the price.

  

  “Meanwhile, An Islamic Fifth Column Builds Inside America,” by Paul Sperry, IBD, October 1, 2015 (thanks to Pamela Geller)

  In berating GOP presidential hopeful Ben Carson for suggesting a loyalty test for Muslims seeking high office, CNN host Jake Tapper maintained that he doesn’t know a single observant Muslim-American who wants to Islamize America.

   

  “I just don’t know any Muslim-Americans — and I know plenty — who feel that way, even if they are observant Muslims,” he scowled.

   

  Tapper doesn’t get out much. If he did, chances are he’d run into some of the 51% of Muslims living in the U.S. who just this June told Polling Co. they preferred having “the choice of being governed according to Shariah,” or Islamic law. Or the 60% of Muslim-Americans under 30 who told Pew Research they’re more loyal to Islam than America.

   

  Maybe they’re all heretics, so let’s see what the enlightened Muslims think.

   

  If Tapper did a little independent research he’d quickly find that America’s most respected Islamic leaders and scholars also want theocracy, not democracy, and even advocate trading the Constitution for the Quran.

   

  These aren’t fringe players. These are the top officials representing the Muslim establishment in America today.

   

  Hopefully none of them ever runs for president, because here’s what he’d have to say about the U.S. system of government:

  • Muzammil Siddiqi, chairman of both the Fiqh Council of North America, which dispenses Islamic rulings, and the North American Islamic Trust, which owns most of the mosques in the U.S.: “As Muslims, we should participate in the system to safeguard our interests and try to bring gradual change, (but) we must not forget that Allah’s rules have to be established in all lands, and all our efforts should lead to that direction.”
  • Omar Ahmad, co-founder of the Council on American-Islamic Relations, the top Muslim lobby group in Washington: “Islam isn’t in America to be equal to any other faith, but to become dominant. The Quran should be the highest authority in America, and Islam the only accepted religion on Earth.”
  • CAIR spokesman Ibrahim Hooper: “I wouldn’t want to create the impression that I wouldn’t like the government of the United States to be Islamic sometime in the future.”
  • Imam Siraj Wahhaj, director of the Muslim Alliance in North America: “In time, this so-called democracy will crumble, and there will be nothing. And the only thing that will remain will be Islam.”
  • Imam Zaid Shakir, co-founder of Zaytuna College in Berkeley, Calif.: “If we put a nationwide infrastructure in place and marshaled our resources, we’d take over this country in a very short time… What a great victory it will be for Islam to have this country in the fold and ranks of the Muslims.”…

  Read more here…

  These Islamic luminaries, who arguably spend more time with Muslims than Tapper, say the American Muslim community would rather live under a theocracy.

  

  

• The State Department's Collective Madness

  Submitted by Robert Parry via ConsortiumNews.com,

  Over the past several decades, the U.S. State Department has deteriorated from a reasonably professional home for diplomacy and realism into a den of armchair warriors possessed of imperial delusions, a dangerous phenomenon underscored by the recent mass “dissent” in favor of blowing up more people in Syria.

  Some 51 State Department “diplomats” signed a memo distributed through the official “dissent channel,” seeking military strikes against the Syrian government of Bashar al-Assad whose forces have been leading the pushback against Islamist extremists who are seeking control of this important Mideast nation.

  

  Secretary of State Hillary Clinton testifies before Congress on Jan. 23, 2013, about the fatal attack on the U.S. mission in Benghazi, Libya, on Sept. 11. 2012. (Photo from C-SPAN coverage)

  The fact that such a large contingent of State Department officials would openly advocate for an expanded aggressive war in line with the neoconservative agenda, which put Syria on a hit list some two decades ago, reveals how crazy the State Department has become.

  The State Department now seems to be a combination of true-believing neocons along with their liberal-interventionist followers and some careerists who realize that the smart play is to behave toward the world as global proconsuls dictating solutions or seeking “regime change” rather than as diplomats engaging foreigners respectfully and seeking genuine compromise.

  Even some State Department officials, whom I personally know and who are not neocons/liberal-hawks per se, act as if they have fully swallowed the Kool-Aid. They talk tough and behave arrogantly toward inhabitants of countries under their supervision. Foreigners are treated as mindless objects to be coerced or bribed.

  So, it’s not entirely surprising that several dozen U.S. “diplomats” would attack President Barack Obama’s more temperate position on Syria while positioning themselves favorably in anticipation of a Hillary Clinton administration, which is expected to authorize an illegal invasion of Syria — under the guise of establishing “no-fly zones” and “safe zones” — which will mean the slaughter of young Syrian soldiers. The “diplomats” urge the use of “stand-off and air weapons.”

  These hawks are so eager for more war that they don’t mind risking a direct conflict with Russia, breezily dismissing the possibility of a clash with the nuclear power by saying they are not “advocating for a slippery slope that ends in a military confrontation with Russia.” That’s reassuring to hear.

  Risking a Jihadist Victory

  There’s also the danger that a direct U.S. military intervention could collapse the Syrian army and clear the way for victory by Al Qaeda’s Nusra Front or the Islamic State. The memo did not make clear how the delicate calibration of doing just enough damage to Syria’s military while avoiding an outright jihadist victory and averting a clash with Russia would be accomplished.

  

  Video of the Russian SU-24 exploding in flames inside Syrian territory after it was shot down by Turkish air-to-air missiles on Nov. 24, 2015.

  Presumably, whatever messes are created, the U.S. military would be left to clean up, assuming that shooting down some Russian warplanes and killing Russian military personnel wouldn’t escalate into a full-scale thermonuclear conflagration.

  In short, it appears that the State Department has become a collective insane asylum where the inmates are in control. But this madness isn’t some short-term aberration that can be easily reversed. It has been a long time coming and would require a root-to-branch ripping out of today’s “diplomatic” corps to restore the State Department to its traditional role of avoiding wars rather than demanding them.

  Though there have always been crazies in the State Department – usually found in the senior political ranks – the phenomenon of an institutional insanity has only evolved over the past several decades. And I have seen the change.

  I have covered U.S. foreign policy since the late 1970s when there was appreciably more sanity in the diplomatic corps. There were people like Robert White and Patricia Derian (both now deceased) who stood up for justice and human rights, representing the best of America.

  But the descent of the U.S. State Department into little more than well-dressed, well-spoken but thuggish enforcers of U.S. hegemony began with the Reagan administration. President Ronald Reagan and his team possessed a pathological hatred of Central American social movements seeking freedom from oppressive oligarchies and their brutal security forces.

  During the 1980s, American diplomats with integrity were systematically marginalized, hounded or removed. (Human rights coordinator Derian left at the end of the Carter administration and was replaced by neocon Elliott Abrams; White was fired as U.S. ambassador to El Salvador, explaining: “I refused a demand by the secretary of state, Alexander M. Haig Jr., that I use official channels to cover up the Salvadoran military’s responsibility for the murders of four American churchwomen.”)

  The Neocons Rise

  As the old-guard professionals left, a new breed of aggressive neoconservatives was brought in, the likes of Paul Wolfowitz, Robert McFarlane, Robert Kagan and Abrams. After eight years of Reagan and four years of George H.W. Bush, the State Department was reshaped into a home for neocons, but some pockets of professionalism survived the onslaughts.

  

  Former Assistant Secretary of State Elliott Abrams, a leading neocon.

  While one might have expected the Democrats of the Clinton administration to reverse those trends, they didn’t. Instead, Bill Clinton’s “triangulation” applied to U.S. foreign policy as much as to domestic programs. He was always searching for that politically safe “middle.”

  As the 1990s wore on, the decimation of foreign policy experts in the mold of White and Derian left few on the Democratic side who had the courage or skills to challenge the deeply entrenched neocons. Many Clinton-era Democrats accommodated to the neocon dominance by reinventing themselves as “liberal interventionists,” sharing the neocons’ love for military force but justifying the killing on “humanitarian” grounds.

  This approach was a way for “liberals” to protect themselves against right-wing charges that they were “weak,” a charge that had scarred Democrats deeply during the Reagan/Bush-41 years, but this Democratic “tough-guy/gal-ism” further sidelined serious diplomats favoring traditional give-and-take with foreign leaders and their people.

  So, you had Democrats like then-U.S. Ambassador to the United Nations (and later Secretary of State) Madeleine Albright justifying Bill Clinton’s brutal sanctions policies toward Iraq, which the U.N. blamed for killing 500,000 Iraqi children, as “a very hard choice, but the price – we think the price is worth it.”

  Bill Clinton’s eight years of “triangulation,” which included the brutal air war against Serbia, was followed by eight years of George W. Bush, which further ensconced the neocons as the U.S. foreign policy establishment.

  By then, what was left of the old Republican “realists,” the likes of Henry Kissinger and Brent Scowcroft, was aging out or had been so thoroughly compromised that the neocons faced no significant opposition within Republican circles. And, Official Washington’s foreign-policy Democrats had become almost indistinguishable from the neocons, except for their use of “humanitarian” arguments to justify aggressive wars.

  Media Capitulation

  Before George W. Bush’s invasion of Iraq, much of the “liberal” media establishment – from The New York Times to The New Yorker – fell in line behind the war, asking few tough questions and presenting almost no obstacles. Favoring war had become the “safe” career play.

  

  At the start of the U.S. invasion of Iraq in 2003, President George W. Bush ordered the U.S. military to conduct a devastating aerial assault on Baghdad, known as “shock and awe.”

  But a nascent anti-war movement among rank-and-file Democrats did emerge, propelling Barack Obama, an anti-Iraq War Democrat, to the 2008 presidential nomination over Iraq War supporter Hillary Clinton. But those peaceful sentiments among the Democratic “base” did not reach very deeply into the ranks of Democratic foreign policy mavens.

  So, when Obama entered the White House, he faced a difficult challenge. The State Department needed a thorough purging of the neocons and the liberal hawks, but there were few Democratic foreign policy experts who hadn’t sold out to the neocons. An entire generation of Democratic policy-makers had been raised in the world of neocon-dominated conferences, meetings, op-eds and think tanks, where tough talk made you sound good while talk of traditional diplomacy made you sound soft.

  By contrast, more of the U.S. military and even the CIA favored less belligerent approaches to the world, in part, because they had actually fought Bush’s hopeless “global war on terror.” But Bush’s hand-picked, neocon-oriented high command – the likes of General David Petraeus – remained in place and favored expanded wars in both Iraq and Afghanistan.

  Obama then made one of the most fateful decisions of his presidency. Instead of cleaning house at State and at the Pentagon, he listened to some advisers who came up with the clever P.R. theme “Team of Rivals” – a reference to Abraham Lincoln’s first Civil War cabinet – and Obama kept in place Bush’s military leadership, including Robert Gates as Secretary of Defense, and reached out to hawkish Sen. Hillary Clinton to be his Secretary of State.

  In other words, Obama not only didn’t take control of the foreign-policy apparatus, he strengthened the power of the neocons and liberal hawks. He then let this powerful bloc of Clinton-Gates-Petraeus steer him into a foolhardy counterinsurgency “surge” in Afghanistan that did little more than get 1,000 more U.S. soldiers killed along with many more Afghans.

  Obama also let Clinton sabotage his attempted outreach to Iran in 2010 seeking constraints on its nuclear program and he succumbed to her pressure in 2011 to invade Libya under the false pretense of establishing a “no-fly zone” to protect civilians, what became a “regime change” disaster that Obama has ranked as his biggest foreign policy mistake.

  The Syrian Conflict

  Obama did resist Secretary Clinton’s calls for another military intervention in Syria although he authorized some limited military support to the allegedly “moderate” rebels and allowed Saudi Arabia, Qatar and Turkey to do much more in supporting jihadists connected to Al Qaeda and even the Islamic State.

  

  Syrian women and children refugees at Budapest railway station. (Photo from Wikipedia)

  Under Secretary Clinton, the neocon/liberal-hawk bloc consolidated its control of the State Department diplomatic corps. Under neocon domination, the State Department moved from one “group think” to the next. Having learned nothing from the Iraq War, the conformity continued to apply toward Libya, Syria, Afghanistan, Ukraine, Russia, China, Venezuela, etc.

  Everywhere the goal was same: to impose U.S. hegemony, to force the locals to bow to American dictates, to steer them into neo-liberal “free market” solutions which were often equated with “democracy” even if most of the people of the affected countries disagreed.

  Double-talk and double-think replaced reality-driven policies. “Strategic communications,” i.e., the aggressive use of propaganda to advance U.S. interests, was one watchword. “Smart power,” i.e., the application of financial sanctions, threats of arrests, limited military strikes and other forms of intimidation, was another.

  Every propaganda opportunity, such as the Syrian sarin attack in 2013 or the Malaysia Airlines Flight 17 shoot-down over eastern Ukraine, was exploited to the hilt to throw adversaries on the defensive even if U.S. intelligence analysts doubted that evidence supported the accusations.

  Lying at the highest levels of the U.S. government – but especially among the State Department’s senior officials – became epidemic. Perhaps even worse, U.S. “diplomats” seemed to believe their own propaganda.

  Meanwhile, the mainstream U.S. news media experienced a similar drift into the gravity pull of neocon dominance and professional careerism, eliminating major news outlets as any kind of check on official falsehoods.

  The Up-and-Comers

  The new State Department star – expected to receive a high-level appointment from President Clinton-45 – is neocon Assistant Secretary of State for European Affairs Victoria Nuland, who orchestrated the 2014 putsch in Ukraine, toppling an elected, Russia-friendly president and replacing him with a hard-line Ukrainian nationalist regime that then launched violent military attacks against ethnic Russians in the east who resisted the coup leadership.

  

  Assistant Secretary of State for European Affairs Victoria Nuland, who pushed for the Ukraine coup and helped pick the post-coup leaders.

  When Russia came to the assistance of these embattled Ukrainian citizens, including agreeing to Crimea’s request to rejoin Russia, the State Department and U.S. mass media spoke as one in decrying a “Russian invasion” and supporting NATO military maneuvers on Russia’s borders to deter “Russian aggression.”

  Anyone who dares question this latest “group think” – as it plunges the world into a dangerous new Cold War – is dismissed as a “Kremlin apologist” or “Moscow stooge” just as skeptics about the Iraq War were derided as “Saddam apologists.” Virtually everyone important in Official Washington marches in lock step toward war and more war. (Victoria Nuland is married to Robert Kagan, making them one of Washington’s supreme power couples.)

  So, that is the context of the latest State Department rebellion against Obama’s more tempered policies on Syria. Looking forward to a likely Hillary Clinton administration, these 51 “diplomats” have signed their name to a “dissent” that advocates bombing the Syrian military to protect Syria’s “moderate” rebels who – to the degree they even exist – fight mostly under the umbrella of Al Qaeda’s Nusra Front and its close ally, Ahrar al Sham.

  The muddled thinking in this “dissent” is that by bombing the Syrian military, the U.S. government can enhance the power of the rebels and supposedly force Assad to negotiate his own removal. But there is no reason to think that this plan would work.

  In early 2014, when the rebels held a relatively strong position, U.S.-arranged peace talks amounted to a rebel-dominated conference that made Assad’s departure a pre-condition and excluded Syria’s Iranian allies from attending. Not surprisingly, Assad’s representative went home and the talks collapsed.

  Now, with Assad holding a relatively strong hand, backed by Russian air power and Iranian ground forces, the “dissenting” U.S. diplomats say peace is impossible because the rebels are in no position to compel Assad’s departure. Thus, the “dissenters” recommend that the U.S. expand its role in the war to again lift the rebels, but that would only mean more maximalist demands from the rebels.

  Serious Risks

  This proposed wider war, however, would carry some very serious risks, including the possibility that the Syrian army could collapse, opening the gates of Damascus to Al Qaeda’s Nusra Front (and its allies) or the Islamic State – a scenario that, as The New York Times noted, the “memo doesn’t address.”

  

  Russian President Vladimir Putin greets Secretary of State John Kerry before meetings at the Kremlin on Dec. 15, 2015. (State Department photo)

  Currently, the Islamic State and – to a lesser degree – the Nusra Front are in retreat, chased by the Syrian army with Russian air support and by some Kurdish forces with U.S. backing. But those gains could easily be reversed. There is also the risk of sparking a wider war with Iran and/or Russia.

  But such cavalier waving aside of grave dangers is nothing new for the neocons and liberal hawks. They have consistently dreamt up schemes that may sound good at a think-tank conference or read well in an op-ed article, but fail in the face of ground truth where usually U.S. soldiers are expected to fix the mess.

  We have seen this wishful thinking go awry in Iraq, Afghanistan, Libya, Ukraine and even Syria, where Obama’s acquiescence to provide arms and training for the so-called “unicorns” – the hard-to-detect “moderate” rebels – saw those combatants and their weapons absorbed into Al Qaeda’s or Islamic State’s ranks.

  Yet, the neocons and liberal hawks who control the State Department – and are eagerly looking forward to a Hillary Clinton presidency – will never stop coming up with these crazy notions until a concerted effort is made to assess accountability for all the failures that that they have inflicted on U.S. foreign policy.

  As long as there is no accountability – as long as the U.S. president won’t rein in these warmongers – the madness will continue and only grow more dangerous.

  

  

• Caught On Tape: What Happens In China When You Don't "Exceed Expectations"

  In exceptional America’s new normal, there is no consequence for under-performance. In China, however, as this shocking clip shows, for Rural Commercial Bank employees that do not “exceed themselves” there is one punishment… Public Spanking!

  As China People’s Daily reports, a bank manager spanks employees at a Rural Commercial Bank for not “exceeding themselves” in Changzhi, Northern China…

   

  Shocking: Manager spanks employees at a Rural Commercial Bank for not “exceeding themselves” in Changzhi, N #China.https://t.co/x0wlx7fJOK

  — People’s Daily,China (@PDChina) June 19, 2016

  

  

• Canadian Troops Have Been Issued "Inappropriate Sexual Behaviors" Cards

  It's one thing for Germany to create a leaflet in order to help refugees understand proper sex etiquette, however it seems the Canadian Armed Forces needs a bit of a reminder as well.

  In response to a scathing report on sexual misconduct in the Canadian Forces prepared last year by former Supreme Court Justice Marie Deschamps, which found a "hostile sexualized environment" existed in the military (including everything from swearing and sexual innuendo, to rape), more than 120,000 wallet-size cards have been distributed to military personnel to remind them that, among other things, sexual assault is an inappropriate behavior.

  So, without further ado, courtesy of the National Post, here is the card that will keep everyone from acting inappropriately within the Canadian Forces.

  

  Your inappropriate sexual behaviors card… don't leave home without it!

  

  

• The Mysterious Case Of Buildings Being Scrubbed From China's Street View

  In September of 2014, Jonathan Browning came across something quite stunning. As a freelance photographer living in China, he was searching for locations on Shanghai's Huangpu River using Baidu Total View (the Chinese version of Google Street View). While examining one picture closely, he noticed that part of a cooling chimney next to a suspension bridge had been crudely erased.

  

  As Browning investigated further, more instances were found, so as Wired reports, Browning hired an SUV and asked a friend to drive him around as he took photographs so he could see the buildings for himself. "You don't want to be seen. Two foreigners driving a car is always weird, especially in an industrial area, and then taking photos, it can cause problems" Browning said, adding that he had encountered problems in the past working on stories about pollution.

  Browning's isn't sure why this strange scrubbing of photos takes place; "At first I thought it could just be for weird aesthetic reasons. I guess it's security. But it's a bit random." He wondered about the process behind censorship: "I don't know who does it, if it's an algorithm that gets GPS co-ordinates for each place and then somehow wipes it, or if an actual person goes to each one and cleans it up with Photoshop", "It would be great to meet these people and see what they think about it. If they wanted to do it, why didn't they do it properly?"

  Johan Lagerkvist, a professor of Chinese language and culture at Stockholm University said "It's a bit peculiar. It's like shouting, 'hey, we've got something secret over here!'", although he didn't think it was the government "It doesn't look like the government, although that cannot be ruled out."

  Here is what Browning found as he took pictures of his own and compared them to Baidu.

  

  

  

  

  

  Browning has since moved back to the UK with his wife, and said that China's government is always a mystery: "China's a great country. But it's two different things. You've got the government and what they say and do, and then you've got the people. The government is always the mystery."

  * * *

  Whether it's a government mandated scrubbing of industrial parks, or just a bored employee at Baidu who felt like messing with some pictures we'll never really know. What Browning found however, is certainly fascinating.

  

  

• "The US Is Sleepwalking Towards A Nuclear Confrontation"

  Submitted by Adam Taggart via PeakProsperity.com,

  Following his cautionary analysis on the increasing tension between the US/NATO and Russia, Chris interview sDmitry Orlov this week about the potential likelihood for actual direct conflict to break out between the world powers.

  Orlov was born and raised in Leningrad in the former Soviet Union and immigrated to the United States in the mid 70s, He has spent the past several decades traveling back and forth between the two countries, writing about the collapse of the Soviet Union and the many similarities he sees between that and the secular decline happening in the West. Orlov recently co-authored a stark warning with a number of other experts on Russia, concerned that the US is recklessly provoking a military confrontation it cannot win:

  The United States is sleepwalking towards a nuclear confrontation with Russia. It is astounding in its stupidity this approach. What's going on is an effort by the US military and by NATO officials to extract as much money as possible out of Eastern Europe, to continue financing weapons and generally extract military spending out of Europe.

   

  The neocons have a very stiff ideology of world domination. Basically they took over the US government because it's the largest and most vulnerable democracy in order to realize their insane dreams of world domination.

   

  It hasn’t gone that well. But there's no convincing them. There isn’t a feedback loop from experience to what they do next. One defeat causes them to organize for the next defeat without realizing it. So they don’t realize that what they have done in the Middle East has been completely counter-productive. They don’t realize, for instance, that trying to promote democracy and secular regimes in Islamic countries doesn’t produce democracy or secular regimes – what it produces is jihadism and radicalization and things like ISIS. They can’t process that thought because their ideology says "democracy is the weapon we use". We used it successfully against the United States. Look what wonderful shape the US democracy is. It is bought and sold on the open market and we are going to do that to every country in the world.

   

  There is no stopping them. They are like zombies. Until somebody shoots them in the head they are going to keep moving.

   

  Now in Russia a military drill can be called without warning at any time, and everything better work. Basically the entire military is at a high state of readiness. The US media has missed the fact that what the Russians did in Syria with a really, really small contingent is something that the US couldn’t possibly have done and NATO couldn’t possibly have done. If you look at the number of sorties and the number of strikes per unit time — which is basically ground crews working seamlessly with pilots on rotation, jets landing, getting refueled, getting reloaded taking off continuously — that is not something that the US is capable of at this point. This is a different military. This is not the US military. This is something completely different. And then there hasn't been much reporting about the new weapons that Russia has — the S300, the S400 now they are rolling out the S500 which will be able to hit targets in near space and that will basically be like a giant impenetrable shield over most of Russia including all of the ballistic weapons that the US has. They also haven’t really reported on the super sonic torpedoes and cruise missiles that Russia has developed, or mention the fact that Russian nuclear subs lurking along the American western and eastern seaboards all the time on patrol armed with these caliber supersonic cruise missiles that the US has absolutely nothing to detect them with or to shoot them down — and they can be nuclear tipped.

   

  Russia is ready. What is even more scary is that the Russian people are ready. There are all these groups all over Russia that do stunts like they run marathons off road. The marathons sometimes include some tactical objectives too. So this is like paramilitary training for lots and lots of young people in the country. Some of them don’t even like the government that much but that doesn’t mean that they won’t take orders if orders are given. Even if there isn’t a nuclear confrontation and NATO rolls into Russian territory they will bleed and they will bleed to death just like it has always happened with people who invaded Russia. There isn’t a happy outcome, there isn’t a face saving outcome for the United States or for NATO. There is just basically the choice between death and humiliation.

  Click the play button below to listen to Chris' interview with Dmitry (51m:18s)

  

  

• Sterling Soars Above 1.46 As Stops Triggered, Momentum Algos Ignited

  Just four hours ago, when the first Asian bourses opened for FX trading, we reported that sterling had soared by 75 pips in early trading, rising to its highest level in 10 days.

  Fast forward to the moment Japan opened for trading, when the momentum algos finally kicked in, and in an attempt  to cover up another month of disastrous economic news for Japan (which reported a 11.3% collapse in exports, together with a 13.8% plunge in imports), cable exploded suddenly and violently higher on high volume as a major stop level was triggered at 1.454, which in turn launched FX momentum algos, and promptly took GBPUSD above 1.46 nearly 600 pips higher than the Thursday lows, and less than 200 pips away from Citigroup’s “extreme” print forecast of 1.4799 in the event of a Remain vote.

  

  Of course, Remain hasn’t even voted yet, and instead the entire euphoria is based on one poll supposedly taken in the aftermath of Jo Cox’ murder, which has given Remain a fractional lead.

  What is perhaps just as curious is that using Citi’s GBPUSD “extreme print” range for Exit and Remain outcomes of 1.2777 and 1.4799, respectively, with Cable trading at 1.45570, this means that as of this moment, the FX market is pricing in an 88% probability of a Remain victory.

  Finally, the reason for the massive buying spree and the surge in speculation that the UK will remain in the EU, it is highlighted appropriately in red in the chart below.

  

  

  

• Japanese Finance Minister Reminds Elderly "Hurry Up & Die"

  Everyone knows that Japan, whose population is now declining for the first time in its history…

  

   

  …sold more adult than baby diapers for the first time in 2012, and is "older" than any nation in the world, has a "demographic problem."

  

   

  What few may know, however, is that it also has a secret plan to fix said "demographic problem" – a solution that would make Hitler, Goebbels and Stalin proud.

  In 2013, then Deputy PM Taro Aso, 72 years young at the time, suggested that the elderly in Japan should just "hurry up and die" because "You cannot sleep well when you think it's all paid by the government."

  Well, the now death-defying 75-year-old finance minister took another swing at the elderly… saying last week that he wondered how much longer a 90-year-old person intends to live.

  

   

  The outspoken Aso, who is also deputy prime minister, made the comment at a Liberal Democratic Party rally in Otaru, Hokkaido, on Friday, where he said: “I recently saw someone as old as 90 on television, saying how the person was worried about the future. I wondered ‘How much longer do you intend to keep living?’ “

  His comments, part of a speech urging wealthy elderly citizens to spend more to spur the economy, drew immediate fire from Democratic Party President Katsuya Okada.

  “This is an insult to the nation’s elderly,” Okada told reporters in Yufu, Oita Prefecture, on Saturday. “It’s extremely disheartening that someone who cannot understand the public’s concerns about nursing care is serving as finance minister.”

  During the Otaru rally, Aso pointed to the more than ¥1.7 quadrillion of personal assets held nationwide, saying the money needs to be spent.

  “The biggest problem at the present is how everyone is staying put,” he said. “If you don’t spend the money you have, that money will mean nothing. What’s the point of accumulating more wealth? Just looking at the money you have?”

  So hurry up and die already…

  As we remarked previously, remember that this is the nation that the US is set to imitate at all costs: in everything from the rising debt/GDP, to the interest as a % of revenue, to the demographic distribution of the population, to, well, everything. And, perhaps, one day to the treatment of the elderly. Because unlike the US, Japan does not have an insolvent Social Security Fund and underfunded liabilities that amount to about 10 times its GDP. Ironically, in the perspective of benefits promised to its society, Japan is in a better place than even the US.

  

  

• The Problem With Corporate Debt

  Submitted by Pater Tenebrarum via Acting-Man.com,

  Taking Off Like a Rocket

  There are actually two problems with corporate debt. One is that there is too much of it… the other is that a lot of it appears to be going sour.

   

  

  Harvey had a good time in recent years…well, not so much between mid 2014 and early 2016, but happy days are here again!

   

  As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us:

  “Businesses racked up debt in the January-to-March period at the fastest pace in three quarters, according to data released Thursday.

   

  Business debt grew at a blistering 7.9% annual rate in the first quarter, the Federal Reserve said. Business debt has expanded by around 8% in three of the last five quarters. Companies still have substantial cash on the sidelines, as their stockpiles edged down to $1.89 trillion from $1.9 trillion.”

  (emphasis added)

  While Marketwatch told us how much cash companies are holding, for some reason it didn’t deign to tell us how much corporate debt there actually is, in dollars and cents. It would be nice to be able to compare these figures, wouldn’t it?

  Here is a chart that shows the sum of commercial loans held by US banks and outstanding US non-financial corporate bonds:

   

  

  US non-financial corporate debt… can’t have too much of a good thing! – click to enlarge.

   

  Now, as we all know, this debt as been incurred in order to engage in wise capital investment, so it will be very easy to pay it back with future profits…. well, not really, actually. A lot of it appears to have been wasted in decidedly unprofitable investments. This should be no surprise with administered interest rates at zilch for many years.

  The rest has been judiciously deployed for financial engineering purposes, such as stock buybacks, m&a activity and even dividend payments. This, we hear, has been quite good for the stock options of many a corporate executive. Who would want to begrudge them that?

   

  Charge-Offs and Delinquencies Soar

  We are just guessing here….but we believe there must be a few irate bank managers somewhere. Quite possibly they are irate with themselves, for having lent too much money to too many deadbeats. Here is a chart we have frequently shown before: the annual rate of change of the sum of charge-offs and delinquencies in commercial loans (we thank our late friend BC for the inspiration – may he RIP).

  Believe it or not, this number is growing at a record fast pace as of Q1 2016 – at 122% y/y it is surpassing even the rate of change peak seen near the trough of the “Great Recession” of 2007 – 2009. And this is happening with the Federal Funds rate target at a measly 0.25-0-50% corridor and the broad money supply (TMS-2) still growing at more than 8% y/y!

   

  

  The annual rate of change of the sum of delinquencies and charge-offs of commercial loans (black line, lhs), vs. the FF rate (red line, rhs) reaches a new record high. Good thing that corporate debt is “growing at a blistering pace” as well of late, otherwise this might get noticed – click to enlarge.

   

  Well, who knows, but maybe buying junk bonds here isn’t the best idea ever. Just a hunch, mind.

   

  Conclusion

  Corporate debt remains a major Achilles heel of the echo bubble. Color us slightly astonished that so little attention is seemingly paid to it (with the notable exception of Stanley Druckenmiller, who made mention of it at a recent hedge fund conference). In our experience, the things that attract little attention are often worth watching very closely.

   

  

  All aboard the Junk Express! There is no alternative for the discerning fixed income investor!

   

  Addendum: Fitch Blurb

  We just noticed this small blurb from Fitch in our mail, summarizing the latest developments in junk land:

  U.S. HY Energy Defaults Tally $13 Billion in May; June TTM Default Rate Approaching 5%

   

  The June trailing 12-month (TTM) U.S. high yield bond default rate is closing inon 5%, reaching 4.7% after another $3 billion of defaults thus far this month, The $46.4 billion of recorded defaults this year is just $2 billion less than the total for the entire 2015.

   

  Through mid-June, energy and metals/mining accounted for 84% of defaults ($38.9 billion). The May energy TTM rate stood at 14.6% following $12.7 billion of sector defaults last month while the E&P rate is at 28.6%. The average high yield bid levels are at 92.9, up from 91.1 last month and from 83.7 in February when crude oil prices were at their low point

   (emphasis added)

  

  

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• Top NSA Officials’ Reaction To 9/11: “9/11 Is a Gift To The NSA. We’re Going To Get All Of The Money We Need, And Then Some” … “

  What was the NSA’s reaction to 9/11 … the greatest intelligence failure in history?

  After all, overwhelming evidence shows that 9/11 was foreseeable. Indeed, Al Qaeda crashing planes into the World Trade Center and the Pentagon was itself foreseeable. Even the chair of the 9/11 Commission said that the attack was preventable.

  And a top NSA whistleblower says that the NSA had all of the information it needed prior to 9/11 to stop the attacks. The only reason NSA didn’t share that information with other agencies is because of corruption … in an effort to consolidate power. And see this.

  As a high-level NSA whistleblower notes in a brilliant new documentary coming out in September (the best documentary I've ever seen), the reactions to 9/11 by the number 2 and number 3 official at the NSA were:

  “9/11 is a gift to the NSA. We’re going to get all of the money we need … and then some”

  and

  “We’ll milk this cow for 15 years”

  How can this be true?

  Because mass surveillance has nothing to do with preventing terrorism.

  

• Read This Before The Government Uses The Orlando Shooting To Start Another War

  Submitted by Claire Bernish via TheAntiMedia.org,

  Late Thursday evening, the Wall Street Journal reported, 51 State Department officials signed a statement condemning U.S. policy in Syria in which they repeatedly call for “targeted military strikes against the Damascus government and urging regime change as the only way to defeat Islamic State.”

  “In other words,” as Zero Hedge summarized, “over 50 top ‘diplomats’ are urging to eliminate [Syrian Pres. Bashar al] Assad in order to ‘defeat ISIS’, the same ISIS which top US ‘diplomats’ had unleashed previously in order to … eliminate Assad.”

  This gordian knot created by United States foreign policy — and intensified by that same policy — means not only could war with Syria be on the horizon, but if that happens, the U.S. could be facing a far more serious threat.

  While discontented officials used what’s known as the “Dissent Channel” — “an official forum that allows employees to express opposing views,” State Department spokesman John Kirby explained in the WSJ — Saudi government officials employed more direct means to press their interests with the U.S. in Syria.

  In a meeting with President Obama on Friday, Saudi foreign minister Adel al Jubair asserted, “Saudi Arabia supports a more aggressive military approach in Syria to get Assad to agree to a political solution,” as CBS’ Mark Knoller tweeted.

  al Jubeir says Saudi Arabia advocates release of 28 classified pages on 9/11 attacks so his country can respond to "any allegations."

  — Mark Knoller (@markknoller) June 17, 2016

  Of course, this meeting and the push for increased military force couldn’t be more timely to drum up public support, as a heated national debate has ensued following the deadly attack on an Orlando nightclub purportedly carried out by Omar Mateen — who pledged loyalty to ISIS as he killed 49 people and wounded over 50 others.

  Despite the CIA’s report acknowledging it found no tangible connections between Mateen and the so-called Islamic state — also released on Friday — the narrative concerning his ISIS ties saturated mainstream headlines for days, almost certainly cementing the link in the public’s mind.

  Disgruntled politicians eager to overthrow Assad — thus also carrying out Saudi goals — can now facilely flip the script to assert deposing the Syrian government is necessary in the fight against everyone’s enemy, the Islamic State.

  “Failure to stem Assad’s flagrant abuses will only bolster the ideological appeal of groups such as Daesh [ISIS, etc.], even as they endure tactical setbacks on the battlefield,” the WSJ reported the dissenting cable stated.

  But concerns about bloating ISIS’ following borders on comical, except for the potential waterfall of repercussions from carrying out targeted strikes on the Syrian government, considering the U.S. government, itself, once expressed the desire for the rise of an Islamic State to aid in the overthrow of — you guessed it — Assad.

  According to declassified documents obtained by Judicial Watch last year:

  “If the situation unravels there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).”

  Former Director of National Intelligence and retired U.S. Army Lt. Gen. Michael Flynn, however, spoke to Al Jazeera about this ill-fated, notorious strategical blunder.

  “You’re on record as saying that the handling of Syria by this administration has been a mistake. Many people would argue that the U.S. actually saw the rise of ISIL coming and turned a blind eye, or even encouraged as a counterpoint to Assad,” journalist Mehdi Hasan prefaced his query, adding, “The U.S. saw the ISIL caliphate coming and did nothing.”

   

  Flynn responded, “Yeah, I think that we — where we missed the point. I mean, where we totally blew it, I think, was in the very beginning.”

  Besides backing and blessings from the Saudi government for aggression on the Syrian front, dissent among U.S. officials couldn’t be more imperative in their eyes, because, as the WSJ reported:

  “The internal cable may be an attempt to shape the foreign policy outlook for the next administration, the official familiar with the document said. President Barack Obama has balked at taking military action against Mr. Assad, while the Democratic hopeful Hillary Clinton has promised a more hawkish stance against the Syrian leader. Republican candidate Donald Trump has said he would hit Islamic State hard but has also said he would be prepared to work with Russia and Syria.”

  In fact, as Zero Hedge also noted, an albeit contested report from earlier this week claimed Saudi Deputy Crown Prince Mohammed bin Salman made comments including “a claim that Riyadh has provided 20 percent of the total funding to” Clinton’s campaign.

  Politicians and officials, in other words, are fast aligning a narrative touting the need to wage war with Syria in order to have it carried out by the candidate they assume will next take the White House.

  And despite being a risky move in its own right — not to mention a potentially superficial, if not muddying, solution to an almost solely U.S.-created problem — ramping up military airstrikes in Syria could quite literally spark war with Russia.

  “The Russian Air Force bombed U.S.-trained rebels in southern Syria not once, but twice Thursday, and the second wave of attacks came after the U.S. military called Russia on an emergency hotline to demand that it stop,” an unnamed defense official with knowledge of the situation told Fox News.

  Russia has repeatedly warned against U.S. moves to oust Assad, which President Vladimir Putin’s spokesman, Dmitry Peskov, reiterated following the tense situation Thursday and the report calling for increased military targeting of the Syrian government saying, it “wouldn’t help a successful fight against terrorism and could plunge the region into total chaos.”

  As recently as February, Saudi Arabia proposed sending its own troops to join the fight against ISIS — which Russia wholly condemned. As head of the State Duma committee, Pavel Krasheninnikov, warned, “Syria has to give official consent, to invite, otherwise it will be a war.”

  Now, it appears, that war might be closer than ever.

  Syria doesn’t constitute the only arena of contention between the U.S. and Russia. As Anti-Media reported this week, continued buildup of NATO forces along the old Cold War foe’s borders in the Balkans and Poland — and particularly also in the Black Sea — has provoked Russia sufficiently enough for officials to caution the move might amount to aggression.

  “This is not NATO’s maritime space and it has no relation to the alliance,” Russia’s director of European affairs told Interfax.

  Nonetheless, the U.S. and E.U. have proffered a policy whereby defense of its installations on foreign soil is being carried out under the cloak of the NATO alliance — possibly with the intent of posturing dominance in the region to create a buffer zone for operations in Syria.

  Pipelines through Syria would specifically allow oil and natural gas to flow to the European Union, which currently sources that fuel primarily from Russia. In other words, if Russia wants to defend its profitable relationship with the E.U., it must defend against the U.S.-led, Saudi-supported overthrow of its Syrian ally, Assad.

  Meanwhile, civilians in Syria have been treated like cannon fodder and are fleeing for their lives — but the intensifying geopolitical maneuvers appear more likely than ever to have brought us all to the brink of a third world war.

  

  

• BMG Polls Throw Mud In The Waters of Brexit Trends: Numbers Believable?

  Submitted by Mish Shedlock of MishTalk

  Yesterday I wrote how that even recent phone polls show Leave ahead in the Brexit debate.

  A BMG poll that was supposed to be released on Friday was delayed until today. That poll strongly reverses other recent telephone polls.

  The headline reads “Remain 53.3%, Leave 46.7%” but that representation is quite inaccurate.

  The BMG/Herald Final EU Referendum shows Remain leads 46% to 43% with 11% undecided.

  

  Don’t Knows and PNTS (prefer not to say) totaled 11%. From this set of numbers BMG issued the final result “Remain 53.3%, Leave 46.7%”. Remain lead by 7pts after imputed DK/PNTSs.”

   

  Why impute voting intention for Undecideds and Refusals?

  BMG states “It is our view that using predicted voting intentions to impute voting intentions for undecideds and refusals is preferable and more accurate than existing methods of excluding undecideds and refusals.”

  Headline Numbers Believable?

  In a word, No (at least without normalizing the results to other polls).

  Let’s do that now.

  Recent Phone Poll Analysis

  

  The above tabulation is the best interpretation as to where we stand now.

  The latest poll is actually Survation, but is it biased  to Leave?

  Leave Bias

  

  BMG notes “Our latest poll took 6 days to complete for just over 1,000 responses.  Some respondents are harder to reach than others, and some are more difficult to convince to take part in a survey. If there’s no response our interviewers will call the sample of respondents up to eight times and never at the same time of the day. It is for this reason that the majority of our survey responses are collected on the second or later attempt.”

  Survation was the only pollster not to conduct its survey over multiple days. If one disregards Suration for that reason, the two latest polls are BMG and Ipos MORI.

  BMG has a 3 point lead for Remain whereas IPOS Mori has a 6 point lead for Leave. ICM is the next most recent poll and it has a 5 point lead for Leave.

  No Trend Change

  One poll does not change the trend. It does suggest things are not as clear-cut for Leave as they were.

  Moreover, we still do not know how the death of Jo Cox affects the overall results. To understand, we need to see new polls after the her senseless murder.

  

  

• Artist's Impression Of The Opening Ceremony At The Rio Olympics

  Presented with no comment…

   

  

   

  Source: Townhall.com

  

  

• Huge Scandal Erupts Inside NATO: Alliance Member Germany Slams NATO "Warmongering" Against Russia

  As we reported in just the past week, not only has NATO accelerated its encirclement of Russia, with British soldiers deployed in Estonia, US soldiers operating in Latvia and Canadians in Poland, while combat units are being increased in the Mediterranean… 

  

   

  … but even more troubling, was NATO’s assessment that it may now have grounds to attack Russia when it announced that if a NATO member country becomes the victim of a cyber attack by persons in a non-NATO country such as Russia or China, then NATO’s Article V “collective defense” provision requires each NATO member country to join that NATO member country if it decides to strike back against the attacking country.

  Specifically, NATO is alleging that because Russian hackers had copied the emails on Hillary Clinton’s home computer, this action of someone in Russia taking advantage of her having privatized her U.S. State Department communications to her unsecured home computer and of such a Russian’s then snooping into the U.S. State Department business that was stored on it, might constitute a Russian attack against the United States of America, and would, if the U.S. President declares it to be a Russian invasion of the U.S., trigger NATO’s mutual-defense clause and so require all NATO nations to join with the U.S. government in going to war against Russia, if the U.S. government so decides.

  Also recall that the attack on the DNC servers which leaked the Democrats confidential files on Trump and Hillary donors lists were also blamed on “Russian government hackers”, before it emerged that the act was the result of one solitary non-Russian hacker, but not before the US once again tried to escalate a development which may have culminated with war with Russia! 

  Throughout all of these escalations, the popular narrative spun by the “democratic” media was a simple one: it was Russia that was provoking NATO, not NATO’s aggressive military actions on the border with Russia that were the cause of soaring geopolitical tension. Ignored in the fictional plot line was also Russia’s clear reaction to NATO provocations that it would “respond totally asymmetrically” an outcome that could in its worst oucome lead to millions of European deaths. Still, no matter the risk of escalation, one which just two weeks ago led to assessment that the  “Risk Of Nuclear Dirty Bomb Surges On Poor US-Russia Relations“, NATO had to maintain its provocative attitude .

  All NATO had to do was assure that all alliance members would follow the lead, and nobody would stray from the party line.

  And then everything imploded when none other than the Foreign Minister of NATO member Germany, Frank-Walter Steinmeier, criticized NATO for having a bellicose policy towards Russia, describing it as “warmongering”, the German daily Bild reported. And just like that, the entire ficitional narrative of “innocent” NATO merely reacting to evil Russian provcations has gone up in flames.

  As AFP adds, Steinmeier merely highlighted all those things which rational persons have known about for a long time, namely the deployment of NATO troops near borders with Russia in the military alliance’s Baltic and east European member states. However, since it comes from a NATO member, suddenly one can’t accuse Russian propaganda. In fact, NATO has absolutely no planned response to just this contingency.

  “What we should avoid today is inflaming the situation by warmongering and stomping boots,” Steinmeier told Bild in an interview to be published Sunday.

  
  German Foreign Minister Frank-Walter Steinmeier

  “Anyone who thinks you can increase security in the alliance with symbolic parades of tanks near the eastern borders, is mistaken,” Germany’s top diplomat added.

  Needless to say, Russia bitterly opposes NATO’s expansion into its Soviet-era satellites and last month said it would create three new divisions in its southwest region to meet what it described as a dangerous military build-up along its borders. This is precisely what NATO wants as it would be able to then blame Russian effect to NATO cause as an irrational move by the Kremlin, one to which the kind folks at NATO HQ would have no choice but to respond in their caring defense of all those innocent people, when in reality it is NATO that is desperate to provoke and launch the conflict with Russia.

  And now even its own members admit it!

  In its latest ridiculous escalation, blamed on Russia no less, NATO announced on Monday that it would deploy four battalions to Estonia, Latvia, Lithuania and Poland to counter a more assertive Russia, ahead of a landmark summit in Warsaw next month. Well, as Steinmeier made it very clear, NATO’s deployment to provoke Russia was precisely that. As a result a Russian “assymmetric” response is assured, and this time it may even spill over into the combat arena, something which would bring infinite delight to Washington’s military-industrial complex neocon puppets.

  In an interview with Bild on Thursday, NATO chief Jens Stoltenberg said Russia is seeking to create “a zone of influence through military means”. “We are observing massive militarisation at NATO borders — in the Arctic, in the Baltic, from the Black Sea to the Mediterranean Sea,” he told the newspaper.

  How do we know Steinmeier hit it nail on the head? The neocon Council of Foreign Relations trotted out its “fellow” who promptly took to character assassinations and demanding Steinmeier’s resignation, instead of asking if perhaps a NATO-member country accusing NATO of being a warmongering provocateur, is not the real reason why Europe is back deep in the cold war, with an escalating nuclear arms race to go alongside it, courtesy of the US military industrial complex whose profits are entirely dependent on war, conflict and the death of civilians around the globe.

  If Steinmeier calls it “warmongering” to push back agst Putin, he should step down — that’s not German policy. https://t.co/4V2iLCYvtx

  — Stephen Sestanovich (@SSestanovich) June 18, 2016

  As for the unprecedented reality in which NATO’s biggest and most important European member is suddenly and quite vocally against NATO and as a result may be pivoting toward Russian, we for one can’t wait to see just how this shocking geopolitical debacle for western neocons and war hawks concludes.

  

  

• Noam Chomsky On The Breakdown Of American Society & A World In Transition

  Submitted by C.J.Polychroniou via Truth-Out.org,

  The US is facing uncertain times. While it remains the only global superpower, it is no longer able to influence events and outcomes to its liking, at least not for the most part. Frustration and worry about the risk of upcoming disasters seem to far outweigh US voters' hopes for a more rational and just world order. Meanwhile, Noam Chomsky argues, the rise and popularity of Donald Trump is occurring due to the fact that US society is breaking down.

  In this exclusive interview with Truthout, Noam Chomsky addresses contemporary developments in both the United States and around the world and challenges prevailing views about class warfare, neoliberalism as the outcome of economic laws, the role of the US as a global power, the status of emerging economies and the power of the Israel Lobby.

  CJ Polychroniou: Noam, you have said that the rise of Donald Trump is largely due to the breakdown of American society. What exactly do you mean by this?

  Noam Chomsky: The state-corporate programs of the past 35 or so years have had devastating effects on the majority of the population, with stagnation, decline and sharply enhanced inequality being the most direct outcomes. This has created fear and has left people feeling isolated, helpless, victims of powerful forces they can neither understand or influence. The breakdown is not caused by economic laws. They are policies, a kind of class war initiated by the rich and powerful against the working population and the poor. This is what defines the neoliberalism period, not only in the US but in Europe and elsewhere. Trump is appealing to those who sense and experience the breakdown of American society — to deep feelings of anger, fear, frustration, hopelessness, probably among sectors of the population that are seeing an increase in mortality, something unheard of apart from war.

  Class warfare remains as vicious and one-sided as ever. Neoliberal governance over the last thirty years, regardless if there was a Republican or a Democratic administration in place, has intensified immensely the processes of exploitation and induced ever-larger gaps between haves and have-nots in American society. Moreover, I don't see neoliberal class politics being on retreat in spite of the opportunities that opened up because of the last financial crisis and by having a centrist Democrat in the White House.

  The business classes, which largely run the country, are highly class conscious. It is not a distortion to describe them as vulgar Marxists, with values and commitments reversed. It was not until 30 years ago that the head of the most powerful union recognized and criticized the "one-sided class war" that is relentlessly waged by the business world. It has succeeded in achieving the results you describe. However, neoliberal policies are in shambles. They have come to harm the most powerful and privileged (who only partially accepted them for themselves in the first place), so they cannot be sustained.

  Neoliberal policies are in shambles. They have come to harm the most powerful and privileged, so they cannot be sustained.

  It is rather striking to observe that the policies that the rich and powerful adopt for themselves are the precise opposite of those they dictate to the weak and poor. Thus, when Indonesia has a deep financial crisis, the instructions from the US Treasury Department (via the IMF) are to pay off the debt (to the West), to raise interest rates and thus slow the economy, to privatize (so that Western corporations can buy up their assets), and the rest of the neoliberal dogma. For ourselves, the policies are to forget about debt, to reduce interest rates to zero, to nationalize (but not to use the word) and to pour public funds into the pockets of the financial institutions, and so on. It is also striking that the dramatic contrast passes unnoticed, along with the fact that this conforms to the record of the economic history of the past several centuries, a primary reason for the separation of the first and third worlds.

  Class politics is so far only marginally under attack. The Obama administration has avoided even minimal steps to end and reverse the attack on unions. Obama has even indirectly indicated his support for this attack, in interesting ways. It is worth recalling that his first trip to show his solidarity with working people (called "the middle class," in US rhetoric) was to the Caterpillar plant in Illinois. He went there in defiance of pleas by church and human rights organizations because of Caterpillar's grotesque role in the Israeli occupied territories, where it is a prime instrument in devastating the land and villages of "the wrong people." But it seems not even to have been noticed that, adopting Reagan's anti-labor policies, Caterpillar became the first industrial corporation in generations to break a powerful union by employing strike-breakers, in radical violation of international labor conventions. That left the US alone in the industrial world, along with apartheid South Africa, in tolerating such means of undermining workers' rights and democracy — and now I presume the US is alone. It is hard to believe that the choice was accidental.

  There is a widespread belief at least among some well-known political strategists that issues do not define American elections — even if the rhetoric is that candidates need to understand public opinion in order to woo voters — and we do know of course that media provide a wealth of false information on critical issues (take the mass media's role before and during the launching of the Iraq war) or fail to provide any information at all (on labor issues, for example). Yet, there is strong evidence indicating that the American public cares about the great social, economic and foreign policy issues facing the country. For example, according to a research study released some years ago by the University of Minnesota, Americans ranked health care among the most important problems facing the country. We also know that the overwhelming majority of Americans are in support of unions. Or that they judged the war against terror to be a total failure. In the light of all of this, what's the best way to understand the relation between media, politics and the public in contemporary American society?

  It is well-established that electoral campaigns are designed so as to marginalize issues and focus on personalities, rhetorical style, body language, etc. And there are good reasons. Party managers read polls, and are well aware that on a host of major issues, both parties are well to the right of the population — not surprisingly; they are, after all, business parties. Polls show that a large majority of voters object, but those are the only choices offered to them in the business-managed electoral system, in which the most heavily funded candidate almost always wins.

  Similarly, consumers might prefer decent mass transportation to a choice between two automobiles, but that option is not provided by advertisers — indeed, by markets. Ads on TV do not provide information about products; rather, they provide illusion and imagery. The same Public Relations firms that seek to undermine markets by ensuring that uninformed consumers will make irrational choices (contrary to abstract economic theories) seek to undermine democracy in the same way. And the managers are well aware of all of this. Leading figures in the industry have exulted in the business press that they have been marketing candidates like commodities ever since Reagan, and this is their greatest success yet, which they predict will provide a model for corporate executives and the marketing industry in the future.

  The Obama administration has avoided even minimal steps to end and reverse the attack on unions.

  You mentioned the Minnesota poll on health care. It is typical. For decades, polls have shown that health care is at or near the top of public concerns — not surprisingly, given the disastrous failure of the health care system, with per capita costs twice as high as comparable societies and some of the worst outcomes. Polls also consistently show that large majorities want a nationalized system, called "single payer," rather like the existing Medicare system for the elderly, which is far more efficient than the privatized systems or the one introduced by Obama. When any of this is mentioned, which is rare, it is called "politically impossible" or "lacking political support" — meaning that the insurance and pharmaceutical industries, and others who benefit from the current system, object. We gained an interesting insight into the workings of American democracy from the fact that in 2008, unlike 2004, the Democratic candidates — first Edwards, then Clinton and Obama — came forward with proposals that at least begun to approach what the public has wanted for decades. Why? Not because of a shift in public attitudes, which have remained steady. Rather, [the] manufacturing industry has been suffering from the costly and inefficient privatized health care system, and the enormous privileges granted, by law, to the pharmaceutical industries. When a large sector of concentrated capital favors some program, it becomes "politically possible" and has "political support." Just as revealing as the facts themselves is that they are not noticed.

  Much the same is true on many other issues, domestic and international.

  The US economy is facing myriad problems, although profits for the rich and corporations returned long ago to the levels they were prior to the eruption of the 2008 financial crisis. But the one single problem which most of academic and financial analysts seem to focus on as being of most critical nature is that of government debt. According to mainstream analysts, US debt is already out of control, which is why they have been arguing consistently against big economic stimulus packages to boost growth, contending that such measures will only push the US deeper into debt. What is the likely impact that a ballooning debt will have on the American economy and on international investor's confidence in the event of a new financial crisis?

  No one really knows. Debt has been far higher in the past, particularly after World War II. But that was overcome thanks to the remarkable economic growth under the wartime semi-command economy. So we know that if government stimulus spurs sustained economic growth, the debt can be controlled. And there are other devices, such as inflation. But the rest is very much guesswork. The main funders — primarily China, Japan, oil producers — might decide to shift their funds elsewhere for higher profits. But there are few signs of such developments, and they are not too likely. The funders have a stake in sustaining the US considerable economy for their own exports. There is no way to make confident predictions, but it seems clear that the entire world is in a tenuous situation, to say the least.

  You seem to believe, in contrast to so many others, that the US remains a global economic, political and of course military superpower even after the latest crisis — and I do have the same impression, as well, as the rest of the world economies are not only not in any shape to challenge America's hegemony but are looking toward the US as a savior of the global economy. What do you see as the competitive advantages that US capitalism has over the EU economy and the newly emerging economies in Asia?

  The 2007-08 financial crisis in large measure originated in the US, but its major competitors — Europe and Japan — ended up suffering more severely, and the US remained the choice location for investors who are looking for security in a time of crisis. The advantages of the US are substantial. It has extensive internal resources. It is unified, an important fact. Until the civil war in the 1860s, the phrase "United States" was plural (as it still is in European languages). But since then the phrase has been singular, in standard English. Policies designed in Washington by state power and concentrated capital apply to the whole country. That is far harder in Europe. A couple of years after the eruption of the latest global financial crisis, the European Commission task force issued a report saying that "Europe needs new bodies to monitor systemic risk and co-ordinate oversight of financial institutions across the region's patchwork of supervision," though the task force, headed then by a former French central banker, "stopped well short of suggesting a single European watchdog" — which the US can have any time it wants. For Europe, it would be "an almost impossible mission," the task force leader said. [Several] analysts, including the Financial Times, have described such a goal as politically impossible, "a step too far for many member states reluctant to cede authority in this area." There are many other advantages to unity. Some of the harmful effects of European inability to coordinate reactions to the crisis have been widely discussed by European economists.

  When a large sector of concentrated capital favors some program, it becomes "politically possible" and has "political support."

  The historical roots of these differences between Europe and the US are familiar. Centuries of … conflict imposed a nation-state system in Europe, and the experience of World War II convinced Europeans that they must abandon their traditional sport of slaughtering one another, because the next try would be the last. So we have what political scientists like to call "a democratic peace," though it is far from clear that democracy has much to do with it. In contrast, the US is a settler-colonial state, which [murdered] the indigenous population and consigned the remnants to "reservations," while conquering half of Mexico, then expanding beyond. Far more than in Europe, the rich internal diversity was destroyed. The civil war cemented central authority, and uniformity in other domains as well: national language, cultural patterns, huge state-corporate social engineering projects such as the suburbanization of the society, massive central subsidy of advanced industry by research and development, procurement and other devices, and much else.

  The new emerging economies in Asia have incredible internal problems, unknown in the West. We know more about India than China, because it is a more open society. There are reasons why it ranks 130th in the Human Development Index (about where it was before the partial neoliberal reforms); China ranks 90th, and the rank could be worse if more were known about it. That only scratches the surface. In the 18th century, China and India were the commercial and industrial centers of the world, with sophisticated market systems, advanced health levels by comparative standards, and so on. But imperial conquest and economic policies (state intervention for the rich, free markets rammed down the throats of the poor) left them in miserable conditions. It is notable that the one country of the [global] South that developed was Japan, the one country that was not colonized. The correlation is not accidental.

  Is the US still dictating IMF policies?

  It's opaque, but my understanding is that IMF's economists are supposed to be, maybe are, somewhat independent of the political people. In the case of Greece, and austerity generally, the economists have come out with some strongly critical papers in the Brussels programs, but the political people seem to be ignoring them.

  On the foreign policy front, the "war on terror" seems to be a never ending enterprise and, as with the Hydra monster, a new head pops when one is cut off. Can massive interventions of force wipe out terrorist organizations like ISIS?

  Upon taking office, Obama expanded intervention forces and stepped up the wars in Afghanistan and Pakistan, just as he had promised he would do. There were peaceful options, some recommended right in the mainstream: in Foreign Affairs, for example. But these did not fall under consideration. Afghan president Hamid Karzai's first message to Obama, which went unanswered, was a request to stop bombing civilians. Karzai also informed a UN delegation that he wanted a timetable for withdrawal of foreign (meaning US) troops. Immediately he fell out of favor in Washington, and accordingly shifted from a media favorite to "unreliable," "corrupt," etc. — which was no more true than when he was feted as our "our man" in Kabul. Obama sent many more troops and stepped up bombing on both sides of the Afghan-Pakistan border — the Durand line, an artificial border established by the British, which cuts the Pashtun areas in two and which the people have never accepted. Afghanistan in the past often pressed for obliterating it.

  The entire world is in a tenuous situation, to say the least.

  That is the central component of the "war on terror." It was certain to stimulate terror, just as the invasion of Iraq did, and as resort to force does quite generally. Force can succeed. The existence of the US is one illustration. The Russians in Chechnya is another. But it has to be overwhelming, and there are probably too many tentacles to wipe out the terrorist monster that was largely created by Reagan and his associates, since nurtured by others. ISIS is the latest one, and a far more brutal organization than al-Qaeda. It is also different in the sense that it has territorial claims. It can be wiped out through massive employment of troops on the ground, but that won't end the emergence of similar-minded organizations. Violence begets violence.

  US relations with China have gone through different phases over the past few decades, and it is hard to get a handle on where things stand today. Do you anticipate future US-Sino relations to improve or deteriorate?

  The US has a love-hate relation with China. China's abysmal wages, working conditions, and lack of environmental constraints are a great boon to US and other Western manufacturers who transfer operations there, and to the huge retail industry, which can obtain cheap goods. And the US now relies on China, Japan and others to sustain its own economy. But China poses problems as well. It does not intimidate easily… When the US shakes its fist at Europe and tells Europeans to stop doing business with Iran, they mostly comply. China doesn't pay much attention. That's frightening. There is a long history of conjuring up imaginary Chinese threats. It continues.

  Do you see China being in a position any time soon to pose a threat to US global interests?

  Among the great powers, China has been the most reserved in use of force, even military preparations. So much so that leading US strategic analysts (John Steinbrunner and Nancy Gallagher, writing in the journal of the ultra-respectable American Academy of Arts and Sciences) called on China some years ago to lead a coalition of peace-loving nations to confront the US aggressive militarism that they think is leading to "ultimate doom." There is little indication of any significant change in that respect. But China does not follow orders, and is taking steps to gain access to energy and other resources around the world. That constitutes a threat.

  Indian-Pakistani relations pose clearly a major challenge in US foreign policy. Is this a situation the US can actually have under control?

  To a limited extent. And the situation is highly volatile. There is constant ongoing violence in Kashmir — state terror by India, Pakistan-based terrorists. And much more, as the recent Mumbai bombings revealed. There are also possible ways to reduce tensions. One is a planned pipeline to India through Pakistan from Iran, the natural source of energy for India. Presumably, Washington's decision to undermine the Nonproliferation treaty by granting India access to nuclear technology was in part motivated by the hope of undercutting this option, and bringing India to join in Washington's campaign against Iran. It also may be a related issue in Afghanistan, where there has long been discussion of a pipeline (TAPI) from Turkmenistan through Afghanistan to Pakistan and then India. It is probably not a very live issue, but quite possibly is in the background. The "great game" of the 19th century is alive and well.

  In many circles, there is a widespread impression that the Israel lobby calls the shots in US foreign policy in the Middle East. Is the power of the Israel lobby so strong that it can have sway over a superpower?

  My friend Gilbert Achcar, a noted specialist on the Middle East and international affairs generally, describes that idea as "phantasmagoric." Rightly. It is not the lobby that intimidates US high tech industry to expand its investments in Israel, or that twists the arm of the US government so that it will pre-position supplies there for later US military operations and intensify close military and intelligence relations.

  When the lobby's goals conform to perceived US strategic and economic interests, it generally gets its way: crushing of Palestinians, for example, a matter of little concern to US state-corporate power. When goals diverge, as often happens, the Lobby quickly disappears, knowing better than to confront authentic power.

  I agree totally with your analysis, but I think you would also agree that the Israel lobby is influential enough, and beyond whatever economic and political leverage it carries, that criticisms of Israel still cause hysterical reactions in the US — and you certainly have been a target of right-wing Zionists for many years. To what do we attribute this intangible influence on the part of the Israel lobby over American public opinion?

  That is all true, though much less so than in recent years. It is not really power over public opinion. In numbers, by far the largest support for Israeli actions is independent of the lobby: Christian religious fundamentalist. British and American Zionism preceded the Zionist movement, based on providentialist interpretations of Biblical prophecies. The population at large supports the two-state settlement, doubtless unaware that the US has been unilaterally blocking it. Among educated sectors, including Jewish intellectuals, there was little interest in Israel before its great military victory in 1967, which really established the US-Israeli alliance. That led to a major love affair with Israel on the part of the educated classes. Israel's military prowess and the US-Israel alliance provided an irresistible temptation to combine support for Washington with worship of power and humanitarian pretexts… But to put it in perspective, reactions to criticism of US crimes are at least as severe, often more so. If I count up the death threats I have received over the years, or the diatribes in journals of opinion, Israel is far from the leading factor. The phenomenon is by no means restricted to the US. Despite much self-delusion, Western Europe is not very different — though, of course, it is more open to criticism of US actions. The crimes of others usually tend to be welcome, offering opportunities to posture about one's profound moral commitments.

  Under Erdogan, Turkey has been in a process of unfolding a new-Ottoman strategy towards the Middle East and Central Asia. Is the unfolding of this grand strategy taking place with the collaboration or the opposition of the United States?

  Turkey of course has been a very significant US ally, so much so that under Clinton it became the leading recipient of US arms (after Israel and Egypt, in a separate category). Clinton poured arms into Turkey to help it carry out a vast campaign of murder, destruction, and terror against its Kurdish minority. Turkey has also been a major ally of Israel since 1958, part of a general alliance of non-Arab states, under the US aegis, with the task of ensuring control over the world's major energy sources by protecting the ruling dictators against what is called "radical nationalism" — a euphemism for the populations. US-Turkish relations have sometimes been strained. That was particularly true in the build-up to the US invasion of Iraq, when the Turkish government, bowing to the will of 95% of the population, refused to join. That caused fury in the US. Paul Wolfowitz was dispatched to order the disobedient government to mend its evil ways, to apologize to the US and to recognize that its duty is to help the US. These well-publicized events in no way undermined Wolfowitz's reputation in the liberal media as the "idealist-in-chief" of the Bush administration, utterly dedicated to promoting democracy. Relations are somewhat tense today too, though the alliance is in place. Turkey has quite natural potential relations with Iran and Central Asia and might be inclined to pursue them, perhaps raising tensions with Washington again. But it does not look too likely right now.

  On the western front, are plans for the eastward expansion of NATO, which go back to the era of Bill Clinton, still in place?

  One of Clinton's major crimes in my opinion — and there were many — was to expand NATO to the East, in violation of a firm pledge to Gorbachev by his predecessors after Gorbachev made the astonishing concession to allow a united German to join a hostile military alliance. These very serious provocations were carried forward by Bush, along with a posture of aggressive militarism which, as predicted, elicited strong reactions from Russia. But American redlines are already placed on Russia's borders.

  What are your views about the EU? It is still largely a trailblazer for neoliberalism and hardly a bulwark for US aggression. But do you see any signs that it can emerge at some point as a constructive, influential actor on the world stage?

  It could. That is a decision for Europeans to make. Some have favored taking an independent stance, notably De Gaulle. But by and large European elites have preferred passivity, following pretty much in Washington's footsteps.

  *  *  *

  

  

• Russia Warns US Against Striking Assad

  As we reported yesterday, over 50 US State Department officials are now calling for "targeted military strikes" directly against Assad's Syrian government as a means to defeat ISIS.

  The irony of course is that we've now come full circle. The US created ISIS in hopes of toppling Assad, and now that the ISIS strategy is losing momentum (due in large part to Russia' relentless pounding of the group), the US now wants to just fast forward to the end game, which is to take out Assad directly (using ISIS as a reason of course).

  What has also emerged is that Saudi Arabia has now grown impatient with the fact that Assad is still in power, and have started to press the US to provide more sophisticated weapons to the rebels. Saudi foreign minister Adel al Jubeir who is visiting the US just confirmed as much yesterday when he said that "Saudi Arabia supports a more aggressive military approach in Syria to get Assad to agree to a political solution."

  The Foreign Minister says Saudi Arabia supports a more aggressive military approach in Syria to get Assad to agree to a political solution.

  — Mark Knoller (@markknoller) June 17, 2016

  In response to calls to take this approach, the Obama administration has expressed concern that attacking the Assad regime could lead to a direct conflict with Russia and Iran, which of course is a rational way to view the situation because Russia has been steadfast in its support of Assad's government, or at least not allowing the US to take it out.

  Speaking to Russia's top economic forum, Putin proposed that the Syrian opposition could be offered seats in the Syrian cabinet as part of efforts to encourage dialogue that could lead to new elections being held in Syria. Putin said that creating a new government that will have the trust of most of Syria's population is key to ending the conflict, and that goal can be achieved through drafting a new constitution and holding new elections, something Assad pledged to Putin would happen.

  In a sound bite that Putin absolutely must have known would get back to the Obama administration, Putin reportedly said "There is nothing more democratic than elections" – clearly a jab at the US and its hypocrisy of wanting to simply take out Assad militarily as opposed to working with Russia to force Syria holding new elections.

  On Friday, Putin's spokesman Dmitry Peskov strongly warned Washington against striking Assad's forces, saying it would "fuel turmoil across the entire region", and that any attempt to topple Assad's government "wouldn't help a successful fight against terrorism and could plunge the region into total chaos."

  Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said that the calls for a military action against Assad "can't but worry any reasonable person", adding "who would bear responsibility for that? Or shall we see the same Hollywood-style smile as it happened already in Afghanistan, Iraq and Libya?"

  * * *

  Of course Konashenkov is right, the US has made a complete mess out of the Middle East and it appears as though Russia is not going to allow yet another debacle to take place in Syria. The question is this, will the US fold and pander to its Saudi "friends" who are pushing to have Assad out, or will the fact that toppling Assad will lead to a direct conflict with Russia be enough to have the US stand down. If all of the recent activity taking place on Russia's borders is any indication, we can get a good sense as to which way the US is leaning.

  

  

  

• Making 'The Unthinkable' The New Reality – Hogs To Slaughter

  Submitted by HardScrabbleFarmer via The Burning Platform blog,

  America is a third world country, it’s just not ready to accept that reality yet. Politically it is thoroughly corrupted, economically it is too deeply indebted to ever extricate itself, morally it is without direction, rudderless in dangerous seas and heading for the rocks.

  The divides between the wealthy and the impoverished too wide to ever cross, the races and generations set against one another deliberately, provoked hourly by the very people who should be doing everything possible to unite them, armed to the teeth, seething with rage, neutered or enraged by pharmaceuticals, depending upon the age and gender, divided by sex, generations of fatherless children at every level raising up children who have no connection to anything that isn’t coming from a glowing screen- and all the while deliberately it seems, provoking hostility with every nation, every race, every people and persuasion in order to stir up a seething cauldron of slights and revenge for the coming reckoning.

  Those once magnificent buildings will burn and the swarms that dwelt there will fan out, like flames across the face of the old nation looking to settle the score, imagined or real.

  Last night I had a dream. One of the last things I did before I called it quits just after dark was to feed the hogs. I stood on the tailgate of the truck and emptied bags of watermelon rinds and soft mangoes, wilted heads of lettuce, bunches of carrots, apples, sweet yellow hothouse peppers imported from Holland, strawberries by the gallon, string beans, potatoes, cabbages and onions. The sows stood up on the fence rails and lifted their snouts to me to pet, their way of thanking me for the meal although they’d waited all day long for it.

  When I finished I broke down the cardboard boxes and rolled up the empty plastic bags and then filled their troughs with fifty gallons of fresh, cool water. The Moon wasn’t quite full and Mars just beneath it, glowing like a jewel, and in the distance the large thunderheads were tipped pink from the last rays of the distant Sun, barn swallows streaking across the top of the orchard feasting on the mosquitoes that came to life in the cooling air.

  I thought about these hogs, always hungry, always anticipating the next feeding and how easy they have become to manage since I discovered that simple secret. They will sit patiently waiting for me to bring them food rather than try and escape and find something to eat on their own. They are spoiled by their good fortune, fattening themselves on the food I bring them until they produce the things we require of them- piglets to sell and sausage and bacon to eat. I cannot imagine that the people who have managed to gain control of the levers of power in this world have not only learned from these kinds of lessons, but perfected the intricacies of human manipulation; psychological, pharmaceutical, social and spiritual.

  I dreamed that the reasons that government checks and benefits were doled out monthly was no different than the reason I feed the pigs only once a day in large quantities. They grow dependent upon it, it is just large enough to make them feel for the moment like they have something substantial and to be excited about it and so remain close to the source of that disbursement, but it is not enough for them to ever be able to put away for the future so they might have the chance to escape that perpetual bondage, and by the end of their waiting there is only the hunger for the next allotment. No one would choose to live that way voluntarily and so they are led there, like the farmer with his bucket of slops, tapping the edge with a stick as he walks back to the enclosure, every head tilted in his direction, every eye glued to the pail.

  The people who run the show know what they’re doing in such minute detail that the exact dollar figure of public assistance must have been studied to the last cent. This much and no more. How they slowly altered the values one at a time to make the unthinkable the new reality. Who could possibly father children and then abandon them? Who could accept from another the sustenance of life while never trying to participate in your own? At each step they added another rail, a new line of wire to the enclosure that is the life of the human livestock. And how many so readily accepted their own confinement and subjugation.

  

  

• So You Didn't Get Rich…

  Submitted by Mark Ford via InternationalMan.com,

  Waa! It’s not fair!

  We baby boomers were told that if we worked hard and saved, we could spend the last quarter of our lives living comfortably and free from financial worries. Our parents told us. Our employers told us. Even the government told us.

  How often, during our years of toil, did we daydream about those future days? The leisurely breakfasts, the afternoons golfing, dinners with friends, weekends with our grandchildren…

  (Note to younger people: Don’t stop reading. What I’m saying here applies to you too—in spades!)

  But now that we are reaching retirement age, the promise is beginning to feel like a fraud.

  For many of us, a financially secure, worry-free retirement no longer seems possible.

  Not to worry. I’m going to give you my best advice on how to create a very attractive retirement from what looks to be a seemingly impossible financial situation.

  After scaring you with some numbers in this essay, I’m going to spend the next installment telling you how to fix anything you may have been doing wrong. I’ll also give you some realistic suggestions for acquiring wealth—no matter how much you have to start with—while you are still willing and able to work for it.

  Finally, I’ll give you an idea for how you can retire very comfortably—and very soon—on a modest income. And by “modest,” I mean less than $40,000 per year.

  What Happened to the Dream?

  What happened, fellow boomers? How did we fail? Did we work too few hours? Too few years? Did we spend more than we should have? Or fail to save… or save too little? Did we invest poorly?

  What happened was a combination of “surprises.” Some predictable. Some not so much…

  1. We worked hard, but we didn’t get meaningful wage increases.

  As a group, we boomers worked more than we were required to throughout our careers. Not only did we work more than 40 hours per week, our productivity nearly doubled between 1979 and 2013 (according to the Bureau of Labor Statistics).

  And we are still working hard. According to the Current Population Survey, the full-time working boomer aged 55-plus is still averaging 42.4 hours per week. (The most recent data is from 2013.)

  The problem was that, over the long haul, our wages did not keep pace with inflation.

  From 1948–1979, wages adjusted for inflation rose 93.4%, according to the Economic Policy Institute. The wage rate increases were beating the slow rise of inflation—big time.

  Now look at what happened in the late-1970s…

  

  In 1979 (some sources say as early as 1972), wages went flat. For the next 35 years, as we boomers passed through our late teens, 20s, 30s, and 40s, real wages increased only about 8%.

  And since 2009, the tide has reversed. Real hourly wages are once again on the decline.

  So while our bills continued to rise, our take-home pay, in real dollars, didn’t—and still doesn’t—keep pace with inflation.

  2. We saved less and less.

  According to various sources, the average boomer has had an average annual disposable income of $24,000. The problem is: We squandered a lot of it.

  Take a look at the following chart. It shows the personal saving rate of Americans since 1960. As you can see, it fell from a high in the mid-1970s to 0.8% in the early 2000s.

  [The personal saving rate is the percentage of disposable income set aside in savings. Disposable income is the amount of money available after taxes have been deducted.]

  

  Americans Have Been Saving Less and Less Since the Mid-1970s

  Since boomers made up 33% of the U.S. population during those years, it’s safe to say the general downward trend applies to us too. From our late teens through our 40s and 50s, we saved less and less.

  3. We took on a lot of debt.

  Here’s another chart, this one showing the household debt service ratio (DSR) since the 1980s.

  [The DSR is an estimate of the ratio of debt payments to disposable personal income.]

  

  From 1993–2007, the Debt Service Ratio Increased 27%

  Notice how in 1980 household financial obligations represented around 11% of disposable income. That increased for over two decades.

  So we saved less and, since our wages hardly moved, we were forced to take on more debt to support our bad spending habits. (I’ll talk more about this in a moment.)

  For the little we did save, we put a bit of it in the stock market. Which leads us to yet another slew of “predictable surprises”…

  4. We were poor investors.

  Based on analysis done by Pew Research and others, the average retirement-age American today has managed to accumulate a net worth of about $230,000. About $150,000 of that is socked away in some type of retirement account(s).

  Now, the average retirement-age American would have done quite well in his retirement account(s)… had he not let himself get in the way.

  You see, the S&P 500 has returned an average of around 11% annually since the mid-1980s.

  However, the average U.S. investor in U.S. stock funds earned only 3.7% annually over the past 30 years. (I’m using the mid-1980s because that’s when the first of the boomers hit their mid-30s. And the mid-30s are when big income increases start to happen and people are finally able to put a little aside for savings… and investing.)

  So, in theory, if a 35-year-old boomer would have parked $15,000 in the S&P 500 in 1984—and didn’t touch it—the stock market would have grown that to over $350,000.

  Instead, at the 3.7% return the average investor managed, that $15,000 investment in the stock market grew to just shy of $45,000.

  How is it even possible that so many of us managed to underperform the stock market by so much for three decades?

  We weren’t the smartest investors.

  Most investors—not just boomers—chase returns. They jump on a stock after it’s already made a big run. And they cling to a sinking one far too long, hoping for a turnaround.

  5. We invested through some nasty market crashes.

  The crash of 1987 (when we boomers were 23–41 years old) was the first big shakeout.

  On Black Monday, the Dow lost 22.6%, or $500 billion. This was the largest single-day market crash in history.

  Then there was the bursting of the tech (“dot-com”) bubble in March 2000. From top to bottom, the Nasdaq composite lost 78% of its value from 2000–2002. Tech fund investors were hit even harder.

  I remember how confident some of my peers were about the tech market right up until the crash. Though they never told me the numbers, I know that a few of them were devastated. If you had jumped on the bandwagon and invested in tech funds at the Nasdaq’s high in 2000, you would have likely lost three-quarters of your investment just two short years later.

  And despite having lived through these experiences…

  6. We still didn’t learn our lesson.

  Getting back to our love affair with debt—we made yet another critical mistake. Not only did we save less and take on more debt, we attempted to live well beyond our means.

  When housing and land prices became too inflated in the early 2000s, we got greedy and ate up the crummy subprime loans the banks offered us. We saw low interest rates and overleveraged ourselves to buy a bigger house, a faster car, a more luxurious life. (“We doubled productivity! We earned it!”)

  The real estate bubble burst in 2007–2008 and real estate prices plummeted. That triggered yet another stock market crash, which lost us many more millions.

  According to the Mortgage Bankers Association, as many as 3 million homes fell into foreclosure during the Great Recession. In some popular retirement spots, like Nevada, as much as 57% of homeowners still owe more on their mortgages than their homes are worth.

  What Retirement Looks Like for the Average Baby Boomer Today

  So here we are now.

  Given all of the above, things are looking bleak. And it only gets worse.

  As I mentioned earlier, the average retirement-age American today has a net worth of about $230,000. Around $150,000 of that is in one or more retirement accounts.

  Still, will these numbers support a comfortable retirement?

  Let’s do the math…

  Assuming a 3.7% average annual return (the average return of most stock investors), a $150,000 retirement fund would return $5,550 per year, or $462.50 per month.

  Now, keep in mind that this includes capital returns. Not just cash returns. So even if you wanted to spend this entire amount, it wouldn’t be possible (without selling some of your investments and facing capital gains taxes).

  But for simplicity’s sake, let’s just use the $5,550 number.

  Five thousand per year won’t buy you much in today’s world. And it will buy less each year as inflation erodes the value of the dollar. Luckily for most people, retirement accounts are only one source of retirement income. Social Security is another source.

  The average Social Security income for retired workers in 2013 was $1,306 per month, or $15,672 per year.

  So for the average person approaching retirement age, their retirement accounts and Social Security gets them to $1,768.50 per month, or $21,222 per year.

  For one in three retirees, a third source of income is pension payouts. The median private pension benefit for individuals aged 65 and older in 2013 was $8,612. The median government (state or local) pension benefit was $20,276.

  Put all that information together and retirees can expect an average monthly income of $1,700–$3,400 per month.

  What sort of retirement lifestyles would this range of income afford?

  Consider the following:

  • The current median rent in the U.S. is $1,471. The average three-bedroom, two-bath apartment will cost you $1,300-1,700 per month.

  • The average monthly electric bill for said house will cost around $107 per month.

  • The average cable/internet bill is around $64 per month.

  • The average annual golf club dues are around $520 per month.

  • The average restaurant meal costs around $26 for two people, and retirees dined out an average of 193 times in 2013… or 16 times per month. That’s $418 per month on restaurants.

  • The average annual budget for travel for retirees is $7,700. Retirees apparently plan to travel four times per year in their golden years (though I’m unsure how $7,700 will cover that). If we break it down monthly, that’s $641 per month.

  Basic housing expenses, a golf membership, a few meals out each week, and a trip every three months sounds pleasant enough… though far from luxurious.

  But here’s the problem: Someone earning an average amount won’t be able to afford this lifestyle on passive income alone.

  And we haven’t even considered gas, groceries, haircuts, gifts for the grandchildren, and an occasional movie.

  And what about health care?

  The average retiree should expect to spend $220,000 out of pocket on health care during retirement—not including long-term care.

  Let’s be conservative and say your retirement will last 20 years. That’s about $11,000 per year for health care, or $917 per month.

  Add it all up—assuming another $2,000 per year for the expenses we haven’t yet accounted for—and you’re looking at costs of about $4,300 per month, or nearly $52,000 per year.

  Keep in mind, too, that $52,000 is going to climb as inflation marches higher.

  If you’re just pulling from your retirement account to make up the difference, you’re going to run out of money several years before you die. Even if you’re earning on the high end of average, you’re still looking at a shortfall of about $1,000 a month. The return on your investments just isn’t enough to make up the difference.

  So let’s assume that you are nearing or at retirement age, and you can’t even come close to $52,000 in income.

  Or—forget that—what if you just want to stop worrying and stressing over your current financial situation altogether?

  What should you do?

  I have some solutions. Five of them, in fact.

  Fair warning: The information below might be difficult to take. But if you stick with it to the end, my bet is that you’ll feel a lot better about your situation. In fact, many of my longtime readers have taken this plan and broken free of financial worry completely.

  More importantly, you’ll have a plan of action.

   

  1. Be realistic about what you can expect from stocks.

  First and foremost, you must recognize that you will not be able “make up” for the past by implementing any sort of short-term stock strategy in hopes of catching a big takeoff.

  No matter what investment service you use, you wouldn’t be able to double or triple your money in 10 years or less without taking wild risks.

  If you just had a portfolio that matched market averages, you’d only get 7–10% per year.

  Take the sum of all your stock investments and multiply that by 7–10% per year for, say, 10 years and you will have a realistic idea of what to expect.

  Write that number down. Don’t be tempted to make it bigger by telling yourself you will make 15% or 20% every year. It is possible that you could do that. But if you move all your money into speculative stock strategies, it is more likely that you will end up with much less than 7%.

  2. Accept the fact that you may have to continue working.

  Hear me out…

  When your heart is set on retiring at 65, you may feel like working beyond that age will be a living hell.

  But it doesn’t have to be. I’ve retired three times so far (at 39, 49, and 59). And each time, I found that going back to work was a welcome relief.

  And I’m not only speaking from my own experience alone. I’ve advised many people to keep working in retirement and they have found a great deal of satisfaction in turning their hobbies and passions into second and third careers.

  You don’t have to keep doing the work that you have been doing. You might be able to move into a consulting or freelance position with your current employer. Or follow a dream and start your own business. I have dozens of ideas you could try… which I’ll tell you about shortly.

  But if you need to continue to work, you need to continue. The moment you accept that fact, the odiousness of working will dissipate. You might even be okay with it. Heck, you might eventually be thrilled with it.

  My view on this subject is that one should never give up active work entirely. That’s because work provides great and sustaining fulfillment. Especially if it involves learning something new or following a passion or hobby.

  3. Develop an additional stream of income.

  Recognize another financial fact of life: the amount of money you have to save and invest, after you take away assets you plan to keep forever (like your house or your wife’s jewelry), is the single most important factor in building wealth. I call this your “net investable wealth,” or N.I.W.

  You won’t hear this from brokers or bankers or stock market analysts. They won’t say it because it shatters the myth that clever stock market investing is the cure for all financial problems.

  Fact is, stock investing alone can’t give you the wealth you need for retirement. Eking out a few percentage points on an investment portfolio will not solve your problem of needing more income now.

  You must increase your income by other means—none of which will incur fees and commissions from your stockbroker. And none of which will be subject to the sort of volatility the market is likely to face in future downturns.

  So how are you going to do that? How are you going to increase your income now, at this stage of your life?

  The answer may not please you, but you must come up with a strategy to make more money from a business you have or work for.

  You must also create a second stream of income. And this is so important that you have to find an hour or two every day to devote to making it happen.

  I am not going to tell you exactly how to do that here. But I’m going to suggest that you check out a program I created called the Extra Income Project.

  I’ve spent five years working with a team of people to develop a series of reports and how-to guides for developing income from a side business or hobby. All 36 of the individual income strategies we currently cover (plus another 10-plus we have in the works) are based on my own and my mentees’ personal experiences successfully earning money in this way.

  If you want to immediately make more money, I’m telling you: This is the way to do it. This is the fastest way to grow your income.

  4. Consider—or reconsider—real estate investing.

  I don’t mean the kind of real estate investing that is advertised on late-night infomercials, but income-generating real estate investing. The kind of real estate investing that I do.

  This strategy will give you income almost immediately. And it may very well give you asset appreciation—which can add to your net worth considerably in 10 years or less.

  By the way, contrary to common opinion, you don’t need a massive investment to get into rental real estate. You can get started by pooling money with one or two friends and going in on a few properties.

  Really, to be a successful rental real estate investor, all you need is three things: money, knowledge, and time. This is true of most investments, but the good news is that with rental real estate, you don’t need a lot of any one of them. In fact, with the right deal, a partner, and leverage, you can get into a lucrative rental real estate property for as little as $10,000.

  Real estate is not difficult to understand. It is very much a simple supply-and-demand sort of investment. I have been able to make millions doing it and avoid the bubble without ever taking a course or getting a license or any of that stuff.

  5. Retire this year on $40,000 or less.

  Finally, once you increase your income, your next step should be to decrease your expenses.

  Because there is a way to enjoy a dream retirement, even if your income is limited to $40,000 or less.

  Imagine, you wake up when you want to and spend a half hour walking on the beach. On the way back, you buy fresh red snapper from your favorite local fish vendor.

  You enjoy breakfast served to you on your private porch. Afterward, you work on your novel or you paint. Then you take a nap.

  You have lunch at your regular table in the corner. After lunch, you check on the money you made from your side business today ($500). Then you take another nap.

  In the late afternoon, you visit some of your friends. At sunset, you have drinks with your spouse at a beachside bar and listen to a young man play his guitar.

  Does that sound good?

  Many of my friends are living this dream currently. And not because they’re rich.

  They’re able to live in luxury by moving abroad. What I just described to you is a typical day in Nicaragua for many retired American expats—many of them who started with a smaller than average retirement fund.

  Even in nice areas in Nicaragua, property costs and rents are low. Taxes are low. The cost of living is low. Health care is affordable, and the quality is on par with the U.S.

  And here’s another great perk: There is no tax on a pension or any other money being brought into the country, as long as it was earned outside the country.

  You can run an internet business or any other business back home (refer back to points 2 and 3) and not be taxed a penny in Nicaragua.

  Imagine earning just $40,000 per year and enjoying this lifestyle. A little house five minutes from the ocean… housekeeping and gardening services year-round… access to wild, private beaches… spas and horseback riding for $10–$25 per hour… and day trips for less than $200.

  Wait a minute… doesn’t that sound a lot like the retirement you always dreamed of?

  I hope you’re starting to realize that even if things didn’t go as well as you’d planned over the years, it’s not too late to have your dream retirement. Far from it. If you do the things I’m suggesting to you today, starting with boosting your income, you’ll find that, instead of disappearing, your retirement account will grow and grow over the years. You’ll learn new things about yourself, acquire new skills, have fun, and have greater financial security along the way.

  All you need to do is start.

  

  

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• "Something is Going On" – And It's Worse Than You Thought

  Submitted by Justin Raimondo via Anti-War.com,

  I used to wonder why in the heck right-wing commentators on Fox News kept repeating the same mantra over and over again: sitting through the Republican debates, my eyes glazed over when I heard each and every candidate denounce the Obama administration for refusing to say the Sacred Words: “radical Islamic terrorism.” What are these people talking about, I thought to myself: they’re obsessed!

  In short, I wrote it off as Fox News boilerplate, until the other day when, in the wake of the Orlando massacre, Donald Trump said the following on Fox: “Something is going on. He doesn’t get it, or he gets it better than anybody understands. It’s one or the other.” Reiterating this trope later on in the same show, he averred that the President “is not tough, not smart – or he’s got something else in mind.”

  The Beltway crowd went ballistic. Lindsey Graham had a hissy fit, and other Republican lawmakers started edging away from the presumptive GOP nominee. The Washington Post ran a story with the headline: “Donald Trump Suggests President Obama Was Involved With Orlando Shooting.” Realizing that this level of bias was a bit too brazen, the editors changed it an hour or so later to: “Donald Trump Seems to Connect President Obama to Orlando Shooting.” Not much better, but then again we’re talking about a newspaper that has a team of thirty or so reporters bent on digging up dirt on Trump.

  In any case, Trump responded as he usually does: by doubling down. And he did it, as he usually does, on Twitter, tweeting the following:

  “Media fell all over themselves criticizing what Donald Trump ‘may have insinuated about @POTUS.’ But he’s right:”

  The tweet included a link to this story that appeared on Breitbart: an account of a 2012  intelligence report from the Defense Intelligence Agency predicting the rise of the Islamic State in Syria – and showing how US policy deliberately ignored and even succored it. Secured by Judicial Watch thanks to the Freedom of Information Act, the document says it’s very likely we’ll see the creation of “an Islamic State through its union with other terrorist organizations in Iraq and Syria.” And this won’t just be a grassroots effort, but the result of a centrally coordinated plan: it will happen because “Western countries, the Gulf states and Turkey are supporting these efforts” by Syrian “opposition forces” then engaged in a campaign to “control the eastern areas (Hasaka and Der Zor) adjacent to Western Iraqi provinces (Mosul and Anbar).”

  This is precisely what happened, and, as we see, the Iraqi Army is now in the field – with US support – trying to retake Mosul and Anbar, with limited success. Yet it’s not like we didn’t know this was coming – and didn’t have a hand in creating the problem we are now spending billions of dollars and even some American lives trying to “solve.” Things are turning out exactly as the DIA report said they would:

  “[T]here is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).”

  And who, exactly, are these “supporting powers”? The anonymous author of the report points to “the West, Gulf countries, and Turkey.” Last I heard, the US is part of the West – although the way things are going, that may not be true for very much longer. And of course the US has had a policy of supporting the “moderate” Syrian Islamist “opposition,” which ended in massive defections from the so-called Free Syrian Army to openly jihadist outfits like al-Nusra and ISIS.

  There was a split in the administration over this policy, with then Secretary of State Hillary Clinton and then CIA director David Petraeus arguing for a full-scale effort to overthrow beleaguered Ba’athist strongman Bashar al-Assad with massive aid to a loosely-defined “opposition.” Petraeus even openly argued for arming al-Nusra – the Syrian affiliate of al-Qaeda – and there were indications that, before Hillary left Foggy Bottom, an arms pipeline was opened up between the Libyan jihadists we aided in overthrowing Ghaddafi and their Syrian brothers.

  Obama was reluctant to get more involved, but Hillary and Petraeus were gung-ho, along with the usual “humanitarian” interventionists in the administration and the media, who were accusing the President of standing by while “genocide” was being carried out by Assad. In reality, the jihadists were chopping off heads and wreaking just as much devastation as the Syrian army, but these facts didn’t make it into the media narrative.

  In any case, the administration split was finally resolved when the President announced he was going to intervene in Syria with air strikes. This provoked a huge backlash from flyover country, with congressional switchboards tied up and protests coming in fast and furious. Clearly, the American people didn’t want another war in the Middle East, and, one by one, members of Congress who had planned on voting yes began to back down. The President backtracked – happily, I imagine. Hillary, who had alreadyleft the administration, was handed her final rebuke. Yet the seeds planted by her Syria policy would soon sprout into flowers of evil.

  War was avoided, at least for the moment – but the prediction of that anonymous DIA agent was coming true. As thousands of US-trained –and-equipped rebels joined ISIS, along with the arms and other goodies provided courtesy of the US taxpayers, their leader declared the “Caliphate” and expanded its operations into North Africa, Europe – and the US.

  The long reach of the Islamic State has been felt in this country twice in recent months: first in San Bernardino, and now in Orlando. Both terrorists traveled to Saudi Arabia, ostensibly for religious purposes, where they may have received training – and instructions.

  When Omar Mateen opened fire in that Orlando nightclub, killing fifty people and wounding nearly one-hundred, the monster we created came back to haunt us. It didn’t matter that he may not have had direct links to ISIS: inspired by them, he carried out his grisly mission as he swore allegiance to Abu Bakr al-Baghdadi, the “Caliph” of the Islamic State.

  The Washington Post, in its mission to debunk every word that comes out of Trump’s mouth, ran an article by Glenn  Kessler minimizing the DIA document, claiming that it was really nothing important and that we should all just move along because there’s nothing to see there. He cited all the usual Washington insiders to back up his thesis, but there was one glaring omission: Gen. Michael Flynn, who headed up the DIA when the document was produced and who was forced out by the interventionists in the administration. Here is what Flynn told Al-Jazeera in an extensive interview:

  Al-Jazeera: “You are basically saying that even in government at the time you knew these groups were around, you saw this analysis, and you were arguing against it, but who wasn’t listening?

   

  Flynn: I think the administration.

   

  Al-Jazeera: So the administration turned a blind eye to your analysis?

   

  Flynn: I don’t know that they turned a blind eye, I think it was a decision. I think it was a willful decision.

   

  Al-Jazeera: A willful decision to support an insurgency that had Salafists, Al Qaeda and the Muslim Brotherhood?

   

  Flynn: It was a willful decision to do what they’re doing.”

  Of course, Glenn Kessler and the Washington Post don’t want to talk about that. Neither do the Republicans in Congress, who supported aid to the Syrian rebels and wanted to give them much more than they got. They’re all complicit in this monstrous policy – and they all bear moral responsibility for its murderous consequences.

  Gen. Flynn, by the way, is an official advisor to Trump, and is often mentioned as a possible pick for Vice President.

  The idea that we could use Islamists to fight jihadists was always crazy, and yet that is what the foreign policy Establishment and the congressional warhawks in both parties have been pushing. The “Sunni turn,” initiated by the Bush administration, supported (and funded) by the Saudis, the Turks, and the Gulf states, and escalated by the Obama administration, has empowered our worst enemies and endangered the American people. And here is the ultimate irony: it was done in the name of “fighting terrorism.” This gives new meaning to the concept of “blowback,” CIA parlance for an action (often covert) that has the unintended consequence of blowing back in our faces.

  It certainly blew back in the faces of those partygoers in Orlando – in a hail of bullets.

  That Trump gets this is little short of amazing, and yet truth often comes to us in unexpected ways. He may be an imperfect vessel – and that is surely an understatement – but he is absolutely correct in this instance: this administration and this President either “doesn’t get it, or he gets it better than anybody understands. It’s one or the other.”

  The media and the Never Trumpers leaped on this statement and translated it into the old Obama-is-a-secret-Muslim trope, but that’s not what he was talking about. He was talking about the largely unknown history of our intervention in Syria, where Hillary Clinton was the jihadists’ best friend and benefactor. It was she who led the charge to “liberate” Syria, to arm the “moderate” head-choppers and do to that war-torn wreck of a country what she had done to Libya. Obama knows it: and so does the media. But their lips are sealed.

  Fortunately, mine aren’t.

  So we finally unlock the Great Mystery: why oh why does is this administration and the Clinton campaign so reluctant to utter the words “radical Islamic terrorism”? Is it because of political correctness and a fear of inciting “Islamophobia”? Don’t flatter them: they’re not above that, when it serves their purposes. But it doesn’t serve their purposes this time.

  What they’re afraid of is alienating their allies in the Middle East – not just the jihadists they’ve funded and succored in an effort to overthrow Assad, but primarily the Saudis, the Turks, and the Gulf sheikhs who are all in on the game and are playing it for all it’s worth. And of course there’s the Clinton Foundation, which has received millions in “donations” from the Saudi royals and their satellites.

  The US policy goal in the region is to block the Iranians and their Shi’ite allies, including Syria’s Assad, from expanding their influence in the wake of the failed Iraq war. That war installed a Shi’ite regime in Baghdad, and in order to protect our vaunted ally Israel – which is set on regime change in Syria – we are backing and have been backing Sunni radicals, precisely those “radical Islamic terrorists” whose name will never pass Hillary Clinton’s lips.

  We’ve been pointing this out on this site for years: I’ve written about it extensively. And now the Republican candidate for President is talking about it. To all those well-intentioned hand-wringers out there who think I’ve gone overboard in my coverage of Trump, contemplate that amazing fact for a while – and then get back to me.

  

  

• Hong Kong Bookseller Who Was 'Disappeared' By Chinese Authorities Tells Of What Happened

  It's no secret that the Chinese government has no problem making people disappear that are causing a problem for the communist regime – we have written about the topic many times (here, here, and here).

  However, the latest case of a disappearance (that we're aware of) is most interesting. Beginning late last year, five booksellers from the shop Causeway Bay Books (which among other things sells books containing political gossip) in Hong Kong went missing, and all of them later surfaced in China in police custody for illegally trading banned books in mainland China. All have returned to Hong Kong except one, and the most recent to be returned home is Lam Wing-kee, who was reportedly back in Hong Kong earlier this week. At the time, Lam didn't have anything to say about what happened, "he refused to disclose other details regarding his absence" the police said.

  

  It appears that now, Lam has a lot to say about what happened. In a televised news conference, Lam said he was detained by Chinese authorities while visiting the mainland city of Shenzhen, across the border from Hong Kong, and his travel documents were confiscated. Lam was then blindfolded, handcuffed, and taken by train to the eastern city of Ningbo about 13 hours away where he would spend the next five months in a 200 to 300 square foot cell before being moved to an apartment. Lam would be watched 24 hours a day by Chinese guards, and even something as simple as brushing his teeth would be monitored. A string was even tied to the toothbrush for fear Lam may want to harm himself. Lam said the he was detained by a little known "Central Examination Group" of the Chinese Communist Party, a special task force that reports to senior Beijing leaders.

  "I couldn't call my family. I could only look up to the sky, all alone.", "they wanted to lock you up until you go mad" Lam said.

  Lam said he had to sign away his right to a lawyer and right to contact his family, and was subsequently questioned 20 to 30 times about his role in Hong Kong's publishing industry. At one point, Lam said that he was forced to sign a confession that books were unlawfully sold in order to harm the Chinese society. The confession also was also written to incriminate his colleague (who also has been disappeared, and has yet to return).

  "It was a show, and I accept it. I had to follow the script. If I did not follow it strictly, they would ask for a retake" Lam said regarding the confession.

  Chinese authorities thought that Lam would continue to cooperate, so Lam was apparently allowed to travel back to Hong Kong after promising to return to the mainland with a hard drive full of information on customers. Instead, Lam held a press conference, and said "I dare not go back. I don't plan on setting foot in mainland China ever again."

  The details provided by Lam not surprisingly contradict China's claims that nobody had been taken, rather everyone who disappeared had turned themselves in voluntarily to cooperate with an investigation – Beijing's go to line whenever anyone mysteriously turns up missing.

  "Lam Wing-kee has blown apart the Chinese authorities' story. He has exposed what many have suspected all along: that this was a concerted operation by the Chinese to go after the booksellers." said Mabel Au, Amnesty International's director in Hong Kong.

  "If we remain silent, if I, myself, being the least vulnerable among the booksellers remain silent, Hong Kong will become hopeless. It took lots of courage, and two sleepless nights of consideration, for me to decide to share the whole story with you and tell the whole world that this incident is not only about me or the bookstore. It's about the core value that the people of Hong Kong need to safeguard. Hong Kongers should not bow down to the power" Lam said during the press conference.

  * * *

  The incident, aside for the fact that humans are being abducted, provides Hong Kong with evidence that the "one country, two systems" formula under which Hong Kong has been governed since its return to China from British rule in 1997 is being violated.The system was to guarantee separate laws and freedoms not granted elsewhere in China for 50 years. While we certainly can appreciate that there are theoretical frameworks in place to separate mainland China and Hong Kong, we are realists, and the reality is that China will do what it pleases when it comes to these matters. We hope we don't learn of another Lam Wing-kee disappearance as a result of this decision to expose what really takes place behind the scenes – it certainly was a courageous thing to do.

  Here is how China views the "one country, two system" framework:

  

  

• Elizabeth Warren’s War On The Poor

  Submitted by Patrick Trombly via The Mises Institute,

  There is no American politician more closely associated with “progressive” economic causes than Massachusetts Senator Elizabeth Warren. The senator is widely regarded by the political Left as an expert on financial issues, is a self-professed champion of the “working poor,” and is a proud, finger-wagging chastiser of the 1 percent and Wall Street. Her cause is to lift up the least powerful and protect them from the most powerful. She appears to genuinely believe in this cause, and has made several policy proposals that she believes will serve it. Because of her position and the public’s association of the senator with this cause, it is assumed that the policies she proposes will in fact serve it, and that anyone who supports the same causes should get on board and support her proposed policies.

  Senator Warren’s stated objective of helping the least powerful is laudable. The problem is that, though well-intentioned, many of Senator Warren’s proposed policies would actually harm the very people whom she intends to help, while her other proposals represent distractions from the real threats to the least powerful, and thus have the effect of allowing these threats to continue. By occupying the seat of defender of the least powerful while advocating policies that would harm the least powerful, the senator has become a danger to her own cause. Below are three examples.

  Minimum Wage / “Fight for $15”

  Senator Warren has long advocated an increase in the minimum wage, to $15/hour, on the premise that raising the minimum wage will lift the wages of the working poor — people presently earning, say, $9 per hour. The problem is that that is not how minimum wage, or any other price floor, works. The minimum wage is a price floor. A price floor does not magically lift prices, but merely establishes a legal minimum price below which exchanges are not allowed to take place, rendering exchanges that would have taken place at lower prices illegal.

   

  Much in the way that a $15 minimum price for a hamburger would not raise the price that people pay for a McDonald’s hamburger from about $2 to $15. A $15/hour minimum wage would not raise the price that McDonald’s franchises will pay for unskilled labor. Instead, it would force McDonald’s franchises and other employers of low-skilled individuals to replace staffs of several low-skilled employees with staffs comprising fewer, skilled employees, and/or to automate. In either case, some low-skilled workers presently earning $9/hour to $11/hour would lose their jobs, or have their hours cut significantly back, to make room for the fewer, higher-skilled laborers and/or robots. While Senator Warren may not intend for this result to occur, it is what would occur if her policy recommendation is adopted.  Her proposed policy would transform millions of working poor people into unemployed poor people.

   

  Payday Lenders

  Similarly, Senator Warren has recently proposed restrictions limiting the ability of lenders, known as “payday lenders,” to make short-term, fast-approval, unsecured loans to consumers with marginal or no credit histories. Much in the way that Senator Warren disapproves of the wages that low-skilled workers are paid, she disapproves of the interest and fees charged on these unsecured loans to high-risk borrowers. However, interest rates are similar to wages in that they often behave like prices. Interest rates often react to restrictions the same way prices do. And much in the way that outlawing employment of people at wages below $15/hour does not lift anyone’s wage to $15/hour, outlawing high-rate loans does not lower the rate on anyone’s loan. Instead, it prevents loans that would have been made at high interest rates from being made.

   

  In other words, such a policy denies credit to the very people whom Senator Warren claims to want to support — even though those very people have determined that they have a borrowing need. Whatever it is that they need or want to purchase with the borrowed funds will be denied them, whether it is the rent payment, a medical prescription, dental work, car repair, or some other expense. As with the “Fight for $15,” Senator Warren may not intend for this result to occur, but it is what would occur if her policy prescription is adopted.

   

  Income Inequality

  Senator Warren and others have pointed out that since the early 1970s, and especially since the mid-1990s, there has been a growing gap between the top 1 percent of the top 1 percent and everyone else, in terms of income and wealth. The underlying causes are quite simple. Generally speaking, the groups with the most wealth tend to generate their income through ownership and trading of financial assets priced in dollars. Everyone else tends to generate their income through wages and salaries paid in dollars. Meanwhile, the central bank has, to an ever-increasing degree, been expanding the supply of dollars, thus perpetually devaluing wages and salaries while inflating the prices of financial assets. This is why real wages have been stagnant for decades while investment returns on real estate, stocks, and commodities have skyrocketed.   

   

  In 1971, the last vestiges of the gold standard were abandoned, leaving the Fed free to expand the money supply according to a goal of “price stability,” which it defines as being “mildly inflationary,” but which, curiously, ignores the prices of assets, including some of the very assets directly financed with the newly issued and loaned money, such as houses and stocks. 

   

  Since the mid-1990s, naturally deflationary forces such as the end of the Cold War, the liberalization of China and freer trade have — under these definitions — given the Fed increasing room to expand the money supply without triggering significant inflation of the prices that are included in its consumer price metric. This has offset the deflation, and thus the gains in workers’ purchasing power, that the above-mentioned world events should have brought about. This has also made saving more difficult, and, in the short run, less attractive, with the obvious result that the savings rate for the last 20 years has been half the savings rate in the prior 20.

   

  After a generation of low savings, about 40 percent of Americans don’t have enough set aside to cover a surprise $1,000 expense. There is nothing novel or complex about this. Inflating the currency to enrich the already-wealthy at the expense of everyone else is a centuries-old trick, infamously employed by John Law in France in the early 1700s, and many others. Moreover, the boom-bust cycles that also result from inflating the currency via the lending channel create unnecessary volatility in job markets, as employment opportunities are created and then destroyed in boom sectors such as construction in the 2000s and oil drilling in the 2010s. 

  What does this have to do with Senator Warren?  Her position on the Banking Committee gives her an audience with the Chair of the Federal Reserve on a regular basis. Yet she has never taken the opportunity to raise the issue of monetary inflation and its ill effects. Instead she has focused on the Fed’s decisions not to “break up big banks” or “bring bankers to trial” for various misdeeds. Some of these misdeeds are real, but none related to what Senator Warren contends are her main concerns: wage stagnation and income inequality. Indeed, whether most deposits are held and most loans are made by 10 banks or 10,000 banks won’t change income and wealth inequality if the banks are members of a protected cartel that creates money out of thin air and loans it into the financial system. Senator Warren’s efforts in this respect use up attention and energy that could otherwise be devoted to understanding what actually causes the wage stagnation and inequality: the systematic and perpetual wage and savings devaluation, and asset price inflation, conducted by our central bank.

  We should not quarrel with Senator Warren’s stated goal of protecting the least powerful in society, but we should take issue with many of Senator Warren’s proposed strategies to achieve her stated goal — because they don’t work. If Senator Warren wishes to achieve her stated goals, then she should re-think her policy objectives, become familiar with basic economic principles, and adjust her policy prescriptions accordingly, especially with respect to the central bank.

  

  

• US Citizen Kills Himself In Taiwan Courtroom After Being Convicted Of Drug Possession

  A US citizen killed himself in courtroom in Taiwan on Thursday after being given a four year prison sentence for being convicted of growing marijuana and opium at his home in Changhua, in central Taiwan.

  

  Upon learning of his sentence from a court interpreter, 41 year old Tyrel Martin Marhanka replied "four years?" The interpreter told Marhanka that he could appeal, but Marhanka replied "I don't want to appeal." According to the Taipei Times,  Marhanka became agitated and yelled "I don't want to live anymore", before removing two 21cm scissor blades and stabbing himself on both sides of the neck, severing the arteries.

  At the time of the April arrest, the Taipei Times reports that police found more than 200 cannabis plants, 195 dried cannabis plants and 10 opium poppies at a rented house in Yongjing Township, Changhua County.

  A prison term of up to seven years was possible, but the court gave just four years because Marhanka hadn't sold anything, and used just for his own use.

  An initial investigation found that Marhanka was able to smuggle the scissor blades into the courtroom with a magazine, and the metal detector didn't uncover the scissors when he entered the building.

  The court said it felt "deep regret", and that the building didn't have enough space for a more advanced scanner, but would install X-ray machines in a new building.

  Marhanka had lived in Taiwan for more than 15 years, and worked as an English teacher. He leaves behind a wife and two children as a result of this bizarre and tragic incident.

  Here is local news covereage of the incident.

  

  

• Japan: A Future Of Stagnation

  Submitted by Charles Hugh-Smith of OfTwoMinds blog,

  Take a declining population with declining rates of productivity growth and load it up with debt, and you get a triple-whammy recipe for permanent stagnation.

  
  One of our longtime friends in Japan just sold the family business. The writing was on the wall, and had been for the past decade: fewer customers, with less money, and no end of competition for the shrinking pool of customers and spending.

  Our friend is planning to move to another more vibrant economy in Asia. She didn't want to spend the rest of her life struggling to keep the business afloat. She wanted to have a family and a business with a future. It was the right decision, not only for her but for her family: get out while there's still some value in the business to sell.

  I have written a number of entries on Japan's economic downward-spiral and its largely hidden social depression over the past decade, most recently: Global Bellwether: Japan's Social Depression (September 25, 2014)

  Lessons from Japan: Decades of Decay, Unavoidable Collapse (April 26, 2016)

  The Keynesian Fantasy is that encouraging people to borrow money to replace what they no longer earn is a policy designed to fail, and fail it has. Borrowing money incurs interest payments, which even at low rates of interest eventually crimps disposable earnings.

  Banks must loan this money at a profit, so interest rates paid by borrowers can't fall to zero. If they do, banks can't earn enough to pay their operating costs, and they will close their doors.

  If banks reach for higher income, that requires loaning money to poor credit risks and placing risky bets in financial markets. Once you load them up with enough debt, even businesses and wage earners who were initially good credit risks become poor credit risks.

  Uncreditworthy borrowers default, costing the banks not just whatever was earned on the risky loans but the banks' capital.

  The banking system is designed to fail, and fail it does. Japan has played the pretend-and-extend game for decades by extending defaulting borrowers enough new debt to make minimal interest payments, so the non-performing loan can be listed in the "performing" category.

  Central banks play the game by lowering interest rates so debtors can borrow more. This works like monetary cocaine for a while, boosting spending and giving the economy a false glow of health, but then the interest payments start sapping earnings, and once the borrowed money has been spent/squandered, what's left is the interest payments stretching into the future.

  Central banks played another game: buying assets to inflate asset bubbles, bubbles that were supposed to spark the wealth effect: once businesses and households see their net worth rise as assets bubble higher, they will be psychologically induced to borrow against that new wealth and spend, spend, spend.

  The Bank of Japan has played this game to little effect. The BOJ now owns a significant chunk of Japan's stock market, but the real economy continues its long descent into stagnation.

  

  Demographics matter. As the populace ages, older people spend less and sell assets to raise cash for their non-earning retirement years. As young families have fewer children, consumption declines accordingly.

  Take a declining population with declining rates of productivity growth and load it up with debt, and you get a triple-whammy recipe for permanent stagnation. There are Degrowth strategies that make sense because they're designed to be sustainable, but first the systems that have been designed to fail–Keynesian stimulus policies and the banking system–must be allowed to fail.
   

  

  

• Living 'The American Dream' In These Cities Is Not Possible

  Originally posted at TheRedPin.com,

  "The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

  That idea – and those words, written by James Truslow Adams in 1931 – forms the foundation upon which the country was built.

  But that foundation has cracked.

  It’s one thing to fantasize about living the American Dream from regions outside the United States. It’s another to be already living in America and to not be able to attain it.

  And while the American Dream ensures that no one is legally barred from reaching their full potential, it doesn’t prevent individuals from being held back in other ways. After analyzing the cost of living and median income levels in 74 U.S. cities, we found significant obstacles to obtaining the American Dream across the country.

  Picture Perfect, American Dream–Style

  

  Imagine it: You own a 1,480-square-foot home with a one-car garage, perfect for your family of four and all your needs, all nicely contained by a manicured front lawn and a white picket fence. You also have the funds for two adults-only dinner dates and one trip to the movies per month.

  Sounds nice, right? That version of material wealth and comfort will cost you roughly $3,547 per month, or $42,548 per year.

  The bulk of your expense is not even the mortgage; instead, it’s the monthly groceries. Clearly, you have very hungry mouths to feed.

  Don’t forget, it will cost you approximately $245,000 to raise a child until the age of 18. And the typical American Dream usually includes at least two children.

  Getting Ahead, Just by Demographics

  

  Based on three criteria, we can easily divide the 323.5 million people living in the United States into “those who can afford to live on easy street” and “those who cannot” – the “haves” and “have-nots,” a concept that American literature has widely explored and that American citizens experience every day.

  According to our research, the first required criterion for becoming one of the “haves” is simply to be a man. Despite the fact that women make up nearly half the workforce – and act as the main, or at least equal, breadwinner in 4 out of 10 households – women earn only 79 cents for every dollar that a man makes, according to 2015 figures. That’s a gender wage gap of 21 percentage points.

  The second criterion for becoming one of the “haves” is to be either white or Asian.

  And the third criterion is age: those most likely to be “haves” are Asian men between the ages of 35 and 54, and white men between the ages of 35 and 64.

  The implications of failing to fall into those three categories are staggering, especially when we focus on the 35 to 44 age range. An Asian man in this age range will make $66,318 each year, but his female counterpart won’t even crack $40,000. The same disparity holds true for white women.

  And many black men and women, as well as Hispanic men and women, sit far below the American Dream line – in some cases, by as much as $20,000, according to median results.

  Needing Smarts to Succeed

  

  From the first day of kindergarten, and possibly even before, American children learn that an education is the gateway to success. With it, there is nothing they can’t do; but without it, they are destined to fail.

  To some extent, this maxim proves to be true. Statistically, both men and women with minimal education – a high school diploma, or less – will not head quickly toward the American Dream. Even those with some college education, but without a degree, sit below the required $42,000.

  However, with a master’s, doctorate, or professional degree, a man’s salary is almost guaranteed to exceed the income required to live comfortably. A man with a professional degree can expect to earn at least six figures, while a woman can expect to earn approximately $63,000. And while this discrepancy is shocking, it pales in comparison to the discrepancy between men and women who have an associate or bachelor’s degree. For women with these degrees, even achieving financial security remains a challenge.

  Based on median income, a woman who has earned a bachelor’s degree will make $40,033, while a man who has obtained his associate degree will see nearly $44,000. That puts him, but not her, on track toward a white picket fence. It’s a trend that’s echoed in every education increment.

  Reality Sinks in for Major American Cities

  

  It’s no secret that coastal living is expensive. However, we might go a step further and say that the American Dream is fast becoming a fantasy on the coasts. That statement sharpens the cold, hard facts and puts them into perspective.

  The good news is that middle America and the Southwest still offer a thriving environment for the American Dream. It’s hard to imagine just how far the dollar can go before moving there, according to Holly Johnson.

  “For example, when I tell people I bought my 2,000-square-foot Indianapolis home on one-third of an acre for a cool $188,500, they often look at me like I have three heads,” she writes in her article, “A Potentially Easier Way to Get Rich: Move to the Midwest.” “In fact, I’m pretty sure they assume I’m being dishonest somehow, or that my home is actually a giant cardboard refrigerator box. But they’re wrong.”

  Sure, she admits, the Midwest isn’t nearly as exciting as the East and West Coasts. However, small-town festivals provide entertainment, and open fields and parks (instead of congested, busy streets) are perfect for children. And community theater, while it’s not the Broadway stage, provides a dose of much-needed culture.

  Depending on your priorities, the Southwest and Midwest could be the answer for your American Dream – at least until more people catch on to the trend.

  Look No Further for the American Dream

  

  Of these 53 cities where the good life is attainable, the vast majority are inland or comfortably nestled in the Midwest and Southwest– which should come as no surprise.

  At the top of the list is Fairfax, Virginia, where the median yearly savings add up to roughly $45,500, mostly thanks to the approximately $100,500 median household income and the fact that 91.7 percent of its residents have finished high school.

  Anchorage, Alaska, boasts a yearly savings of about $32,200, with a median household income of $78,121 and a graduation rate of 92.5 percent. Stamford, Connecticut, rounds out the top three cities, with $28,268 in savings, a $77,221 median household income, and a graduation rate of 87 percent.

  Zero Dreamers in Sight

  

  New York, New York: It’s a wonderful town – for those with a boatload of disposable income or absolutely zero interest in making it in America.

  When purchasing the typical 1,480-square-foot home, New Yorkers pay approximately $1,625 per square foot, for a grand total of $2.4 million worth of real estate. The average person needs to earn nearly $90,000 in addition to their income to afford the American Dream in New York.

  That’s the extreme. In San Francisco, the tune is more like $36,500 in supplemental income, which 25-year-old Peter Berkowitz was simply not willing to pay. Instead, he constructed an 8-foot-long bedroom pod inside his pal’s apartment, so he could live up the street from the beach for a fraction of the rent he would otherwise be paying.

  Where to Find the American Dream

  

  As shown on the map, the United States comprises pockets of affordability and unaffordability. The states where you are most unlikely to thrive are New York and Massachusetts thanks to housing costs.

  And while Hawaii offers insurmountable beauty, very few people can afford the American Dream there. Island living is insanely expensive. A minor example that speaks volumes: In Hawaii, a five-pound sack of potatoes will run you $6.48, more than twice the national average.

  Overall, people living in California, Oregon, Washington, Florida, and much of the East Coast have a harder time building their savings accounts than those in the Southwest and Midwest, due to a larger disparity between income and expenses.

  Barely Getting By

  

  This past spring, New York Governor Andrew Cuomo signed a law that enacted a statewide $15 minimum wage plan. Portland, Oregon, also bumped up its minimum wage, and the issue of minimum wage looms large in this year’s presidential race – for good reason.

  In Hawaii, the issue seems most severe. The current minimum wage is $7.75, but in order for Hawaiians to afford the American Dream, minimum wage would need to be raised to $34.49 – nearly 4.5 times higher than what it is now.

  The pattern continues throughout the U.S. If citizens are to have any hope of reaching the American Dream, the minimum wage in Washington, D.C. – as well as in New York, California, Alaska, and Connecticut – needs to be about three times higher than it currently is, while the minimum wage in Mississippi needs to be about twice as high.

  For now, the minimum wage debate only focuses on getting Americans above the poverty line. Perhaps focusing on the Dream will come next.

  Conclusion

  For some parts of the country, namely the Southwest and Midwest, the risk of never achieving the American dream is slim. There, the American Dream is alive and well. And while residents give up a certain level of excitement and culture to live in these locations, they get more bang for their buck and live more comfortably.

  In the coastal areas and big cities, it’s nearly impossible for Americans to live out the ideal picture of the picket-fenced life. For them, the American Dream changes once again, and they must adjust it to fit their mold of what brings them happiness, security and comfort.

  Read more here at TheRedPin.com…

  

  

• Rio Declares State Of "Public Calamity", Warns Of Total Collapse In Security, Health And Transport

  Earlier today, the IAAF announced that Russian track and field athletes would be banned from the Rio Oympics due to allegations of systematic doping. Rune Andersen, who heads the IAAF task force overseeing Russia’s attempts to reform, said that a “deep-seated culture of tolerance, or worse, appears not to be materially changed”. “No athlete will compete in Rio under a Russian flag,” he said.

  Perhaps instead of fighting this decision, Putin’s response should be a simple “thanks” because just hours later, and just 49 days before the start of the Olympics, the Rio state government declared a state of “public calamity” (yes, that’s the technical term) warning of a risk of total collapse in public security, health, transport and virtually everything else, because as the local government explained, the financial crisis is preventing it from fulfilling its requirements for the Games.

  ‘State of calamity’ decreed in Rio; the state is broke. #Rio2016 #Brazil pic.twitter.com/nJen4WTiQd

  — juliana barbassa (@jbarbassa) June 17, 2016

  In other words, the money is gone… all gone, and as we jokingly predicted some time ago, as a result of the ongoing economic and now political catastrophe in the country, the 2016 Oympics may never even happen in the country gripped by what may be the worst depression in its history. Oh, and then the whole Zika thing.

  As Bruce Douglas adds, the Rio state government fears “total collapse in public security, health, education, mobility, education, environment” due to financial crisis, and that Rio de Janeiro “will adopt exceptional necessary measures to rationalize all public services, with the aim of realizing the [Olympic] Games.”

  It was not clear what would happen if the rationalization fails. Finally, by declaring a state of public calamity, the state government of Rio de Janeiro aims to get access to federal cash.

  The question is whether there is any left.

  And then, on the background of this dire assessment, some humor:

  I would like to ask the Rio de Janeiro state government what exactly declaring a state of public calamity means, but website’s down #Rio2016

  — Bruce Douglas (@bruceecurb) June 17, 2016

   

  The silver lining: no matter how bad Brazil’s economy gets, it will always remain rich in natural resources

  

  

  

• Las Vegas Going Dry? Largest Reservoir In America Reaches Record Low

  Las Vegas and its 2 million residents and 40 million tourists a year may have a problem. As we noted a month ago, America's largest reservoir Lake Mead reached a record low, nearing levels that would force the Interior Department to declare a "shortage," which will lead to significant cutbacks for Arizona and Nevada. Well it has got worse…

  At 1072 Feet, Lake Mead has never been more empty…

  

  Source: LakesOnline

  Under the federal guidelines that govern reservoir operations, the Interior Department would declare a shortage if Lake Mead’s level is projected to be below 1,075 feet as of the start of the following year. In its most recent projections, the Bureau of Reclamation calculated the odds of a shortage at 10 percent in 2017, while a higher likelihood – 59 percent – at the start of 2018.

  But those estimates will likely change when the bureau releases a new study in August. Rose Davis, a public affairs officer for the Bureau of Reclamation, said if that study indicates the lake’s level is going to be below the threshold as of Dec. 31, a shortage would be declared for 2017.

  That would lead to significant cutbacks for Arizona and Nevada. California, which holds the most privileged rights to water from the Colorado River, would not face reductions until the reservoir hits a lower trigger point.

   

  

   

  And now, to put this rapid decline in context,  NASA Earth Observatory published the two space images…

  

  As NASA explains, they’re from a pair of Landsat satellites and show the lake near its highest and lowest points over the past 32 years. The Landsat 5 satellite acquired the top image on May 15, 1984. The lake last approached full capacity in the summer of 1983. Landsat 8 acquired the second image – below – on May 23, 2016.

   

  As one water research scientist warned, "this problem is not going away and it is likely to get worse, perhaps far worse, as climate change unfolds."

  As population growth and heavy demand for water collide with hotter temperatures and reduced snowpack in the future, there will be an even greater mismatch between supply and demand, said Kelly Sanders, an assistant professor at the University of Southern California who specializes in water and energy issues.

   

  “The question becomes how to resolve this mismatch across states that all depend on the river to support their economic growth,” Sanders said. She expects incentives and markets to help ease some of the strains on water supplies, “but it is going to be tricky to make the math work in the long term.”

  

• Orlando Killer's Father "Knew Obama"? Schmoozed In Washington, Sought Afghan Presidency

  Submitted by Mac Slavo via SHTFPlan.com,

  How close was presumed killer Omar Mateen to the bizarre world of Washington politics?

  

  Close enough to raise your hackles about what is really going on.

  Mateen’s father, Seddique Mateen, apparently visits the Capitol frequently, take pictures in front of the State Department and White House press room, and likes to pose with Congressmen, especially from the Foreign Affairs Committee.

  There are also rumors, though they are unconfirmed, that Seddique Mateen has also met with President Obama.

  His activity at the State Department and Foreign Affairs Committee also suggest possible liaisons with former Secretary of State Hillary Clinton and current Secretary of State John Kerry, along with other U.S. politicians.

  Picture of him were posted to his Facebook account:

  

  

  Seddique is currently running for president in Afghanistan, and has been lobbying for State Department backing in what would be a tense balance between support for the Taliban and U.S. alike. He also broadcasts a TV show in California that feature his political views and campaign material.

  It is father Seddique who planted the story in the media that Mateen was driven to kill after becoming upset at seeing two men kissing in Miami – framing the issue in terms of hate crimes and politically-loaded groups in conflict:

  “We were in Downtown Miami, Bayside, people were playing music, and he saw two men kissing each other in front of his wife and kid and he got very angry. They were kissing each other and touching each other and he said, ‘Look at that. In front of my son they are doing that.’ And they we were in the men’s bathroom and men were kissing each other.”

  Given that his son was a long-time security contractor at G4S in conjunction with Homeland Security and FEMA government contracts before he apparently pledged loyalty to ISIS and shot up a gay nightclub, there are many questions about the penetration of security inside the U.S. by radical Islamic, foreign and/or ISIS elements.

  Patrick Henningsen at 21st Century Wire identified him as a CIA asset in Afghanistan:

  FACT: The father of this shooter is very well-connected. Too well-connected for this event’s narrative to considered ‘normal.’

   

  [Seddique Mateen is] an absolutely ideal profile for a Washington-managed, CIA controlled-opposition political candidate….

   

  

  He also cites Daniel Hopsicker’s interesting addition – that the members of Congress that Mateen has been meeting with are also connected to intelligence activities involving Afghanistan… and so is the media channel:

  My own suspicion was first awakened on Monday morning when U.S. news outlets uniformly reported that the father’s TV show aired on a  “U.S.-based Afghan satellite channel.”

   

  The name of the nameless Afghan satellite channel, Payam Afghan, is said to be widely-known in Southwest Asia as a CIA-Pakistani ISI construct, as this picture from Flicker shows.

   

  Pictured below is Seddique Mateen with California Republican Congressman Dana Rohrabacher.

   

  

  Rohrabacher (R-CA) was initially elected to Congress in 1988, with the fundraising help of friend Oliver North.

   

  Rohrabacher’s decades-long involvement in “all things Afghan” eventually earned him the nickname “Gunga Dana.” Today he chairs the United States House Foreign Affairs Subcommittee on Europe, Eurasia and Emerging Threats.

  Mateen was also pictured with Rep. Ed Royce, Chairman of the United States House Committee on Foreign Affairs.

  

  Clearly, there is something very weird up with this mass shooting story… it doesn’t make sense, and the figures involved appear very tied to intelligence networks and security activities.

  While the American people at large must endure extra security checks at airports and a growing police state that warrants them with suspicion and contempt, Muslim assets with questionable ties and motives are inside the security system that was set-up in response to 9/11 to stop terrorists and lone wolf attacks.

  Ironic, or infiltration by design?

  Perhaps there is more to Mateen as well, as his entire story pieces together a very convenient narrative, and his history as an actor raises questions as to the legitimacy of his identity to begin with. Is he a 21st Century Oswald-cutout-style patsy to fit the homegrown ISIS terror plot that the feds wish to advance?

  The official story does not check out, so there is clearly some other explanation.

  

  

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• Austerity Kills! Bank Of Greece Admits "Greeks' Health Deteriorating, Life Expectancy Shrinks"

  Via KeepTalkingGreece.com,

  The economic crisis and the strict austerity bound to the Greek bailout agreement kills. They kill Greeks. The Bank of Greece may not write it in such a melodramatic way on its Monetary Policy Report 2015-2016. However, the conclusions in the chapter about “<span title="??? ?????????? ???? ?????? ?? ?????? ???????? ??? ??????? ??? ??????????? ?????? ??? ???????? ??? ??????? ?? ????? “?????????????? ???? ????? ??? ??????, ?????????? ????? ??? ?????????? ???? ????? ??? ?????????¨.

  “>Reforms in health, economic crisis and impact on the health of population” are shocking and confirm what we have been hearing and reading around from relatives and friends in the last years: that the physical and mental health of Greeks has been  deteriorating – partly due to economic insecurity, high unemployment, job insecurity, income decrease and constant exposure to stress. Partly also due to economic problems that have patients cut their treatment, partly due to the incredible cuts and shortages in the public health system.

  The Report notes that “while it takes longer to reco<span title="?????? ????????????? ??? ?????????? ???????????? ?????? ??? ?? ?????????? ? ??????? ????????, ?? ?????? ???????? ?????????? ??? ?????? ??? ??????? ??? ?????????? ??????.

  “>rd the exact effect, trends show a deterioration of the health of Greeks in the years of loan agreements and austerity cuts.”

  <span title="-?? ??????????? ?????????.

  “>The BoG states:

  – Suicides increased. “The risk of suicidal behavior <span title="-? ??????? ??????????? ???????? ?? ??????? ????? ??? 50%, ???? ?????? ??? ??????? ??? ??????? ?????? ???? ???? ???? ????? ??? ??? ??????? ??? ?????????.

  “>increases when there are so-called primary risk factors (psychiatric-medical conditions), while the secondary factors (economic situation) and tertiary factors (age, gender) affects the risk of suicide, but only if primary risk factors pre-exist.

   

  <span title="-?????? ????? ? ?????? ??? ????????? ?? ?????? ???????? ??? ?????? ??????? ?????????.

  “><span title="-? ??????? ??????????? ???????? ?? ??????? ????? ??? 50%, ???? ?????? ??? ??????? ??? ??????? ?????? ???? ???? ???? ????? ??? ??? ??????? ??? ?????????.

  “>– Infant mortality increased by nearly 50%, mainly due to increase of deaths of infants younger than one year, and the decline of births by 22,1%. Infant mortality increase: 2.65% in 2008 and 3.75% in 2014

   

  <span title="??? ?????? ???????? ??? ??????? ????????????? ?????? ??? ?? ??????? ????????? ???? ???????? ??????? ??? ???????????? ??? ??????? ??? ???????? ??? ?????????? ?????? ???? ?? ???????????? ?? ????????? ??? ???? ????? ????????? ???????,.

  “>– Increase of parts of population with mental illness, especially with depression. Increase:  3.,3% in 2008 to 6.8% in 2009, to 8.2% in 2011 and to 12.3% in 2013. In 2014, a 4.7% of the population above 15 years old declared it suffered form depression – that was 2.6% in 2009.

   

  <span title="??? ?????? ???????? ??? ??????? ????????????? ?????? ??? ?? ??????? ????????? ???? ???????? ??????? ??? ???????????? ??? ??????? ??? ???????? ??? ?????????? ?????? ???? ?? ???????????? ?? ????????? ??? ???? ????? ????????? ???????,.

  “><span title="-?? ????????? ??? ?????? ???????? ????????? ???? 24% ???????.

  “>-Increase of chronic diseases increased by approximately 24%.

  <span title="??? ?????? ???????? ??? ??????? ????????????? ?????? ??? ?? ??????? ????????? ???? ???????? ??????? ??? ???????????? ??? ??????? ??? ???????? ??? ?????????? ?????? ???? ?? ???????????? ?? ????????? ??? ???? ????? ????????? ???????,.

  “>The BoG notes that “the large cuts in public expenditure have not been accompanied by changes and improvement of the health system in order to limit the consequences for the weakest citizens and vulnerable groups of the society.”

  <span title="???? ?????? ??? ???????? ??? ???????? ??? ??????? ?????????? ?????:

  “>The report of the Governor of the Bank of Greece reckons surveys conducted by Greek Statistic Authorities (ELSTAT) and according to which:

  1. <span title="-???? ?????? ??? ?????? ???????????? ????????? ?????? (???? 24,2%) ???? ???????? ??????? 15 ???? ??? ??? ??? ??????? ??? ?????? ??? ?????? ?????? ???????? ?????? ? ?????? ??????..

     “>a significant increase of 24.2% of people aged 15+ suffering from chronic health problem or chronic disease.

  2. <span title="-???? ?????? ??? ?????? ???????????? ????????? ?????? (???? 24,2%) ???? ???????? ??????? 15 ???? ??? ??? ??? ??????? ??? ?????? ??? ?????? ?????? ???????? ?????? ? ?????? ??????..

     “>increase of more than 15% of people who limited their activities<span title="-??????, ??? ??????? ??? ?????? ???????? ?? ??????? ??? ????????? (15+) ??? ????????? ??? ?????????????? ??? ???? ??????????? ?????? ?? 2014.

     “> due to health problems in 2014.

  3. <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

     “>percentage of low-weight (below 2.5 kg) births increased by 19% in 2008-2010, and that this is associated with long-term negative effects on the health and the development of children.

  Citing OECD data of 2013, the BoG underlines that 79% of the population in Greece was not covered with insurance and therefore without medical and medicine due to long-term unemployment, while self-employed could not afford to pay their social contributions.

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>A survey conducted in 2014 by ELSTAT showed that part of population above 15 years old was in need of medical help but did not receive it due to lack of financial means:

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>13% of population did not receive medical care or treatment

   

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>15.4% of population did not receive dental care of treatment

   

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>4.3% of population did not receive mental health care services

   

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>11.2% did not take the prescription medicine prescribed by doctors.

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>The same survey shows a decrease in private hospital admissions and increase in public hospital with the effect that public hospitals are not able to cope with the increase demands due to austerity budget and personnel cuts. Public hospital admission in 2009 were 1.6 million, and 2.5 million in 2014.

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>According to the survey, percentage of population that needed to receive medical-nursing care and received it in delay or not at all was:

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>13.1% due to long waiting list

   

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>6.1% due to long distance or transportation problems

   

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>9.4% due to lack of specialized doctors and health personnel.

  <span title="???? ?????????? ?? ??????? ??? ????????? ??????? ??????? ?????? (???? ??? 2,5 ????) ???? ?????? ???? ??????? ???? 19% ??? ??????? 2008-2010, ??????? ??? ????????? µ? µ??????????? ????????? ?????????? ???? ????? ??? ??? ???????? ??? ???????.

  “>The BoG report warns that the economic crisis and the devaluation of the health sector threaten to shrink the life-expectancy.

  <span title="?? ????µ? ?????????????? ??? ?????µ????????? ???????, ??µ???? µ? ??? ?????? ???????????? ??????? ?????? ??? µ??????? ?????????? ??? 3,3% ?? 2008 ?? 6,8% ?? 2009, 8,2% ?? 2011 ??? 12,3% ?? 2013.

  “>Everyone who lives in Greece knows very well the drug with the long waiting lists in to get an appointment for an medical examination or a diagnostic checks in public hospitals. In some cases the next appoint for a simple check may take up to a year. Due to merging of hospitals and primary health centers, people may need to travel even 120 km to find the doctor they need. Just a couple of days ago, KTG posted about the dramatic situation in Ierapetra town in south Crete and the people in their despair would rather seek the help of a local veterinarian than a doctor for humans.

  However, t<span title=") ???? µ?????? ?????? ???µ????, ?) ?? 6,1% ??? ??????µ?? ???? µ?????? ???- ?????? ? ??????µ???? ??? µ??????? ??? ?) ?? 9,4% ??? ??????µ?? ???? ???????? ??????????? ?????? ??? ???????µ????? ??????.

  “>he crisis does not affect the patients only. It affects the health personnel as well. It was just two days ago, when a friend of mine, a doctor specialized in vascular diseases was telling me that while he was always keeping the necessary distance to patients he has started to be affected because people are really suffering due to the economic crisis. “There is a lot of drama out there, and I cannot close my eyes to it.” he said.

  <span title=") ???? µ?????? ?????? ???µ????, ?) ?? 6,1% ??? ??????µ?? ???? µ?????? ???- ?????? ? ??????µ???? ??? µ??????? ??? ?) ?? 9,4% ??? ??????µ?? ???? ???????? ??????????? ?????? ??? ???????µ????? ??????.

  “>One of the neighborhood pharmacists has been telling me on and off about the dramatic number of patients who cannot afford the self-participation in prescription medicine. Many of his clients cut their treatment into half – like 1 tablet for cholesterol not daily but every other day basis – and that some have given up the whole treatment. “For some people the choice is: either have treatment or food.”

  <span title=") ???? µ?????? ?????? ???µ????, ?) ?? 6,1% ??? ??????µ?? ???? µ?????? ???- ?????? ? ??????µ???? ??? µ??????? ??? ?) ?? 9,4% ??? ??????µ?? ???? ???????? ??????????? ?????? ??? ???????µ????? ??????.

  “>And this has been going on since 2012, when then Greek Health Minister adopted the German model of “self-participation in prescription medicine, laboratory tests” and cut some primary health services but forgot to adopt also that aspect of the German model that provides that patients would not spend more than 2% of their income for medical services and medication.

  But I’ve written many times about this in the past, haven’t I? I thought to give a break to the “Greek drama” but reality is stronger than the blogger’s wishes and plans.

  Source: Bank of Greece Report, other details here, here

  P.S. life-expectancy will shrink? I suppose the creditors would be more than happy about it as people will die, pensions will not be paid and insurance funds will be saved.

  

  

• Orlando Victims Died Because They Were Unarmed – Not Because They Were Gay

  Submitted by Brandon Smith via Alt-Market.com,

  Numerous liberty movement analysts and proponents, myself included, have been warning about 2016 and the heightened potential for multiple terrorist events.  I have written extensively on the history of ISIS, its proven ties to western governments and the disturbing program to forcefully inject millions of Islamic refugees into western nations in the name of dubious “multiculturalism,” allowing thousands of potential terrorists into our borders without obstruction.  The reality is that terrorist attacks of small and medium scale are likely to become a monthly or weekly occurrence in the U.S. and the EU as we close in on the end of the year.  Get used to the idea, because this problem is not going to go away while our own governments are aiding and even funding the very psychopaths that they are supposed to be protecting people from.

  The recent attack at at gay club in Orlando by a self-proclaimed ISIS advocate, killing at least 49 people and wounding at least 53 more, was not at all a surprise.  The scale of the attack should have been expected.  No one in the U.S. should have assumed anything less given the number of dead during events in Europe.

  What is frustrating, however, is that even though these attacks are highly predictable, very few Americans seem to be preparing in any meaningful way to counter them.  In fact, I happened across a clip of establishment mouthpiece Bill O’ Reilly the other day arguing that there “is nothing that we can do” to stop such "lone wolf attacks".

  Ostensibly, this is an argument against the inevitable push for more gun control by Leftists in the wake of the Orlando massacre; but it also sets a dangerous and false precedent in the minds of the public.  The fact of the matter is, the American people CAN stop the majority of terrorist attacks of this nature anytime they wish, without the aid of government or the implementation of unconstitutional gun control measures.

  On the “progressive” side of the debate, of course, their only solution is to promote more gun control. They have a habit of exploiting every tragedy in order to defile the 2^nd Amendment and dance in the blood of mass shooting victims while furthering their agendas.  They could not care less about the people who died, they only care about the political capital their deaths can buy.

  In the wacky social justice camp, a “feel good” approach is being pursued.  The argument among the cultural Marxists is that we must “turn hate into love,” whatever that means.  But the basic strategy seems to be to ignore the glaring problems with Islamic fundamentalism (whether supported by government or not) and blame straight white people for their supposed "colonial privilege" instead.

  All camps also seem to be overly focused on the sexual proclivities of the victims.  The fact that a gay club was the target has LGBT organizations in a frenzied rush to capitalize on the hate crime train.  Of course, the reality that the Left has consistently defended the integration of Islam and western culture is never brought up.  I have not yet seen the social justice crowd explain how they can reconcile the jihadist contempt for homosexuals with their supposed concern for the safety of the gay community.  I am certainly interested to watch the mental gymnastics in action, though.

  Frankly, the sexual “identities” of those killed does not really matter much.  Followers of ISIS have not necessarily shown any favoritism to any particular target group.  They’ll kill just about anyone, including their own comrades in arms if there is something to be gained by it.

  With all the sociopolitical blathering going on in the mainstream media, the core issue has been completely overlooked — why did those people die?

  As stated in the title, they did not die because they were gay.  ISIS agents kill all kinds of people under a spectrum of motives.  They may or may not have been attacked because they were gay (according to former classmates and his ex-wife, Mateen may have even been gay himself), but they died for other reasons.

  The victims also did not die because gun control measures are not in place; Omar Mateen passed background checks when purchasing his weapons.  No amount of added measures would have flagged him because he had no criminal record to speak of.  And, as the ISIS attacks in Paris proved, bad guys can get their hands on guns even in countries with the most stringent gun control laws.

  Perhaps the federal government could have stopped Mateen; they had already been watching him for years.  But, the feds either ignored the danger or were well aware of the danger and did nothing (this seems to be a constant trend in the history of terrorism in the U.S.).  In either case, the government is not going to save you from terrorism, and if your only hope is that you expect the authorities to keep you from harm, you are probably going to die.

  Leftists want to direct public interest towards the gay issue.  They want to make the Orlando attack a martyr’s cry for the LGBT community and social justice warriors.  But the cold truth is that most or all of the people killed in Orlando could have lived — if only they had a logical attitude of self defense.

  I have enough tactical background to recognize a professional shooter.  Anyone who can walk into the sheer wall of human chaos that erupts in a crowded building during an active shooter scenario and still be able to achieve the fire discipline necessary to achieve kill shots on 50 people and wound 53 more is highly trained.  A random spraying of bullets into a crowd is not going to produce such results.  This was the work of a collected and skilled person, or, there were other shooters present that we are not yet aware of.

  The ONLY remedy to remove a skilled active shooter (or even most unskilled active shooters) is another skilled shooter.  That night in Orlando ended in a bloodbath because there were no skilled civilian shooters, gay or straight, present in the building when the attack occurred.

  Now, given, if a terrorist is searching for a soft target, you can’t get much softer than a gay night club.  The lack of self defense instinct and a penchant for anti-gun politics make the gay community easy pickings.  However, the potential for self defense is present in almost every person as long as proper training is applied.

  As I have pointed out in the past, even the FBI admits that the vast majority of active shooter scenarios that are stopped are obstructed by civilians present at the event, NOT by law enforcement.  The great lie being perpetuated in the mainstream is that you must have "government training" to handle an active shooter.  In reality, civilians are the most common and effective stop measure.  Many active shooters will even commit suicide immediately after they meet any resistance from intended victims in order to avoid prolonged pain or capture.  You are the first and sometimes only responder when your own life is in danger.

  In the end, the danger represented by “lone wolf” terrorism or organized terrorism is energized by the American public’s refusal (on both the Left and the Right) to accept that the only practical solution is an armed and trained citizenry.  We can argue for an eternity about “hate crime,” Islamic integration, government vigilance, etc.  None of it will amount to jack.  Nothing will ever be accomplished.  The real debate, the debate that the establishment does not want the American public to entertain, is the debate over our level of personal preparedness.

  The mainstream narrative demands that we argue over gun control, multiculturalism, more government and better vetting of potential terrorists.  While all these issues are vital for various reasons, none of them confront the greater problem.  If Americans are not interested in methods to protect themselves, then all else is futile.  Each individual must decide his or her potential safety margin.

  The bottom line?  If you want better odds of survival, you will arm yourself, you will train regularly to handle active shooter scenarios and you will carry your weapon avidly.  If you do not, then YOU are responsible for every consequence that you, and those you care for, suffer down the road.

  

  

• US Negative Interest Rate Bets Surge To Record Highs

  As the "deflationary supernova" sweeps across the world, dragging bond yields to zero-and-beyond, even the almighty omniscent Federal Reserve has been forced to capitulate as the 'cheapness' of Treasury bonds lures the world's yield-hunters dragging it ever closer to the negative rate realities of Switzerland, Japan, and Germany. As rate-hike odds collapse, along with The Fed's credibility, so investors are increasingly betting on the chance that the inevitable negative interest rate washes ashore in a US money-market-crushing manner. While bets on 'NIRP' in 2016 have faded modestly, expectations for a 'below-zero' rate in 2017 (and implictly a stock market crash) have never been higher…

  We suspect the words "it could never happen here" were uttered numerous times in Switzerland, Japanese, and German halls of officialdom over the past few years…

  

   

  And with The Fed rapidly losing faith…

  

   

  It appears not only are Treasury yields attractively 'cheap' (and "safe") to the rest of the world's bonds…

  

   

  But their relative moves to stocks also suggest something is amiss in equity land around the world…

  

   

  And so, traders are increasingly positioning for negative rates in 2017… or, as we explain below, positioning cheaply for a stock market crash…

  

  [the chart shows the cumulative open interest in par calls on eurodollar futures contracts that expire in 2016 and 2017 – basically options on short-term interest rates with a strike price of zero, such that they pay out if the Fed takes rates negative]

  As we explained previously, when queried whether this is indeed a trade to bet on a market drop, Michael Green responded as follows:

  [A reader] thought  this might be an attempt by hedge funds to hedge out their exposure to rising interest rates very cheaply.

   

  My initial idea was that it actually could be a bet on negative rates (if for some reason the Fed had to come back into the picture with QE4).

   

  The bottom line:

   

  "Deep OTM puts on the S&P are very expensive while par ED calls are relatively cheap.

   

  In my view, we are that inflection point where the Fed is going to start to waffle…the bear market beckons and they will not be able to stick with their interest rate guidance. Of course, markets tend to frown on Central Bankers revealed as less than omniscient…"

  Loking at the chart above, one wonders if The Fed tries QE in 2016 first, and/or increases its war on cash before negative rates are forced upon Americans.

  

  

• Terrorism As Pretext For Intervention In Middle East

  Submitted by Nauman Sadiq via OrientalReview.org,

  In order to understand the hype surrounding the phenomena of Islamic radicalism and terrorism, we need to understand the prevailing global economic order and its prognosis. What the pragmatic economists have forecast about the free market capitalism has turned out to be true; whether we like it or not. A kind of global economic entropy has set into motion. The money is flowing from the area of high monetary density to the area of low monetary density.

  The rise of the BRICS countries in the 21st century is the proof of this tendency. BRICS are growing economically because the labor in developing economies is cheap; labor laws and rights are virtually nonexistent; expenses on creating a safe and healthy work environment are minimal; regulatory framework is lax; expenses on environmental protection are negligible; taxes are low; and in the nutshell, windfalls for the multinational corporations are huge.

  Thus, BRICS are threatening the global economic monopoly of the Western capitalist bloc: that is, North America and Western Europe. Here we need to understand the difference between the manufacturing sector and the services sector. The manufacturing sector is the backbone of the economy; one cannot create a manufacturing base overnight. It is based on hard assets: we need raw materials; production equipment; transport and power infrastructure; and last but not the least, a technically-educated labor force. It takes decades to build and sustain a manufacturing base. But the services sector, like the Western financial institutions, can be built and dismantled in a relatively short period of time.

  If we take a cursory look at the economy of the Western capitalist bloc, it has still retained some of its high-tech manufacturing base, but it is losing fast to the cheaper and equally robust manufacturing base of the developing BRICS nations. Everything is made in China these days, except for hi-tech microprocessors, softwares, a few Internet giants, some pharmaceutical products, the Big Oil and the all-important military hardware and the defense production industry.

  

  Apart from that, the entire economy of the Western capitalist bloc is based on financial institutions: the behemoth investment banks, like JP Morgan chase, total assets $2359 billion (market capitalization: 187 billion); Citigroup, total assets $1865 billion (Market Capitalization: 141 billion); Bank of America, total assets $2210 billion (Market Capitalization: 133 billion); Wells Fargo, Goldman Sachs, BNP Paribas and Axa Group (France), Deutsche Bank and Allianz Group (Germany), Barclays and HSBC (UK).

  After establishing the fact that the Western economy is mostly based on its financial services sector, we need to understand its implications. Like I said earlier, that it takes time to build a manufacturing base, but it is relatively easy to build and dismantle an economy based on financial services. What if Tamim bin Hammad Al Thani (the ruler of Qatar) decides tomorrow to withdraw his shares from Barclays and put them in some Organization of Islamic Conference-sponsored bank, in accordance with Sharia?

  What if all the sheikhs of Gulf countries withdraw their petro-dollars from the Western financial institutions; can the fragile financial services based Western economies sustain such a loss of investments? In April this year the Saudi finance minister threatened that the Saudi kingdom would sell up to $750 billion in Treasury securities and other assets if Congress passed a bill that would allow the Saudi government to be held responsible for any role in the September 11, 2001 terror attacks. And $750 billion is only the Saudi investment in the US, if we add its investment in Western Europe, and the investments of UAE, Kuwait and Qatar in the Western economies, the sum total would amount to trillions of dollars of Gulf’s investment in the US and Western Europe.

  Notwithstanding, we need to look for comparative advantages and disadvantages here. If the vulnerable economy is their biggest weakness, what are the biggest strengths of the Western powers? The biggest strength of the Western capitalist bloc is its military might. We have to give credit to the Western hawks they did which nobody else in the world had the courage to do: that is, they privatized their defense production industry. And as we know, that privately-owned enterprises are more innovative, efficient and in this particular case, lethal. But having power is one thing, and using that power to achieve certain desirable goals is another.

  The Western liberal democracies are not autocracies; they are answerable to their electorates for their deeds and misdeeds. And much to the dismay of pragmatic, Machiavellian ruling elites, the ordinary citizens just can’t get over their antediluvian moral prejudices. In order to overcome this ethical dilemma, the Western political establishments wanted a moral pretext to do what they wanted to do on pragmatic, economic grounds. That’s when 9/11 took place: a blessing in disguise for the Western political establishments, because the pretext of “war on terror” gave them carte blanche powers to invade and occupy any oil-rich country in the Middle East and North Africa region.

  

  No wonder then that the first casualty of “war on terror” after Afghanistan had been Iraq; and what did the corporate media tell us about invading Iraq back in 2003? Saddam’s weapons of mass “deception” and his purported links with al Qaeda? It is only a coincidence that Iraq holds 140 billion barrels of proven crude oil reserves and produces more than 3 million barrels per day of crude oil.

  Then again what did the Western mainstream media tell us about the Libyan so-called “humanitarian intervention” in 2011? Peaceful and democratic protests by the supposedly “moderate and secular” Libyans against the Qaddafi regime and the Western responsibility to protect the supposedly democratic revolutions and civilian lives? Once again it is only a coincidence that Libya holds 48 billion barrels of proven oil reserves and produces 1.6 million barrels per day of most easily extractable crude.

  Fact of the matter is that monopoly capitalism and global neo-colonial economic and political order are the real issues, while Islamic radicalism and terrorism are the secondary issues and itself a byproduct of the former. That’s how the mainstream media constructs artificial narratives and dupes its audience into believing them: during the Cold War it created “the Red Scare” and told its audience that communism is an existential threat to the free world and the Western way of life; the mainstream media’s naïve audience bought this narrative.

  Then the Western powers and their Saudi and Pakistani collaborators financed, trained, armed and internationally legitimized the Afghan “freedom fighters” and used them as proxies against the Soviet Union.

  After the dissolution of the Soviet Union they declared the former “freedom fighters” to be terrorists and another existential threat to the free world and the Western way of life. The audience of the corporate media again bought this narrative.

  Then again, during the Libyan and Syrian civil wars the former “terrorists” once again became freedom fighters – albeit in a more nuanced manner, this time around the corporate media sells them as “moderate rebels.” How on earth could you label a militant holding a gun in his hands as “moderate and peaceful?”

  The way I see it, Islamic State, like its predecessor, al Qaeda, is also a hobgoblin to create an atmosphere of fear in order to justify an interventionist policy in the energy-rich Middle East. Islamic State in Iraq and Syria is quite different from its so-called affiliates in remote and disparate regions such as Libya and Sinai.

  Only thing that differentiates Islamic State from other ragtag jihadist outfits is its sophisticated weapons arsenal that has been provided to it by NATO and bankrolled by the Gulf Arab states during the Syrian proxy war; another factor that gives a comparative advantage to Islamic State over other jihadist outfits is its top and mid-tier command structure, which is comprised of professional, ex-Baathist military and intelligence officers from Saddam era.

  Any militant outfit that lacks Islamic State’s weapons arsenal and its professional command structure cannot claim to be affiliated with it merely on the basis of ideological affinity without any organizational and operational link. Moreover, Islamic State is not a terror outfit like al Qaeda; it has overrun one-third of Syria and Iraq, therefore, it’s an insurgent organization.

  In order to sustain their crumbling “war on terror” narrative, the Western powers now make a distinction between “the green, yellow and red terrorists” – green militants, like the Free Syria Army, whom the NATO overtly supports; yellow jihadists, such as the Army of Conquest that includes the Saudi-supported, hardline Islamists like Ahrar al-Sham and the al-Qaeda-affiliate al-Nusra Front, whom the NATO covertly supports; and the red terrorists like the Islamic State which is a by-product of the hypocritical Western policy in Syria and Iraq.

  

  Photo taken in Benghazi, Libya, in February 2016

  In the last 15 years of the so-called “war on terror” the Western powers have toppled only a single Islamist regime of Taliban in Afghanistan and three Arab nationalist regimes — Saddam’s Baathist regime in Iraq, Qaddafi’s Afro-Arab nationalist regime in Libya and they are now desperately trying to oust another anti-Zionist, Baathist regime of Bashar al-Assad in Syria.

  Some of the high-ranking American and British security officials, like Dennis Blair of NSA, Eliza Manningham-Buller of MI-5 and Alastair Crooke of MI-6, have conceded on the record that bringing down the possibility of incidents of terrorism to a zero-level in a highly militarized world is simply not an option.

  Terrorism is only a crime, a heinous crime but a crime, nevertheless; it is not an act of war. Those who treat it like an act of war have ulterior motives. It is the job of the law enforcement and intelligence agencies to prevent and minimize such incidents from taking place, however, as the above mentioned security specialists have stated in their reports that just like any other crime the incidents of terrorism can be brought down significantly by implementing prudent and long-term security and foreign policies, but complete elimination of terrorism is simply not a possibility.

  Crimes like murders, thefts, robberies and rapes do occur in all societies; in the ideal, prosperous and peaceful societies the rate of such crimes is low, while in the impoverished and conflict-ridden societies the rate of such crimes is high. But there will always be criminals like Anders Breivik and Seung-Hui Cho of Virginia Tech massacre-fame who would unleash a reign of terror in any given society.

  Notwithstanding, the phenomena of militancy and insurgency has less to do with religious extremism, as such, and more with the weak writ of the state in the rural and tribal areas of the developing countries, which has further been exacerbated by the deliberate weaponization of certain militant groups by the regional and global players.

  The Maoist insurgency in India, for instance, has claimed 2,866 fatalities since 2010; and they are Hindus, not Muslims. Whether it’s Islamist or Maoist radicals, such insurgencies are only the reactions to wealth disparity and uneven development that has mostly been limited to the urban centers while the rural hinterland languishes in abject poverty, and the law enforcement and the state’s security apparatus does not has a presence in the insurgency-prone areas.

  The root factors that have primarily been responsible for spawning militancy and insurgency anywhere in the world is not religion but socio-economics, ethnic diversity, marginalization of the disenfranchised ethno-linguistic and ethno-religious groups and the ensuing conflicts; socio-cultural backwardness of the affected regions, and the weak central control of the impoverished developing states over their territory.

  After invading and occupying Afghanistan and Iraq, and when the American “nation-building” projects failed in those hapless countries, the US’ policy-makers immediately realized that they were facing large-scale and popularly-rooted insurgencies against the foreign occupation, consequently, the occupying military altered its CT (counter-terrorism) doctrines in the favor of a COIN (counter-insurgency) strategy. A COIN strategy is essentially different from a CT approach and it also involves dialogue, negotiations and political settlements, alongside the coercive tactics of law enforcement and military and paramilitary operations on a limited scale.

  All the regional militant groups like the Taliban, Islamic State, al Shabaab in Somalia and Boko Haram in Nigeria; and even some of the ideological affiliates of al Qaeda and Islamic State, like AQAP, AQIM, Islamic State in Afghanistan, Yemen and Libya, which have no organizational and operational association with al Qaeda Central or the Islamic State of Iraq and Syria, respectively, are not terror groups, as such, but Islamist insurgents whose cherished goal is the enforcement of Shari’a in the areas of their influence, like their progenitor, the Salafist State of Saudi Arabia.

  

  Saudi Arabia’s risky oil game

  Finally, I fail to see the reason why the Western powers have been blowing the Islamist insurgencies in the Middle East out of proportions, which have been but the consequence of their own ill-conceived wars in Afghanistan, Iraq, Libya, Yemen, Somalia and Syria? What is it that the insurgents want and the so-called “liberal interventionists” cannot accept as a matter of principle? Is it the enforcement of Shari’a, or the barbaric Hudood-style executions that have earned the Taliban, Islamic State, al Shabaab and Boko Haram the odium of the international community? If that is the case, then why do the Western powers overlook the excesses committed by Saudi Arabia where Shari’a is the law of the land and Hudood-style executions are an everyday occurrence?

  This contradiction speaks volumes about the sheer hypocrisy and double standards of the Western powers: that, when it comes to securing 265 billion barrels of Saudi oil reserves and 100 billion barrels, each, of UAE and Kuwait that together constitutes 465 billion barrels, i.e. one-third of the world’s proven crude oil reserves, they are willing to overlook the excesses that have been committed by such Medieval regimes but when it comes to negotiating with the Islamist insurgents to reach political settlements and to let up on all the violence and spilling of blood in the region, they stand firm against the so-called “terrorists” as a matter of principle.

  

  

• GAO Report Reveals The FBI Has Built A Massive Facial Recognition Database

  In what should come as a surprise to absolutely nobody (as we previewed it here years ago), a new report by the Government Accountability Office (GAO) reveals that the FBI has compiled a massive facial recognition database without any oversight.

  The FBI has accessed driver's license photo databases from 16 states, as well as passport and visa photo databases from the State Department which were used to compile a facial recognition database of millions of Americans and foreigners who have never been accused of a crime TechCrunch reports.

  

  The FBI has access to a stunning 411.9 million images for use in its facial recognition program, and while that should be enough to disturb everyone, the fact that the FBI ignored the Privacy Act which requires government agencies to disclose how they harvest and use personal information such as ID photos should ratchet that anxiety up a bit more. Oh, and one more thing, it's working with 16 more states to provide even further database access as well.

  According to the report, the DOJ has an oversight structure in place to help ensure privacy protections, but didn't approve the program until well over three years since the pilot began.

  A

  Speaking of privacy protections, the report found that the FBI has never done a true audit of the system to test its accuracy, so it doesn't even know if it's reliable or not.

  "There appears to be no internal oversight on this system and that's remarkable. Today we found out that they have no idea if they're misusing it or not, they've [FBI] literally never done an audit." said Alvaro Bedoya, executive director of the Center on Privacy and Technology at Georgetown Law. "They might not be storing these photos at Quantico but it has built, in effect, a nationwide biometric database using driver's license photos. It's breathtaking" Bedoya added.

  "I have always maintained that Americans have a fundamental right to privacy, and I believe that in order to protect this right, our citizens must have a basic understanding the tools law enforcement uses to keep them safe. This GAO report raises some very serious concerns, and reveals that the FBI's use of facial recognition technology is far greater than had previously been understood. This is especially concerning because the report shows that the FBI hasn't done enough to audit its own use of facial recognition technology or that of other law enforcement agencies that partner with the FBI, nor has it taken adequate steps to ensure the technology's accuracy." Senator Al Franken said in a statement on the report.

  One final point that should keep everyone up at night (but won't) is the fact that the FBI has proposed that the database be exempt from the provisions in the Privacy Act completely. Said otherwise, the FBI wants to (continue to) collect data on people and never have to disclose how it's collected, and what it's used for. Then again by doing whatever it wants anyway, we're already at that point.

  Land of the free, and such.

  

  

• The Fed Has Brought Back "Taxation Without Representation"

  Submitted by Simon Black via SovereignMan.com,

  In February 1768, a revolutionary article entitled “No taxation without representation” was published London Magazine.

  The article was a re-print of an impassioned speech made by Lord Camden arguing in parliament against Britain’s oppressive tax policies in the American colonies.

  Britain had been milking the colonists like medieval serfs. And the idea of ‘no taxation without representation’ was revolutionary, of course, because it became a rallying cry for the American Revolution.

  The idea was simple: colonists had no elected officials representing their interests in the British government, therefore they were being taxed without their consent.

  To the colonists, this was tantamount to robbery.

  Thomas Jefferson even included “imposing taxes without our consent” on the long list of grievances claimed against Great Britain in the Declaration of Independence.

  It was enough of a reason to go to war.

  These days we’re taught in our government-controlled schools that taxation without representation is a thing of the past, because, of course, we can vote for (or against) the politicians who create tax policy.

  But this is a complete charade. Here’s an example:

  Just yesterday, the Federal Reserve announced that it would keep interest rates at 0.25%.

  Now, this is all part of a ridiculous monetary system in which unelected Fed officials raise and lower rates to induce people to adjust their spending habits.

  If they want us little people to spend more money, they cut rates. If they want us to spend less, they raise rates.

  It’s incredibly offensive when you think about it– the entire financial system is underpinned by a belief that a committee of bureaucrats knows better than us about what we should be doing with our own money.

  So this time around the grand committee decided to keep interest rates steady at 0.25%.

  Depending on where you sit, this has tremendous implications.

  If you’re in debt up to your eyeballs (like the US government), low interest rates are great.

  It means the government can continue to borrow even more money and go even deeper into debt.

  Low interest rates are also good for banks, because they can borrow for nothing from the Fed, then earn a handsome profit on that free money.

  But if you’re a responsible saver, low interest rates are debilitating.

  Banks only pay their depositors about 0.1% interest. Yet according to the US Labor Department, inflation is at least 1.1%, and has averaged 2.23% since 2000.

  This means that when adjusted for inflation, anyone who bothers saving money is losing at least 1% every single year.

  That might not sound like much. But compounded over a longer period, it can lead to a substantial difference in your standard of living.

  Maybe that’s why the government’s own numbers show that wages, when adjusted for inflation, are far lower than they were even 15 years ago.

  Or why wealth inequality is now at a level not seen since the Great Depression.

  Or why alarming data from Pew Research last year show that the middle class is now no longer the dominant socioeconomic stratum in the United States.

  Back during his days as a presidential candidate, Ron Paul used to frequently remark that inflation is an invisible tax on the middle class.

  And he’s right.

  The combination of inflation and low interest rates benefits certain people, while it causes middle class people’s savings to lose purchasing power.

  This constitutes a transfer of wealth from savers to debtors.

  In other words, it’s a tax.

  Yet unlike a normal tax which is passed by Congress, this inflation/interest rate tax is created by the central bank.

  You and I don’t get to vote for the twelve members of the Federal Reserve Open Market Committee (FOMC) who dictate interest policy.

  In fact, based on the way the Federal Reserve works, the majority of the committee members are actually appointed by commercial banks.

  Here’s the quick version: there are twelve Federal Reserve banks in the US banking system.

  They’re located in major cities like New York, San Francisco, St. Louis, Dallas, etc. And each Federal Reserve bank has its own separate Board of Directors.

  Yet two-thirds of the board members for each Federal Reserve bank are appointed by big Wall Street banks like JP Morgan and Goldman Sachs.

  And oh, hey, what a surprise, the last three major appointments to the Federal Reserve were all former high-level Goldman Sachs employees.

  These guys aren’t even trying to hide the fact that Wall Street banks control the Fed.

  So, Wall Street banks control the boards of directors at the Fed banks. The Fed bank boards of directors appoint the committee members who set monetary policy.

  And the monetary policy they set ends up being a gigantic tax… a transfer of wealth from the middle class to a tiny group of beneficiaries, including the US government and the banks themselves.

  This is an unbelievable scam… and it truly is taxation without representation.

  Unelected bureaucrats impose their will over the entire financial system in a way that benefits a handful of people at the expense of everyone else.

  And we have absolutely no say in the matter.

  Well, actually we do.

  Even though we can’t vote for the boards of directors at the various Federal Reserve banks like Citigroup and Goldman Sachs can do, we are able to vote with our dollars.

  Think about it: every single dollar that you keep in this poor excuse for a financial system is a tacit vote in favor of the corruption.

  Every dollar you take out of the system is a vote against it.

  And as we’ve explored before, there are substantial options for your savings– precious metals, cryptocurrencies, productive real estate, safe P2P arrangements with strong yields, and well-capitalized banks abroad that actually pay sufficient interest to keep up with inflation.

  

  

• "It's Only A Matter Of Time Before Many Of Them Blow Up" – The Default Cycle Has Begun

  It's been a tough year for traders and bankers alike, as layoffs have gripped firms due to difficult trading environments and an overall sluggish economy.

  However, there is one area that is starting to actually pick up. As the number of bankruptcies begin to increase, firms are expanding their turnaround teams in order to handle all of the work headed their way – bankers with experience in turnarounds and restructuring are now in high demand.

  "Firms are hungry for experienced restructuring professionals, who are increasingly in short supply. You need to reach deep into your Rolodex to find people you know who are capable, and you need to move fast." said Richard Shinder, hired by Piper Jaffray in March to help build out its restructuring team.

  Both the number of bankruptcies and the amount of liabilities associated with them have picked up significantly, as Bloomberg points out.

  

  With the amount of companies in distress, firms such as Lazard, Guggenheim Partners, Perella Weinberg Partners and AlixPartners are all hiring in anticipation of even more bankruptcies.

  "Cycles come and go, but when a wave hits, you want to make sure you are in the right seat with the right group of people. We are putting the band back together." said Ronen Bojmel, who is helping to build the restructuring team at Guggenheim.

  Moody's is forecasting high default rates in sectors that are largely expected given commodity prices, such as Metals & Mining and Oil & Gas, however trouble looks to be spilling over into other sectors such as Construction, Media, Durable Consumer Goods, and even Retail. As we have discussed for quite some time, central banks in their infinite wisdom have made the cost of money so cheap that it has created an environment that forces a complete misallocation of capital in the market as the search for yield continues down every rabbit hole it can find. This will (and already is) inevitably catch up to the economy in the form of defaults and bankruptcies.

  "The wave is already here. Many risky debt deals have been done as people chased yield, and it's a matter of time before many of them blow up." said Tim Coleman, head of PJT Partners.

  

  Business is booming for firms such as Guggenheim and Lazard, which implicitly means very bad news for the rest of the economy.

  From BBG

  Guggenheim has one of the fastest-growing turnaround teams, with 11 senior advisers brought on in less than three years. Projects include advising satellite operator Intelsat SA, which has more than $15 billion of debt. For Lazard, the largest independent merger adviser, restructuring advisory revenue jumped 84 percent to $42.6 million in the first three months of this year from the same period last year, according to filings. Its work included negotiating turnaround plans for Vantage Drilling, an oil-and-gas company that sought bankruptcy protection in December, and Walter Energy Inc., a coal producer that filed last summer.

  "Restructuring advisers have been busy moving to different firms lately. That shows a growing conviction that the next cycle is upon us and there is a desire to be in the right seat when the music stops. And if you're really lucky, among friends you know and trust." Said Guggenheim's Durc Savini.

  The right seat when the music stops, that sounds like something tin foil hat wearing irrelevant bloggers would say. At any rate, with the corporate bankruptcy index surging, and firms scrambling to bolster restructuring teams, we recommend that everyone remain acutely aware of these developments.

  

  

  

• Here's What You Need To Know About The Cold War 2.0 (Because It's Already Here)

  Submitted by Claire Bernish via TheAntiMedia.org,

  As mainstream media attention largely focuses on complex entanglements destabilizing the Middle East, the United States continues to advance a rather aggressive agenda against Russia through its NATO allies in the Balkans and beyond. While an amassing of NATO troops in states bordering the U.S.’ Cold War foe might be troubling news in itself, an examination of several factors provides ample reason for vigilance.

  

  Source: RiskAdvisory

  On Tuesday, NATO Secretary-General Jens Stoltenberg announced the alliance would be sending 4,000 troops to the Baltic states and Poland after nervous nations called for increased NATO presence following Russia’s annexation of Crimea. Germany, the U.S., the U.K., and an as-yet unnamed fourth nation will deploy troops to Estonia, Lithuania, Latvia, and Poland at some point in 2017. But the build-up won’t be limited to those areas.

  “We are looking into how we can increase our presence in the Black Sea region,” Stoltenberg explained to reporters prior to Tuesday’s meeting of the defense ministers. “We have already increased our presence with more air-policing, with assurance measures, with more naval presence and with more exercises.

   

  “But we are also looking into what more we can do. And we are discussing and addressing an offer from Romania that they can provide the framework, the headquarters for a brigade that can then organize and facilitate NATO activities in the region, including exercises and also assurance measures.”

  Following the meeting, the Secretary-General told the press, “I welcome the commitments made by many allies today to contribute.”

  Russia, however, understandably sees the bolstering of troops — particularly in the Black Sea region — in a different light.

  “This is not NATO’s maritime space and it has no relation to the alliance,” Russia’s director on European affairs, Andrey Kelin, told Interfax.

  At a meeting of the Atlantic Council last month, Stoltenberg asserted the U.S. and E.U., as Zero Hedge paraphrased, “have the right in the form of NATO to defend its territories on foreign soil” in regard to Russia. This muddied stance — positing offense behind the thin veil of taking defensive measures — has generated concerns among policy critics who see such moves as poking the Cold War hornet’s nest and capable of provoking military conflict. And for good reason.

  While geopolitical wrangling through NATO continues, the U.S. has initiated a sweeping secret project called The Russia New Generation Warfare — an “analysis of how Russia is reinventing land warfare in the mud of eastern Ukraine,” as DefenseOne described — or, a study tasked with modernizing ground capabilities to counter perceived superiority of Russian forces. Director of the U.S. Army’s Capabilities Integration Center, Lt. Gen. H. R. McMaster describes the impetus for the project — lack of preparedness — as if ground conflict with Russia in this new Cold War is a virtual foregone conclusion.

  “We spend a long time talking about winning long-range missile duels,” McMaster explained, noting such strategy doesn’t account for what happens after such a bombardment. What the U.S. needs, he said, is an increase in, as well as better, artillery.

   

  “We’re outranged by a lot of these systems and they employ improved conventional munitions, which we are going away from,” he said. “There will be a 40- to 60-percent reduction in lethality in the systems that we have. Remember that we already have fewer artillery systems. Now those fewer artillery systems will be less effective relative to the enemy. So we need to do something on that now.”

  McMaster’s concerns surround updating capabilities of ground operations to align and preferably surpass those of Russia; but the greatest threat — the one that has frozen the Doomsday Clock at three minutes to midnight — is the potential for escalation to nuclear war. And as hyperbolic as that may sound, either U.S.- or Russian-instigated nuclear war isn’t at all the outside possibility it had been for years following the first Cold War.

  Though a nuclear attack as a first-strike act of aggression might not happen anytime soon, as Seth Baum, executive director of the Global Catastrophic Risk Institute, explains the situation, aggression should be the least of our concerns.

  “The fact that no nuclear war has ever happened does not prove that deterrence works, but rather that we have been lucky,” Baum warned.

  Inadvertent nuclear war actually presents a far greater threat than a basic act of aggression with nuclear missiles. In fact, accidents in judgment around the world put us all at risk a startling number of times each year. U.S. and NATO tacitly provoking Russia through the installation of bases and troop buildup flanking Russian borders, in the context of accidental nuclear war, constituted a major factor in the decision by the Bulletin of the Atomic Scientists to move the Doomsday Clock to the brink of midnight.

  According to the latest available data, Baum explained, between 1977 and 1983, false alarms — moments when one nation or another had nearly launched nuclear warheads in response to faulty information another had already done so — occurred between 43 and 255 times each year. While statistics more current than 1983 remain classified, the posturing between NATO and Russia makes the sheer number of false alarms a pertinent cause for vigilance.

  “Russia understands as well as China (and U.S. strategists, for that matter) that the U.S. missile defense systems near Russia’s borders are, in effect, a first-strike weapon, aimed to establish strategic primacy — immunity from retaliation,” Professor Noam Chomsky explains in his latest book, Who Rules the World? “Perhaps their mission is utterly unfeasible, as some specialists argue. But the targets can never be confident of that. And Russia’s militant reactions are quite naturally interpreted by NATO as a threat to the West.

   

  “One prominent British Ukraine scholar poses what he calls a ‘fateful geographic paradox’: that NATO ‘exists to manage the risks created by its existence.’”

  Chomsky somewhat ominously adds, “The threats are very real right now.”

  With President Obama’s nuclear weapons modernization budget topping the $1 trillion mark, critics question the needless stoking of Cold War rivalries through a de facto renewed arms race.

  “Both Russia and the United States are now officially and publicly using the other side as a justification for nuclear weapons modernization programs,” Hans Kristensen, director of the Nuclear Information Project, told the Intercept in an email.

  This sentiment echoed that of David Culp, a legislative representative with the Quaker-affiliated Friends Committee on National Legislation, whom the Intercept cited:

  “The increased spending on U.S. nuclear weapons is already provoking similar responses from Russia and China. We are slowly slipping back into another Cold War, but this time on two fronts.”

  Geostrategic wrangling along Russia’s borders isn’t cause for panic, by far. But with attentions trained on the caustic imbroglio on numerous Middle East fronts, it remains imperative to understand that a less immediate — but no less crucial — additional arena is ramping up. Particularly as repercussions from the latter could most directly impact us all.

  

  

• "Loan Stacking" – The Blind Spot That Could Blow Up The P2P Model

  Back in February we noted that there were cracks starting to show in the world of P2P lending, and more specifically, with LendingClub's inability to assess credit risk of its borrowers that were causing the company to experience higher write-off rates than forecast.

  From that February post, here is a chart that was used in a LendingClub presentation showing just how far off the company was in predicting write-off rates – it was evident then that their algorithms weren't working very well.

  Here is what we said at the time:

  What the slide above shows is that LendingClub is terrible at assessing credit risk. A write-off rate of 7-8% may not sound that bad (well, actually it does, but because P2P is relatively new, we don't really have a benchmark), it's double the low-end internal estimate.

   

  That's bad.  In other words, we said, the algorithms LendingClub uses to assess credit risk aren't working. Plain and simple.

  

  And now courtesy of Reuters, we learn of a critical blind spot in the world of online lending. The risk to these online P2P companies such as LendingClub, is that as shown above, robust enough credit checks have not been developed to gauge true credit risk of borrowers. If said borrowers had what are referred to as "stacked" loans, meaning they have taken out one loan in order to pay for a prior loan, sometimes the algorithm won't be able to pick up all of those obligations in a timely enough fashion, and the borrowers credit risk is significantly understated.

  As Reuters explains:

  Many online lenders have failed to detect the “stacking” of multiple loans by borrowers who slip through their automated underwriting systems, lending company executives and investors told Reuters.

   

  The practice is proliferating in the sector – led by LendingClub, OnDeck and Prosper Marketplace – because of many lenders’ hurried, algorithmic underwriting, use of “soft” credit inquiries, and patchy reporting of the resulting loans to credit bureaus, according to online lending and consumer credit experts.

   

  Such loopholes, they said, can result in multiple lenders making loans to the same borrowers, often within a short period, without the full picture of their rising obligations and deteriorating ability to pay.

   

  Stacking is “causing problems with the whole industry," said Brian Biglin, chief risk officer of LoanDepot, a five-year-old mortgage lender that last year started making personal loans online.

  However, even if lenders are aware of the issue, and run further credit checks, the reporting can still be sketchy enough where the risk still is not picked up properly.

  In their haste to give applicants quick loan decisions – sometimes within 24 hours – some marketplace lenders do not conduct thorough credit checks, known as "hard inquiries," according to industry executives.

   

  Such checks create an updated log of credit and loan applications, and they can lower a borrower's credit score. Soft inquiries don’t require the borrower’s consent and don't usually show up on credit reports.

   

  OnDeck said it runs only soft checks. LendingClub and Prosper said they initially run soft checks but run hard checks later in the process, just before funding loans.

   

  Running hard checks only at the last minute, however, can also leave other lenders in the dark, said Gilles Gade, president and CEO of Cross River Bank, which invests in many online lending platforms. At that point, the borrower may have already obtained other loans, he said, because hard checks can take about 30 days to show up on a credit report.

   

  Another problem: Loans that never show up on credit reports at all, because of uneven reporting by online lenders.

   

  “Not all lenders in our industry report to bureaus," said Leslie Payne, a spokeswoman for LendUp, which makes high-interest installment loans. In a February blog post, Experian, the credit bureau, said a “significant number” of marketplace lenders do not report their loans.

   

  Prosper, Avant and LendingClub told Reuters that they report their loans to all three major credit bureaus at least monthly. OnDeck said it reports to several leading commercial credit bureaus, including Experian and PayNet.

  These new revelations could scare off investors who are already concerned about the loose underwriting standards and rising default risk. As Reuters notes, some major backers such as BlackRock and Citigroup have already retreated from the space.

  Firms such as Blue Elephant Capital Management stopped buying loans from Prosper for several months over concerns about weak underwriting and profitability. Brian Weinstein, CIO at Blue Elephant said that marketplace lenders need to slow their lending processes and improve sharing of credit information, adding "stacking was one of the reasons why we think we saw credit deteriorate last summer when we stopped our marketplace lending program."

  Industry leaders LendingClub and Avant said they are aware of stacking and its dangers, but they downplayed the risks Reuters notes.

  With the turmoil that LendingClub has been involved in as of late, namely the prompt resignation of CEO Renaud Laplanche as a result of knowingly selling $22 million in loans to Jefferies that didn't meet the agreed specifications, the last thing the firm needs is to blow up (further) because it was too nonchalant about ensuring it had a robust credit approval process.

  

  

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• DHS Secretary Sees All Americans As A Threat: "Gun Control Has To Be A Part Of Homeland Security"

  Submitted by Mac Slavo via SHTFPlan.com,

  The agency’s source of power has always been fear.

  And now is the time to capitalize upon it.

  Homeland Security chief Jeh Johnson has seized upon the Orlando shooting and is… rather predictably… using the specter of terrorism as a pretext for instituting gun control on a wider scale. (Of course, he isn’t alone.)

  Secretary Johnson told CBS News that:

  Just days after the massacre in an Orlando nightclub left 49 people dead and 53 wounded, Homeland Security Secretary Jeh Johnson on Tuesday said that gun control is now a critical element of protecting the U.S. homeland and keeping Americans safe.

   

  “We have to face the fact that meaningful gun control has to be a part of homeland security,” Johnson said in an interview on “CBS This Morning.” “We need to do something to minimize the opportunity for terrorists to get a gun in this country.”

   

  […]

   

  “I thought frankly after Sandy Hook where you have schoolchildren murdered in a classroom that maybe finally this will be the tipping point and we were not able to move the needle in Congress, unfortunately,” Johnson said.

  It seems Jeh Johnson thought Sandy Hook would be all that was necessary to reign in gun rights. For him, it is all part of ‘public safety.’

  But apparently, the powers-that-be will wait for a bigger and bigger tragedy until something too big to ignore happens, then they can push for their un-American agenda with the opposition pinned down and the rest of the population too afraid to think.

  Maybe the Orlando mass murder is that event.

  DHS Secretary Jeh Johnson: Passing gun control is now ‘part and parcel of homeland security’

  Though quieter than than it has been under past heads, Homeland Security has clearly maintained the twisted view that all Americans are potential terrorists, and that a preemptive police state, complete with surveillance, data mining and social profile trolling is necessary in order to maintain relative peace.

  This attitude is noted in recent meetings of the Homeland Security Advisory Committe, discussing in part its community partnership program for Countering Violent Extremism (CVE):

  “Secretary Johnson said there is much left to accomplish in this final year of the Administration… Counterterrorism remains a cornerstone mission of the Department. There is a new environment when it comes to the global terrorism threat, which includes not only terrorist-directed attacks, but terrorist-inspired attacks. These threats call for a whole-of-government response, including military, law enforcement, and robust intelligence gathering and sharing efforts. These efforts extend to the private sector as well, and DHS is very active in this arena.”

  It is clear that so-called “right-wing extremists” are still a leading concern for Homeland Security and the federal government agencies.

  via Breitbart

  One month after the San Bernardino terrorist attack that left 14 innocent people dead, Department of Homeland Security Secretary Jeh Johnson told advisors that right wing extremists pose just as much of a threat to the country as Islamic extremists.

   

  Johnson made the comments during the Homeland Security Advisory Council’s (HSAC) January meeting. City of Austin Mayor Art Acevedo, whom Johnson appointed to HSAC, shifted the discussion to the threat of right-wing extremists, according to the official meeting minutes.

   

  “Member Acevedo reminded the Council that the threat from right-wing extremists domestically is just as real as the threat from Islamic extremism,” the minutes state.

  The Homeland Security Advisory Committee reports:

  “Secretary Johnson agreed and noted that CVE, by definition, is not solely focused on one religion. Member Goldenberg seconded Member Acevedo’s remarks and noted the importance of online sites in right wing extremist communities, not only in America but worldwide.”

  Against all logic, the Department of Homeland Security, which oversees immigration and the borders in addition to law enforcement and national security issues, has vowed to ‘give voice to the plight’ of Muslims, rather than focusing on keep out radical and potentially violent members of that group – essentially welcoming another attack.

  Instead, ordinary Americans, including those with dissident political views of any kind, are typically regarded as potential threats under Homeland Security watch lists.

  Flags, firearms and incendiary conversations on social media have given ’cause’ to a government that is out of control and only wants a population that is ready to turn in its guns and be afraid of what the media tells them, not a population that is ready to challenge the unconstitutional actions of its government.

  Changes are coming. Keep your eyes open and encourage those around you to stand up for their rights.

  

  

• USDJPY, Nikkei Plunge As BoJ Disappoints With "No Change"

  While only 5 of 40 economists expected a rate cut and only 7 of 39 any additional easing, hopes were rife for some additional ETF buying or hints at further stock purchasing by The Bank of Japan… but no. USDJPY immediatley plunged to a 104 handle and Nikkei 225 crashed 300 points.

  As Bloomberg reports, for a two-day meeting, this was the BOJ's earliest announcement since June 2014. Some more headlines crossing terminal:

  • BOJ Board Votes 7-2 to Keep Neg Rate Unchanged – Sato, Kiuchi Dissented on Vote on Negative Rate
  • BOJ Board Votes 8-1 to Keep monetray base target
  • BOJ: Production Continues to Be More or Less Flat After Quake
  • BOJ: Japan's Economy Continues to Recover Moderately
  • BOJ: Needs to Be Mindful of Risks to Price Trend
  • BOJ slightly more bearish on price outlook, admitting that CPI might be “a little negative'' or around 0% for the time being.
  • BOJ says inflationary expectations have weakened recently, yet no action. Kuroda's explanation later today will be interesting.
  • 55 percent of economists forecast a BOJ move at the next BOJ meeting on July 29, in a June 6-10 Bloomberg survey. How many will changed their minds after the BOJ did nothing even with the yen at the highest since September 2014?

  Risks highlighted in the statement include uncertainties surrounding emerging and commodity-exporting economies, particularly China, developments in the U.S. economy and the European debt problem.

  The doves and the hawks are growing further apart…

  

   

  And the "no change" decision has crushed USDJPY and Japanese stocks…

  

   

  Nikkei 225 is testing the critical 15,500 level once again…

  

   

  USDJPY is now at its lowest since Sept 2014 and 17% from the June 2015 highs…

  

   

  The USDJPY tumble is dragging US equity futures lower… Dow Futs -180 from post-Fed spike highs…

  

  Finally, as Enda Curran, Bloomberg's Chief Asia Economics Correspondent notes,

  Is Kuroda handing the growth baton to the government? That's been a theme of G-7 and G-20 policy gatherings this year that it's time for governments to step in and do more for growth by spending money and pushing through reforms. It's hard to pick up any sense of urgency from this on the BOJ side.
   

  When asked what he thought of Kuroda's decision, Shinzo Abe said "Depends."

  

  

• Violence Begets Violence: The Orlando Shootings And The War On Terror

  Submitted by John Whitehead via The Rutherford Institute,

  “Americans have been told that their government is keeping them safe by preventing and prosecuting terrorism inside the US… But take a closer look and you realize that many of these people would never have committed a crime if not for law enforcement encouraging, pressuring, and sometimes paying them to commit terrorist acts.” – Human Rights Watch

  We can rail against ISIS, hate crimes, terror threats, Islamic radicalization, gun control and national security. We can blame Muslims, lax gun laws, a homophobic culture and a toxic politic environmental. We can even use the Orlando shooting as fodder for this year’s presidential campaigns.

  But until we start addressing the U.S. government’s part in creating, cultivating and abetting domestic and global terrorism – and hold agencies such as the FBI and Defense Department accountable for importing and exporting violence, breeding extremism and generating blowback, which then gets turned loose on an unsuspecting American populace – we’ll be no closer to putting an end to the violence that claimed 50 lives at an Orlando nightclub on June 12, 2016, than we were 15 years ago when nearly 3,000 individuals were killed on Sept. 11, 2001.

  Here’s what I know:

  The United States, the world’s largest exporter of arms, has been selling violence to the world for too long now. Controlling more than 50 percent of the global weaponry market, the U.S. has sold or donated weapons to at least 96 countries in the past five years, including the Middle East.

   

  The U.S. also provide countries such as Israel, Egypt, Jordan, Pakistan and Iraq with grants and loans through the Foreign Military Financing program to purchase military weapons.

   

  At the same time that the U.S. is equipping nearly half the world with deadly weapons, profiting to the tune of $36.2 billion, its leaders have also been lecturing American citizens on the dangers of gun violence and working to enact measures that would make it more difficult for Americans to acquire certain weapons.

  Blowback, a CIA term referring to the unintended consequences of the U.S. government’s international activities, is a reality. Chalmers Johnson, a former CIA consultant, repeatedly warned that America’s use of its military to gain power over the global economy would result in devastating blowback. We failed to heed his warning.

  The 9/11 attacks were blowback: the CIA provided Osama bin Laden with military training and equipment to fight the Soviet Union, only to have him turn his ire on the U.S. The Boston Marathon Bombing was blowback: the Tsarnaev brothers reportedly credited the U.S. wars in Afghanistan and Iraq as the motives for their attacks.

  The attempted Times Square bomber was blowback for America’s drone killings of civilians in Afghanistan and Iraq. The Fort Hood shooter, a major in the U.S. Army, was blowback for the horrors our enlisted men and women are being exposed to as part of this never-ending war on terror: the 39-year-old psychiatrist had been struggling to come to terms with when, if ever, is the death of innocents morally justified.

  The Orlando nightclub shooting is merely the latest tragic example of blowback on a nation that feeds its citizens a steady diet of violence through its imperial wars abroad and its battlefield mindset at home, embodied by heavily armed, militarized police and SWAT team raids.

  You want to put an end to the mass shootings, the terrorist bombings and the domestic extremism?

  Then start by telling the government to stop creating blowback at home by stirring up wars abroad, stop killing innocent civilians as part of its drone wars, and stop policing the world through foreign occupations.

  Demand that the U.S. government stop turning America into a battlefield. Hillary Clinton may be right that “weapons of war have no place on our streets,” but I don’t see her attempting to demilitarize the U.S. government—the largest gun owner in the nation—she just wants to take guns away from American citizens.

  And while you’re at it, tell the FBI to stop labeling anyone who might disagree with the government’s policies as “anti-government,” “extremist” and a “terrorist,” because while they’re busy turning average Americans into criminals, the real criminals are getting away with murder.

  Omar Mateen, the alleged gunman responsible for the Orlando shooting, is the end product of a diseased mindset that has overtaken the U.S. government. It’s a calculating mindset that views American citizens as economic units on a profit-and-loss ledger. And it’s a manipulative mindset that foments wars abroad (and in our own communities) in order to advance its own ambitions.

  Whatever Mateen’s issue—whether he was “radicalized on the internet,” as the government suggests, or mentally ill or homophobic or conflicted about his own sexuality—he was also a victim of a government that has been at war with its own citizens for decades.

  Mateen was a 29-year-old American citizen, born in New York and raised in Florida.

  He was employed by the military industrial complex. Since 2007, he worked for G4S, one of the world’s largest private security firms, which contracts with the Department of Defense and the Department of Homeland Security. G4S operates security centers, prisons and court cells and provides security to college campuses such as the University of Virginia.

  As a security guard, Mateen was licensed to carry a firearm.

  He was placed on the FBI’s terrorist watch list twice because of inflammatory remarks shared with a coworker and a brief association with an American suicide bomber. After twice being investigated and interviewed by the FBI, Mateen had his case file closed and was removed from the agency’s watch list.

  And here’s where things get particularly interesting: what role, if any, did the FBI play in Mateen’s so-called radicalization?

  Was the agency so busy amassing power, pursuing non-terrorists and inventing terrorists that it failed to recognize a “lone wolf” terrorist in its midst? Or was this another case of the FBI planting the seeds of terrorism in an impressionable mind?

  Neither scenario is beyond the realm of possibility.

  It could be that the FBI dropped the ball.

  How many times in the wake of a bombing or shooting have we discovered that the alleged terrorist was known to the FBI and yet still managed to slip through their radar?

  How is it that most people who get on the FBI’s terrorist watch list—even mistakenly—rarely if ever get off, while 29-year-old Omar Mateen was taken off the watch list, despite having been investigated for making inflammatory statements, interrogated by government agents on two different occasions, and having connections to a suicide bomber (two criteria for being watchlisted)?

  As The Guardian notes:

  Some of the most serious terrorist attacks carried out in the US since 9/11 have revolved around “lone wolf” actions, not the sort of conspiracy plots the FBI have been striving to combat. The 2010 Times Square bomber, Faisal Shahzad, only came to light after his car bomb failed to go off properly. The Fort Hood killer Nidal Malik Hasan, who shot dead 13 people on a Texas army base in 2009, was only discovered after he started firing. Both evaded the radar of an FBI expending resources setting up fictional crimes and then prosecuting those involved.

  Then again, it could be that this is yet another terrorist of the FBI’s own making.

  The FBI has a long, sordid history of inventing crimes, breeding criminals and helping to hatch and then foil terrorist plots in order to advance its own sordid agenda: namely, amassing greater powers under the guise of fighting the war on terrorism.

  Investigative journalist Trevor Aaronson argues convincingly that “the FBI is much better at creating terrorists than it is at catching terrorists.” According to Aaronson’s calculations, the FBI is responsible for more terrorism plots in the United States than al Qaeda, al Shabaab and the Islamic State combined.

  One method to the agency’s madness involves radicalizing impressionable young men in order to create and then “catch” terrorists. Under the guise of rooting out terrorists before they strike, the FBI targets mentally ill or impressionable individuals (many of whom are young and have no prior connection to terrorism), indoctrinates them with anti-American propaganda, pays criminals $100,000 per case to act as informants and help these would-be terrorists formulate terror plots against American targets, provides them with weapons and training, and then arrests them for being would-be terrorists. This is entrapment, plain and simple, or what former FBI director Robert Mueller referred to as a policy of “forward leaning – preventative – prosecutions.”

  Whether or not the crisis of the moment—in this case, the mass shooting at an Orlando nightclub—is a legitimate act of terrorism or manufactured by some government agency or other, it’s hard not to feel as if we’re being manipulated and maneuvered by entities that know exactly which buttons to push to ensure our compliance and complaisance.

  Already the politicians are talking about the next steps.

  President Obama wants to restrict gun sales to American citizens. Of course, the U.S. government will continue to increase its production of and sales of weapons worldwide. What this means, as we’ve seen in Afghanistan and Iraq and most recently with ISIS, is that U.S. weapons will find their way to enemy hands and be used against our own soldiers.

   

  Citing the need for an intelligence surge, Hillary Clinton wants to pressure technology companies to help the government conduct expanded online surveillance of potential extremist attackers. Of course, we already know how the government defines a potential extremist: as anyone—right-wing or left-wing—who disagrees with government policies and challenges government authority.

   

  Meanwhile FBI Director James Comey is urging Americans to report anything they see that may be “suspicious.” There’s also been a lot of talk about individuals who are “radicalized through the internet.” This comes on the heels of efforts by the Obama administration to allow the FBI to access a person’s Internet browser history and other electronic data without a warrant.

   

  This is the same agency that is rapidly hoovering up as much biometric data as it can (DNA, iris scans, facial scans, tattoos) in order to create a massive database that identifies each citizen, tracks their movements, connects them to relatives and associates, and assigns them threat assessments based on their potential to become anti-government troublemakers, “extremists” or terrorists of any kind.

  Suddenly it’s all starting to make a lot more sense, isn’t it?

  As I point out in my book Battlefield America: The War on the American People, what we’re witnessing is the case being made for the government to shift even more aggressively into the business of pre-crime: monitoring all Americans, identifying which individuals could become potentially “anti-government,” and eliminating the danger before it can pose a threat to the powers-that-be.

  In this way, whether fabricated or real, these attacks serve a larger purpose, which is to give the government even greater powers to wage war, spy on its citizens, and expand the size and reach of the government.

  The 9/11 attacks delivered up a gift-wrapped Patriot Act to the nation’s law enforcement agencies. As Chalmers Johnson recounted:

  The people in Washington who run our government believe that they can now get all the things they wanted before the trade towers came down: more money for the military, ballistic missile defenses, more freedom for the intelligence services and removal of the last modest restrictions (no assassinations, less domestic snooping, fewer lists given to “friendly” foreign police of people we want executed) that the Vietnam era placed on our leaders.

  The Orlando attacks may well do away with what little Fourth Amendment protections remain to us in the face of aggressive government surveillance.

  Thus, whether you’re talking about a mass shooting at an Orlando nightclub, a bombing at the Boston Marathon, or hijacked planes being flown into the World Trade Center, the government’s spin machine is still operating from the same playbook they used post-9/11. Just invoke the specter of terrorism, trot out the right bogeyman (extremist Muslims, homophobes, racists, etc.), sentimentalize the victims enough, and most Americans will fall in line and patriotically support the government in its fight against the “enemy.” 

  Likewise, the government’s response to each crisis follows the same tune: a) the terrorists did it, b) the government is hard at work fighting the war on terror, and c) Americans need to “help” the government by relinquishing some of their freedoms.

  So where does that leave us?

  Chalmers Johnson, who died in 2010, believed that the answer is to bring our rampant militarism under control. As he concluded in an essay for The Nation:

  From George Washington’s “farewell address” to Dwight Eisenhower’s invention of the phrase “military-industrial complex,” American leaders have warned about the dangers of a bloated, permanent, expensive military establishment that has lost its relationship to the country because service in it is no longer an obligation of citizenship. Our military operates the biggest arms sales operation on earth; it rapes girls, women and schoolchildren in Okinawa; it cuts ski-lift cables in Italy, killing twenty vacationers, and dismisses what its insubordinate pilots have done as a “training accident”; it allows its nuclear attack submarines to be used for joy rides for wealthy civilian supporters and then covers up the negligence that caused the sinking of a Japanese high school training ship; it propagandizes the nation with Hollywood films glorifying military service (Pearl Harbor); and it manipulates the political process to get more carrier task forces, antimissile missiles, nuclear weapons, stealth bombers and other expensive gadgets for which we have no conceivable use. Two of the most influential federal institutions are not in Washington but on the south side of the Potomac River–the Defense Department and the Central Intelligence Agency. Given their influence today, one must conclude that the government outlined in the Constitution of 1787 no longer bears much relationship to the government that actually rules from Washington. Until that is corrected, we should probably stop talking about “democracy” and “human rights.”

  

  

• "When The Dragon Roars" – ASEAN Officials Unleash Statement Critical Of China… Then Immediately Retract

  "We expressed our serious concerns over recent and ongoing developments, which have eroded trust and confidence, increased tensions and which may have the potential to undermine peace, security and stability in the South China Sea." That is what was said in a statement issued by the Association of Southeast Asian Nations (ASEAN)… before it was immediately retracted.

  

  Following a China-ASEAN meeting in the southern Chinese city of Yuxi, an ASEAN statement was issued by Malaysia's Foreign Ministry that expressed deep concerns over tensions in the South China Sea, however just hours later the statement was mysteriously retracted.

  The original statement included comments that took some not so subtle shots at China's activity in the region, and given the fact that the statement was immediately retracted, it is clear that China wasted no time in explaining to to everyone involved who was in charge.

  Here are some of the comments that were in the initial statement upon release, per AP.

  "We expressed our serious concerns over recent and ongoing developments, which have eroded trust and confidence, increased tensions and which may have the potential to undermine peace, security and stability in the South China Sea"

   

  "We emphasized the importance of non-militarization and self-restraint in the conduct of all activities, including land reclamation, which may raise tensions in the South China Sea"

   

  "[The Group] cannot ignore what is happening in the South China Sea as it is an important issue in the relations and cooperation between ASEAN and China"

  According to TIME, it takes consensus of all 10 members for ASEAN to issue any statement, and one senior regional diplomat said that in the minutes after the ASEAN statement went out, Beijing lobbied to have the statement retracted.

  "When the dragon roars, the little countries need to stay away from the fire coming out of its mouth. We have no choice but to acknowledge this political reality." said the diplomat.

  Perhaps the countries initially had an extra shot of courage after US Defense Secretary Ash Carter's visit to Singapore earlier this month, where Carter said that the US would remain the most powerful military and main underwriter of security in the region. Whatever the case, Carter was not in that meeting, and the little countries ran out of resolve when the big dragon roared. The US may want to tread very lightly in its assumption that the region will support its role in the South China Sea, because whether it is factual or not, China knows it can twist enough arms for that not to be the case if ever push really came to shove – which is on its way – and if the region unifies against the US being involved, it will be very difficult to justify still being there. Not that it has ever stopped them before.

  

  

• How Will You Cope With A Lower Standard Of Living?

  Submitted by Tom Chatham via Project Chesapeake,

  The forces are mounting that will eventually overwhelm most Americans and send their standard of living to unknown depths. Americans that have only known the post WWII prosperity are ill equipped and educated to deal with depression level living. Easy credit and instant gratification have created a nation of whining, self absorbed, entitlement minded people with no moral or mental toughness.

  Doug Casey believes we are headed for what he calls a super depression created by the ending of a debt super cycle. The bigger the debt cycle the bigger the depression that follows. That’s how reality works and most people are not prepared for reality.

  When this depression, which has already started, gets momentum, it will overwhelm the plans of a society that is expecting to get things like social security, pensions and payouts from retirement plans they have paid into for many years. All of those things will disappear almost overnight and leave society gasping and stupefied over what to do. Their reactions will be to yell and scream and try to identify who to blame but the only person they should blame is the one in the mirror.

  Many very smart people have raised the alarm and done their best to warn the sleeping public, but those slumbering masses have ignored the warnings and hit the snooze button one more time. The masses do not understand economics, do not want to understand economics and they will pay dearly for that ignorance in the coming days.

  When the real unemployment rate becomes common knowledge as it increases substantially, people will be left to survive on what resources they have saved up outside the banking system that cannot be stolen by the politicians and bankers. That is a key point here. The assets you have outside the system that cannot be stolen from you with a few key strokes on some computer.

  Those hoping for some miraculous event that will send the U.S. back to the days of manufacturing might and jobs for all will never see it happen. Those days are gone. The west line theory tells us our economy will slow down and become more modest as the shipping center of the world moves west to the next powerhouse region which is Asia. This is what history teaches us.

  When people suddenly wake up one morning and they have no job, their retirement is gone and they need to care for their family, what will they do? When government services have collapsed and they suddenly realize they are now living in a third world country with few government services, what will they do? When the banks are closed and only a select few connected people have any type of money or access to goods, what will they do?

  This is the reality that many people will face in the future and they have no idea how bad it can get. They refuse to contemplate the harsh reality they will be living in and take steps to mitigate the effects. To do so would be to acknowledge it could happen and they are taking personal responsibility. Personal responsibility is a dirty phrase in today’s entitlement society. To see some of the effects one only has to look at the collapse of society in Venezuela today to see what awaits.

  When it happens it will all fall back to you to take responsibility for your family and take care of them for the duration. To do that you need to plan now for that eventuality and build up the resources you will need to provide food, shelter, clothing and security when the system fails to do it for you. You need to be Noah on his ark not the people watching as he floated away.

  Having resources stored up is a must but it may not get you all the way through if the situation lasts for many years. That is why you need some type of plan to replace those resources as time goes by and have some way to generate some type of income or at least items to trade. Usable goods are for the short term and things like gold ,silver and production equipment are for the long term to help you get through the crisis with the least amount of pain.

  Even with proper planning the days ahead will not be easy as the standard of living of society will fall substantially to levels only seen in failed third world countries or old pictures. The assets actually owned by people today is very small compared to how they live. They will default on their home loan, their car loan, and their credit card debt leaving them with very few real possessions and few ways to move what they have left even if they have some place to go. Ultimately these people will become the new serfs to the wealthy class that will take possession of anything of value. Feudalism will once again rule.

  The lack of planning by society will make this a reality if it is allowed. What will you do when everything you have worked a lifetime for is suddenly taken away? Do you have a plan to keep what you have? Do you have a plan to make money when you cannot find a job? Do you have a way to take care of your family until things stabilize? Do you have a home you will not lose if the whole system breaks down? What will you do if electricity or fuel is too expensive to buy or not available to the general population? These are the questions you should be asking yourself now and you better have a good answer because your family will be asking them when the greater depression sets in.

  

  

• Homeland Security Issues Terrorism Advisory Alert

  Just days after the State Department issued a travel alert for European visitors (due to the threat of terrorism), it appears the Orlando massacre has pushed The Department of Homeland Security to do the same domestically. For the next five months, DHS warns "we are particularly concerned about homegrown violent extremists who could strike with little or no notice," adding that "increased public vigilance and awareness continue to be of utmost importance."

  Via The Department of Homeland Security…

  National Terrorism Alert System Bulletin

  Date Issued:  Wednesday, June 15, 2016
  View as PDF:  National Terrorism Advisory System Bulletin – June 15, 2016 (pdf, 1 page, 876.65KB)

  Summary

  In December, we described a new phase in the global threat environment, which has implications on the homeland. This basic assessment has not changed. In this environment, we are particularly concerned about homegrown violent extremists who could strike with little or no notice. The tragic events of Orlando several days ago reinforce this. Accordingly, increased public vigilance and awareness continue to be of utmost importance. This bulletin has a five-month duration and will expire just before the holiday season. We will reassess the threats of terrorism at that time.

  Duration

  Issued:  June 15, 2016
  Expires:  November 15, 2016

  Details

  • Since issuing the first Bulletin in December, our concerns that violent extremists could be inspired to conduct attacks inside the U.S. have not diminished.
  • Though we know of no intelligence that is both specific and credible at this time of a plot by terrorist organizations to attack the homeland, the reality is terrorist-inspired individuals have conducted, or attempted to conduct, attacks in the United States.
  • DHS is especially concerned that terrorist-inspired individuals and homegrown violent extremists may be encouraged or inspired to target public events or places.
  • As we saw in the attacks in San Bernardino, Paris, Brussels, and, most recently, Orlando, terrorists will consider a diverse and wide selection of targets for attacks.
  • Terrorist use of the Internet to inspire individuals to violence or join their ranks remains a major source of concern.
  • In the current environment, DHS is also concerned about threats and violence directed at particular communities and individuals across the country, based on perceived religion, ethnicity, nationality or sexual orientation.

  U.S. Government Counterterrorism Efforts

  • DHS and the FBI continue to provide guidance to state and local partners on increased security measures.  The public may observe an increased law enforcement and security presence across communities, in public places and at events in the months ahead. This may include additional restrictions and searches on bags, more K-9 teams, and the use of screening technologies.
  • The FBI is investigating potential terrorism-related activities associated with this broad threat throughout the United States.  Federal, state, and local authorities are coordinating numerous law enforcement actions and conducting community outreach to address this evolving threat.

  How You Can Help

  • Report suspicious activity to local law enforcement or public safety officials who are best positioned to respond and offer specific details on terroristic indicators.
  • Suspicious activity or information about a threat may also be reported to Fusion Centers and the FBI’s Field Offices – part of the Nationwide Suspicious Activity Reporting Initiative.
  • Learn how to recognize signs of pre-operational planning associated with terrorism or other criminal activity.

  Be Prepared

  • Be prepared for increased security and plan ahead to anticipate delays and restricted/prohibited items.
  • In populated places, be responsible for your personal safety. Make a mental note of emergency exits and locations of the nearest security personnel. Keep cell phones in your pockets instead of bags or on tables so you don’t lose them during an incident. Carry emergency contact details and any special needs information with you at all times. For more visit Ready.

  Stay Informed

  • The U.S. Government will provide additional information about any emerging threat as additional information is identified. The public is encouraged to listen to local law enforcement and public safety officials.
  • We urge Americans to continue to travel, attend public events, and freely associate with others but remain vigilant and aware of surroundings.
  • The Department of State issues international travel alerts and warnings.

  If You See Something, Say Something™. Report suspicious activity to local law enforcement or call 911.

  *  *  *

  It's time to panic and quake in fear, hand over your guns and allow yourself to be 100% surveilled… or the terrorists win!

  

  

  

• “Islamic Refugee” With Gas Pipeline Plans Arrested In New Mexico Border County

  By Judicial Watch

  “Islamic Refugee” With Gas Pipeline Plans Arrested In New Mexico Border County

  Police in a U.S. town bordering Mexico have apprehended an undocumented, Middle Eastern woman in possession of the region’s gas pipeline plans, law enforcement sources tell Judicial Watch. Authorities describe the woman as an “Islamic refugee” pulled over during a traffic stop by a deputy sheriff in Luna County, New Mexico which shares a 54-mile border with Mexico. County authorities alerted the U.S. Border Patrol and the Federal Bureau of Investigation’s (FBI) Joint Terrorism Task Forces (JTTF) has been deployed to the area to investigate, sources with firsthand knowledge of the probe confirm.

  The gas pipeline plans in the woman’s possession include the Deming region, law enforcement sources say. Deming is a Luna County city situated about 35 miles north of the Mexican border and 60 miles west of Las Cruces. It has a population of about 15,000. Last year one local publication listed Deming No. 1 on a list of the “ten worst places” to live in New Mexico due to high unemployment, poverty, crime and a horrible public education system. The entire region is a High Intensity Drug Trafficking Area (HIDTA), according to the Justice Department’s National Drug Intelligence Center due to the large amounts of methamphetamines, heroin, cocaine and marijuana smuggled through the state by Mexican traffickers. Specifically, the renowned Juárez and Sinaloa cartels operate in the area, the feds affirm in a report.

  Judicial Watch has broken a number of stories in the last few years about Mexican drug traffickers smuggling Islamic terrorists into the United States through the porous southern border. Last summer high-level sources on both sides of the Mexico-U.S. border offered alarming details about an operation in which cartels smuggle foreigners from countries with terrorist links into a small Texas rural town near El Paso. Classified as Special Interest Aliens (SIA) by the U.S. government, the foreigners get transported to stash areas in Acala, a rural crossroads located around 54 miles from El Paso on a state road – Highway 20. Once in the U.S., the SIAs wait for pick-up in the area’s sand hills just across Highway 20.

  A few months ago Judicial Watch reported that members of a cell of Islamic terrorists stationed in Mexico cross into the U.S. to explore targets for future attacks with the help of Mexican drug traffickers. Among the jihadists that travel back and forth through the porous southern border is a Kuwaiti named Shaykh Mahmood Omar Khabir, an ISIS operative who lives in the Mexican state of Chihuahua not far from El Paso, Texas. Khabir trained hundreds of Al Qaeda fighters in Pakistan, Afghanistan and Yemen and has lived in Mexico for more than a year, according to Judicial Watch’s high-level Homeland Security sources. Now Khabir trains thousands of men—mostly Syrians and Yemenis—to fight in an ISIS base situated in the Mexico-U.S. border region near Ciudad Juárez. Khabir actually brags in a European newspaper article about how easy it is to stake out American targets because the border region is wide open. In the same story Foreign Affairs Secretary Claudia Ruiz, Mexico’s top diplomat, says she doesn’t understand why the Obama administration and the U.S. media are “culpably neglecting this phenomenon,” adding that “this new wave of fundamentalism could have nasty surprises in store for the United States.”

  This recent New Mexico incident brings to mind a story Judicial Watch broke less than a year ago involving five young Middle Eastern men apprehended by Border Patrol in an Arizona town (Amado) situated about 30 miles from the Mexican border. Two of the Middle Eastern men were carrying stainless steel cylinders in backpacks, alarming Border Patrol officials enough to call the Department of Homeland Security (DHS) for backup. A multitude of federal agents descended on the property and the two men carrying the cylinders were believed to be taken into custody by the FBI. Only three of the men’s names were entered in the Border Patrol’s E3 reporting system, which is used by the agency to track apprehensions, detention hearings and removals of illegal immigrants. E3 also collects and transmits biographic and biometric data including fingerprints for identification and verification of individuals encountered at the border. The other two men were listed as “unknown subjects,” which is unheard of. “In all my years I’ve never seen that before,” a veteran federal law enforcement agent told Judicial Watch.

  

  

• Currency-nado: Yen, Yuan Surge; Gold Tops $1300; Bitcoin Spikes To 28-Month Highs

  The US Dollar continues to slide (after bouncing off Fed statement plunge lows), as it appears a rush to other 'currencies' is under way. USDJPY is plumbing new depths beyond Oct 2014's lows (before the end of QE3 and start of QQE2), offshore Yuan is rallying (back below 6.60), gold just hit $1300 (pushing May highs back to Jan 2015 highs), and finally Bitcoin is spiking as China opens once more (now above $700), its highest since Feb 2014. Japanese bonds are at new record low yields (and Treasuries are pushing lower with 10Y at 1.55% near Feb's flash-crash lows).

  JGB yields are plumbing record lows…

  

   

  With 2s5s now inverted!!

  

   

  And the 10Y Treasury is near flash-crash lows…

  

   

  As money flows into Yen…

  

   

  And Yuan…

  

   

  And it seems its not just 'normal' currencies, market participants are running from fiat in general…

  As Bitcoin soars over $730 – 28 month highs….

  

   

  And Gold tops $1300 once again…

  

   

  Charts: Bloomberg

  

  

• What The First 100 Days After Brexit Would Look Like

  When it comes to “Plan B” Europe is funny: it never has one.

  The best example is, of course, Greece most notably from an April 2013 press conference, when Mario Draghi responded to a question from Zero Hedge readers about a worst case scenario for Greece. This was the exchange that took place:

  Scott Solano, DPA: Mr Draghi, I’ve got a couple of question from the viewers at Zero Hedge, and one of them goes like this: say the situation in Greece or Spain deteriorates even further, and they want to or are forced to step out of the Eurozone, is there a plan in place so that the markets don’t basically collapse? Is there some kind of structural system, structural safety net, especially in the area of derivatives? And the second questions is: you spoke earlier about the Emergency Liquidity Assistance, and what would have happened to the ELA in Cyprus, the approximately €10 billion, if the country had decided to leave the Eurozone?

   

  Mario Draghi, ECB: Well you really are asking questions that are so hypothetical that I don’t have an answer to them. Well, I may have a partial answer. These questions are formulated by people who vastly underestimate what the Euro means for the Europeans, for the Euro area. They vastly underestimate the amount of political capital that has been invested in the Euro. And so they keep on asking questions like: “If the Euro breaks down, and if a country leaves the Euro, it’s not like a sliding door. It’s a very important thing. It’s a project in the European Union. That’s why you have a very hard time asking people like me “what would happened if.” No Plan B.

  To be sure, we learned just one year later that Mario Draghi was lying, when thanks to a series of FT articles, we learned that Europe did indeed have a Plan B, only it was called a “Plan Z.” However, we also learned that when it comes to worst case scenarios, Europe’s unelected bureaucrats and central bankers pretend – purely for public optics and “confidence-boosting” reasons – that any scenario that is anything less than the desired one, is so inconceivable, they choose to stick their head in the sand instead of even evaluating its impact.

  Fast forward three years when Europe finds itself in the same situation, only this time not with Grexit but with Brexit staring Europe in the face just one week from today.

  And just like last time, Bloomberg reports that “there’s no road map for European authorities facing the prospect of a British exit from their 28-nation union — by design.”

  Incidentally that’s not true: as the CIO of JPM Private Bank reminded us today, “The Lisbon Treaty includes Article 50 which does contemplate the departure of an EU member. As messy as it might be, a Brexit would be managed by the parties involved, and be a far cry from dissolving a monetary and fiscal union to which member states had “pledged their lives, their fortunes and their sacred honor”.“

  But let’s assume Bloomberg is right, because it is more dramatic that way because according to its sources, “officials in Brussels are under orders not to commit any scenarios to paper to avoid alarmist leaks, according to a senior official from one European government tasked with making preparations.”

  Wait, “to avoid alamist leaks?”

  The IIF, which earlier today said a Brexit would be a bigger threat to the global economy than Lehman, must not have gotten the memo. And certainly not David Cameron and his merry scaremongering men: after all did the PM not say that Brexit would lead to world war?

  Ironically, Europe itself appears to have ignored what Europe’s directive are: “Given the potential political and financial shockwaves surrounding a Brexit vote, it’s not clear a map would do much good. Global markets are already sputtering as anxiety mounts about the impact on the world economy. EU President Donald Tusk goes so far as to say that it could spell the end of “western political civilization itself.”

  Sounds just a little alarmist to us.

  But we get it: scare the crap out of people to avoid the outcome that nobody in Europe actually has any idea how it would play out:

  Tusk’s exaggeration highlights the task in self-preservation awaiting European officials as they confront the potential departure of a country from the EU — something that was inconceivable when the union was established. The mechanism for an exit was only written into law in 2009.

  So now that the inconceivale is all too conceivable, and in fact, donwright realistic, here is a thought experiment conducted by Bloomberg, looking at what the first 100 days after a Brexit vote would look like.

  But before we get there, the first 24 hours.

  Before dawn on June 24, if an exit vote becomes clear, the EU’s top brass from Berlin to Brussels will be forced into damage control. In echoes of the Greek debt crisis, euro-area finance ministers may hold an emergency meeting as soon as that evening. Wild swings in the pound, more aggressive interventions by the Swiss National Bank and a ratcheting up of global instability rank as likely market reactions.

   

  Currency markets haven’t priced in the U.K.’s exit from the EU, so if it happens, “a crash is pretty likely,” Lothar Mentel, chief executive officer of Tatton Investment Management in London, said on Bloomberg Television. “We would have to brace ourselves for quite a rough awakening on that Friday.”

   

  

   

  The political fallout may be even more fraught. Europe’s traditional counterweights, France and Germany, whose enmity the EU was set up to banish, will seek to gain some of the initiative. They are planning a response as early as June 24 that could include a commitment to deeper euro-area integration as well as a declaration that the EU dream remains alive, according to three people familiar with the plans.

   

  “The European Union will need to have a credible strategy,” said Guntram Wolff, of the Brussels-based policy group Bruegel. “To avoid a gradual disintegration of the EU, political leaders will need to strengthen the attractiveness of the EU and especially the Franco-German alliance.”

  Then the first week:

  As the weekend begins and the reality dawns in the U.K. that it has voted to leave the world’s largest trading bloc, the rest of Europe will have their own questions to answer. Amid fears that a “Leave” vote could further fuel populist and anti-establishment sentiment throughout Europe, the EU’s leaders could choose to take the unprecedented step of calling an emergency summit without British representation as early as Saturday, June 25.

   

  The reason would be two-fold: send a message to Spanish voters who go to the polls June 26 that the EU remains strong; and to work out what to offer — or, more likely, what not to offer — the U.K. in areas such as free movement of people and access to the EU’s single market.

   

  There will be divisions to overcome even without the British. In France, where opinion polls say the euroskeptic National Front may make it through to the runoff in next year’s presidential elections, President Francois Hollande will have cause to show the electorate that leaving the bloc carries negative consequences. Other leaders, such as those of the Netherlands and Denmark, where anti-EU feeling is also growing, may consider it more politically beneficial to offer support to Britain, their traditional ally.

   

  Nations outside the euro area, especially those where anti-EU sentiment has been on the rise, such as Hungary, Poland and Sweden, could form a group of countries resisting any French and German attempts to move the EU in a more integrationist direction. With Britain’s exit, non-euro countries would lose their crucial partner — they would represent only 14 percent of the EU’s gross domestic product. David Cameron is scheduled to meet the other 27 EU leaders at a summit in Brussels the following week. It’s at this gathering that the prime minister is likely to trigger the EU’s Article 50 — the never-before-used law that catapults nations out of the club.

   

  That would set a deadline of two years — until the end of June 2018, during which time the U.K. would have to negotiate its exit. Will Cameron want the U.K. to become like Norway or Iceland and maintain a close working relationship with the bloc as part of the European Economic Area? Or could there be another set-up that means the U.K. would have to trade with the EU under the World Trade Organization framework?

  Finally the first 100 days.

  EU chiefs fear the referendum will spark similar demands across the continent. With elections due in the Netherlands, France and Germany in 2017, there’s reason to discourage others from following the U.K.’s course, and this could weaken Britain’s hand in negotiations. It could also divert the EU’s attention away from other issues, including Greek finances, the refugee crisis and tackling instability in Ukraine, according to Michael Leigh, senior fellow at the German Marshall Fund.

   

  By this time, the political mist in the U.K. may be clearing. The EU could find itself dealing with another prime minister — someone like former London Mayor Boris Johnson, who supported Brexit and whom bookmakers have installed as the favorite to lead the Conservative Party. Whoever it is, the new British leader would probably have to extricate the U.K. from the EU while facing the prospect of a further referendum, on Scottish independence.

   

  The U.K. would start talks to renegotiate EU agreements in areas as diverse as fishing quotas, financial-services legislation and health and safety standards established over more than 50 years, simultaneously having to start negotiating its own trade deals with the rest of the world. Talks would also have to begin on the relocation of EU bodies headquartered in the U.K., such as the European Banking Authority. Each step of the way must be agreed upon by the EU’s other members and the European Parliament, a process lasting at least seven years and with no guarantee of success, EU President Tusk told Germany’s Bild newspaper.

   

  “No one can predict the long-term consequences,” Tusk said in the interview. “I fear that Brexit could be the beginning of the end not only of the EU, but of the entire western political civilization.”

  Why stop there and not look at the second 100 days? Because after Brexit, for the European “Union” there most likely will not be a second 100 days. And it all may start one week from tomorrow.

  

  

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• NATO Begins Encirclement Of Russia

  Via German Economic News, translated by Eric Zuesse,

  NATO prepares a veritable military buildup in Eastern Europe: German soldiers are operating in Lithuania, the British take over Estonia, and US soldiers move in to protect Latvia. The Canadians will be in Poland. Also in the Mediterranean, combat units are being increased. Russia perceives the activity as a threat, but hasn’t yet announced any countermeasures.

  

  Source: RiskAdvisory

  At the NATO summit during July 8th-9th in Warsaw, the Alliance will adopt a massive military presence along Russia’s border. Russia is classified by NATO as a threat. NATO Secretary General Jens Stoltenberg recently said in Washington that the US and the EU have the right in the form of NATO to defend its territories on foreign soil. Critics of this strategy believe that it’s possible this upgrade will increase significantly the danger of a conflict between the superpowers. Wednesday in Brussels, the defense ministers want the military alliance to take decisions which will then be sealed by the leaders in Poland. NATO wants to strengthen its military presence on its eastern borders significantly, and to position foreign combat troops battalions in Poland and the three Baltic states. Germany is the core of the Association in Lithuania, the British in Estonia, and the United States is expected to be that in Latvia. What remains unclear, however, is who will be sending troops to Poland.

  Maybe Canada will take on this task, it was last reported from Polish diplomatic sources as quoted by Reuters. “’The summit in Warsaw will be President Obama’s last (NATO summit) and the U.S. wants it to be a success. It will ensure that the fourth framework country is found, possibly by leaning on Canada,’ the source said. ‘Washington will bend over backwards here.’”

  Germany wants to send at least 600 soldiers to Lithuania, which will constitute the core of the local battalion there with about 1,200 soldiers.

  The battalions are to include around 1,000 soldiers each, and are not permanently stationed in the eastern countries, but replaced regularly. By means of this rotation, the military alliance wants to avoid a formal breach of the NATO-Russia Founding Act 1997, which prohibits the permanent stationing of a “substantial” number of combat troops in the east. What specifically “substantial” means, however, is controversial. [In other words: Obama wants to be more aggressive than the NATO-Russia Founding Act of 1997 might allow; he wants to violate the treaty in such a way that he’ll be able to say he’s not really breaking the treaty.]

  Poland and the Baltic countries want to push NATO to be even more aggressive. They demand among other things, increased aerial surveillance by fighter jets of the alliance partners on the Baltic. Poland had in the past also repeatedly demanded the permanent stationing of NATO combat troops [which would clearly violate the NATO-Russia Founding Act]. The Baltic States and Poland have been feeling threatened since Russia’s March 2014 annexation of the Ukrainian peninsula of Crimea.

  NATO defense ministers will also discuss a new mission in the Mediterranean. What exactly is planned there, is difficult to judge. Officially the rise of extremist ISIS militias and the refugee crisis are given as reasons for that expansion of NATO. ISIS is financed and otherwise supported by Saudi Arabia, the closest ally of the West in the Middle East. A good reason why NATO, the most powerful fighting force in all of the world’s military, have not coped with that group of more or less random ragtag mercenaries, is not known. Russia is fighting on the side of Syria against ISIS and against previously officially the US-backed al-Nusra Front [Al Qaeda in Syria — the Syrian affiliate of the group that did 9/11].

  The NATO alliance is looking for a new combat mission in the Mediterranean, as the 11 September 2001 NATO response “Active Endeavor” patrolling the Mediterranean to stop terrorists there, has actually become obsolete. The ministers therefore want to consider whether the mission should be transformed into a more general one to strengthen security in the Mediterranean. Also being considered is to transform that mission to a closer cooperation with the European Union, which maintains its own naval deployment off the Libyan coast against human traffickers and the rescue of refugees in distress under the name “Sophia”. At dinner on Tuesday therefore also the EU foreign policy chief Federica Mogherini and government representatives from the non-NATO countries Finland and Sweden will also be in NATO headquarters.

  The agenda on Wednesday also includes the future of the NATO mission in Afghanistan. According to current plans, the US wants to reduce the number of its troops in Afghanistan from its current 9800 to 5500. Whether Obama will hold to that objective despite the poor security situation in Afghanistan isn’t yet clear.

  

  Show teaser normally

  

• Decoupling FOREX investing from trading

  Forex is a trader’s market.  So many complex factors go into foreign exchange rates, it’s really impossible to conclude what will be the EUR/USD in 1 year, 10 years, or 50 years – as explained in Splitting Pennies.  Investing in Forex is like betting on the weather.  And frankly speaking, given the right climate, it can work.  For example, during the post 9/11 global market, it was assumed that USD would go down, and it did – thus propping currencies like NZD, EUR, GBP, and others.  Take a look at the monthly GBP/USD chart – interesting to ponder also because of possible Brexit looming:

  

  It took the credit crisis of 2007 to reverse the trend.  And in the end – looking back 15 years, what changed with the GBP/USD rate?  Right back to where it was, 1.41 handle.  With talk of Brexit, Bremain – what is a Forex investor to think?  Flip a coin – you’ll have better odds.  Psychological factors in Forex work against investors as well.  Do you really have what it takes, to sit on a GBP/USD position for 6 years?  From 2001 to 2007, it would have been without leverage, a 48% gain – with 10x leverage, or 10:1 – that’s 480% – plus the swap (which still would have been positive for a GBP/USD long in that time).  So here’s a situation where the climate was ripe for long term Forex investment.  Since then, such an opportunity hasn’t presented itself, with the majors.  Maybe Brexit will be a new trend of GBP/USD – the start of a new super cycle.  But it’s too complicated to bet on.  There are other examples, such as the 4 decade long CHF bull run that ended with the SNB (Swiss National Bank) bending over for their US masters.  Investors who bought CHF post Nixon shock, would have had without leverage 400% + return, since the recent super cycle top, and final meltdown and manipulation of the Swiss Franc.

  Everyday, we wake up and check the markets – what’s the news?  Even with a 24/7 dedicated analysis team, it’s difficult to even conclude what the market outcome will be, based on the facts.  Market perception in Forex can be completely off.  For example there are those that believe Brexit can be GBP positive post vote.  

  Investing in Forex requires years of experience, a crack analysis team, loads of investment capital to weather any short term storm, and nerves of steel.  

  Trading Forex

  So, let’s explore ‘trading’ Forex – meaning – day trading, short term, to capture price movements, regardless of direction – as an investment strategy PER SE.  

  If anyone has ever tried trading Forex manually – it’s nearly impossible.  Statistics about individual Forex traders can be misleading.  Brokers are now required to publish statistics about accounts, how many are positive, and other data.  But this data doesn’t include how many accounts are managed, or use signals, algorithms, or other robot-assisted trading.  Because trading Forex is so difficult, many traders will develop or purchase trading algorithms (such as this one named “Liquidity”) to assist their trading.  It’s similar to hiring a manager such as an RIA (Registered Investment Advisor), the difference being it’s a software system that manages your account, placing trades based on a proprietary algorithm.  (An algorithm is a series of steps)

  This type of algorithmic trading in Forex is so common, it’s almost unheard of that someone will blindly trade Forex without the aid of an algorithm, signal system, or other aid.  A technical indicator system such as technical analysis, qualifies as a signal system.  So, is it possible in Forex to find good algorithms, and trading systems, that work?  Yes – of course it is!  Companies such as Fortress Capital, offer Forex Managed Accounts services (in the case of Fortress, for QEP (Qualified Eligible Person) only ).  Other companies such as Elite E Services, offer algorithms for purchase and lease, for traders to trade their own accounts.  But of course, it’s an ever growing problem for US Citizens, who are only allowed a few small choices of Forex brokers, who are over regulated (due to the overwhelming Forex fraud which is .. knock knock .. a thing of the past).

  One day, perhaps the Forex regulations will change, and robo-advisors will be an asset class by itself.  This is happening outside of the US, as the lax rules and higher leverage allow algorithms to live and breathe.  Until that day, US investors who are interested in Forex, are left with the difficult choices of expatriation, qualifying themselves as QEP, or sticking to the good ol’ stock market, where it’s possible to buy products that you enjoy every day, like Microsoft (MSFT).  

  In conclusion, here we have simply decoupled Forex investing from trading, and hinted at the hybrid mix – when a trader uses an algorithm, it becomes an ‘investment’ just as one invests in a currency, one ‘invests’ in a robotic strategy.  But the good news about robots, they can be tested, and used in a plethora of ways.  Whereas, with simple vanilla currency investing, there’s only so many ways to sell a covered call on a GBP/USD position to earn extra ‘dividends.’

  If you’re interested in learning more about what Forex is – the starting place is to checkout Splitting Pennies – Understanding Forex.  It’s only $6.11 on Kindle, about $1 in 1970 when Forex was created.  For those who remember when markets were traded on paper, there’s a paperback edition of the book Splitting Pennies for only $14.98.  The book was published by Elite E Services, Inc. – a Forex technology company.

  

• Paul Craig Roberts' Skeptical Take On The Orlando Shooting

  Authored by Paul Craig Roberts,

  Some readers have asked for my take on the Orlando Shooting.

  I don’t have one. Let’s see if together we can form a reasonable view.

  Let’s start with the basic first question. Before there can be a murder declared, there must be a body. Has anyone seen on TV or in newspapers pictures of dead bodies? Bodies should be readily available if the reports are correct that fifty people were killed and 50 or more were wounded and in hospital.

  I cannot bear the presstitute TV and print media. These are full-time propaganda organizations. Hopefully, some of you hold your nose and watch the news and can fill in the spaces. Has anything we have been told been confirmed by any real evidence?

  Initially, I saw a CNN newscast and a RT report. The reports were heavy with verbiage of blood being all over the place, but the only visual evidence offered were three people, supposedly injured, being helped, not by medics or first responders, but by ordinary folks. A couple of people were helping a guy with tattoos in place of a shirt, but there was no sign of blood. Several people were helping people in police uniforms to carry a person who they dumped in the back of a pickup truck, not in the cab. About 6 people were carrying a person stretched out prone (no stretcher) down a street.

  There was no blood and it looked like a crisis acting performance. Why prone? Is an injured person really able to keep his body stiff so that he can be carried along prone parallel to the ground? Where are they taking him? Is this just a camera walk-by? http://www.cnn.com/videos/us/2016/06/12/orlando-nightclub-shooting-witness-sot.cnn/video/playlists/orlando-nightclub-shooting/ What has become of the protocol that untrained people are not to attempt to help injured people? When police arrive at a scene, they usually run off bystanders, not recruit them to assist their activities or allow them to carry away the wounded and dead.

  Readers have noticed that the visual evidence does not match the verbal reports. Readers report that Fox “News” and MSNBC repeatedly show the same footage described above of bystanders carrying supposedly injured victims whose facial expressions are completely unstressed and show no pain, fear, or blood.

  So has anyone seen any dead bodies? Any body bags? Any wounded taken to hospitals in ambulances? Any of the hospital wounded interviewed by TV reporters? Has any reporter checked with the morgue?

  Allegedly, people inside the massacre location made cell phone calls and texted. But no one took photos or videos? Are there no security cameras? No doormen to notice a heavily armed person enter?

  With 50 people killed and 50 or more wounded and reports of oceans of blood, there should be plenty of evidence Have any of you seen any of it?

  As far as I know, dead bodies, other than those of the perpetrators themselves, seldom if ever emerge from the terrorist attacks. No dead bodies materialized from the Paris attacks except those of the alleged perpetrators. No dead bodies ever emerged from the Sandy Hook shootings. The only dead bodies I recall from the San Bernardino shooting were the husband-and-wife-alleged-perpetrators, and their hands were handcuffed behind their backs. Do police handcuff dead people who the police have shot to pieces? I don’t remember dead bodies from Brussels, just reports of dead bodies.

  One could say that the media is averse to invading the privacy of dead people and their relatives by showing dead bodies, or that the media doesn’t want to show gruesome scenes—except for the videos of Muslim terrorists cutting off people’s heads. But by now the unanswered questions from the various shootings have created so much skepticism that a person would think the media would provide corroborative evidence for the official claims.

  Maybe they have. As I admit, I don’t watch the presstitute news.

  In order to shoot 100 people, the principal weapon allegedly used, an AR-15, would have had to have been reloaded several times, a procedure that takes enough time for people to rush the shooter and overpower him.

  Is it possible for one person to shoot 100 people successfully but not be able to shoot even one cop when police appear? Remember the Charlie Hebdo event. The two killers were highly professional when they wiped out the magazine staff and a policeman in the street, but later when confronted by police they were so hapless and incompetent as to suggest that they were not the same people. Remember the San Bernardino shootings. Three eyewitnesses said that the shooters were three muscular males dressed in black, not a husband and diminutive wife with a new baby.

  What is most troublesome about these shootings is that the story seems already prepared by the government and is immediately set. We are fed the story before there is time for investigation by government or media. The media never investigate. The media just repeat the government’s story over and over until it is set in everyone’s mind. Contrary evidence is just discarded.

  The alleged perpetrators are always killed, so we never hear from them. The only survivor of the various terrorisms is the younger Tsarnaev brother who has been held incommunicado. We have never heard directly from him.

  One might think that by now the US media would have at least a smidgen of skeptcism. After all, for the past 15 years we have wasted trillions of dollars in wars in the Middle East based on lies that Saddam Hussein had weapons of mass destruction and Assad used chemical weapons against his own people. So why is the media willing to accept whatever the government says without any investigation or even raising a question?

  The chairman, co-chairman, and legal counsel of the official 9/11 Commission have said publicly that the commission was lied to by the US government, that information was withheld from the commission, and that the commission was “set up to fail.” If the government will not tell the truth to the 9/11 Commission, why would the government tell us peons the truth?

  It is not reporting merely to repeat the government’s claim. But that is all we get from the payroll jobs, unemployment and inflation reports to terrorism reports and claims of “Russian aggression.”

  Send your emails with URLs of news broadcasts showing dead bodies and other real evidence. Don’t send in your speculations. They might be interesting and on the mark, but what we are trying to do is to see if there is any real evidence in behalf of this latest story of mass slaughter inside a night club.

  It will be difficult, perhaps even impossible, to get any truth out of the Orlando shooting. Too many vocal and well organized interest groups have a strong stake in the government’s explanation. It comes to the aid of the anti-Muslim lobby and the Trump campaign which want Muslims kept out of the US and those here arrested and deported. It comes to the aid of the gun control lobby. It comes to the aid of the progressive-left that wants to normalize homosexual and transgendered people, thus the outpouring of sympathy for those shot in the homosexual night club. It comes to the aid of the spy industry and the police state that want no check on their activities. It comes to the aid of Washington’s murderous foreign policy—so what if we blow up Muslim children—look what they do to us when they grow up, which is what the Israelis say about the Palestinians. It comes to the aid of the neoconservatives and the military-security complex for whom wars against Muslims advance their agenda and fatten their pocketbook.

  All of these interests are far more powerful than the right of peons to know the truth.

  

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• Visualizing The Over-Education Bubble – Student Loan Delinquencies Are Soaring

  What do you get when you combine skyrocketing tuition costs, a lack of growth in high-paying jobs, moral hazard, and America’s largest-ever generation of students?

  As VisualCapitalist's Jeff Desjardins explains, it’s a recipe for a mountain of $1.3 trillion in student loan debt – much of which is not being paid for.

   

  

  Courtesy of: Visual Capitalist

   

   

  Very Delinquent Students

  With many students graduating with high debt loads, a growing number of students are becoming delinquent on their loans. The most recent estimate by the Federal Reserve Bank of New York estimates the percent of 90+ day delinquent loans to now be at 11.0%.

  This puts student loans at a higher delinquency rate than credit cards (7.6%), auto loans (3.5%), and mortgages (2.2%). It’s also particularly interesting because historically credit cards have had the highest rates among all types of consumer credit. Despite this, student loans “passed” credit cards in delinquency frequency at the end of 2012.

  Why are student loans the most troubled form of consumer debt right now? It’s the result of a clear mismatch between supply and demand for college-educated workers.

  The Overeducation Bubble

  Have college graduates been oversold on the prospects of a college degree? Or is the market for high-paying jobs not materializing as expected in the current low-growth economy?

  Either way, many college grads are punching below their weight in the job market. In a 2014 study, economists affiliated with the Federal Reserve Bank of New York found that up to 49% of recent college graduates aged 22 to 27 were working in careers that do not requite any college education.

  Based on this and other factors, renowned investor Peter Thiel has called higher education to be a bubble:

  If a college degree always means higher wages, then everyone should get a college degree. But how can everyone win a zero-sum tournament? No single path can work for everyone, and the promise of such an easy path is a sign of a bubble.

  He’s backed up his opinion with the Thiel Fellowship, a $100,000 grant for would-be students who want to “build something” rather than sit in a classroom.

  Some Students Left Behind

  A recent survey shows that many graduates are regretting their choices around student debt and education. Roughly 57% of millennials now say they regret how much they borrowed, and over one-third of respondents said they wouldn’t have gone to college if they knew the true price tag.

  Massive debt loads and the increasing student loan delinquency rate translate into real consequences for the economy. Many graduates are deferring having families or owning homes. One study even says that a modest student loan debt of $30,000 could cut $325,000 from a person’s 401(k) balance by retirement time.

  

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• The FBI And NSA Won't Keep Us Safe

  Submitted by Ryan McMaken via The Mises Institute,

  The NSA was too busy spying on your family to stop the Orlando gunman. But why aren't night clubs keeping tabs on people who walk in with rifles? 

  According to various sources, the gunman in Orlando's Saturday massacre, Omar Mateen, was being investigated by the FBI. (See Judge Napolitano's interview for more, here.) But, as was the case before 9/11, the FBI keeps such a long list of so many many people, that the list tells them nothing about who is a real threat. Meanwhile, we have been told countless times that the NSA should be able to spy on anyone it wishes in order to "keep us safe." Given that Mateen was already on an FBI threat list, was the NSA eavesdropping on Mateen? If not, why not? Was the NSA too busy spying on dirt-poor backwoods members of "militias" to bother keeping track on Mateen, who, by many accounts, was a man who spoke often of his sympathy for terrorists? It's becoming increasingly evident the NSA simply collects so much information on so many people and casts far too wide of a net. What the NSA does is great for blackmailing powerful people. It's less useful in actually catching terrorists. 

  We have also learned that Mateen worked for a taxpayer-funded "private" security agency that is under contract with numerous government agencies around the world including the CIA. The company often provides security for Federal buildings, and presumably has access to numerous federal installations. His co-workers believed he was unhinged. 

  Basically, it sounds just like another "success" story we've come to expect from the FBI and the US federal government in general. The Feds maintain huge lists of "suspects" but have no way of separating out the real threats from the people who just say things. The Feds insist they should be able to spy on everyone, but ignore crucial information. The Feds pay private security firms that hire people like Mateen. 

  Meanwhile, the federal government insists on the prerogative to regulate the lives of ordinary people right down to whom they can hire, what sorts of plants they can grow, and of course — what kinds of self-defense they can obtain for themselves. Violations often come with long, draconian prison sentences. 

  But rest assured, the FBI and NSA will no doubt "rectify" the situation by lobbying for bigger budgets for themselves and giving pay increases to all involved. 

  Where Was the Private Security? 

  It should surprise no one that the FBI, yet again, has failed to use its already-vast powers to prevent a major act of terrorism. But, we're still left asking ourselves why it was so easy for a man with a long gun to walk into a private establishment and shoot dozens of people? Did the Pulse club in Orlando keep any tabs on its entrances, and did it allow anyone to enter? 

  By state law, the Pulse club was a "gun free zone" as people with a conceal-carry license are not allowed to carry in an establishment that serves alcohol. 

  In other words, the patrons at the club were denied the ability to defend themselves by state law. So, why did the club not provide any meaningful security of its own? 

  Will the Pulse club hide behind the claim that it could not "foresee" an event like this, and therefore need not provide any security?

  That was the strategy used by the Aurora movie theater where James Holmes murdered 12 people. In that case also, the theater could not be bothered with noticing that someone had propped open a back door and walked to his car to put on body armor and walk back with several weapons, a gas mask, and tear gas grenades. Now that mass shootings have occurred at various types of theaters (including the Paris theater where dozens were shot in 2015), will owners continue to claim that there is no way to foresee such events? 

  Night clubs have been targets for terrorists for many years. The La Belle club in Berlin was bombed in 1986, resulting in 3 deaths and 230 people injured. The 2002 Bali Bombings — at a night club — resulted in 203 deaths. There have been other cases of shootings and arson attacks at night clubs. Was an attack on a night club so "unforeseeable" that it was no problem to allow a man with an assault rifle access to a dance floor? 

  Lawsuits will be sure to come alleging that the establishment in question should have provided better security. It will be interesting to see what arguments will be employed to demonstrate that private owners need not take steps to exclude bombers and gunmen from their clubs, presumably on the grounds that such events are "unforeseeable." How many bombings and shootings at public entertainment venues must take place before it is considered prudent to take steps to prevent such events? 

  Private Security Addresses Immediate Threats And Casts a Far Smaller Net

  Indeed, decentralized, private security is far more likely to actually work — especially considering the "safety" provided by the NSA and FBI — than are broad regulatory approaches at the national level. 

  After all, harsh and broad gun control laws in France did not prevent the 2015 Paris massacres. More adequate private security at the Bataclan theatre in Paris, on the other hand, might have actually done some good. 

  Unfortunately, many people still subscribe to the idea that governments can "keep us safe" with gun control laws and mass spying programs and other massive nationwide programs that target the entire population. Not only are these programs extremely costly (in terms of both enforcement and administration) but they are incapable to identifying when and where these acts of violence will occur. After all, a nationwide program that targets everyone, must monitor and regulate 300 million people. Immense amounts of resources are spent monitoring, prosecuting, and regulating harmless people.  Private security at a night club need only regulate the people seeking access to that specific location. 

  Private Security Is Prudent Even when Peaceful Individuals Can Carry Weapons 

  Naturally, many opponents of gun control will point out that private gun ownership is effective in providing both direct and indirect deterrence to gunman. That is often true. 

  Oddly, though, many of the same people who advocate for private gun ownership also deny that owners of public shops and venues bear any responsibility in securing their own property from bombers and gunmen. Not only is this view naive, but it also provides fodder to gun control advocates who believe that only centralized, regulatory efforts by governments can provide meaningful safety from attackers. 

  Patrons at public businesses should demand that the owners have taken steps to prevent gunmen with malicious intent from entering the premises. Not all citizens — a group that includes children and old people and the disabled — have the time and resources to train in self defense with firearms. Similarly, one might point out that not all people have the resources to train in other essential activities, including keeping automobiles in safe, working order, and building structures that don't fall down on us. While some amateurs are trained in those skills, most people rely on trained professionals for these services. 

  Naturally, we expect private owners to provide buildings that are structurally sound before we are willing to enter them. So, why should security be just an afterthought? 

  I suspect that many reasons for the the disconnect here is that people have a nostalgic and fanciful view of the world in which safety should just a "given" that is provided cheaply and easily by some government agency that's out of sight and out of mind. There is also a naive view that government can effectively prevent and combat violence everywhere by passing some laws. We've been conditioned to believe that we shouldn't have to worry about things like safety from murderers when we go to the hardware store. In the real world, though, it is extremely important to consider the real costs and benefits of providing private and decentralized safety measures at private establishments. As the Orlando massacre has demonstrated yet again, relying on government agencies for safety just isn't cutting it.

  

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• Islamic State Leader Reportedly Killed After Coalition Bombing

  Several months ago, when ISIS’ oil money started to dry up as a result of Russian airstrikes severing key supply routes with Turkey, we predicted that it is only a matter of time before the entire conflict (because technically there is no war) involving the Islamic State would quietly be swept away from the front pages, since the primary objective behind ISIS – the removal of Syria’s president al-Assad – had failed, with the arrival of Russian military forces in Syria. We also suggested that the most effective way to achieve this would be through the elimination of the Islamic State’s figurehead, Abu Bakr al-Baghdadi.

  And now that the conflict against Islamic State forces is making rapid progress both in Iraq and in Syria, with forces rapidly closing in on the ISIS capital of Raqqa for one final major battle before ISIS is relegated to the trash heap of US-funded “has been” terrorist organizations alongside Al-qaeda, it is only fitting to have a bin Ladinesque send off to Baghdadi as well.

  Which is perhaps why on Tuesday morning, Asian, Iranian and Arab media all reported that Islamic State leader Abu Bakr al-Baghdadi died on Sunday after his hideout was bombed by the U.S. led-coalition. The news about al-Baghdadi’s death, first reported by Western Journalism, came after an Iraqi TV channel reported last week that the ISIS boss had been wounded near the Iraqi-Syrian border.

  Iraq’s Al Sumariya TV cited local sources in Iraq’s Nineveh province who told the channel that al-Baghdadi and other ISIS leaders had been injured by a coalition airstrike on the Islamic State’s headquarters near the Syrian border. When Col. Chris Garver, a spokesman for the U.S.-led coalition, was asked if he could confirm the Al Sumariyah report, he said that he had “nothing to confirm” at that moment.

  It wasn’t just the Iraqis: on Tuesday Indian and Iranian media also reported they had evidence of al-Baghdadi’s death and released a video with images of what seems to be the corpse of the ISIS leader. In Khabar, a Hindi-language news channel in India, was the first outlet that published the images.

  Other media reported that Amaq News Agency, an outlet that is linked to ISIS, had published an official statement that read: “Abu Bakr al-Baghdadi has been killed by coalition air strikes on Raqqa on the fifth day of Ramadan.” Meanwhile, the British news site Mirror, cited Iraqi security officers who claimed al-Baghdadi died in Mosul, Iraq. 

  “Iraqi aircraft hit Baghdadi’s convoy as it was moving towards Karabla to attend a meeting of the Daesh [ISIS] terrorist leaders,” the Mirror reported, citing an unnamed source in Iraq.

  A statement from Amaq news agency linked to Islamic State said: “Abu Bakr al-Baghdadi has been killed by coalition air strikes on Raqqa on the fifth day of Ramadan.” Another source claimed he died in Mosul, Iraq – another ISIS-held stronghold.

  As we have reported previously, Al-Baghdadi has been traveling around to avoid being captured or killed by his many enemies. He traveled from Syria to Mosul at least twice over the last six months and reportedly visited Libya, where he helped organize the conquest of a large part of Libya’s coastal plain.

  The self-proclaimed caliph was born as Ibrahim Awwad Ibrahim al-Badri in 1971 in Samarra, Iraq. Al-Baghdadi later claimed the tribe he belonged to descended from the Prophet Muhammad. The ISIS leader obtained bachelor’s degree, a master’s degree and a doctorate in Islamic studies from the Islamic University of Baghdad. After the American invasion of Iraq, al-Baghdadi helped to found the Islamist group Jamaat Jaysh Ahl al-Sunnah wa-l-Jamaah. He was arrested by U.S. forces on Feb. 2, 2004, but reportedly was released in December that year after he was designated “a low-level prisoner.” Other reports claim that al-Baghdadi remained in custody until 2009 and that he was imprisoned with other future ISIS leaders.

  In May 2010, according to folklore, al-Baghdadi became the leader of Islamic State in Iraq, the official al-Qaida branch in the country, and organized a string of deadly suicide attacks that escalated after the withdrawal of U.S. forces from Iraq. He remained the group’s leader until the founding of ISIS, the Islamic State of Iraq and the Levant that came into being after the group expanded its activities into Syria.

  On June 29, 2014, out of the blue, al-Baghdadi announced the establishment of a worldwide caliphate, a move that was harshly condemned by many Islamic governments and led to a conflict with al-Qaida leader Ayman al-Zawahiri. The move was also facilitated with the funding of various nations, including Qatar and Saudi Arabia, while according to declassified reports, the CIA was also instrumental in ISIS’ formative years which would be used as a blunt object to eliminate Al-Assad from power.

  The death of al-Baghdadi will likely be a serious blow to the Islamic State after the organization already lost more than 40 percent of its territory in Iraq and Syria and suffered a string of battle losses recently.

  

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• Dear Janet, "No Surprises!" – China Devalues Yuan To Weakest Since Jan 2011

  Just in case The Fed had any ideas of surprising markets with a “confidence-inspiring” rate-hike tomorrow, The PBOC just sent a message loud and clear to Janet as they devalued the Yuan fix by over 2 handles, above 6.60 for the first time since January 2011.

  This is the 3rd major devaluation step in the last 10 months (remember when China said August was a “one off”?)

  

   

  Bear in mind this kind of currency turmoil has not ended well for US equities in the past…

   

  

   

  Which may help explain why funding market stress is starting to appear in Libor/OIS and basis-swaps (demand for USDollars), and why US and European banks are tumbling…

  

   

  Charts: Bloomberg

  

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• An Inconvenient Truth: How The Obama Administration Became Earth's Largest Arms Dealer

  With the Obama presidency in its final year, there is one central element of his foreign policy that has received little attention – the dramatic acceleration of lethal weapons exports by the U.S. military and defense contractors. As Ammo.com details,   the Obama administration has approved more lethal weapon sales to more foreign countries than any U.S. administration since World War II.   Many billions more than G.W. Bush's administration, in fact. And some of these sales will likely result in unintended consequences i.e. "blowback" – especially as more than 60 percent of them have gone to the Middle East and Persian Gulf.

  (After all, U.S. weapons supplied to the mujaheddin in Afghanistan to fight the Soviets were then used to help launch Al-Qaeda. Arms supplied to Iraqi security forces and Syrian rebels have been captured by ISIS. And “allies” from Bahrain to Egypt to Saudi Arabia have used U.S.-supplied weapons to defeat homegrown democracy movements.)

  On May 23rd, President Obama announced at a press conference in Hanoi that the U.S. would be lifting its decades-long embargo on sales of lethal weapons to Vietnam. Such a reversal in U.S. foreign policy raises questions: How does the U.S. arms export market actually work? Which companies in the military-industrial complex profit from these sales? Who really ends up with U.S. weapons? And most importantly, how many of those weapons could eventually be used against us?

  
  Source: Ammo.com

  

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• Rent In London Is Consuming 57% Of Millennials' Income

  While the luxury housing bubble has burst in the UK, one-bedroom rentals that are popular among millennials are still putting a dent in their discretionary cash flow.

  A new study by Countrywide Plc, the UK's largest realtor, reports that a one-bedroom apartment in London now consumes 57% of a millennials net income on average, up 16% from 2007 which saw rent consume 41% of income.

  The average cost of a small home in London now stands at $1,609 a month, up 48% in the past nine years, and well surpassing wage growth of 11% over the same period Bloomberg reports.

  In Great Britain overall, one-bedroom apartment rents are taking up over 45% of income for millennials, up from 2007 levels as well.

  

  With the price to own completely unaffordable due to the influx of foreign investors and cheap money, many individuals and especially millennials, have turned to renting, pushing rent higher as a result. It seems as though those millennials who expect to make hundreds of thousands after graduating school better track those jobs down quickly, lest they want to end up like many of their counterparts in the US who increasingly live with their parents.

  

  

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• How Muslim Countries Treat Homosexuals

  Submitted by Jim Quinn via The Burning Platform blog,

  The left wingers are spouting gibberish about this having nothing to do with Islam or Muslim beliefs. Bullshit. Muslims hate gays and think they should die for their lifestyles. It’s their law.

  

  Source: WaPo

  10 nations where the penalty for gay sex is death

  By Colin Stewart

  Ten nations with large Muslim populations have laws providing for the death penalty for same-sex activity.

  Only a few actually impose the death sentence. Exactly how many is a difficult question.

  The 2016 State-Sponsored Homophobia report from ILGA, the International Lesbian, Gay, Bisexual, Trans and Intersex Association, lists 13-14 places that threaten the death penalty for homosexuality, including the basic 10 plus several specific variations:

  • One where executions occur — and go unpunished — despite the fact that there is no death-penalty law (Iraq);
  • One that has approved a death-penalty provision but has not yet incorporated it into the nation’s laws (Brunei);
  • One that conducts executions but is not recognized as a nation (the Islamic State, also known as Daesh, ISIS and ISIL);
  • One where, in theory, a particular interpretation of its laws would provide for the death penalty but, in practice, no executions have been reported (United Arab Emirates)

  The ILGA list is quite similar to this blog’s list of those 14 countries, printed below:

  A best-information-available list of countries/regions where executions for homosexual activity are carried out or are provided by current or future law:

  Nations with such laws on the books; executions have been carried out

  1. Iran
  2. Saudi Arabia

   

  Nations with such laws on the books; no recent executions reported

  3. Sudan
  4. Yemen

  Nations with such laws on the books in part of the country; no verified executions for homosexual activity

  5. Nigeria
  6. Somalia

  Nations with such laws on the books; no executions reported

  7. Afghanistan
  8. Mauritania
  9. Pakistan
  10. Qatar

  Those are the “ten nations with large Muslim populations” mentioned in this article’s first paragraph.” In addition, executions and possible executions are an issue in four other places:

  Nation with no such a law on the books; executions are carried out by militias and others

  11.  Iraq

  Not recognized as a nation; carries out executions

  12. Daesh/the Islamic State (ISIS/ISIL)

  

  The Sultan of Brunei, Hassanal Bolkiah

  Nation where such a law was scheduled to take effect in 2016 (but might not)

  13. Brunei Darussalam

  Nation where some interpretations of existing law would provide for the death penalty, but no executions have been reported

  14. United Arab Emirates

  News coverage in all of those nations is unreliable at best, so specific evidence of executions for same-sex intimacy is rare.  What’s known about some specific countries is cited below.

  In Somalia,  a gay teenager was reportedly stoned to death in 2013, but those reports have not been verified.

  In Nigeria, the BBC reported in 2007, “More than a dozen Nigerian Muslims have been sentenced to death by stoning and for sexual offences ranging from adultery and homosexuality. But none of these death sentences have actually been carried out as they were either thrown out on appeal or commuted to prison terms as a result of pressure from human rights groups.”

  In Sudan, the death penalty is in frequent use, but there are no recent reports of executions for same-sex intimacy.  In 2014, Sudan ranked at No. 6 worldwide in number of executions (23+) for various offenses, just below the United States, with 35, according to Amnesty International.

  Similarly, Yemen is No. 7 in frequency of executions overall, but the death penalty apparently has not been imposed recently for homosexual activity.   Researchers for Canada’s Immigration and Refugee Board reported more than 10 years ago, “Information on whether such sentences have been carried out was not found.” More recently an article on Yemen’s gay community in The Tower magazine stated, “Traditionally, that death penalty is not enforced, but citizens have been imprisoned for their sexual orientation.”

  Saudi Arabia is  No. 3 among the world’s most avid executioners, with 90+ in 2014.  At least in the past, beheadings were imposed for homosexual behavior, including three men in 2002. Imprisonment and lashings are a more common punishment for same-sex activity.

  Iran is No. 2 in the world for frequency of executions, behind China.  Those include executions for homosexual activity, although the facts are often unclear or misrepresented in such cases. (See, for example, “Bogus hanging in Iran, bogus tweets in Egypt” and “Series of public hangings in Iran, including 2 for sodomy.”)

  Evidence is a bit clearer about two war-torn areas — Iraq and the territory controlled by  Daesh/the Islamic State (ISIS/ISIL).  The ILGA report of 2015 noted that “Iraq, although [the death penalty is] not in the civil code, clearly has judges and militias throughout the country that issue the death sentence for same-sex sexual behaviours. … We are also aware that in the Daesh(ISIS/ISIL)-held areas the death penalty is implemented (although a non-State actor, it is listed in the report). ” For examples, see:

  • Iraq has become a death trap for gay men (September 2012)
  • ‘Islamic State’ has reported 15 LGBTI executions (May 2015)

  In some nations, the death penalty is on the books but is not imposed. ILGA in 2015 stated:

  Brunei Darussalam is due to activate the death penalty for same-sex sexual acts in 2016, but it seems likely that like Pakistan, Afghanistan and Qatar although it is on the statute, it will not be implemented.

  ILGA reported in 2016 about Brunei: “there is no sign that the threatened death penalty is to be implemented.”

  According to the U.S. Department of State, Mauritania belongs in this category too.  A U.S. Department of State cable from 2009, released by WikiLeaks in 2011, indicated that Mauritania has never imposed the death penalty for homosexual activity or any other crime.

  ILGA reported in 2016 that “although is understood that the United Arab Emirates has not implemented [the death penalty] under the Sharia code, it remains a possibility under interpretations current in the Emirates.”

  

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• 17 Facts About The Orlando Shooter That Every American Should Know

  Submitted by Michael Snyder via The End of The American Dream blog,

  America is in shock.  On Sunday, a 29-year-old Islamic terrorist named Omar Mateen shot 102 people at a gay club known as Pulse in the heart of Orlando, Florida.  49 of those that were shot died, and 53 were wounded.  So how in the world did this happen?

  Well, when you combine radical political correctness with extreme government incompetence and the dramatic growth of radical Islam inside the United States, you create an environment which is absolutely primed for Islamic terror. 

  The truth is that the FBI knew about this guy well in advance.  In fact, they had even interviewed him three separate times over the years.  And at one point the government had been investigating the mosque that he had been attending, but that investigation was shut down by Hillary Clinton’s State Department.  Mateen had told the FBI that he hoped to be a martyr someday, and those were not just idle words.  His twisted ideology fueled his actions, and so the choices that he ultimately made should not have come as a surprise to law enforcement authorities.  But now that this has happened, will it change the way that the government approaches Islamic terror? 

  The following are 17 facts about the Orlando shooter that every American should know…

  #1 According to the Director of the FBI, Mateen had “links to al-Qaida, Hezbollah, and the Islamic State“.

  #2 Mateen’s father has openly expressed support for the Taliban on YouTube.

  #3 Despite those links to terror organizations, Mateen was allowed to work “as a security guard at a local courthouse“.

  #4 Mateen wasn’t directly hired by the courthouse.  Instead, he was officially an employee of the largest security services company in the world…

  The Orlando nightclub terrorist who pledged allegiance to ISIS worked almost a decade for a major Department of Homeland Security contractor, raising alarms that ISIS sympathizers and agents have infiltrated the federal agency set up after 9/11 to combat terrorists.

   

  Officials say Omar Mir Seddique Mateen, an Afghan-American who held two firearms licenses and a security officer license, was employed by the security firm G4S Secure Solutions USA Inc. since Sept. 10, 2007. The Jupiter, Fla.-based company merged with the Wackenhut Corp. after 9/11 and assumed federal contracts.

  #5 It turns out that this U.S. subsidiary of G4S is a company that works very closely with “the Department of Homeland Security, the US Army, and federal and local law enforcement.”

  #6 Mateen’s ex-wife says that he would repeatedly beat her while they were married.

  #7 He started to become radicalized after separating from his first wife.  While they were together, she said that he didn’t show much interest in religion.

  #8 He made pilgrimages to Saudi Arabia in 2011 and 2012.

  #9 He claimed to personally know the Boston Marathon Bombers.

  #10 According to the FBI, Mateen has “been on the radar before“, he was interviewed by them three separate times, and they conducted a 10 month investigation of his activities in 2013.

  #11 He is being described as “unhinged and unstable” by his former coworkers.

  #12 Mateen once declared that he hoped to martyr himself someday, and the FBI knew all about this.

  #13 Despite everything that the federal government knew about Mateen, he was still permitted to legally buy guns just last week.

  #14 In an odd twist, it also turns out that Mateen was a registered Democrat.

  #15 A respected Islamic scholar was urging Muslims in Orlando to “get rid” of homosexuals just a couple of months before this shooting took place…

  Farrokh Sekaleshfar – a British-born doctor and Muslim scholar – has gained a following by urging Muslims to ‘get rid of’ homosexuals.

   

  And in April, he took his speech titled ‘How to deal with the phenomenon of homosexuality’ to the Husseini Islamic Center in Sanford, just outside Orlando, Florida.

   

  Two months later, 29-year-old Omar Mateen carried out the worst massacre in US history by opening fire on a gay club in the same city.

  #16 Hillary Clinton’s State Department shut down an investigation of the mosque that Mateen attends because it “unfairly singled out Muslims“.

  #17 Just moments before the attack, Mateen reportedly called 911 to swear his allegiance to ISIS.

  When is it going to finally sink in for our politically correct politicians that Islamic terror is a major threat?

  There are lots of other Omar Mateens out there.  And as radical Islam continues to spread both inside and outside this country, the threat is only going to get a lot worse.

  Barack Obama is a perfect example of just how clueless many of our top politicians are about all of this.  During his speech to the nation, he did not connect this act of terror with radical Islam in any way, shape or form.  But the only reason why Mateen did what he did was because of his worldview.  He felt perfectly justified in picking up a weapon and gunning down dozens of people, and martyrdom was a reward in his eyes.  If he had not been immersed in the world of radical Islam for years, he never would have done such a thing.

  Wrong beliefs lead to wrong actions.  We see this in action all around us every day, but most of the time the consequences are not as dramatic as we just witnessed in Orlando.

  As I have been warning about for some time now, Islamic terror attacks inside the United States are going to continue to get worse.

  If you think what happened in Orlando was bad, just wait until these terrorists get their hands on chemical, biological or nuclear weapons.

  The detonation of a single weapon of mass destruction in one of our major cities would instantly change life as we know it for every man, woman and child in this entire nation.

  The ideology that fuels these terrorists continues to grow, and over time it is inevitable that they will acquire increasingly more powerful weapons.

  So yes, gunning down dozens of people in a crowded nightclub is an atrocity that is so evil that it is hard to find words to describe it.

  But someday we will see far, far worse in this nation, and at this point we are completely unprepared to deal with that reality.

  

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• Multiple Suspects On The Loose In Orlando – Why The Media Blackout Of Eyewitness Accounts?

  Submitted by Shepard Ambellas via Intellihub.com,

  According to heavily censored eyewitness reports, totally suppressed from the mainstream, there were likely several other radicalized perpetrators involved with Saturday night’s terror attack, which led deaths of 49 club-goers at Pulse and over 50 others being injured.

  One eyewitness to the attack, who was inside the nightclub when it happened, was giving his testimony to the attack, after being trapped inside the club, live on-air, to a mainstream news source when he was abruptly cut off after providing a crucial detail. The eyewitness said that during the attack “there was a guy there that was trying to […] hold the door closed so that we couldn’t exit,” as pointed out by an investigative reporter on YouTube.

  Additionally, there were reports that police could be seen quietly conducting an “active search” for accomplices who may have already exited the nightclub after the attack.

  Another eyewitness that was inside Pulse when the attack occurred told reporters, “I’m pretty sure it was more than one person, you know, like I said, I heard two guns going at the same time.” The eyewitness said that the event lasted “like eight minutes.”

  Another crucial detail that the press is leaving out is that the shooter or shooters were initiating “rapid fire;” which means that the weapons used were likely fully automatic, as depicted by the same eyewitness when he made an animated machine gun-like sound with his mouth for the press to hear.

  The witness said that he could smell the gun smoke in the air and that the attackers were “working together.”

  “It was not one shot at a time,” but rather from a machine gun,” another witness said, who eventually made it out of the club into the “alleyway.”

  Raw footage from the scene also reveals that officers may have been engaging an additional perpetrator outside of the nightclub, backing up other reports.

  It has also been reported that both FBI and police, around the country, are increasing their security protocols, dispatching undercover officers and specifically beefing up security measures at the annual Gay Pride Parade which is still currently underway in Los Angeles.

  Moreover, officials also are concerned that there is a ‘gaping hole’ in the nation’s security net and that more attacks may occur.

  Authorities and even the President of the United States, Barack Obama, are currently downplaying the fact that there is a definite radicalized Islamic ideological connection to the attack and again, are covering up the fact that multiple suspects are likely still on the loose.

  

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• No More "$1,000 Dinners & Champagne" For "Above The Law" Bankers At Standard Chartered

  Standard Chartered CEO Bill Winters is fighting the battle to right the ship at the bank on two fronts. First, Winters needs to figure out a way to deal with plunging revenues and billions in NPLs. On the other front, the CEO is working to change a culture in which he is finding many bankers consider themselves "above the law."

  

  Since taking over as CEO in the middle of 2015, Winters has replaced much of the senior executive team and initiated a probe into employee conduct and ethics. The result of the probe into misconduct has led Winters to add significant firepower to the bank's internal investigation team, including former detectives from the FBI, Scotland Yard, Hong Kong police and the New Zealand intelligence agency Bloomberg reports.

  Winters said that he has encountered "a looseness" in the way the bank was managed since coming in as CEO, and said he's uncovered a culture where senior managers felt they were "above the law." In a memo to employees titled #knowtherules, Winters wrote "I am concerned that a small number of employees, including some senior managers, have willfully disregarded our policies – sometimes for personal gain – and set a poor example for their peers and teams. I am deeply disappointed and angry at some of the examples we are finding."

  Still licking its wounds from a 2012 deferred prosecution agreement in which the bank was fined $667 million for violating US sanctions by engaging in $250 billion in transactions with Iran, Winters is on high alert when it comes to ethics violations and employee misconduct because as Bloomberg notes, the bank could potentially lose its US banking license if it slips up again.

  In one memo, Winters described a culture where managers felt they were "above the law" and was very clear on the fact that there would be a zero tolerance policy going forward for anyone not taking bank policies seriously.

  "I want this to be clearly understood – we have zero tolerance for any employee that deliberately flouts and circumvents our rules and policies, without regard for their seniority or role."

  At the moment, it appears as though Winters is putting some bite behind the bark. In the memos, Winters is providing real examples of rule breaking, and what has happened to those employees. One memo cites three senior employees who didn't disclose their investment in an unlicensed money lender that charged high interest rates, and they were all subsequently dismissed.

  The risk and controls committee will dock bonus if compliance or risk officers report that policies aren't being taken seriously enough, and General Counsel David Fein who is heading the effort has made sure that the new rules have been communicated clearly to the staff of 84,000 and excuses such as "I didn't know what the policy was" will no longer fly. "They are not going to have the same mitigating factors, that stuff's gone." Fein said.

  Everything is being scrutinized at the bank, along with the big things, "smaller" things such as expense reports are now being controlled more diligently. Pam Walkden, new HR chief says "we've done a lot of training around what is the right way to submit your expenses and what are legitimate expenses. You cannot go and spend $1,000 on a fancy dinner with champagne. If you accidentally charge an orange juice from the mini bar, that's not the end of the world. But if you take out 20 people and make the most junior person pay for it, that's big trouble."

  Winters has a lot of ground to make up in order to make shareholders happy. The bank spent $243 million on regulatory costs alone in Q1 of this year, which is 10.8% of the entire operating costs of the bank, and the effort is something that Winters feels important, even as the bank trades at a significant discount to book value according to Bloomberg.

  

  

  * * *

  While we are skeptical that any bank CEO is truly cleaning house, on the surface it appears as though Winters is actually trying to so so, which is a positive. However as usual, its a deeds not words type of thing, so whether or not the CEO can get the misconduct under control remains to be seen. One final observation, and most importantly, how are bankers supposed to survive if they're unable to spend $1,000 on fancy dinner and champagne?

  

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• Former CIA Agent To Americans: Time To Talk About What's Really Causing Terrorism

  Submitted by Carey Wedler via TheAntiMedia.org,

  In the wake of yet another terrorist attack, a former CIA counterterrorism agent has shared her insight into what causes such tragic, intentional carnage. Amaryllis Fox spoke for the first time publicly with Al Jazeera Plus (AJ+) about terrorism, misguided narratives on why it happens, and the underlying motivators driving it — ultimately urging  Americans and those in power to adopt a different approach in comabating the ongoing violence.

  “If I learned one lesson from my time with the CIA, it is this: everybody believes they are the good guy,” says Fox, who is currently “in the process of getting her CIA cover rolled back,” AJ+ reports. She is now a peace activist and runs Mulu, “an e-commerce company supporting at-risk communities around the world.”

  Fox worked as a counterterrorism and intelligence official for the clandestine services during the 2000s. In her first public statement on her time there, she discussed the limitations on the American public’s perception of the war on terror:

   

  “The conversation that’s going on in the United States right now about ISIS and about the United States overseas is more oversimplified than ever. Ask most Americans whether ISIS poses an existential threat to this country and they’ll say yes. That’s where the conversation stops.”

  Indeed, while a majority of Americans fear terrorism, reaching a consensus on how to tackle ISIS has proved contentious. Fox explained the simplicity of the way the conflicts are viewed on both sides:

  “If you’re walking down the street in Iraq or Syria and ask anybody why America dropped bombs, you get: ‘They were waging war on Islam.’”

  In America, the question is: “Why were we attacked on 9/11?”

  Fox says if you pose this question, “You get: they hate us because we’re free.”

  However, she contests the validity of these assumptions, pointing to the powerful forces that drive conflict in the first place:

  “Those are stories manufactured by a really small number of people on both sides who amass a great deal of power and wealth by convincing the rest of us to keep killing each other.”

  Indeed, both sides of the conflict expend significant effort campaigning to prove their crusades are justified. In the United States, after decades of prolonged conflict, the populace is largely desensitized to war and often ignorant of its current manifestations.

  Fox challenges this paradigm:

  “I think the question we need to be asking, as Americans examining our foreign policy, is whether or not we’re pouring kerosene on a candle. The only real way to disarm your enemy is to listen to them. If you hear them out, if you’re brave enough to really listen to their story, you can see that more often than not, you might have made some of the same choices if you’d lived their life instead of yours.”

  Of course, as Americans mourn the most recent mass shooting, it is doubtful many citizens are well-versed in the U.S. foreign policy that provokes such terrorism. Rather, they focus, understandably, on the wrong done to their nation. But Fox offered a unique perspective that lends insight to the “enemy.”

  “An Al-Qaeda fighter made a point once during debriefing,” she recounted. “He said all these movies that America makes — like Independence Day, and the Hunger Games, and Star Wars — they’re all about a small scrappy band of rebels who will do anything in their power with the limited resources available to them to expel an outside, technological advanced invader. ‘And what you don’t realize,’ he said, ‘is that to us, to the rest of the world, you are the empire, and we are Luke and Han. You are the aliens and we are Will Smith.’”

  However, she also challenged the Al-Qaeda fighter’s take, arguing that on both sides of  conflict, those fighting on the ground often provide the same reasons for doing so:

  “But the truth is that when you talk to people who are really fighting on the ground, on both sides, and ask them why they’re there, they answer with hopes for their children, specific policies that they think are cruel or unfair,” she says.

   

  “And while it may be easier to dismiss your enemy as evil, hearing them out on policy concerns is actually an amazing thing, because as long as your enemy is a subhuman psychopath that’s gonna attack you no matter what you do, this never ends. But if your enemy is a policy, however complicated — that we can work with.”

  As terror attacks become an increasingly normal occurrence in the West — and as Western intervention trudges ahead unabated — hearing out enemies’ concerns may, at this point, be the most effective counterterrorism gesture the United States can make; that is, if it is truly determined to bring an end to the violence.

  

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• Arrest Of Accomplice Of "Lone Wolf" Orlando Shooter Expected Soon

  As we reported first thing this morning, contrary to media reports that Omar Mateen had acted as a “lone wolf” when he singlehandedly killed 49 and injured over 50 – a monumental task outside of video games and Hollywood – something about this story just did not make sense, especially since according to eyewitness reports, suppressed from the mainstream, there were likely several other perpetrators involved with Saturday night’s terror attack.

  As it turns out, the police and the FBI may have to “adjust” the narrative, because according to WFTV, an arrest of an alleged accomplice of Mateen will be “made soon.”

  @KRayWFTV reporting on law enforcement angle of #pulseshooting #wftv pic.twitter.com/bfw7bgEAT2

  — Daralene Jones (@DJonesWFTV) June 13, 2016

  #BREAKING: Arrest to be made soon of alleged accomplice in #PulseShooting #WFTV @KRayWFTV pic.twitter.com/bNS5UEGYW2

  — WFTV Eyewitness News (@WFTV) June 13, 2016

  As WFTV further reports, “sources told Channel 9 Monday that law enforcement could possibly make an arrest in the next few days of someone who allegedly helped the Orlando gunman carryout the mass shooting inside Pulse nightclub that killed 49 people on Sunday.”

  However, the station adds, citing US Attorney Lee Bentley, “We have no reason to believe that anyone connected to this crime is placing the public in imminent danger at this time.” Unless, of course, there is a “reason to believe” that the narrative that had been peddled all along about a lone-wolf style killing, when in fact there was at least two or more perpetrators, was a glaring lie.

  For now, however, the authorities are scrambling to create the new story, and as WCVB adds, a US government official said that no arrest is imminent.

  A US Government Official briefed on the Orlando case tells us no arrest is imminent #wcvb #5investigates

  — Karen Anderson (@karenreports) June 14, 2016

  It’s almost as if the government itself can no longer keep its official story straight.

  

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• Thanks America: Spending On Military Weapons Saw Its Largest Yearly Increase In A Decade

  For those who who thrive on conflict (ie: countries with a strong military industrial complex – read: United States), 2015 was a year to be proud of.

  The world defense market climbed to $65 billion in 2015, up by $6.6 billion from 2014 the consulting company IHS Inc said in its Global Defence Trade Report. That's the largest yearly increase in the past decade, led by Saudi purchases which jumped about 50% to $9.3 billion in 2015 according to Bloomberg.

  

  As it continues its conflict in Yemen, and with an eye on countering Iran, Saudi Arabia's purchases consisted of Eurofighter Typhoon jets, F-15 warplanes and Apache helicopters, as well as precision-guided weapons, drones and surveillance equipment according to Ben Moores, a senior defense analyst at IHS Aerospace, Defence & Security who wrote the report.

  Egypt became the world's fourth-biggest weapon's importer, spending almost $2.3 billion in 2015, ramping up from spending $1 billion or less before 2013. Moores says the higher spending by Egypt is being underwritten by France and other Gulf Arab states.

  Iraq spent nearly as much as Egypt as it shifts money from operations and personnel toward procurement, IHS said. The country is battling Islamic State militants in the Anbar province and is preparing for the eventual battle to retake the northern city of Mosal.

  Moores says that the IHS doesn't foresee oil prices recovering beyond current levels for another three years, which means oil exporters may have to cut back on procurement in the future – (or the US can just offer a discount for "slightly used" equipment, one or the other).

  Another interesting point from the reports, as Bloomberg notes, is that states bordering the South China Sea increased defense spending by 71% since 2009 in attempt to deter China. Those purchases were for items such as aircraft and anti-ship missiles the IHS added.

  From an export perspective, everyone will be shocked to learn that the United States was the top weapons exporter in 2015, supplying almost $23 billion in goods and equipment, of which $8.8 billion went to the Middle East.

  "Going forward, the total may exceed $30 billion as deliveries of the F-35 begin to ramp up" the report said, referring to the next-generation fighter aircraft built by Lockheed Martin.

  

  Russia came in at the world's No. 2 exporter, and is likely to increase its trade with Iran  as the country begins to replace its aging air force equipment, a massive undertaking that could cost $40 to $60 billion according to Moores.

  France is poised to further its exports as well, as it builds a $39 billion submarine order it won from Australia earlier this year.

  As we previously noted, the global arms trade is absolutely huge, and is continuing to grow as exporters stir up conflict in order to grow GDP look to help keep the peace with global arms sales. Remember this information the next time we hear about the imminent threat Russia poses, or about how the US just needs to make sure it sticks its nose into the South China Sea disputes.

  * * *

  Bonus:

  Here is a graphic (more here) showing the global arms trade between 2011-2015, with the usual suspects exporting and the Middle East significantly increasing imports.

  

  

  

• How A Venezuela Food Protest Turned Into A Deadly Police Gunfight

  After last week’s first reported casualty during a Venezuela looting, things have, as expected, gotten exponentially worse and according to Reuters, the recent wave of lootings and food riots in crisis-hit Venezuela has left another three people dead in just the past few days. The state prosecutor’s office is investigating the deaths of a 21-year-old man in eastern Sucre state on Saturday, another 21-year-old man in the Caracas slum of Petare on Thursday, and a 42-year-old woman in the western state of Tachira last Monday.

  All three suffered gunshot wounds during chaotic scenes outside supermarkets, which have become a flashpoint for violence and looting amid scarcities of basics across the South American OPEC member country, according to local rights group Provea. A policeman has been arrested over the Tachira death, which as we reported was most likely the result of police gunshots.

  With basics such as flour and rice running short, crowds chanting “We want food!” are thronging supermarkets daily, presenting a major problem for the struggling leftist government of President Nicolas Maduro.

  More than 10 incidents of looting are occurring daily, according to the Venezuelan Observatory of Violence, a local monitoring group.

  Meanwhile, here is a video of just how deadly Venezuela has become: what started as a food protest in the Caracas parish of La Vega last Friday, quickly tuned into a gunfight with several wounded police officers and who knows how many shot protesters. 

  

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• Dramatic Footage Emerges From Inside Orlando Nightclub During Deadly Shooting

  As the world continues to learn more about the tragic events that occurred over the weekend at a gay nightclub in Orlando, in what ultimately was the deadliest mass shooting in US history, a dramatic video has emerged that captures the very moment the shooting began that fateful evening.

  Amanda Alvear, a 25 year old nursing student, was streaming footage on snapchat showing club goers enjoying themselves just as a hail of gunfire rang out in the club. The brief clip was posted on Facebook by Amanda's brother Brian according to the Daily Mail.

  The Mail reports that Brian indicated on his Facebook account that Amanda received and answered one call after the video. Sadly, the last thing he had heard about his sister was that she was hiding in the bathroom before learning of her death.

  

  

  

  Here is the snapchat video – Warning: May be disturbing for some viewers.

  

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• The EU Is Coming To Close Down Your Free Speech

  Submitted by Douglas Murray via The Gatestone Institute,

  • The German Chancellor was not interested in the reinforcement of Europe's external borders, the re-erection of its internal borders, the institution of a workable asylum vetting system and the repatriation of people who had lied to gain entry into Europe. Instead, Chancellor Merkel wanted to know how Facebook's founder could help her restrict the free speech of Europeans, on Facebook and on other social media.

  • Then, on May 31, the European Union announced a new online speech code to be enforced by four major tech companies, including Facebook and YouTube.

  • It was clear from the outset that Facebook has a definitional problem as well as a political bias in deciding on these targets. What is Facebook's definition of 'racism'? What is its definition of 'xenophobia'? What, come to that, is its definition of 'hate speech'?

  • Of course the EU is a government — and an unelected government at that — so its desire not just to avoid replying to its critics — but to criminalise their views and ban their contrary expressions — is as bad as the government of any country banning or criminalising the expression of opinion which is not adulatory of the government.

  • People must speak up — must speak up now, and must speak up fast — in support of freedom of speech before it is taken away from them. It is, sadly, not an overstatement to say that our entire future depends on it.

  It is nine months since Angela Merkel and Mark Zuckerberg tried to solve Europe's migrant crisis. Of course having caused the migrant crisis by announcing the doors of Europe as open to the entire third-world, Angela Merkel particularly would have been in a good position actually to try to solve this crisis.

  But the German Chancellor was not interested in the reinforcement of Europe's external borders, the re-erection of its internal borders, the institution of a workable asylum vetting system and the repatriation of people who had lied to gain entry into Europe. Instead, Chancellor Merkel was interested in Facebook.

  When seated with Mark Zuckerberg, Frau Merkel wanted to know how the Facebook founder could help her restrict the free speech of Europeans, on Facebook and on other social media. Speaking to Zuckerberg at a UN summit last September (and not aware that the microphones were picking her up) she asked what could be done to restrict people writing things on Facebook which were critical of her migration policy. 'Are you working on this?' she asked him. 'Yeah', Zuckerberg replied.

  In the months that followed, we learned that this was not idle chatter over lunch. In January of this year, Facebook launched its 'Initiative for civil courage online', committing a million Euros to fund non-governmental organisations in its work to counter 'racist' and 'xenophobic' posts online. It also promised to remove 'hate speech' and expressions of 'xenophobia' from the Facebook website.

  It was clear from the outset that Facebook has a definitional problem as well as a political bias in deciding on these targets. What is Facebook's definition of 'racism'? What is its definition of 'xenophobia'? What, come to that, is its definition of 'hate speech'? As for the political bias, why had Facebook not previously considered how, for instance, to stifle expressions of open-borders sentiments on Facebook? There are many people in Europe who have argued that the world should have no borders and that Europe in particular should be able to be lived in by anyone who so wishes. Why have people expressing such views on Facebook (and there are many) not found their views censored and their posts removed? Are such views not 'extreme'?

  

  One problem with this whole area — and a problem which has clearly not occurred to Facebook — is that these are questions which do not even have the same answer from country to country. Any informed thinker on politics knows that there are laws that apply in some countries that do not — and often should not — apply in others. Contrary to the views of many transnational 'progressives', the world does not have one set of universal laws and certainly does not have universal customs. Hate-speech laws are to a very great extent an enforcement of the realm of customs.

  As such it is unwise to enforce policies on one country from another country without at least a very deep understanding of that country's traditions and laws. Societies have their own histories and their own attitudes towards their most sensitive matters. For instance in Germany, France, the Netherlands and some other European countries there are laws on the statute books relating to the publication of Nazi materials and the propagation of material praising (or even representing) Adolf Hitler or denying the Holocaust. The German laws forbidding large-scale photographic representations of Hitler may look ridiculous from London, but may look less ridiculous from Berlin. Certainly it would take an enormously self-confident Londoner unilaterally to prescribe a policy to change this German law.

  To understand things which are forbidden, or able to be forbidden, in a society, you would have to have an enormous confidence in your understanding of that country's taboos and history, as well as its speech codes and speech laws. A ban on the veneration of communist idols, for instance, may seem sensible, tasteful or even desirable in one of the many countries which suffered under communism, wish to minimise the suffering of the victims and prevent the resurrection of such an ideology. Yet a universal ban on images or texts which extolled the communist murderers of tens of millions of people would also make criminals of the thousands of Westerners — notably Americans — who enjoy wearing Che Guevara T-shirts or continue their adolescent fantasy that Fidel Castro is an icon of freedom. Free societies generally have to permit the widest possible array of opinion. But they will have different ideas of where legitimate expression ends and where incitement begins.

  So for Facebook and others to draw up their own attempt at a unilateral policy of what constitutes hate-speech would be presumptuous even if it were not — as it is — clearly politically biased from the outset. So it is especially lamentable that this movement to an enforced hate-speech code gained additional force on May 31, when the European Union announced a new online speech code to be enforced by four major tech companies, including Facebook and YouTube. Of course, the EU is a government — and an unelected government at that — so its desire not just to avoid replying to its critics — but to criminalise their views and ban their contrary expressions — is as bad as the government of any country banning or criminalising the expression of opinion which is not adulatory of the government.

  That these are not abstract issues but ones exceedingly close to home has been proven – as though it needed proving – by the decision of Facebook to suspend the account of Gatestone's Swedish expert, Ingrid Carlqvist. In the last year Sweden took in between 1 and 2% additional people to its population. Similar numbers are expected this year. As anyone who has studied the situation will know, this is a society heading towards a breakdown of its own creation, caused (at the most benign interpretation) by its own 'open-hearted' liberalism.

  Countries with welfare models such as Sweden's cannot take in such numbers of people without major financial challenges. And societies with a poor integration history cannot possibly integrate such vast numbers of people when they come at such speed. As anyone who has travelled around there can tell, Sweden is a country under enormous and growing strain.

  There is a phase in waking up to such change which constitutes denial. The EU, the Swedish government and a vast majority of the Swedish press have no desire to hear critiques of a policy which they have created or applauded; the consequences will one day be laid at their door and they wish to postpone that day, even indefinitely. So instead of tackling the fire they started, they have decided to attack those who are pointing to the fact that they have set the building they are standing in on fire. In such a situation it becomes not just a right but a duty of free people to point out facts even if other people might not want to hear them. Only a country sliding towards autocracy and chaos, with a governing class intent on avoiding blame, could possibly allow the silencing of the few people pointing out what they can clearly see in front of them.

  People must speak up — and speak up now, and speak up fast — in support of freedom of speech before it is taken away from them, and in support of journalists such as Carlqvist, and against the authorities who would silence all of us. It is, sadly, not an overstatement to say that our entire future depends on it.

  

  

• Immigration Economics: Illegal Aliens Are Our Bread and Butter

   This article by David Haggith was first published on The Great Recession Blog.

   

  

  Have you ever wondered why politicians make some immigration illegal and then turn a blind eye to illegal immigration wherever it is happening … for decades? What about why they talk so much about building walls to keep out the vast hoards, rather than simply arresting the much smaller number of people who hire illegal immigrants. Surely drying up the jobs that are available to illegal immigrants would be much more economical than building a thousand-mile wall. This article will tell you why we make some immigration illegal and then turn a blind eye to it.

  Have you also wondered why politician make it illegal for millions of people to enter the country and then eventually support naturalizing those people who broke the laws these very politicians made? This article will answer that, too.

  First, I’ll state that immigration is largely about economics; and by that I do not simply mean that people are coming to the U.S. to gain economic opportunity, though, of course, they are. Nor do I simply mean immigrants are taking jobs away from Americans, though, of course, they are.

  There is an elephant in the room that no one is talking about, and it’s not just a GOP elephant. Immigration economics has a dark underbelly that neither party ever talks about. Since immigration reform is one of the major planks of the Republican’s top candidate for the presidency, there is no time like the present to talk about the elephant.

   

  Neither party wants to end illegal immigration nor make all immigration legal

   

  The fact is both parties have created an immigration dance that they love. First, they both turn a blind eye toward illegal immigration. That, in turn, causes the number of illegal aliens to grow quickly as word travels that “they won’t really do anything about it. Eventually, a large subculture of illegal immigrants becomes a serious social problem that demands political resolution because citizens of the country start getting worked up over the social conflicts they are feeling and the jobs they see going to illegal immigrants.

  The next step of the dance is the tricky one. We saw it happen in Reagan’s day. Both parties compromise in order to fix the problem without fixing it. They fix it by creating amnesty, which they always say is not amnesty because the citizens don’t like amnesty. They don’t fix it in in that they promise all the citizens who are angry about illegal immigration they will only let these illegal aliens in the door because turning them away would create a humanitarian crisis because the number has grown so large.Then they will batten the gates much tighter and never let it happen again. Only … they never do batten the gates at all, and so it happens all over again. Never mind that the number of illegal immigrants only grew to the point of becoming a humanitarian crisis because those same politicians turned a blind eye to illegal immigration for years.

  This article will also answer why that continues on a rinse-and-repeat basis. By the end of the article you may think, “Wow, he is really jaded about politicians,” or you might thing, “Wow, that makes total sense from an economic standpoint, and it really, really stinks.” You’d be right either way.

  Illegal aliens are our bread and butter, and we eat them for lunch. More particularly, politicians know what side their bread is buttered on. They get paid to provide cheap labor for rich people. Let’s break it down to some obvious facts.

   

  The economics of Illegal immigration

   

  The answer to all these questions is really pretty simple:  Illegal immigrants provide the closest thing the U.S. has to a peasant class. It is important that politicians make them illegal so that they will be true peasants (people with nor native rights nor any say in the laws that govern them). It’s important that politicians turn a blind eye to them so that we  will have peasants here … where we want them. It doesn’t accomplish anything toward creating a class of surfs to do work for the rich if we keep them out of the country. But, if they have rights as citizens, they will not remain surfs. We’ll have a peasant revolt.

  The wealthy business owners have wanted a peasant class ever since they could no longer have a slave class. A peasant class is the next best thing. Often, they have lusted for such laborers overseas, and they have gotten politicians into office who made it possible for them exploit an offshore peasant class with sweat shops.

  However, there are many jobs that cannot go overseas. They have to be done by more expensive American workers. If only we had a resident peasant class to do the work that American workers don’t want to do because it doesn’t pay enough.

  The Bush dynasty opened the doors to outsourcing as many jobs to lower-wage workers outside the country as possible in order to help wealthy stock holders amass more wealth, but there wasn’t anything either Bush could do about those jobs that have to be done inside the country … such as cleaning hotels and bussing dishes at restaurants or picking tomatoes grown domestically…. or was there?

  For those jobs, they needed to insource the outsourcing. In other words, they need to find ways to get peasant labor into the country. You know, the kind of labor that doesn’t expect health insurance and doesn’t cry about working conditions and most of all, works cheap.

  Strong immigration laws make that possible. When someone is illegal they are willing to work without benefits and with fewer rights and for less money because they have to stay under the radar. They are afraid of standing up for their rights. Heck, they hardly have rights to stand up for; but if they did stand up, they’d be deported instantly. (Those are the ones who particularly get to be sent home and made a show of so the p0liticians can convince the citizens that they are trying to uphold the laws.)

  Making some people’s presence in the country illegal while turning a blind eye to their being here assures a peasant class of workers. It’s as simple as that: Illegal immigrants are willing to work at subsistence levels because that is what they come from. They don’t need a wage that makes an American living. They have no say in what the government does to them or with them because, like peasants, they have no vote;  but also because they have to keep their heads low. The fact that they have almost no status in society at all assures they will remain cheap.

  As always, if you want to know why things happen, follow the money.

  If you think I’m being cynical and that the government is not intentionally letting illegal aliens in to take jobs at low wages, then ask yourself this simple question: What would happen if, instead of trying to arrest and return home millions of illegal aliens, the government just started arresting and jailing the thousands people who have hired them … starting with just the top one-hundred? The jobs would dry up before you even made it through the top one hundred.

  That’s what would happen, and you know it. People will hire illegal aliens if there is only a financial penalty if you get caught and if they’re pretty sure the government will keep turning a blind eye to the situation; but start putting those employers in jail, and all employers will quickly be checking the ID and green cards of their migrant workers to make sure they have a legal right to work here.

  As soon as the jobs dried up, illegal immigrants who could get no work would find their plight worse here than in their home country, and they would return home of their own free will … unless, of course, you put them on welfare because you’re softhearted, but also softheaded about the costs … and you feel it is the United State’s obligation to save the entire world from poverty and to make your kids and grandkids pay for your benevolence by financing the welfare with national debt.

  You see, you really don’t have to round up millions of people hiding in bushes. You have to round up only hundreds of big employers whose whereabouts are easily known by their big houses. Notice that does not happen. Not ever. You really don’t have to build a wall either. Notice the wall has been talked about for thirty years and still isn’t finished.

  Big business wants cheap labor, and politicians protect their benefactors. The cheapest labor is that which is illegal but knowingly allowed to happen anyway. The justification for turning a blind eye is always, “Americans don’t want these jobs.” If your head is dumber than a turnip and stuck equally deep in the dirt, then you have long accepted that as truth. Actually, it’s just that it sounded reasonable, so you didn’t think it through. If you were dumber than a turnip you wouldn’t be reading this economics blog.

  To think it through, ask yourself why Americans don’t want those jobs. Is it because they’re dirty jobs? That’s the party line. And that may be a small part if it, but cleaning hotels isn’t that bad. Washing and bussing dishes isn’t that bad. Picking tomatoes isn’t that bad.

  Before you say, “Hold on; it’s bad enough,” let me agree that none of it is desirable work to be sure. I mean, I don’t want to go do it. However, American citizens line up to do a lot worse jobs … such as cleaning out and repairing sewer lines. So, why will an American worker clean out a sewer line but not pick a pretty tomato?

  The answer, again, is pretty straight forward when you think it through: the guy who cleans out your sewer line is a plumber, and he makes a whole lot more money per hour to do that work than he could doing those other jobs. If he could make the same amount doing dishes, don’t you think he’d rather be inside cleaning dishes than outside in the mud cleaning sewer pipes? Bending over the tomato plants will also work just as well for sporting that plump plumber derrière.

  Americans don’t want certain jobs because wages for those particular jobs have been suppressed for decades by the availability of cheap, illegal immigrant labor. If there had been a ready pool of people willing to take those jobs at bottom wages, then the wages would have had no choice but to rise over the decades to a level that would attract workers. The dishes have to be washed for the grand hotels to stay in business, and there is a wage at which Americans will line up for the job.

  That’s just market dynamics, but that wages sink to whatever the lowest common denominator will accept is also just market dynamics.

  Now we come to the point where immigration economics really kicks in. The dirty secret is that it is not just the politicians who want the cheap labor and not just big business owners. American citizens want a peasant class, too. That’s why the politicians get away with it.

  Americans want cheap tomatoes and cheaper dinners out. (Well, many of them; not all.) We all know that, if the pickers and the dish washers made more money, we’d have to pay more for the food we eat in and more for the food we eat out. We’d have less to spend on video games and larger televisions. That’s also just a market dynamic. You’re going to pay more for a lot of things if illegal aliens don’t do the jobs for less.

  So, from the bottom to the top, illegal immigration is all about the economic benefits of having a peasant class to do the dirty work in order to afford all the citizens a little better lifestyle.

  But if establishing some people as an illegal class that many citizens turn a blind eye to is something many Americans want, why do politicians eventually always come around to talking about making more immigration legal?

   

  The economics and politics of immigration reform

   

  The rub in all of this is that the peasant class eventually gets large enough to stage a peasant revolt. That’s when the federal government starts to talk once again about amnesty — the politically correct term for which is “immigration reform.”

  Naturally, the politicians do all they can to avoid the term “amnesty” because all previous amnesties left a bad taste in Joe and Jolene Citizen’s mouths because the government promised not to let illegals in again and then did so anyway. (And Americans are ambivalent about having a peasant class; they want the cheap tomatoes but they don’t want their own jobs taken, or they feel bad about seeing people work so cheaply, and guilt kicks in.)

  In the guilt cycle, we atone for our sins and then go back to repeating them. So, the politicians atone for guilt by granting citizenship and then keep letting lots more illegals in to maintain the peasant worker class. (And Joe and Jolene really don’t think too much about this because they like those cheap tomatoes. If you think about it too much, the guilt kicks in, and its hard to enjoy the cheap tomato.)

  Bear in mind, they have to be illegal to remain a peasant class because that’s what forces them to keep their heads down. Just letting in more legalized labor would not do as much to hold the price down.

  Sooner or later, however, you have to give that growing peasant class citizenship. What you forgot about when building up the peasant labor pool is that those people also suffer from this thing we call the “human condition.” So, they start to expect citizenship because they are tired of seeing everyone else around them have more rights and more money than they do. At first, they were glad to come here just for the economic benefit, but now they reach for a higher brass ring. We all rise to a plateau and then feel we could be happy with just thirty percent more.

  If you don’t grant a path to citizenship eventually for all your indentured servants, you face a peasant revolt. Their shear numbers give them power. So, the gates finally open under pressure to allow citizenship for the vast bulk of those who are here illegally. And then they shut again, and all eyes turn blind again in order to develop a new peasant class. We are currently at the peasant revolt point where we have to deal with this.

  Of course, President Obama has been intimating openly for seven years now that he will open those gates to citizenship. Naturally that has attracted hoards of people to migrate to the U.S. illegally in hopes that they will make it through the gates of the city before they close again. This has made the problem grow fast enough that the time for resolving a peasant revolt is happening during Obama’s own shift as president. That’s advantageous because, if he can be the one who gets the hoards in the door, they will probably all become good Democrats to bestow their blessed new votes upon him and his.

  Most good citizen Democrats will support open-door policies toward mass immigration because it is the soft-hearted thing to do. So, he won’t find much resistance from his own party.

  At the same time, many Republicans in Congress will support it because the revolt is happening. There is no getting around it. Republicans know that even legalimmigrants are willing to work for less than native citizens because of the situations they came out of; so it’s good for big business. Still helps keep down the cost of labor, even if not as much as illegal immigration does.

  There is no will on either side of the aisle to do anything real to stop illegal immigration for good. That’s why the Republicans capitulated overnight in granting money for immigration reform without a word … once the last elections were over. The last thing they would want to do is talk about this elephant in the room and expose the real underpinnings of illegal immigration.

  At the same time, they created funding for more border security for political cover. That’s all smoke and mirrors to appease the concerns of rank and file Republicans who are tired of being unemployed. You know now that it was smoke and mirrors because you can see that, after a couple of years, it has done nothing to stem the problem.

  The real solution — if everybody wanted one — is obvious, and I already completely covered it in just one sentence. Jail the employers, and the problem goes away on its own. It’s not about bolting the gates at the border. Illegal immigrants are not coming here because they love the culture; they are coming here for economic opportunity because the peasant class here is a lot better off than the peasant class at home. You can’t blame them. I don’t. Bad as the wages and benefits may be, they’re much better than what they had.

  So, that’s how the game is played and why Republican politicians are ready to allow amnesty without calling it that and while making a lot of noise about spending money to bar the gates. That’s why they’ll continue to turn a blind eye toward the employers who hire illegal aliens.

  It would be a simple thing to create a law that awards jail time based on the number of illegal aliens hired and to start auditing companies now. It’s not that hard for auditors to see if all employees have the right proof of citizenship, and it’s not hard as the person doing the hiring to make sure that all employees have the right documentation and to prove it with facsimiles. You do need good quality documentation that’s hard to counterfeit, but that’s doable, and no system has to be perfect in order to be much better than what we have.

  You won’t hear that talked about by any politician — not even Donald Trump, who is still stuck on the wall.

   

  What is the cost of immigration economics?

   

  The New York Times just published an article about some of the costs of immigration that I find to be far worse than paying more for my tomatoes. Frankly, I’ve been coming across these kinds of articles a lot lately. This one talks about the Islamization of England through attempted control of its public schools by Islamic immigrants. It is stunning how far they have gone in turning some schools into a Muslim cultural institution.

  I read a lot of major European newspapers, and I’ve been seeing this all over Europe for a couple of years. It’s a high social cost.

  Articles in The Telegraph, The Guardian, The Daily Mail, The Jerusalem Post, and numerous other major news sites show me a pattern happening in countries that have been too liberal in their immigration policies. Britain, Germany, France, Norway and Sweden, to name a few are all starting to see internal revolt from their native citizens against immigration because certain immigrants truly do not like the culture they are moving into. They seek to turn the country into what they are used to.

  I think the resulting homogenization of cultures that happens when immigrants try to turn their new land into their old land is also a great loss of diversity and interest.

  Here’s an article on Germany that describes the problem there. Germany has the second-most liberal immigration policy in the world. Guess which nation has the most liberal immigration policy in the world? The U.S.

   

  My own experience of immigration in my neck of the woods

   

  I feel strongly that mmigration in the U.S. needs to be slowed way down. Liberals are creating huge culture clashes by not giving people time to get used to each other’s ways, and they’re creating overpopulation and environmental harm.

  I see this happening all around me. The county I live in is experiencing gridlock for the first time in its existence. Almost all population growth has been from immigration. The county has nearly doubled in size in two decades. While it is about as far from Latin American as you can get, billboards and signs are now starting to use Spanish with no English.

  Prior to to the last two decades, population growth and immigration in this county were gradual. Rapid population growth is resulting in tighter and tighter building regulations to avoid the problems of overdevelopment; so how is such immigration good for the people who live here? Why are we better off with more gridlock? (Simple. It sells more real estate, so again it’s all about money.)

  To me it is not about where the people come from, it’s about the shear number of people. Why do I want them? I wouldn’t want this level of immigration even if they all came from merry old England where my ancestors came from. We have enough people, thanks, and far too few good paying jobs.

  Nevertheless, the group of Latino immigrants is different than all others — much different. Have you noticed television programming is becoming increasingly dominated by Spanish all over the nation. That’s never happened with any other language in this county, and yet this country was made from immigrants from all over the world. All other people accepted the language and culture they moved into and made it their own and became a part of it.

  This pressure to Latinize our own culture in order to accommodate is not because the people are different than other immigrants. They’re just as nice as any other group of people. What’s different is the volume. Latin American immigrants provided such a major portion of the carefully engineered peasant population that they have become such a large group they don’t have to make those changes. They are large enough to demand others change to accommodate them. This is the cost of creating a large peasant population.

  Lest anyone mistake me in an oversensitive manner to thinking I’m calling them peasants because they are Latin, I want to place a reminder here that race has nothing to do with it. They are peasants because they are part of an illegal population made up of all races that exists intentionally to provide cheap labor for the United States. They exist because politicians intentionally turn a blind eye to them but keep them illegal so they have to hold their heads down.

  Big businesses love cheap labor. Big real estate developers love population growth. The locals aren’t having babies fast enough, so immigration means a lot more construction of everything and cheap labor to do the construction so the developers make more money all around.

  I have seen vast acres of beautiful, fertile agricultural land and entire forested mountainsides turn into housing developments entirely bought up by immigrants. In this case, Russian and Indian. In my area, its has turned a beautiful rural county into a sprawling suburb. It’s certainly not an environmental positive, but Democrats love it, too.

   

  The cultural cost of mass migration

   

  The current European immigration crisis has become a political inferno because Islamic immigrants try to change the cultures they move into. Just so this discussion is not about Islam, let’s imagine that it was Jewish mass migration into the United States. In my opinion, if Jews moved to this nation and wanted to speak Hebrew at home and to practise all the rules of Judaism, no one should have a problem with that; but if many Jews moved here and because they had the power of numbers, insisted that government documents be written in Hebrew, we should all have a major problem with that. If they insisted Torah be fought in public schools we should have a problem with that. If they went further an insisted that Torah law become the law of the land, we should have a very big problem with that.

  That, however, has not happened with Jewish immigration, but in some European countries Muslim immigrants are demanding public school classes teach their religion and that government institutes Sharia law. Read the New York Times article above. It will open your eyes about a pattern that is recurring in a number of Western nations.

  I certainly would not move to France and expect the French to speak English to me or to write government documents in English for me. Yet, people are moving to France from Islamic nations and demanding that courts start recognizing Sharia or that the country create special courts for Muslims.

  Culture clashes like this are unavoidable when immigrants are brought in from one culture in huge numbers. If we do not slow immigration to a level where migrants can assimilate with the culture the culture of the country they are moving into, then we will certainly create more and more internal conflicts that will begin to boil over.

  What may seem like a liberal dose of love toward immigrants will prove to be naiveté about human interactions. You have to allow time for people to adjust to each other. When you force people together as Obama has done (doubling the immigration rate) or as Merkel has done in Germany, you continually spawns greater conflict. People do not adjust to each other just because they are forced to.

  We are going to see a lot more racial and nationalistic conflict in Western countries because of the huge increase in legal immigration and the blind eye turned toward illegal immigration along with the amnesty that is coming.

   

  One of my problems is that I love different cultures so much

   

  I like to see lots of difference in culture. Viva la difference. I don’t like homogeneity. And that’s why people need to assimilate when they move into a country, rather than try to transform it into something more like their own culture and country.

  Each country’s culture has its own beauty, and we are losing that all over the world rapidly due to globalization. People in those cultures are feeling that loss. And it’s not inevitable. It’s something politicians are forcing.

  Before you throw the race card at me, you need to know this is written by a guy who thinks interracial children are the most beautiful children on earth, who loves the different looks of different races for all the exotic variety of beauty race gives to this world, who loves accents and who loves to travel and who hopes that nations will have distinctive cultures when he travels to them. Since I was a child I was brought up to love all people of all races and to believe that each race is a different kind of flower in God’s flower garden. The world teams with creative diversity, and that’s beautiful.

  But I’d like Norway to be Norwegian in culture and England, English and Germany, German and Morocco, Moroccan. I don’t want an homogenized world. I want a world with different nations and cultures that respect each other and get along, and that is not what we are getting with mass migration. We are getting a lot more racial conflict from people who seem to have an agenda of forcing others together.

  I don’t  think crashing people together like neutrons in a particle accelerator is going to create any chemistry other than a great big bang. People who want to migrate to another country should not go with any intention of changing that nation’s culture, which particularly includes language. Go to appreciate and mix with the culture that is there and become a part of it. If you don’t like that culture as it is, just don’t go!

  I also don’t think that overpopulation is a good thing. Bringing in hundreds of thousands of immigrants into a state like Florida or California that is, in my opinion, already overpopulated makes now sense. Flooding them into rural areas also makes no sense, as it completely destroys the rural nature of those areas.

  I don’t see that we need more people or that we have a duty to take them. But I DO see that it serves the interest of real estate developers and of businesses that want cheap labor and of politicians that think they can bolster the vote for their party if they give thousands of migrant workers citizenship so they can vote.

  What you see in all the fury around Donald Trump’s rallies is the anger that comes from forcing people together in mass finally starting to express itself. And you’re going to see a lot more of it! The cost in civil unrest is going to become quite high as a result of people who think they know how to do good by forcing others together.

  The most liberal nations of the world are destroying their own cultures and creating racial and nationalistic strife because many of their citizens value their culture and many of the immigrants do not. In Europe you can see that immigrants treat the culture they are moving into with contempt. Violent crime has surged. While some politicians may be advocating rapid immigration out of a sense that they are doing good (acting benevolent toward underprivileged or persecuted people) and others are doing it just to add voters or bring in cheap labor for their Wall Street benefactors, the cost is going to be great.

  Just know that what you are seeing on both sides of Trump rallies is just the tip of the flame unless politicians start backing down from forcing immigration in their already overpopulated nations.

  

• False flag, blow-back, or incompetence? A FOREX look at Orlando Pedassacre

  This tragic event in Orlando is an opportunity to connect the dots in an ever simple global world; as explained in Splitting Pennies – key to understanding Forex markets and how our global financial system includes understanding international politics, and specifically US foreign policy, and how it is connected to the US Dollar as a world reserve currency.  Forex is information brokerage, both as a facilitator and as primary emission of that information.  It is by itself, information – as well, those who play ‘the great game’ use it to execute their strategem.  

  This event, is a domestic event with no implications on the markets (although maybe a short term boom for Smith & Wesson (SWHC) ).  It’s not going to affect Forex, directly.  But it will affect foreign policy – not by itself, but as one woven yarn in a policy sweater.  There will be in the days and months ahead, political aggressiveness to ‘fight terrorism.’  This event alone, would not be sufficient to go to war with Syria for example, but in the area of domestic support of foreign actions, such events are key to seizing the hearts and minds of the average American, and in this case also the LGBT community – embroiled in domestic disputes of their own.

  The fact that the shooter was in contact with the FBI isn’t necessarily suspicious.  The FBI is in contact with millions of people all around the world, connected to cases, and their daily operations.  The fact that shooter worked for this G4S, as reported first here on Zero Hedge – is highly suspicious.  Omar Mateen effectively worked for DHS, although through a subcontracted private company.  This is the “Department of Homeland Security” designed to protect us from such ‘terrorists.’  

  Let’s examine 3 motives:

  False Flag

  If you are one of these TV watchers that believe ‘it doesn’t happen in America’ read the following report from PNAC (Project for a New American Century) in full here – note the DATE and note the SIGNERS of this ‘research’ that says, before 9/11:

  Further, the process of transformation,
  even if it brings revolutionary change, is
  likely to be a long one, absent some
  catastrophic and catalyzing event – like a
  new Pearl Harbor. 

  What an interesting coincidence, that a Washington based think tank that worries about a declining budget (because of declining real military threats) and declining power, should within a short year after publishing their report have the justification they need to increase their budgets and power by 10.  Or more recently, look at evidence of Sandy Hook false flag here and here.

  So was this pedassacre a false flag – to escalate our involvement in Syria, Ukraine, or a number of other global hotspots?  Possible, but not probable.  

  Blowback

  Omar’s parents were from Afghanistan.  He’s a first generation US Citizen refugee child.  How they came to America, is not really important – during any war there is a flood of refugees, not only to America, but often they do flee to their captors (and in many cases, providing information to save their lives).  Being born into these circumstances, watching your country burn (even if his current country was America – his family was still connected to Afghanistan) affects your subconscious.  In this case, the programming of American culture works against the establishment.  It’s telling him to be free – live his desires, and kill kill kill – murder murder murder.  Violent video games, movies, and culture encourage such events – they foster a hostile warlike environment.  A culture of violence is necessary for programming a domestic population sufficient to justify foreign entanglements of war, looting foreign resources, and empire.  We bring war into your living room, tonight at 11 – watch how we spend billions of dollars and ‘help people’ in the middle east.  

  “Blowback” is when, the people who America bombs are not happy, and come back for ‘revenge’ – now they are called “Terrorists.”  Blowback rarely makes its way back to the continential United States, because it takes funding, planning, intelligence, and a well oiled machine to slip through the cracks of a security apparatus.  This is where cultural blowback can be devastating, because there are thousands of disgruntled children of immigrants now being born in America, who will grow up to be flag waving homegrown terrorists in 10, 20, and 30 years.  These children will not be on any Terrorist watchlist, and they will have normal childhoods, not knowing that they’ll join a terror group when they become teenagers.

  The foreign policy of the United States of America post 9/11 breeds terrorists, at home and abroad.  Whether there were or were not many Terrorists in the world in the year 2000, now they are growing exponentially.  Until the US Military pulls out of the middle east, and as long as the US blindly supports Israel, there’s going to be “Terrorists” who “Hate our freedoms.”  The only “Freedom” the US enjoys is to bomb these countries into oblivion with virtually no repercussions.  Well, now we are seeing the repercussions.  

  Incompetence

  DHS, FBI, and others – somehow ‘missed’ a potential attack, by not properly connecting the dots.  This is an extremely unlikely scenario – the event happened 15 minutes from a local FBI field office, who has their “Pulse” on the local community.  Just last month, the FBI foiled a terror plot involving a man who wanted to apparently bomb a synagogue.  They monitor all electronic activity, are we to believe they didn’t pick up any ‘chatter’ ?   We can’t disprove a negative, there’s no evidence supporting the incompetence theory – that it was a ‘mistake.’  Many will say it was incompetence, because Omar was in contact with the FBI previously – and the thinking goes, they already ‘knew’ about his connections to Islam, and so – should have stopped him from buying guns at the first checkpoint, and at the second checkpoint – from any preliminary preparations that were made minutes leading into the event (such as communication with his Terrorist friends).  Not incompetence.

  Forex in focus

  So what does such an event have to do with Forex trading?  Well – it’s all part of a plan to support US Dollar hegemony.  How does that work?  As we explain in detail in Splitting Pennies – there’s a policy in washington that goes something like – use US Dollars or we’ll bomb you.  If you do use US Dollars, maybe you’d like to buy our nice US Treasuries, such as TIPS?  One leg supporting the Petro Dollar is no longer a secret – data has been released that show Saudi’s holdings – about $116 Billion as of March.  How does this support the US Dollar?  Well, imagine that the $116 Billion was sitting in Russian Ruble instead.  Also, as they buy US Treasuries, they first need to buy US Dollars.  Converting from Riyal to USD provides natural support for USD – also, by pricing their oil in USD – buyers of oil must first convert to USD.  It’s really a genius method to support the US Dollar, created by Richard Nixon.  It is long term thinking, that isn’t subject to daily market pressures.  Anyway, shortly before the most recent US invasion of Iraq, they wanted to price oil in Euros.  USA said – NO.  Wrong answer.  Must buy USD.  It’s really a simple policy, let’s not be sensational or dramatic about it.  Without this long term support of the USD, America wouldn’t enjoy such import advantages, things in China wouldn’t be ‘cheap’ – and America wouldn’t be able to carry such a hudge debtload as it does, and other advantages.  This also virtually eliminates the need for any domestic Forex programs – because the USD is unchallenged.  There’s a natural tendency for those policies that support US Dollar hegemony, to crush anything that smells like “Forex” – and to further justification of foreign entanglements du jour.  On today’s menu, we have Syria, Ukraine, Russia, and NATO expansion in East Europe.  From Tyler Durden:

  With tensions between Russia and the West at post-cold war highs, a former NATO deputy military chief is now saying that anuclear war with Russia over the Baltic nations in 2017 is “entirely plausible” according to RT.

  This example contrasts brightly what many understand is Forex – the day to day trading of Euros for Dollars that drive the EUR/USD rate up and down.  And practically, it’s easier for many to make a business out of rate speculation in Forex than in many other markets.  But to understand Forex, one must understand its origin, why it exists, by what powers and authority.  

  To conclude, the US Dollar is backed by something, although it’s not Gold.  It’s backed by bombs.  That’s more than can be said for many competing currencies, including the popular Bitcoin.  Unless you have a world class super army behind you – good luck launching a new currency.

  To learn more about Forex, try starting by reading Splitting Pennies – Understanding Forex.  If you want to learn about Forex day-trading, checkout Baby Pips – free Forex education & resources.  When you’re ready to open an account – sign up for our Elite FX Service first – it can make you or save you a bundle.

  

  

• Markets In Turmoil As Brexit Fears Mount And Japan, China Data Tumbles

  FX, equity, and bond markets are in turmoil as Asian markets begin trading with Japan ugly, Sterling getting spanked, China devaluing FX (stocks down hard), and crude ($48 handle) and US equity futures (Dow -70) extending losses (as bond markets are all tumbling to record low yields). The hangover from further brexit concerns is not helped by the weakness in Japanese and Chinese data tonight.

  First Japanese manufacturing data was a disaster…

  

   

  Then Chinese data largely disappointed. A "meet" in Industrial Production – hovering at multi-year lows…

  *CHINA MAY INDUSTRIAL OUTPUT RISES 6.0% FROM YEAR EARLIER

  

   

  Retail Sales missed…*CHINA MAY RETAIL SALES RISE 10.0% FROM YEAR EARLIER (lowest since 2006)

  

   

  And FAI missed… *CHINA JAN.-MAY FIXED-ASSET INVESTMENT EXC. RURAL RISES 9.6% (lowest since 2000)

  

   

  And if the anxiety over global growth and Brexit were not enough, this China data has sparked even more turmoil in markets as Asia gets going…

  First, Japan…

  • *JAPAN'S TOPIX INDEX EXTENDS DROP TO 3%; NIKKEI 225 FALLS 3%

  

  Japanese stocks shorts biggest since 2008…

  

  And Japanese 10Y Yields record lows (along with 20Y and 5Y)…

  

  But it's not just Japan, Germany, and Switzerland…

  • TAIWAN 10-YR GOVT BOND HITS RECORD LOW OF 0.76%

   

  In China, as we could have guessed by Bitcoin's surge, the Yuan is tumbling…

  PBOC devalues the Yuan fix by over 2 handles – back near 5 year lows…

  

   

  As the Yuan basket plunged to lowest since Nov 2014

  

   

  Chinese stocks are down most in 6 weeks:

  • *HANG SENG INDEX FALLS 2%
  • *CHINA'S SHANGHAI COMPOSITE INDEX FALLS 1.3% TO 2,889.91 AT OPEN

   

  And anything Brexit-related…

  Cable at 2mo lows…

  

   

  Sterling shorts biggest in 3 years…

  

   

  and GBPJPY is a bloodbath… Pound plunging to lowest since Aug 2013…

  

   

  And finally, gold is holidng its recent gains…

  

   

  Despite the monkeyhammering it got earlier…

  

   

  Which must be very upsetting for The BIS. Given this much turmoiling, one can only imagine the central bank efforts to make sure Monday opens green on the NYSE.

   

  Charts: Bloomberg

  

  

• Bill & Hillary Clinton: Republicans' Fifth Column In Democratic Politics

  Authored by Ben Tanosborn,

  Forty days left until the Democratic Party’s convention in Philadelphia, and Bernie, just like Jesus did two millennia ago, will be trying to find answers in solitude… and fight temptation from the devil of “accommodating politics.”  Jesus would do it, according to the Gospels, in the wilderness without food; Bernie is likely to do it at home, in pretty Burlington (Vermont), keeping a normal diet and the company of a smart phone.

  The demonstration of affection for progressivism by Democrats and honest-to-heart Independents was dealt a heavy blow by Tuesday’s election results; results likely to be reinforced by President Obama’s imminent endorsement of Hillary Clinton… triggered by a battle cry urgency to stop this 2016-boogeyman, Donald Trump, from branding the nation as his psycho-political casino:  Fantasy-Trump-America.

  It’s beginning to look as if the $200 million spent by Bernie believers to bring about and promote a progressive sociopolitical agenda for America may prove not to have been in vain, as the voice of progressivism that Clinton-Husband silenced in the 1990’s, might not  remain totally muzzled in Clinton-Wife’s prospective centrist-right platform.

  Resurgent progressivism and loyal conservatism both appear to be undergoing painful castration in this 2016 presidential election; one by undemocratic and corrupt insider party politics, the other by the uglier face of bigoted-populism which might represent well over 25 percent of the nation’s population.  No, folks… not 5, 10 or 15 percent, but upwards of a quarter, maybe a third! This populism is responding to a demographic change in America of major transformational proportions; populism with a latent bigotry now finding an opportunity to surface as champion-du-jour, Donald Trump, singularly leads the way in “finally!” making acceptable both the vocalization and the behavior that up to now has been considered taboo, politically incorrect.   

  Once again we are politically marching towards another presidential election with the limited prospect of choices, most based on aesthetics, not substance; a chance to select the proverbial lesser evil or failing to select at all.  Next January, either odious-Donald or odious-Hillary will be taking up White House residency, Johnson (Libertarian) and Stein (Green) having only non-critical influence in the outcome of the election thanks to our electoral system.  And that brings us to why America is in such dire straits.

  It’s been eight decades since the start of the Spanish Civil War and the advent of that cloak-and-dagger term, “fifth column,” coined by a Spanish general, Emilio Mola, and popularized in the works of an American writer, Ernest Hemingway.

  A fifth column referred to a secret group that surreptitiously undermined the efforts of a larger group from within; a term perhaps a bit distant and esoteric for us today, but its meaning, whether we associate it with patriotism or with treason, remains with us no matter what we call it, or how we prefer to explain its aims and behavior.

  Some of us feel that the Clintons, given the major transformation that has taken place in Democratic national politics in the past generation, did become the quintessential fifth column for the G.O.P., instrumental in sowing, cultivating and harvesting such change.  A change that drastically disconnected the Democratic Party from the progressive nerve center of old, its “new and improved” Clintonian party ideology finding a permanent home in the center-right confines of America’s political spectrum.

  Bill Clinton, and his then bride, Hillary, may have entered elective politics in Arkansas back in the mid-1970’s using the Democratic front door, but in chameleonic fashion, as Ronald Reagan consolidated the tenets of his presidency in the 1980’s, Governor Clinton was quick to mimic his own right turn in politics in the hinterlands of Arkansas.  Heck, if President Reagan was then making hay advocating a smaller government and welfare reform, Bill and his Little Rock cadre of young New Democrats certainly was able to see an immediate personal future following suit embracing both issues, a plagiarized version of what The Old Gipper was preaching from the White House.  After all, old soldiers may never die, but young politicians must adopt change – ideology forever damned!  Or they too, like the old soldiers, could slowly (or speedily) fade away.

  And Bill Clinton then, just as Bill Clinton now, was proving to be masterful at remaining politically relevant without the slightest intention of fading away.  And that feverish desire for relevance as qualified and quantified in his mind by both money and power, appeared to consume not just him but his spouse as well throughout their lives.  Such intense desire might have given this duo the cavalier attitude many of us see in them.  It’s as if this couple is intent to prove to any and all Americans that fidelity has little or nothing to do with the rule of morality, and everything to do with faithfulness to a cause, particularly when that cause is close, personal and meritoriously deserved; even if characterized by most as personal selfishness, totally lacking honesty and decorum.

  Bernie will give his all to bring back progressivism to the Democratic Party, but it will be to no avail… for Americans are not yet ready for a revolution; we may still need a few more darker days in both the economy and our unintended quest in world affairs.

  By election time the Clintons political machine will be humming, well-greased, courtesy of Wall Street… and the fifth column will no longer have to operate in the shadows, Hillary and Bill having made fifth column deception a mainstream virtue.
   

  

  

• Big Names Are Bailing

  Submitted by John Rubino via DollarCollapse.com,

  The list of heavy hitters who are saying bad things about this world and its financial markets – while acting aggressively on their pessimism – is growing to alarming proportions. A few examples:

  Stan Druckenmiller: The bull market is exhausted; move to gold

  (MineWeb) – Legendary investor Stan Druckenmiller, founder of Duquesne Capital Management LLC, told the Sohn Investment Conference in New York last week that he is bullish on gold and bearish on the stock market. Gold, he told the conference, “is our largest currency allocation.”

   

  Druckenmiller recommended that investors sell their equity holdings. “The bull market is exhausting itself,” he told the conference. A major factor has been the Federal Reserve’s easy money policy, which has resulted in “reckless” corporate behavior.

   

  Growing corporate debt is increasingly used for financial engineering, rather than in R&D that could lead to productivity improvements, Druckenmiller said. According to him, from 2012 to 2015, use of debt for U.S. nonfinancial firms for stock buybacks and M&A increased from $1.25 trillion to $2 trillion, while debt for R&D and office equipment grew from $1.55 trillion to only $1.8 trillion.

   

  “The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins and growing indebtedness,” Druckenmiller added.

   

  The slowing Chinese economy as another reason to sell equities, according to Druckenmiller. He believes that stimulus measures by China have “aggravated the overcapacity in the economy.” While he had hope two years ago that the Chinese were willing to accept the tradeoff of a slowdown to gain reform, the Chinese “have opted for another investment-focused fiscal stimulus, which may buy them some time but will exacerbate their problem. They do not need more debt and more houses.”

   

  Instead, Druckenmiller has made a move to gold. “It has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates,” he said. “Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,” he added. Among his investments are holdings in the SPDR Gold Trust.

   

  ————————————-

   

  A Bearish George Soros Is Trading Again

  (Fox Business) – Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

  Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors view gold as a haven during times of turmoil.

   

  Mr. Soros’s recent hands-on approach reflects a gloomier outlook than many. His worldview darkened over the past six months as economic and political issues in China, Europe and elsewhere have become more intractable. While the U.S. stock market has inched back toward records after troubles early this year and Chinese markets have stabilized, Mr. Soros said he remains skeptical of the Chinese economy, which is slowing.

   

  The fallout from any unwinding of Chinese investments likely will have global implications, Mr. Soros said.

   

  “China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency,” Mr. Soros said in an email. “China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues.”

   

  Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.

   

  “If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable, ” he said. Still, Mr. Soros said recent strength in the British pound is a sign that a vote to exit the EU is less likely.

   

  Mr. Soros’s bearish firm bought over 19 million shares of Barrick Gold Corp. in the first quarter, according to securities filings, making it the firm’s largest stockholding at the end of the quarter. That position has gained more than $90 million since the end of the first quarter. Soros Fund Management also bought a million shares of miner Silver Wheaton Corp. in the first quarter, a position that has increased 28% so far in the second quarter.

   

  The last time Mr. Soros became closely involved in his firm’s trading: 2007, when he became worried about housing and placed bearish wagers over two years that netted more than $1 billion of gains.

  ————————————-

   

  If the Markets Crash Then Carl Icahn Could Win Big

  (Barrons) – If financial markets crash, one of the biggest beneficiaries could be billionaire investor Carl Icahn.

  An investment fund run by the 80-year-old Icahn had a net short position of 149% at the end of the first quarter. Icahn is considerably more bearish than he was at the end of 2015, when the fund’s net short position was 25%. A year ago, the fund had a net long position of 4%. It’s rare to see a fund outside a dedicated short fund with such a large bearish stance.

   

  Asked about the big bearish stance, Icahn Enterprises CEO Keith Cozza said on the conference call that “Carl has been very vocal in recent weeks in the media” about his negative views. “We’re much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that.” Icahn was not on the call.

  ————————————-

   

  The Sam Zell Indicator – Time to Get Out of Real Estate?

  (Value Walk) – Talk about exquisite timing.

  Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities.

   

  But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. “Is he cashing out too early?” asked a Bloomberg headline when the deal was announced.

  We all know the answer, of course.

   

  Billionaire Sam Zell deftly sidestepped the coming real estate carnage. Then, with prices at generational lows a few years later, Zell bought hundreds of apartment complexes at dirt-cheap prices.

   

  And today? Well, that’s the ominous part…

   

  Once again, Zell is selling his real estate holdings. Last fall, he unloaded a quarter of his portfolio, buildings totaling about 23,000 rental apartments, to Starwood Capital Group for more than $5 billion.

   

  Zell next sold off apartment buildings in South Florida and Denver, with complexes in Phoenix, Boston and other metro areas expected to be sold before the year is out.

   

  “No one has ever accused me of not being a realist,” Zell told CNBC’s talking heads recently.

  Of course for every seller there has to be a buyer, so to the extent that these guys are bearish, an equal amount of optimistic capital disagrees with their assessment. Still, between Soros, Druckenmiller, Icahn and Zell there’s about a thousand years of successful, audacious experience, so at a minimum their sudden bearishness should be a comfort to smaller players who have reached the same conclusion.

  The fact that they see gold as the antidote to crashing financial markets is also reassuring for long-suffering gold bugs.

  If these and the several other big names now saying scary things (see Bill Gross’s supernova comments) are right, the short stocks/long gold trade is finally about to pay off.

  

  

• Workaholic? This Study Finds You May Have Other Issues

  Being a workaholic comes along with being grown up and having responsibilities (well, it comes along with it for some people). Late nights out at the bar turn into firing up the laptop and putting the finishing touches on that presentation that is due first thing in the morning, weekends that used to be filled with keggers turn into all day working sessions just to catch up on all of the emails that got missed during the week – it happens (even if one works at the US Treasury, but only on occasion don't be alarmed).

  However, there is a rather disturbing study that the World Economic Forum reported earlier in the month that may convince some to schedule that vacation that's been put off for the last decade.

  As the WEF reports, a study of 16,426 working adults in Norway found that those with workaholism are significantly more likely to have psychiatric symptoms.

  From the WEF

  Psychology researchers, led by Cecilie Schou Andreassen from the University of Bergen in Norway, found a strong link between workaholism and ADHD, OCD, anxiety, and depression. They found:

   

  -32.7% of workaholics also met ADHD criteria, compared to 12.7% of non-workaholics

   

  -25.6% of workaholics also met OCD criteria, compared to 8.7% of non-workaholics

   

  -33.8% of workaholics also met anxiety criteria, compared to 11.9% of non-workaholics

   

  -8.9% of workaholics also met depression criteria, compared to 2.6% of non-workaholics

   

  The authors speculated that there are several reasons those with ADHD might suffer workaholism, including inattentiveness forcing them to spend excess hours trying to make up work, working extra hard to counter misperceptions of laziness, or working to alleviate restlessness. For those with OCD, workaholism could become a compulsion. Meanwhile, working hard is “praised and honored in modern society,” write the authors, and so could be used as a means to counter anxiety or depression.

   

  The study, which was co-authored by researchers from Yale University and Nottingham Trent University, did not determine whether workaholism caused the psychiatric symptoms or vice versa.

  Marianna Virtanen, an epidemiologist at UCL and the Finnish Institute of Occupational Health was not involved in the study but says that many psychiatric disorders begin at a young age, they precede workaholism. "It is also possible that the association is bidirectional; workaholism may exacerbate psychiatric symptoms in the long run. It is paradoxical, however, that people may first try to cope with their symptoms by excessive working." Virtanen added.

  Those in the US and Germany have put in the most time working prior to even heading into the office.

  

  "Taking work to the extreme may be a sign of deeper psychological or emotional issues. Whether this reflects overlapping genetic vulnerabilities, disorders leading to workaholism or, conversely, workaholism causing such disorders, remains uncertain." said Dr. Schou Andreassen

  * * *

  Well then, since everything is still inconclusive – there is more work to be done.

  

  

• Paul Craig Roberts On The "Frustrations Of Telling The Truth"

  Authored by Paul Craig Roberts,

  Some examples of the 'abuse' one gets when telling the truth:

  If I criticize the Israeli government for abusing Palestinians and stealing their country, the Israel Lobby accuses me of being an anti-semite who wants to repeat the holocaust. In the same batch of emails, anti-semites denounce me for being too easy on Israel and covering up for the Jewish conspiracy against mankind.

   

  When I write about the One Percent using the government to loot the economy, I receive emails blaming me because I worked for Reagan “who started it all by cutting tax rates for the rich.” These people have no conception of supply-side economics, its purpose, success, and the way it prepared the way for Reagan to negotiate the end of the Cold War. At one point in their lives they read a left-wing screed against Reagan, and that is the extent of their understanding. But they are full of blind hate.

   

  When I write about Washington’s crimes against other countries, I receive emails asking me where I was during Iran-Contra and Grenada. Apparently, they think that a Treasury official can run the State Department and Pentagon. Some of the readers are so confused that they think Reagan overthrew Allende in Chile. Alllende was overthrown in 1973. Reagan was inaugurated in 1981. It is dispiriting that there actually are people this ignorant and so proud of it that they will accuse me of helping Reagan to overthrow Allende.

   

  When I point out the dangers of the reckless folly of Washington’s aggressions against Russia, China, and the independent Muslim world, superpatriots denounce me for being anti-American. There is a stratum of the US population that thinks that it is a criminal act to disbelieve the government or to question its judgment and motives. “You are with us or against us.”

   

  When I document the death of the US Constitution and the rise of the American Police State, “law and order” conservatives admonish me that the police state only appies to terrorists and criminals and does not apply to law abiding citizens. They are convinced that Snowden and Assange are traitors, and no amount of evidence or reason can convince them otherwise. Neither can they be convinced that in the 21st century, law has become a weapon in the hands of government and no longer is a shield of the people. The Rule of Law in America is dead.

  All of my life I have confronted the vast bulk of humanity living in a false reality created by self-serving powerful interest groups and the government that they control. People believe the lies that define their reality, because they lack the education and the emotional and intellectual strength to confront the obvious lies.

  Every truth-teller confronts this barrier every day of his or her life. Every truth-teller wishes he/she could force red pills down the throat of the population.

  In American today there is nothing true that you can say that does not result in a heaving of abuse. The safe course is to repeat all the lies that come out of Washington and the presstitute media.

  To go against the Matrix, you need all of the superpowers of The One.

  

  

• This Is What The Unprecedented Chinese M&A Scramble In America Looks Like

  The raging need for Chinese oligarchs and corporations to park their cash offshore, and as far away as possible from the the mainland and the risk of sudden, sharp (10%-15%) devaluation, has resulted in not only an epic Vancouver housing bubble, or the predicted parabolic surge in bitcoin price (which has soared by 50% in just a few weeks), but an unprecedented M&A spree for US-based assets. We profiled as much in late March in a post titled “Eight Things The Chinese Are Scrambling To Buy In America.”

  And while overall M&A in the US is down substantially YTD, sliding 28% by volume (but only 4% in number of deals) mostly as a result of the volatile market in the early part of the year as well as the chilling effect of Congressional crackdown on tax-inversion deals (such as the pulled Pfizer-Allergan mega-merger), and the lack of any blockbuster mega-cap (>$25 billion) deals, China not only refuses to go away, but the level of Chinese cross-border M&A chasing after US targets is literally off the charts.

  Here are the details from Goldman:

  Cross-border, while down in aggregate, continues to gain share at 34% of total YTD volumes (a 6-year high). While the distribution of acquirers and targets remains relatively well diversified, one trend has been increased Chinese volumes. Notably, China has accounted for 26% of global cross-border activity YTD, which is nearly 3x higher than the next highest year (2013).

   

  

   

  While the vast majority of US targets continue to be bought by US acquirers, there has been a trend towards international purchasers, particularly from China, in recent years (see Exhibit 5). At $28 bn YTD, US-inbound deal flow from Chinese acquirers is already a record level and nearly 2x last year’s volumes ($17 bn). On the flip side, there have been relatively few deals of US acquirers going after Chinese targets, which is a change vs. the last M&A cycle in 2004-2008. See Exhibit 6.

   

  

  So is it time to panic yet? No, first China has to buy Rockefeller Center, because what is taking place now is nothing that didn’t take place almost 30 years ago when Japan was likewise facing a comparable epic liquidity bubble and unleashed a massive wave of US-based acqusitions. Recall from 1989:

  Japanese Buy New York Cachet With Deal for Rockefeller Center

   

  The Rockefeller Group, the owner of Rockefeller Center, Radio City Music Hall and other mid-Manhattan office buildings, said yesterday that it had sold control of the company to the Mitsubishi Estate Company of Tokyo, one of the world’s biggest real estate developers.The deal, which comes almost exactly 50 years after Rockefeller Center opened on Nov. 1, 1939, is only the latest instance of the Japanese buying a vital piece of the American landscape, from Hollywood to Wall Street. In September, the Sony Corporation bought Columbia Pictures for $3.4 billion.

  And of course, “Japanese Buy Pebble Beach Golf Course“

  The property includes four golf courses and the famous lone cypress tree, used as a Pebble Beach logo, which stands on a point of land along the scenic 17-Mile Drive around the peninsula. The deal also includes two resort hotels, the Lodge at Pebble Beach and The Inn at Spanish Bay.  ”It’s right up there in the deal-of-the-year category,” said Jack Barthell, a partner at Kenneth Leventhal, the Los Angeles-based accounting firm that specializes in real estate.

  As most know, the Japanese acquisition spree in 1990 ended with disaster, if only for the acquirors. This time will be absolutely the same, only this time it will be China that is bent over. And, more importantly, once the Japanese M&A wave ended, it has nearly 30 years of relentless contraction, deflation and demographic devastation.

  If China is next – and there is no reason the believe it won’t be now that even Goldman admits China’s total debt is somewhere in the 350% ballpark – watch out as ultra long bond yields plummets right into subzero territory, as the world finally realizes that absent helicopter money and hyperinflation, only a deflationary black hole awaits.

  

  

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• Economists DESTROY the Myth that War Is Good for the Economy

  Debunking the Stubborn Myth that War Is Good for the Economy

  About.com notes:

  One of the more enduring myths in Western society is that wars are somehow good for the economy.

  It is vital for policy-makers, economists and the public to have access to a definitive analysis to determine once and for all whether war is good or bad for the economy.

  That analysis is below.

  Top Economists Say War Is Bad for the Economy

  Nobel prize winning economist Paul Krugman notes:

  If you’re a modern, wealthy nation, however, war — even easy, victorious war — doesn’t pay. And this has been true for a long time. In his famous 1910 book “The Great Illusion,” the British journalist Norman Angell argued that “military power is socially and economically futile.” As he pointed out, in an interdependent world (which already existed in the age of steamships, railroads, and the telegraph), war would necessarily inflict severe economic harm even on the victor. Furthermore, it’s very hard to extract golden eggs from sophisticated economies without killing the goose in the process.

   

  We might add that modern war is very, very expensive. For example, by any estimate the eventual costs (including things like veterans’ care) of the Iraq war will end up being well over $1 trillion, that is, many times Iraq’s entire G.D.P.

   

  So the thesis of “The Great Illusion” was right: Modern nations can’t enrich themselves by waging war.

  Nobel-prize winning economist Joseph Stiglitz agrees that war is bad for the economy:

  Stiglitz wrote in 2003:

  War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon. Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy.

  Stiglitz has also said that this decade’s Iraq war has been very bad for the economy. Seethis, this and this.

  Former Federal Reserve chairman Alan Greenspan also said in that war is bad for the economy. In 1991, Greenspan said that a prolonged conflict in the Middle East would hurt the economy. And he made this point again in 1999:

  Societies need to buy as much military insurance as they need, but to spend more than that is to squander money that could go toward improving the productivity of the economy as a whole: with more efficient transportation systems, a better educated citizenry, and so on. This is the point that retiring Rep. Barney Frank (D-Mass.) learned back in 1999 in a House Banking Committee hearing with then-Federal Reserve Chairman Alan Greenspan. Frank asked what factors were producing our then-strong economic performance. On Greenspan’s list: “The freeing up of resources previously employed to produce military products that was brought about by the end of the Cold War.” Are you saying, Frank asked, “that dollar for dollar, military products are there as insurance … and to the extent you could put those dollars into other areas, maybe education and job trainings, maybe into transportation … that is going to have a good economic effect?” Greenspan agreed.

  Economist Dean Baker notes:

  It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment.

  Professor Emeritus of International Relations at the American University Joshua Goldstein notes:

  Recurring war has drained wealth, disrupted markets, and depressed economic growth.

   

  ***

   

  War generally impedes economic development and undermines prosperity.

  And David R. Henderson – associate professor of economics at the Naval Postgraduate School in Monterey, California and previously a senior economist with President Reagan’s Council of Economic Advisers – writes:

  Is military conflict really good for the economy of the country that engages in it? Basic economics answers a resounding “no.”

  The Proof Is In the Pudding

  Mike Lofgren notes:

  Military spending may at one time have been a genuine job creator when weapons were compatible with converted civilian production lines, but the days of Rosie the Riveter are long gone. [Indeed, WWII was different from current wars in many ways, and so its economic effects are not comparable to those of today’s wars.] Most weapons projects now require relatively little touch labor. Instead, a disproportionate share is siphoned into high-cost R&D (from which the civilian economy benefits little), exorbitant management expenditures, high overhead, and out-and-out padding, including money that flows back into political campaigns. A dollar appropriated for highway construction, health care, or education will likely create more jobs than a dollar for Pentagon weapons procurement.

   

  ***

   

  During the decade of the 2000s, DOD budgets, including funds spent on the war, doubled in our nation’s longest sustained post-World War II defense increase. Yet during the same decade, jobs were created at the slowest rate since the Hoover administration. If defense helped the economy, it is not evident. And just the wars in Iraq and Afghanistan added over $1.4 trillion to deficits, according to the Congressional Research Service. Whether the wars were “worth it” or merely stirred up a hornet’s nest abroad is a policy discussion for another time; what is clear is that whether you are a Keynesian or a deficit hawk, war and associated military spending are no economic panacea.

  The Washington Post noted in 2008:

  A recent paper from the National Bureau of Economic Research concludes that countries with high military expenditures during World War II showed strong economic growth following the war, but says this growth can be credited more to population growththan war spending. The paper finds that war spending had only minimal effects on per-capita economic activity.

   

  ***

   

  A historical survey of the U.S. economy from the U.S. State Department reports the Vietnam War had a mixed economic impact. The first Gulf War typically meets criticism for having pushed the United States toward a 1991 recession.

  The Institute for Economics & Peace (IEP) shows that any boost from war is temporary at best. For example, while WWII provided a temporary bump in GDP, GDP then fell back to the baseline trend. After the Korean War, GDP fell below the baseline trend:

  IEP notes:

  By examining the state of the economy at each of the major conflict periods since World War II, it can be seen that the positive effects of increased military spending were outweighed by longer term unintended negative macroeconomic consequences. While the stimulatory effect of military outlays is evidently associated with boosts in economic growth, adverse effects show up either immediately or soon after, through higher inflation, budget deficits, high taxes and reductions in consumption or investment. Rectifying these effects has required subsequent painful adjustments which are neither efficient nor desirable. When an economy has excess capacity and unemployment, it is possible that increasing military spending can provide an important stimulus. However, if there are budget constraints, as there are in the U.S. currently, then excessive military spending can displace more productive non-military outlays in other areas such as investments in high-tech industries, education, or infrastructure. The crowding-out effects of disproportionate government spending on military functions can affect service delivery or infrastructure development, ultimately affecting long-term growth rates.

   

  ***

   

  Analysis of the macroeconomic components of GDP during World War II and in subsequent conflicts show heightened military spending had several adverse macroeconomic effects. These occurred as a direct consequence of the funding requirements of increased military spending. The U.S. has paid for its wars either through debt (World War II, Cold War, Afghanistan/Iraq), taxation (Korean War) or inflation (Vietnam). In each case, taxpayers have been burdened, and private sector consumption and investment have been constrained as a result. Other negative effects include larger budget deficits, higher taxes, and growth above trend leading to inflation pressure. These effects can run concurrent with major conflict or via lagging effects into the future. Regardless of the way a war is financed, the overall macroeconomic effect on the economy tends to be negative. For each of the periods after World War II, we need to ask, what would have happened in economic terms if these wars did not happen? On the specific evidence provided, it can be reasonably said, it is likely taxes would have been lower, inflation would have been lower, there would have been higher consumption and investment and certainly lower budget deficits. Some wars are necessary to fight and the negative effects of not fighting these wars can far outweigh the costs of fighting. However if there are other options, then it is prudent to exhaust them first as once wars do start, the outcome, duration and economic consequences are difficult to predict.

  We noted in 2011:

  This is a no-brainer, if you think about it. We’ve been in Afghanistan for almost twice as long as World War II. We’ve been in Iraq for years longer than WWII. We’ve been involved in 7 or 8 wars in the last decade. And yet [the economy is still unstable]. If wars really helped the economy, don’t you think things would have improved by now? Indeed,the Iraq war alone could end up costing more than World War II. And given the other wars we’ve been involved in this decade, I believe that the total price tag for the so-called “War on Terror” will definitely support that of the “Greatest War”.

  Let’s look at the adverse effects of war in more detail …

  War Spending Diverts Stimulus Away from the Real Civilian Economy

  IEP notes that – even though the government spending soared – consumption and investment were flatduring the Vietnam war:

  

  The New Republic noted in 2009:

  Conservative Harvard economist Robert Barro has argued that increased military spending during WWII actually depressed other parts of the economy.

  (New Republic also points out that conservative economist Robert Higgs and liberal economists Larry Summers and Brad Delong have all shown that any stimulation to the economy from World War II has been greatly exaggerated.)

  How could war actually hurt the economy, when so many say that it stimulates the economy?

  Because of what economists call the “broken window fallacy”.

  Specifically, if a window in a store is broken, it means that the window-maker gets paid to make a new window, and he, in turn, has money to pay others. However, economists long ago showed that – if the window hadn’t been broken – the shop-owner would have spent that money on other things, such as food, clothing, health care, consumer electronics or recreation, which would have helped the economy as much or more.

  If the shop-owner hadn’t had to replace his window, he might have taken his family out to dinner, which would have circulated more money to the restaurant, and from there to other sectors of the economy. Similarly, the money spent on the war effort is money that cannot be spent on other sectors of the economy. Indeed, all of the military spending has just created military jobs, at the expense of the civilian economy.

  Professor Henderson writes:

  Money not spent on the military could be spent elsewhere.This also applies to human resources. The more than 200,000 U.S. military personnel in Iraq and Afghanistan could be doing something valuable at home.

   

  Why is this hard to understand? The first reason is a point 19th-century French economic journalist Frederic Bastiat made in his essay, “What Is Seen and What Is Not Seen.” Everyone can see that soldiers are employed. But we cannot see the jobs and the other creative pursuits they could be engaged in were they not in the military.

   

  The second reason is that when economic times are tough and unemployment is high, it’s easy to assume that other jobs could not exist. But they can. This gets to an argument Bastiat made in discussing demobilization of French soldiers after Napoleon’s downfall. He pointed out that when government cuts the size of the military, it frees up not only manpower but also money. The money that would have gone to pay soldiers can instead be used to hire them as civilian workers. That can happen in three ways, either individually or in combination: (1) a tax cut; (2) a reduction in the deficit; or (3) an increase in other government spending.

   

  ***

   

  Most people still believe that World War II ended the Great Depression …. But look deeper.

   

  ***

   

  The government-spending component of GNP went for guns, trucks, airplanes, tanks, gasoline, ships, uniforms, parachutes, and labor. What do these things have in common? Almost all of them were destroyed. Not just these goods but also the military’s billions of labor hours were used up without creating value to consumers. Much of the capital and labor used to make the hundreds of thousands of trucks and jeeps and the tens of thousands of tanks and airplanes would otherwise have been producing cars and trucks for the domestic economy. The assembly lines in Detroit, which had churned out 3.6 million cars in 1941, were retooled to produce the vehicles of war. From late 1942 to 1945, production of civilian cars was essentially shut down.

   

  And that’s just one example. Women went without nylon stockings so that factories could produce parachutes. Civilians faced tight rationing of gasoline so that U.S. bombers could fly over Germany. People went without meat so that U.S. soldiers could be fed. And so on.

   

  These resources helped win the war—no small issue. But the war was not a stimulus program, either in its intentions or in its effects, and it was not necessary for pulling the U.S. out of the Great Depression. Had World War II never taken place, millions of cars would have been produced; people would have been able to travel much more widely; and there would have been no rationing. In short, by the standard measures, Americans would have been much more prosperous.

   

  Today, the vast majority of us are richer than even the most affluent people back then. But despite this prosperity, one thing has not changed: war is bad for our economy. The $150 billion that the government spends annually on wars in Iraq and Afghanistan (and, increasingly, Pakistan) could instead be used to cut taxes or cut the deficit. By ending its ongoing wars … the U.S. government … would be developing a more prosperous economy.

  Austrian economist Ludwig Von Mises points out:

  That is the essence of so-called war prosperity; it enriches some by what it takes from others. It is not rising wealth but a shifting of wealth and income.

  We noted in 2010:

  You know about America’s unemployment problem. You may have even heard that the U.S. may very well have suffered a permanent destruction of jobs.

   

  But did you know that the defense employment sector is booming?

  [P]ublic sector spending – and mainly defense spending – has accounted for virtually all of the new job creation in the past 10 years:

  The U.S. has largely been financing job creation for ten years. Specifically, as the chief economist for BusinessWeek, Michael Mandel, points out, public spending has accounted for virtually all new job creation in the past 1o years:

  Private sector job growth was almost non-existent over the past ten years. Take a look at this horrifying chart:

   

  

   

  Between May 1999 and May 2009, employment in the private sector only rose by 1.1%, by far the lowest 10-year increase in the post-depression period.

   

  It’s impossible to overstate how bad this is. Basically speaking, the private sector job machine has almost completely stalled over the past ten years. Take a look at this chart:

   

  

   

  Over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.

   

  But even that gives the private sector too much credit. Remember that the private sector includes health care, social assistance, and education, all areas which receive a lot of government support.

   

  ***

   

  Most of the industries which had positive job growth over the past ten years were in the HealthEdGov sector. In fact, financial job growth was nearly nonexistent once we take out the health insurers.

   

  Let me finish with a final chart.

   

  

   

  Without a decade of growing government support from rising health and education spending and soaring budget deficits, the labor market would have been flat on its back. [120]

  ***

  So most of the job creation has been by the public sector. But because the job creation has been financed with loans from China and private banks, trillions in unnecessary interest charges have been incurred by the U.S.

  And this shows military versus non-military durable goods shipments: [Click here to view full image.]

  So we’re running up our debt (which will eventually decrease economic growth), but the only jobs we’re creating are military and other public sector jobs.

   

  Economist Dean Baker points out that America’s massive military spending on unnecessary and unpopular wars lowers economic growth and increases unemployment:

  Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.

  A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

   

  Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

   

  The scenario we asked Global Insight [recognized as the most consistentlyaccurate forecasting company in the world] to model turned out to have vastly underestimated the increase in defense spending associated with current policy. In the most recent quarter, defense spending was equal to 5.6 percent of GDP. By comparison, before the September 11th attacks, the Congressional Budget Office projected that defense spending in 2009 would be equal to just 2.4 percent of GDP. Our post-September 11th build-up was equal to 3.2 percentage points of GDP compared to the pre-attack baseline. This means that the Global Insight projections of job loss are far too low…

   

  The projected job loss from this increase in defense spending would be close to 2 million. In other words, the standard economic models that project job loss from efforts to stem global warming also project that the increase in defense spending since 2000 will cost the economy close to 2 million jobs in the long run.

  The Political Economy Research Institute at the University of Massachusetts, Amherst has also shown that non-military spending creates more jobs than military spending.

  High Military Spending Drains Innovation, Investment and Manufacturing Strength from the Civilian Economy

  Chalmers Johnson notes that high military spending diverts innovation and manufacturing capacity from the economy:

  By the 1960s it was becoming apparent that turning over the nation’s largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E Woods Jr observes that, during the 1950s and 1960s, between one-third and two-thirds of all US research talent was siphoned off into the military sector. It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.

   

  ***

   

  Woods writes: “According to the US Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation’s plant and equipment, and infrastructure, at just over $7.29 trillion… The amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock”.

   

  The fact that we did not modernise or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. Machine tools, an industry on which Melman was an authority, are a particularly important symptom. In November 1968, a five-year inventory disclosed “that 64% of the metalworking machine tools used in US industry were 10 years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States’ machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the second world war. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry.”

  Economist Robert Higgs makes the same point about World War II:

  Yes, officially measured GDP soared during the war. Examination of that increased output shows, however, that it consisted entirely of military goods and services. Real civilian consumption and private investment both fell after 1941, and they did not recover fully until 1946. The privately owned capital stock actually shrank during the war. Some prosperity. (My article in the peer-reviewed Journal of Economic History, March 1992, presents many of the relevant details.)

   

  It is high time that we come to appreciate the distinction between the government spending, especially the war spending, that bulks up official GDP figures and the kinds of production that create genuine economic prosperity. As Ludwig von Mises wrote in the aftermath of World War I, “war prosperity is like the prosperity that an earthquake or a plague brings.”

  War Causes Austerity

  Economic historian Julian Adorney argues:

  Hitler’s rearmament program was military Keynesianism on a vast scale. Hermann Goering, Hitler’s economic administrator, poured every available resource into making planes, tanks, and guns. In 1933 German military spending was 750 million Reichsmarks. By 1938 it had risen to 17 billion with 21 percent of GDP was taken up by military spending. Government spending all told was 35 percent of Germany’s GDP.

   

  ***

   

  No-one could say that Hitler’s rearmament program was too small. Economists expected it to create a multiplier effect and jump-start a flagging economy. Instead, it produced military wealth while private citizens starved.

   

  ***

   

  The people routinely suffered shortages. Civilian wood and iron were rationed. Small businesses, from artisans to carpenters to cobblers, went under. Citizens could barely buy pork, and buying fat to make a luxury like a cake was impossible. Rationing and long lines at the central supply depots the Nazis installed became the norm.

   

  Nazi Germany proves that curing unemployment should not be an end in itself.

  War Causes Inflation … Which Keynes and Bernanke Admit Taxes Consumers

  As we noted in 2010, war causes inflation … which hurts consumers:

  Liberal economist James Galbraith wrote in 2004:

  Inflation applies the law of the jungle to war finance. Prices and profits rise, wages and their purchasing power fall. Thugs, profiteers and the well connected get rich. Working people and the poor make out as they can. Savings erode, through the unseen mechanism of the “inflation tax” — meaning that the government runs a big deficit in nominal terms, but a smaller one when inflation is factored in.

   

  ***

   

  There is profiteering. Firms with monopoly power usually keep some in reserve. In wartime, if the climate is permissive, they bring it out and use it. Gas prices can go up when refining capacity becomes short — due partly to too many mergers. More generally, when sales to consumers are slow, businesses ought to cut prices — but many of them don’t. Instead, they raise prices to meet their income targets and hope that the market won’t collapse.

  Ron Paul agreed in 2007:

  Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.

   

  The result of this arrangement is inflation. And inflation finances war.

  Blanchard Economic Research pointed out in 2001:

  War has a profound effect on the economy, our government and its fiscal and monetary policies. These effects have consistently led to high inflation.

   

  ***

   

  David Hackett Fischer is a Professor of History and Economic History at Brandeis. [H]is book, The Great Wave, Price Revolutions and the Rhythm of History … finds that … periods of high inflation are caused by, and cause, a breakdown in order and a loss of faith in political institutions. He also finds that war is a triggering influence on inflation, political disorder, social conflict and economic disruption.

   

  ***

   

  Other economists agree with Professor Fischer’s link between inflation and war.

   

  James Grant, the respected editor of Grant’s Interest Rate Observer, supplies us with the most timely perspective on the effect of war on inflation in the September 14 issue of his newsletter:

  “War is inflationary. It is always wasteful no matter how just the cause. It is cost without income, destruction financed (more often than not) by credit creation. It is the essence of inflation.”

  Libertarian economics writer Lew Rockwell noted in 2008:

  You can line up 100 professional war historians and political scientists to talk about the 20th century, and not one is likely to mention the role of the Fed in funding US militarism. And yet it is true: the Fed is the institution that has created the money to fund the wars. In this role, it has solved a major problem that the state has confronted for all of human history. A state without money or a state that must tax its citizens to raise money for its wars is necessarily limited in its imperial ambitions. Keep in mind that this is only a problem for the state. It is not a problem for the people. The inability of the state to fund its unlimited ambitions is worth more for the people than every kind of legal check and balance. It is more valuable than all the constitutions every devised.

   

  ***

   

  Reflecting on the calamity of this war, Ludwig von Mises wrote in 1919

  One can say without exaggeration that inflation is an indispensable means of militarism. Without it, the repercussions of war on welfare become obvious much more quickly and penetratingly; war weariness would set in much earlier.***

  In the entire run-up to war, George Bush just assumed as a matter of policy that it was his decision alone whether to invade Iraq. The objections by Ron Paul and some other members of Congress and vast numbers of the American population were reduced to little more than white noise in the background. Imagine if he had to raise the money for the war through taxes. It never would have happened. But he didn’t have to. He knew the money would be there. So despite a $200 billion deficit, a $9 trillion debt, $5 trillion in outstanding debt instruments held by the public, a federal budget of $3 trillion, and falling tax receipts in 2001, Bush contemplated a war that has cost $525 billion dollars — or $4,681 per household. Imagine if he had gone to the American people to request that. What would have happened? I think we know the answer to that question. And those are government figures; the actual cost of this war will be far higher — perhaps $20,000 per household.

   

  ***

   

  If the state has the power and is asked to choose between doing good and waging war, what will it choose? Certainly in the American context, the choice has always been for war.

  And progressive economics writer Chris Martenson explains as part of his “Crash Course” on economics:

  If we look at the entire sweep of history, we can make an utterly obvious claim: All wars are inflationary. Period. No exceptions.

   

  ***

   

  So if anybody tries to tell you that you haven’t sacrificed for the war, let them know you sacrificed a large portion of your savings and your paycheck to the effort, thank you very much.

  The bottom line is that war always causes inflation, at least when it is funded through money-printing instead of a pay-as-you-go system of taxes and/or bonds. It might be great for a handful of defense contractors, but war is bad for Main Street, stealing wealth from people by making their dollars worth less.

  Given that John Maynard Keynes and former Federal Reserve chair Ben Bernanke both say that inflation is a tax on the American people, war-induced inflation is a theft of our wealth.

  IEP gives a graphic example – the Vietnam war helping to push inflation through the roof:

  

  War Causes Runaway Debt

  We noted in 2010:

  All of the spending on unnecessary wars adds up.

   

  The U.S. is adding trillions to its debt burden to finance its multiple wars in Iraq, Afghanistan, Yemen, etc.

  Indeed, IEP – commenting on the war in Afghanistan and Iraq – notes:

  This was also the first time in U.S. history where taxes were cut during a war which then resulted in both wars completely financed by deficit spending. A loose monetary policy was also implemented while interest rates were kept low and banking regulations were relaxed to stimulate the economy. All of these factors have contributed to the U.S. having severe unsustainable structural imbalances in its government finances.

  We also pointed out in 2010:

  It is ironic that America’s huge military spending is what made us an empire … but our huge military is what is bankrupting us … thus destroying our status as an empire.

  Economist Michel Chossudovsky told Washington’s Blog:

  War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy.

  (and remember Greenspan’s comment.)

  It’s not just civilians saying this …

  The former head of the Joint Chiefs of Staff – Admiral Mullen – agrees:

  The Pentagon needs to cut back on spending.

   

  “We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”

  Indeed, Mullen said:

  For industry and adequate defense funding to survive … the two must work together. Otherwise, he added, “this wave of debt” will carry over from year to year, and eventually, the defense budget will be cut just to facilitate the debt.

  Former Secretary of Defense Robert Gates agrees as well. As David Ignatius wrote in the Washington Post in 2010:

  After a decade of war and financial crisis, America has run up debts that pose a national security problem, not just an economic one.

   

  ***

   

  One of the strongest voices arguing for fiscal responsibility as a national security issue has been Defense Secretary Bob Gates. He gave a landmark speech in Kansas on May 8, invoking President Dwight Eisenhower’s warnings about the dangers of an imbalanced military-industrial state.

   

  “Eisenhower was wary of seeing his beloved republic turn into a muscle-bound, garrison state — militarily strong, but economically stagnant and strategically insolvent,” Gates said. He warned that America was in a “parlous fiscal condition” and that the “gusher” of military spending that followed Sept. 11, 2001, must be capped. “We can’t have a strong military if we have a weak economy,” Gates told reporters who covered the Kansas speech.

   

  On Thursday the defense secretary reiterated his pitch that Congress must stop shoveling money at the military, telling Pentagon reporters: “The defense budget process should no longer be characterized by ‘business as usual’ within this building — or outside of it.”

  While war might make a handful in the military-industrial complex and big banks rich, America’s top military leaders and economists say that would be a very bad idea for the American people.

  Indeed, military strategists have known for 2,500 years that prolonged wars are disastrous for the nation.

  War Increases Inequality … And Inequality Hurts the Economy

  Mainstream economists now admit that runaway inequality destroys the economy.

  War is great for the super-rich, but horrible for everyone else. Defense contractors, Congress membersand bankers love war, because they make huge profits from financing war.

  Pulitzer prize winning New York Times reporter James Risen notes that the so-called war on terror has caused “one of the largest transfers of wealth from public to private hands in American history,” and created a new class of war profiteers which Risen calls “the oligarchs of 9/11.”

  War Increases Terrorism … And Terrorism Hurts the Economy

  Security experts – conservative hawks and liberal doves alike – agree that waging war in the Middle Eastweakens national security and increases terrorism. See this, this, this, this, this, this and this.

  Terrorism – in turn – terrorism is bad for the economy. Specifically, a study by Harvard and the National Bureau of Economic Research (NBER) points out:

  From an economic standpoint, terrorism has been described to have four main effects (see, e.g., US Congress, Joint Economic Committee, 2002). First, the capital stock (human and physical) of a country is reduced as a result of terrorist attacks. Second, the terrorist threat induces higher levels of uncertainty. Third, terrorism promotes increases in counter-terrorism expenditures, drawing resources from productive sectors for use in security. Fourth, terrorism is known to affect negatively specific industries such as tourism.

  The Harvard/NBER concludes:

  In accordance with the predictions of the model, higher levels of terrorist risks are associated with lower levels of net foreign direct investment positions, even after controlling for other types of country risks. On average, a standard deviation increase in the terrorist risk is associated with a fall in the net foreign direct investment position of about 5 percent of GDP.

  So the more unnecessary wars American launches and the more innocent civilians we kill, the less foreign investment in America, the more destruction to our capital stock, the higher the level of uncertainty, the more counter-terrorism expenditures and the less expenditures in more productive sectors, and the greater the hit to tourism and some other industries. Moreover:

  Terrorism has contributed to a decline in the global economy (for example, European Commission, 2001).

  So military adventurism increases terrorism which hurts the world economy. And see this.

  Attacking a country which controls the flow of oil also has special impacts on the economy. For example, well-known economist Nouriel Roubini says that attacking Iran would lead to global recession. The IMF says that Iran cutting off oil supplies could raise crude prices 30%.

  War Destroys Freedom … Which, In Turn, Destroys the Economy

  A permanent war economy destroys our freedoms.

  In turn, loss of liberty is horrible for the economy.

  War Causes Us to Lose Friends … And Influence

  While World War II – the last “good war” – may have gained us friends, launching military aggression is now losing America friends, influence and prosperity.

  For example, the U.S. has launched Cold War 2.0 – casting Russia and China as evil empires – and threatening them in numerous way. For example, the U.S. broke its promise not to encircle Russia, and isusing Ukraine to threaten Russia; and the U.S. is backing Japan in a hot dispute over remote islands, and backing Vietnam in its confrontations with China.

  And U.S. statements that any country that challenge U.S. military – or even economic – hegemony will be attacked are extremely provocative.

  This is causing Russia to launch a policy of “de-dollarization”, which China is joining in. This could lead to the collapse of the petrodollar.

  

• Economic Collapse Will Serve One Purpose: "Global Governance And The Enslavement Of Mankind"

  Submitted by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces (Airborne)) via SHTFPlan.com,

  The ever-tightening noose around the neck of man shows no sign of slippage: all actions by all of the governments are anent control and dominion.  The path to global governance is plainly marked, visible through all of the turmoil.  It is that turmoil, those “incidents” that are created and fostered by the governments that enable them to further constrict the noose.  The economy plummets in Cyprus and Greece?  Time to limit the cash withdrawals.  The European banks are having a “hard time” in places such as France or Spain?  Time to pillage people’s savings and their IRA’s.

  Manufactured crises are the norm, not the exception, and all of them are designed to facilitate one purpose: global governance and the enslavement of mankind.

  The Bilderbergers are meeting in Germany this week.  Paul Joseph Watson of Alex Jones’ Prison Planet reported on some of the key issues they will be discussing, as such:

  “…the creation of a virtual passport that web users will need to obtain before they can use many Internet services is high on the agenda.  The Internet ID will be justified under the guise of “cybersecurity” and creating a convenient method for citizens to access government services, but free speech advocates will view the proposal with deep suspicion as it would threaten online anonymity and possibly chill dissent. Services such as Facebook, YouTube and Twitter could also use the online passport to revoke posting permission if a user violates terms of agreement, another obvious threat to the free flow of information that has made the web what it is today.  Bilderberg globalists are also set to re-invigorate momentum behind another long term goal – a global tax system presided over by the UN.”

   

  Bilderberg Leak: Secretive Group to Discuss Internet ID, Global Tax, By Paul Joseph Watson

  These things are not new, in that they have been proposed before.  Just as with anything that is repeated long enough, however, the reiteration has dulled the senses of most.  The bad thing is that it is being acted upon.  A report by Tarun Wadwha last week described the inculcation of facial recognition software and the use of over 250 million cameras worldwide with the capability of utilizing this software.

  250 million cameras.  That would equal a camera for every 30 people.

  The article went on to detail how in Russia an application called FindFace has come out, the invention of two young entrepreneurs.  This application enables you to track down and identify virtually anyone; the app is building a database as we speak, and it is a matter of time before it expands outside of Russia to Europe and eventually the United States.  The article went on to detail some of the following measures used in the U.S. and Europe in the manner of the movie “Minority Report” with Tom Cruise as such:

  “Microsoft Corp. has patented technology that can allow a billboard to determine who you are and show you personalized advertisements. British authorities are using facial recognition at music festivals to spot troublemakers, while brick-and-mortar stores worldwide are racing to adopt the technology to track loyal customers. Even some high schools and churches have started to use facial recognition to take attendance.”                          

  source: Opinion: Facial recognition will soon end your anonymity

  We see it being inserted into our society and the societies in the world: the surveillance state.  We see the deliberate and intentional collapses of the economies worldwide, the shifting of assets into the hands of those who control the strings either via legislation and “authority” (governments) or monetarily and economically (corporations and banks/bankers).  The daily decline in freedom of speech and the freedom to challenge the establishment…on anything, no matter how minute or obscure…is the rule, not the exception.

  In order for the global governance to occur, each “sphere of influence” such as parallel’s Orwell’s “1984” and the super-states must control its respective sphere absolutely.  Because of the homogeneity of ethnicity that accompanies each area, overlap is not possible from a perspective of control.  But if the spheres of influence are “aligned” at least in purpose and levels of totalitarian control, then an effective balance can be maintained.  Then (to paraphrase Alinsky) it can be a matter of “organizing the organized” with “controllers” who oversee the governments/regimes of all of the spheres without any of the people (the enslaved) ever knowing.

  We are heading into a very dark time…a time where technology will be used to enslave, not enlighten or uplift mankind.  The new dark ages are almost upon us.  It will require nothing less than a world war or a complete global economic collapse (orchestrated, in both cases) to destroy the last vestiges of self-governance and law that exist for us.  The time to put a stop to it is now, before the power base of the elite becomes so strong that individuals cannot withstand it.  The time to rebel against it is now, while we still have the chance before that boot tramples the face of humanity…forever.

  

  

• UNSEALED: Tran vs Wells Fargo – DOJ Declines to Intervene, Banks Continue to Foreclose with Impunity

  

  “Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer”
  ~ Regards, Wells Fargo, Your Friendly Neighborhood Banker

  ~
  

  UNSEALED: Tran vs Wells Fargo Qui Tam – DOJ Declines to Intervene, Banks Continue to Foreclose with Impunity

  First, last month, from The Oregonian:

  A Damascus man claims he was terminated by Wells Fargo & Co. in 2014 after he discovered the bank was repeatedly collecting on mortgage loans for which it did not have the proper documentation. When Duke Tran, 54, complained about the practice, he claims he was told to lie to customers. When he resisted, the bank fired him in November 2014, Tran said. In a whistleblower lawsuit unsealed a week ago, Tran claims Wells also defrauded the U.S. government. He argues the bank illegally collected hundreds of millions of dollars in federal foreclosure-prevention funding for loans the bank knew lacked proper documentation.

  And of course, Wells Fargo denies any wrongdoing…

  Tran’s wrenching transition from happy 10-year veteran at Wells Fargo to self-proclaimed whistleblower began in December 2013 when he fielded a call from a couple terrified they were going to get foreclosed out of their home. They were overdue on their second mortgage and Wells Fargo was demanding a balloon payment. Tran, who worked at the bank’s Beaverton call center, checked and checked again. He claims he could find no trace of the couple’s loan in the bank’s computer system and he told the couple so.

  So what happened when he alerted his superiors?

  Tran says his bosses were not happy. Three months later, on April 21, 2014, Tran and the rest of his team received an email from a supervisor telling them that full disclosure was a bad idea. “Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer,” reads the email, which Tran submitted into the court file.

  Tran was troubled. The first-generation Vietnamese-American and volunteer in the US Army Reserve considered it illegal and unethical for the bank to threaten foreclosure when it didn’t have the mortgage contract in question. “The company told me to lie about that,” he said in an interview. “I don’t think that’s right, for the customers, for the company or the entire country.”

  Now, let’s take a look at the unsealed complaint for more details …

  SUMMARY OF CASE

  Duke Tran was a humble, hardworking family man, who had overcome many obstacles to establish himself in the banking industry. Tran was honest and forthright. He had worked at Wells Fargo for over 10 years as a model employee in its home equity department.

  In 2014, Tran began to ask questions after stumbling upon a secret Wells Fargo policy that he felt compromised his personal ethics and violated the laws governing mortgage servicing.

  Wells Fargo’s internal policy required its employees to unfairly deceive its customers, and the United States, as to the quality of Wells Fargo’s loan documents, in violation of American common law, the Dodd-Frank Act, and Oregon’s Unfair Trade Practices Act.

  When Tran continued to express concerns about its secret policy, Wells Fargo began a campaign designed to discredit Tran and ultimately force him out of the company. Wells Fargo illegally retaliated against Tran throughout 2014 and wrongfully terminated his employment on November 12, 2014.

  Now, having no other choice to make things right, Tran files this complaint to recover fair compensation for Wells Fargo’s retaliation and wrongful termination. Tran also seeks to take back over $1.4 billion on behalf of the American taxpayers; paid by the United States on account of Wells Fargo’s unfair deceptive mortgages practices.

  FACTUAL ALLEGATIONS: Wrongful Termination
  

  On or around March 10, 2013, Tran transferred to the position of Home Equity Customer Service Specialist 4 in the home equity department.

  …

  Most calls that Tran received involved customers who had received letters from Wells Fargo indicating their mortgage balloon payments were due within 90 days, and that if they did not pay, their accounts would be referred to collections for foreclosure. When Wells Fargo received calls from customers with balloon payments due, its policy was to offer its customers financial products to avoid foreclosure, including HAMP loan modifications.

  In or around December of 2013, Tran received the first of what would be many similar phone calls. A husband and wife with an alleged balloon mortgage payment due called Wells Fargo and spoke with Tran. When Tran looked in the Clipper system for their loan contract he realized it was missing or nonexistent, and reported this to them.

  Tran promptly reported the issue with the customers to his supervisor and others within Wells Fargo. The next day, Tran received multiple emails from Wells Fargo headquarters that the loan documents were missing and that the company did not have the customers’ contract. Despite this, Wells Fargo directed Tran to deceive the customers and treat the loan like a balloon payment was due.

  …

  The next day, LeDonne met with Tran and berated Tran for telling the customers the truth about their loan documents. LeDonne told Tran that Tran’s job was in jeopardy and that Tran had placed Wells Fargo at risk by providing this information to the customers. LeDonne went on to say that Janice Norris (“Norris”) and Vice President Lending Manager, Debbie Clausen (“Clausen”) had directed that Tran have no more contact with these customers.

  From then on, Tran received many more calls from customers whose loan documents were missing or nonexistent. Tran began to notice many of the loans with missing documents had been acquired by Wells Fargo from First Union or Sun Trust Bank. As he was directed, whenever customers called in and Wells Fargo’s loan documents were missing, Tran sent the matter to a supervisor.

  On or around March 4, 2014, Tran received a call from a co-worker from Iowa. The coworker asked Tran about the customers Tran told that Wells Fargo had no loan documents for their loan. The customers had called for an update on their loan. Tran reported that he had referred the customers to his supervisors. Tran then asked his team lead, Heather Stone (“Stone”), about the issue. Stone told Tran that she planned to follow-up with the customers but it appeared they had hired an attorney.

  Later that same day, Tran was called in to meet with his supervisor, LeDonne. When Iran walked into his office, LeDonne immediately blew up at him. LeDonne told Iran, “See, I told you before that we’ll get sued and now they’ve hired an attorney!” LeDonne threatened Iran that he would be fired if he ever told another customer the truth about missing or nonexistent loan documents.

  On or around April 21, 2014, Tran received an email about a Wells Fargo internal policy stating that when Wells Fargo has lost loan documents, especially those securing a home, employees are to not share this information with customers under any circumstance.

  “Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer.”

  Tran was immediately uncomfortable with this secret internal policy and went to LeDonne to discuss it. Tran stressed that it was not right or legal to lie to customers. LeDonne cut Iran off and told him that the policy directive came from his boss, Kimberly Thrush (“Thrush”), and senior management.

  A lot more goes on from here, see complaint for much more detail, before Mr Tran is fired for failing to say “hello.”

  On or around November 12, 2014, Tran had a second interview with another unit within Wells Fargo. The interview was for the same day and LeDonne again refused Tran’s request for time off for the interview. Before Tran was able to resolve the issue again LeDonne called Tran in to discuss a customer call. LeDonne told Tran he was being investigated for “misbehavior” in that he did not say “hello” to a customer at the onset of the call. Tran asked to hear the phone call but LeDonne refused. LeDonne told Tran they would meet with the rest of the management team at the end of the day.

  Later that day, Tran was called into a meeting with LeDonne, Thrush, and Norris. LeDonne told Tran that based on the misbehavior they discussed earlier, Wells Fargo was terminating his employment. LeDonne then stood up and told Tran he needed to escort him out of the building.

  FACTUAL ALLEGATIONS: Defrauding the Government

  Wells Fargo’s policy of unfair deception negatively affected not only its employees and customers but also the American taxpayers. From 2009 until March 31, 2015, the United States paid out over $1.4 billion in HAMP incentives based on Wells Fargo loan modification applications. As of the date of this complaint, Wells Fargo has completed more than a million mortgage modifications through HAMP. Of the $1.4 billion paid based on Wells Fargo applications, only a relatively small fraction ($246,871,173.00) went to Wells Fargo’s customers. The largest portions went directly to corporate investors ($825,776,921.00) and Wells Fargo ($359,151,497.00).

  Many of Wells Fargo’s HAMP modifications, including some of the loans Tran was involved with, were based on materially false representations made by Wells Fargo about the quality of its mortgage loan documents.

  Wells Fargo fraudulently used the HAMP modification process to turn incomplete loan files into enforceable mortgages. Wells Fargo intentionally misled its customers and the United States by failing to disclose known material defects in its loan documents. Specifically, Wells Fargo’s secret internal policy involved deceiving customers and the United States when Wells Fargo knew or suspected its loan files were missing documents.

  Just another day in the Good Ol’ USA.

  Full complaint and the DOJ’s order declining to intervene below… 

  www.4closureFraud.org

   

   

   

  

• This Won't End Well – US Asset Managers Target Australia's $1.5 Trillion Pension Funds

  Hedge funds attracted a net $44 billion in assets globally last year, the smallest amount since 2012. As these increasingly desperate funds try to change that in 2016, one enormous target has been identified in Australia.

  Australia has approximately USD$1.5 trillion in retirement savings, one of the largest and fastest growing pools of pension money in the world according to the WSJ. Several US asset managers are already actively working to get a foot in the door, even though management fees charged in Australia are among the world's lowest according to local lobby group Financial Services Council.

  "Everyone wants to get their hands on that pie. People think there's a lot of money to be made in Australia" said Jesse Huang, director for strategic relations Boston based hedge fund PanAgora Asset Management

  

  Other than the potential to grow AUM, the fact that Australian funds doubled their holdings of alternative assets between 2009 and 2015 has funds salivating to set up shop.

  Australian funds doubled their holdings of alternative assets—ranging from venture capital and private equity to hedge-fund investments—to an average of 8% of their portfolios between 2009 and 2015, according to Morningstar. Inflows have been especially strong over the past two years. Including infrastructure and property, Australian funds now hold about 20% of their assets outside of traditional investments such as stocks, bonds and cash.

  Additionally, a recent survey by State Street showed two-thirds of Australian pension funds plan to boost their exposure to hedge funds over the next three years.

  Overseas funds are putting talent on the ground because Australia is "not an easy market to enter. It's complex and highly concentrated, buyers are sophisticated and competition is fierce. Players who only come here to push product are bound to fail" said Anthony James, a partner at PwC in Sydney.

  Potential clients can be tough to convince said Damian Crowley, head of distribution with Pengana Capital, a boutique Sydney fund management firm, adding that some investors "think hedge funds caused the global financial crisis." Alas, if investors have that mindset now, wait until hedge funds tie up pension funds in a bunch of high risk, highly illiquid positions just as the market sells off.

  MLC, one of the largest pension funds in Australia has increased its alternative exposure by nearly 40% over the past three years, most notably to PE and energy futures, but CIO Jonathan Armitage says the A$62 billion fund is "picky."

  "Our starting point is deep, deep skepticism. We make sure we only buy what we understand." Armitage said

  That fact that it's a tough market to enter is not deterring some firms from moving forward however. Oaktree Capital Management, who invests in commercial mortgages and distressed debt opened up a branch in Australia in March, TIAA Global Asset Management opened a Sydney office last year, and Chicago based Northern Trust also set up a Sydney office, along with a sales team in Melbourne to offer full asset-management services to pension funds.

  The shift in asset allocation undoubtedly comes from the fact that safer investment strategies are no longer an option for managers trying to generate returns, thanks to central banks going absolutely insane and driving over $10 trillion of sovereign debt into negative yields (soon to be done with corporate debt as well as Mario accelerates the global collapse to light speed with the ECBs new program).

  Recall that now fixed income is yielding so little, that to earn a return of 7.5% investors would have to construct a portfolio that has nearly 3x the risk than it did in 1995. This is causing pension funds to risk even more to find yield, and thus the increased allocation to alternative assets.

  

  Hedge funds aren't just targeting the big fish of course, retail investors are also on the radar for those looking to get into Australia.

  While foreign hedge funds are eager to target big institutional investors, they are also pitching hard to retail investors—in particular the growing number of Australians, nicknamed “selfies,” who manage their own pension savings. Such investors control about a third of Australia’s retirement assets.

   

  PanAgora, which makes money through complex trading strategies from high-speed algorithmic trading to leveraged short selling, offers one of its funds to mom-and-pop investors here in conjunction with Pengana Capital, a boutique Sydney fund-management firm. Among the more unusual data PanAgora mines to form its trading strategy: thousands of lost-baggage claims for potential signs of poor airline management.

  * * *

  Ah yes, hedge funds who introduce complex trading strategies to mom and pop investors and massive pension funds – what could possibly go wrong there?

  

  

• Bitcoin Spikes Above $600 – 2 Year Highs – On Sudden Massive Chinese Buying

  Once again, on a Saturday night (US time), Sunday morning (China) a sudden burst of buying pressure in Bitcoin, driven by Chinese buyers, has spiked the virtual currency higher on dramatic volume. With Bitcoin now trading at its highest level since May 2014 (in Yuan), and up 250% since we first suggested this an outlet for desperate-to-leave capital outflows in September, we note that the 'arbitrage' of over 150 Yuan points to massively more demand from Chinese buyers for now.

  Another weekend buying-splosion in Bitcoin by The Chinese…

  

   

  It appears, just as we initailly warned here, that more than a few of the few hundred million Chinese have decided that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decided to invest even a tiny fraction of the $22 trillion in Chinese deposits… 

  

   

  … in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.

  And once again tonight, that panic selling of Yuan for Bitcoin has sent it surging in the last few hours, now above $600…

  

   

  This pushes Bitcoin to 2 year highs priced in USDollars…

  

   

  And once again it appears the dominant buyer is in China (OKCoin exchange – which reportedly has 90% of global Bitcoin traffic). This is the highest 'China' Bitcoin price since May 2014

  

   

  Notably with Bitcoin trading 4187CNY and 615USD (with USDCNY at 6.5624), China Bitcoin is trading around 150 Yuan rich to Dollar Bitcoin (once again suggesting strong demand from Chinese buyers).

  Both Gold and Bitcoin have been rising since we first warned of the surge in Chinese capital outflows but the virtual currency has dramatically outperformed…

  

   

  Charts: BitcoinWisdom

  

  

• Rapper Who Threatened To Kill Trump If "Momma's Food Stamps Are Taken Away" Arrested For Stealing Guns

  There was much amusement three weeks ago, when Louisiana rapper Maine Musik said in a YouTube video recording that he would kill republican presidential candidate Donald Trump if his “Mamma’s food stamps are taken away.”

  I could go to war with whoever the fuck I want to, but I really want to go to war with Donald Trump because Donald Trump trying to take food stamps from my mamma and that’s all the fuck she’s got. As long as the motherfucking government let us keep food stamps… we gonna be good, but the first time this nigga pass a law talking about he taking Louisiana purchase, shit going to get ugly.  I swear to god on every motherfucking chain I got, bitchez gonna go down. You gotta understand them (inaudible) love Fruit Loops. They love that shit so if you take that shit nigga it’s coming with the madness and a nigga ain’t gonna play about that.  Y’all take Donald Trump and let him know it’s up over here. We gonna declare war.

  As we reported at the time, shortly after the “rapper” recorded this threat, he was visited by police for posting another video to his Instagram account on May 15, where he and his gang showed off a stockpile of weapons.

  That’s when Maine Musik’s, whose real name is Demarcus Davis, problems really started, ironically not under president Trump, but Obama. The true culprit, however, was neither the current president nor a potential future one, but Demarcus’ own unprecedented stupidity.

  As it turns out in the second video, “Musik” and at least eight other people can be seen brandishing a number of weapons, including rifles, pistols and a sawed-off shotgun, reports Baton Rouge ABC affiliate WBRZ.  According to police, all of the guns visible in the video appear to match makes/models of firearms that were reported stolen by a local fun shop. The Baton Rouge Police Department reported the burglary at Meaux Guns & Ammo, located in the 9600 block of Mammouth Drive, on July 6 of last year. At the time of the report, dozens of firearms were reported stolen. Among those guns was a Ruger 10/22 Krinker Plinker.

  When authorities examined Musik’s video, they noticed similarities between the weapons being waved around and weapons that had been stolen. A Baton Rouge police spokesman told the outlet that a stolen Ruger being brandished in the video was particularly easy to identify because it had been customized before it was stolen.

  Detectives said they were also able to locate the suspect by using a house number and street name visible in the video. A search of Davis’ public Facebook account turned up a photo of the rapper holding the Ruger pistol that was reported stolen. The gun featured numerous customizations and modifications that made it distinctive and easy to spot, according to BRPD.

  Davis was initially brought in for questioning concerning his social media posts and videos after he was arrested and booked for failing to stop at a stop sign while in possession of Drank, a purple liquid identified as codeine syrup. He would also be booked on a charge of possession of a Schedule V CDS in addition to the above gun charges.

  Former Sons of Guns reality TV star Joe Meaux, who owns Meaux Guns and Ammo, told Fox News that he realized the firearms being waved around by Davis were his after watching a video titled “Rapper Threatens Trump” online. “As I’m watching it, I’m thinking these guns are very recognizable,” Meaux told Fox News. “As I watched more, I realized that they were very familiar. They were stolen from me last year. We do a lot of custom work,” he added. “There was one AK-47 copy built from a .22 I identified. Everything from the optic to the way the sling was placed was all very identifiable.”

  As for Davis, he is once again free, having posted $23,000 bail and released the same day he was arrested, although perhaps not for much longer: either the Darwin Awards will snatch him or the secret service will. According to Breitbart, the Secret Service had already been investigating Davis before he was arrested over the rapper’s threats against Trump. Investigators also found photos on Davis’s personal Instagram page, which boasts 56,000 followers, showing him posing with guns. One video features a young girl shooting a replica handgun.

  “Many of the items have been recovered, but the matter is still under investigation so when that is completed we will hopefully get them back,” Meaux told Fox. “But the most important thing is that they are off the streets now.”

  Not really: after posting bail, the rapper is free and awaiting his next court date, although we no longer has any guns.

  Meanwhile, it is clear that nothing has changed: “Maine Musik” posted another video Wednesday with a profanity-laced message for Donald Trump. “Fuck Donald Trump,” Davis says, although this time he has no gun and instead is seen waving a blade. “No more guns… It’s our summer 16, bitch.”

  It is unclear who the knife was stolen from.

  SHERWOOD USA BITCH ???? #????Nation

  A video posted by Maine Luciano (@maine_musik) on Jun 8, 2016 at 2:50pm PDT

  

  

• An Everyman's Guide To Understanding Cryptocurrencies

  Submitted by Charles Hugh-Smith via PeakProsperity.com,

  When an asset rises by almost 30% in a few weeks, it tends to attract attention.  Recently, that asset was bitcoin (BTC). The price of BTC in dollars rose from $454 on May 23 to $590 on June 6^th.

  When an asset doubles in a matter of a few months, it tends to attract attention.  The cryptocurrency Ether (part of the Ethereum platform) doubled from around $7 in April to roughly $14 in early June.

  Are these cryptocurrencies mere fads? Or are they potentially game-changing alternatives to the conventional currencies such as the U.S. dollar, Chinese RMB, Japanese yen or European Union euro?

  There’s no lack of skeptics and critics of bitcoin and other cryptocurrencies. For example, “National currencies aren’t as Centralized, and Bitcoin isn’t as Decentralized, as you think.” (Source)

  There are plenty of defenders of cryptocurrencies as well, for example this response to the article above. 

  The controversy is understandable; bitcoin has had a difficult adolescence. After soaring from $15 in early 2013 to over $1,000 in December 2013, the cryptocurrency crashed to $215 in early 2015 in the wake of the bankruptcy of a major exchange (Mt. Gox) that cost bitcoin investors $470 million in losses.

  Yet despite concerns about security, criminal use and volatility, cryptocurrencies have proliferated at a dizzying pace, and new models such as the “smart contracts” of Ethereum have been developed.

  So what are those of us who can’t follow the technical arguments supposed to make of all this? For that audience, here's my stab at making sense of the potential global role of cryptocurrencies.

  Cryptocurrencies Are Digital Currencies That Are Not Issued by Governments

  What’s a cryptocurrency? Wikipedia’s definition is “a medium of exchange using cryptography to secure the transactions and to control the creation of new units.” Cryptocurrencies exist only in the digital realm; there are no physical coins or paper notes.

  Cryptocurrencies have no intrinsic value. They share this characteristic with fiat currencies issued by governments/central banks:

  “Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “it shall be.” (Source)

  Though major central banks own gold, the currency they issue is not “backed by gold,” i.e. it cannot be converted into gold upon demand.

  The value of fiat currency is a function of supply and demand. There are many sources of demand for currency: governments demand taxes be paid in their fiat currency, for example, and this creates demand for the currency.

  There is however only two sources of supply: the central banks of nation-states (or regional unions like the Eurozone) and private banks in fractional reserve money systems that enable banks to create new money via issuing new loans.

  In a fractional reserve banking system, if a bank has $10 in cash deposits (i.e. in reserve), it can issue a new loan of $100. This loan is new money that was created out of thin air. When the loan is paid in full, this new money disappears from the system.

  When central banks or states issue new currency in excess of what the economy is actually producing, the supply overwhelms demand and the currency’s value (i.e. purchasing power) falls accordingly. Venezuela offers a present-day example: the official exchange rate of the Venezuelan bolivar is 10 to the U.S. dollar (USD), but the “street”/black market value is closer to 1,000 to 1 USD. (My correspondents in Venezuela report that it is illegal to post the black-market exchange rate on a website.)

  Governments typically restrict alternative currencies to protect their monopoly on money issuance: residents must use the government-sanctified currency or face prosecution and prison.

  The U.S. government has declared bitcoin is a commodity (i.e. property) rather than a currency. Other nations have banned bitcoin (presumably out of recognition that it is an alternative currency outside their control.)

  Why does bitcoin have any value at all? There are two basic reasons:

  1. The supply is limited.  The design of bitcoin limits the total number of bitcoins to 21 million. (If you really want to know why this is so, you’ll need to understand the blockchain and bitcoin mining, topics that are beyond the scope of this article.) At present, there are over 15.5 million bitcoins in circulation, roughly three-quarters of the eventual issuance of 21 million.
  2. There is demand for bitcoin precisely because it is outside the control of governments/central banks and cannot be devalued at will by governments/central banks.

  Why Fiat Currencies Are Being Devalued

  Why are most governments/central banks trying to devalue/depreciate their fiat currencies? After all, devaluing the currency reduces the purchasing power of everyone who holds the currency, meaning that the currency buys fewer goods and services. This loss of purchasing power makes everyone who must use the currency poorer.

  Why do governments/central banks pursue a policy that makes their citizens poorer?

  There are two primary reasons why governments seek to devalue their currency:

  1. To make the nation’s exports cheaper, i.e. more competitive, in the belief that expanding exports will make the overall economy grow, despite the fact that devaluing the currency makes imports more expensive, hurting everyone who buys imports.
  2. To make it easier for debtors to service their loans. As our currency loses its value, we experience that loss of purchasing power as inflation: the prices of goods and services rises as the purchasing power of the currency declines. Governments/central banks presume that wages will rise along with the prices of goods and services. This rise in wages will make it easier for debtors to service their debts, i.e. make their monthly payments. In a system that depends on the expansion of debt to fuel consumption, making it easier to service existing debt is of critical importance: if debt becomes more difficult to service, debt expansion slows and so does consumption. As consumption slows, the economy slides into recession.

  As their currency is devalued (by intention or by unintended consequences), the great problem for many people will be transferring their remaining financial wealth out of depreciating currencies into a more stable currency or into assets in a more stable nation.

  The Role of Cryptocurrencies in Capital Preservation

  This is where cryptocurrencies have a role that could increase as global currencies are devalued: if you can shift financial wealth out of a currency that is losing purchasing power into a cryptocurrency that is holding its own or even gaining in purchasing power, it would be irrational not to do so.

  What advantage do cryptocurrencies have over other stores of value such as gold, silver or cash? All of these traditional stores of value have advantages—portability and universal recognition that they are money—but they cannot be transported across the globe quite as easily as digital currencies.

  Though it is a topic of hot debate, many observers believe it is technically difficult to the point of impossibility to stop people from buying, selling and sending cryptocurrencies because currencies such as bitcoin live in a network that is scattered around the globe—a network that can be accessed by anyone with a web browser.

  While local exchanges could be shut down by governments, and businesses could be prohibited from accepting cryptocurrencies, stopping people from logging onto servers sited elsewhere is a bigger challenge. (Many governments have outlawed cryptocurrencies, though their success rate in stopping their citizenry from owning/using cryptocurrencies is unknown.)

  The rise in daily transactions in bitcoin suggests an expanding base of users globally.

  

  In Part 2: Will Cryptocurrencies Soar As The Global Economy Falters? we explore the potential demand for cryptocurrencies as a means of transferring and preserving capital, and the potential impact of these capital flows on valuations of cryptocurrencies.

  As governments actively devalue their currencies (thereby making everyone using the currency poorer), their citizenry with financial capital are forced to seek ways to move their at-risk wealth into other currencies or assets. And as the stability and valuations of cryptocurrencies increase, the potential for a self-reinforcing feedback loop increases: as the value of cryptocurrency rises, it attracts more capital, which pushes prices higher, and so on.

  Are we in the infancy of a global stampede into cryptocurrencies?

  Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

   

  

  

• How Fascism Comes To America

  Submitted by Doug Casey via InternationalMan.com,

  I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time.

  But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come.

  As you know, I believe we're well into what I call The Greater Depression. A lot of people believe we're in a recovery now; I think, from a long-term point of view, that is total nonsense. We're just in the eye of the hurricane and will soon be moving into the other side of the storm. But it will be far more severe than what we saw in 2008 and 2009 and will last quite a while – perhaps for many years, depending on how stupidly the government acts.

  Real Reasons for Optimism

  There are reasons for optimism, of course, and at least two of them make sense.

  The first is that every individual wants to improve his economic status. Many (but by no means all) of them will intuit that the surest way to do so is to produce more than they consume and save the difference. That creates capital, which can be invested in or loaned to productive enterprises. But what if outside forces make that impossible, or at least much harder than it should be?

   

  The second reason for optimism is the development of technology – which is the ability to manipulate the material world to suit our desires. Scientists and engineers develop technology, and that also adds to the supply of capital. The more complex technology becomes, the more outside capital is required. But what if sufficient capital isn't generated by individuals and businesses to fund further technological advances?

  There are no guarantees in life. Throughout the first several hundred thousand years of human existence, very little capital was accumulated – perhaps a few skins or arrowheads passed on to the next generation. And there was very little improvement in technology – it was many millennia between the taming of fire and, say, the invention of the bow. Things very gradually accelerated and improved, in a start-stop-start kind of way – the classical world, followed by the Dark Ages, followed by the medieval world. Finally, as we entered the industrial world 200 years ago, it looked like we were on an accelerating path to the stars. All of a sudden, life was no longer necessarily so solitary, poor, nasty, brutish, or short. I'm reasonably confident things will continue improving, possibly at an accelerating rate. But only if individuals create more capital than they consume and if enough of that capital is directed towards productive technology.

  Real Reasons for Pessimism

  Those are the two mainsprings of human progress: capital accumulation and technology. Unfortunately, however, that reality has become obscured by a morass of false and destructive theories, abetted by a world that's become so complex that it's too difficult for most people to sort out cause and effect. Furthermore, most people in the OECD world have become so accustomed to good times, since the end of WW2, that they think prosperity is automatic and a permanent feature of the cosmic firmament. So although I'm very optimistic, progress – certainly over the near term – isn't guaranteed.

  These are the main reasons why the standard of living has been artificially high in the advanced world, but don't confuse them with the two reasons for long-term prosperity.

  The first is debt. There's nothing wrong with debt in itself; lending is one way for the owner of capital to deploy it. But if a society is going to advance, debt should be largely for productive purposes, so that it's self-liquidating; and most of it would necessarily be short term.

   

  But most of the scores of trillions of debt in the world today are for consumption, not production. And the debt is not only not self-liquidating, it's compounding. And most of it is long term, with no relation to any specific asset. A lender can reasonably predict the value of a short-term loan, but debt payable in 30 years is impossible to value realistically. All government debt, mortgage debt, consumer debt, and almost all student loan debt does nothing but allow borrowers to live off the capital others have accumulated. It turns the debtors into indentured servants for the indefinite future. The entire world has basically overlooked this, along with most other tenets of sound economics.

   

  The second is inflation. Like debt, inflation induces people to live above their means, but its consequences are even worse, because they're indirect and delayed. If the central bank deposited $10,000 in everyone's bank account next Monday, everyone would think they were wealthier and start consuming more. This would start a business cycle. The business cycle is always the result of currency inflation, no matter how subtle or mild. And it always results in a depression. The longer an inflation goes on, the more ingrained the distortions and misallocations of capital become, and the worse the resulting depression. We've had a number of inflationary cycles since the end of the last depression in 1948. I believe we're now at the end of what might be called a super-cycle, resulting in a super-depression.

   

  The third is the export of dollars. This is unique to the U.S. and is the reason the depression in the U.S. will in some ways be worse than most other places. Since the early '70s, the dollar has been used the way gold once was – it's the world's currency. The problem is that the U.S. has exported perhaps $10 trillion – but nobody knows – in exchange for good things from around the world. It was a great trade for a while. The foreigners get paper created at essentially zero cost, while Americans live high on the hog with the goodies those dollars buy.

   

  But at some point quite soon, dollars won't be readily accepted, and smart foreigners will start dumping their dollars, passing the Old Maid card. Ultimately, most of the dollars will come back to the U.S., to be traded for titles to land and businesses. Americans will find that they traded their birthright for a storage unit full of TVs and assorted tchotchkes. But many foreigners will also be stuck with dollars and suffer a huge loss. It's actually a game with no winner.

  What's Next

  These last three factors have enabled essentially the whole world to live above its means for decades. The process has been actively facilitated by governments everywhere. People like living above their means, and governments prefer to see the masses sated.

  The debt and inflation have also financed the growth of the welfare state, making a large percentage of the masses dependent, even while they've also resulted in an immense expansion in the size and power of the state over the last 60-odd years. The masses have come to think government is a magical entity that can do almost anything, including kiss the economy and make it better when the going gets tough. The type of people who are drawn to the government are eager to make the state a panacea. So they'll redouble their efforts in the fiscal and monetary areas I've described above, albeit with increasingly disastrous results.

  They'll also become quite aggressive with regulations (on what you can do and say, and where your money can go) and taxes (much higher existing taxes and lots of new ones, like a national VAT and a wealth tax). And since nobody wants to take the blame for problems, they'll blame things on foreigners. Fortunately (the U.S. will think) they have a huge military and will employ it promiscuously. So the already bankrupt nations of NATO will dig the hole deeper with some serious – but distracting – new wars.

  It's most unfortunate, but the U.S. and its allies will turn into authoritarian police states. Even more than they are today. Much more, actually. They'll all be perfectly fascist – private ownership of both consumer goods and the means of production topped by state control of both. Fascism operates free of underlying principles or philosophy; it's totally the whim of the people in control, and they'll prove ever more ruthless.

  So where does that leave us, as far as accumulating more wealth than the average guy is concerned? I'd say it puts us in a rather troubling position. The general standard of living is going to collapse, as will your personal freedom. And if you're an upper-middle-class person (I suspect that includes most who are now reading this), you will be considered among the rich who are somehow (this is actually a complex subject worthy of discussion) responsible for the bad times and therefore liable to be eaten. The bottom line is that if you value your money and your freedom, you'll take action.

  There's much, much more to be said on all this. I've said a lot on the topic over the past few years, at some length. But I thought it best to be brief here, for the purpose of emphasis. Essentially, act now, because the world's combined economic, financial, political, social, and military situation is as good as it will be for many years… and a lot better than it has any right to be.

  What to Do?

  No new advice here, at least as far as veteran readers are concerned. But my suspicion is that very few of you have acted, even if you understand why you should act. Peer pressure (I'm confident that you have few, if any, friends, relatives, or associates who think along these lines) and inertia are powerful forces.

  That said, you should do the following:

  1. Maintain significant bank and brokerage accounts outside your home country. Consider setting up an offshore asset protection trust. These things aren't as easy to do as they used to be. But they'll likely be much less easy in the future.
  2. Make sure you have a significant portion of your wealth in precious metals and a significant part of that offshore.
  3. Buy some nice foreign real estate, ideally in a place where you wouldn't mind spending some time.
  4. Work on getting official residency in another country, as well as a second citizenship/passport. There's every advantage to doing so, and no disadvantages. That's true of all these things.

  One more thing: Don't worry too much. All countries seem to go through nasty phases. Within the lifetime of most people today, we've seen it in big countries such as Russia, Germany, and China. And in scores of smaller ones – the list is too long to recount here. The good news is that things almost always get better, eventually.

  

  

• Mike Rowe Gives Advice To Students: "Never Follow Your Passion"

  Mike Rowe has some truthiness for those students who are "following their passion" without possessing the skills necessary to accomplish what they're trying to do.

  "You've all been given some terrible advice, and that advice is this: follow your passion."

  

  The former host of Dirty Jobs tells it like it is by explaining to students that passion and ability have nothing to do with each other, and that "Just because you're passionate about something, doesn't mean you won't suck at it.". Rowe also reminds students that just because they may have a degree in a chosen field, it doesn't mean that a dream job awaits.

  "Dream jobs are usually just that – dreams. But their imaginary existence just might keep you from exploring careers that offer a legitimate chance to perform meaningful work."

  "Never follow your passion, but always bring it with you."

  * * *

  Rowe's message fits nicely with our 7 Harsh Realities Of Life Millennials Need To Understand, which should be widely read, lest we end up with more of this…

  

  

  

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• Paul Craig Roberts: "Fellow Americans, Wake Up & Escape The Matrix"

  Authored by Paul Craig Roberts,

  Where Do Matters Stand?

  On the eve of World War II the United States was still mired in the Great Depression and found itself facing war on two fronts with Japan and Germany. However bleak the outlook, it was nothing compared to the outlook today.

  Has anyone in Washington, the presstitute Western media, the EU, or NATO ever considered the consequences of constant military and propaganda provocations against Russia? Is there anyone in any responsible position anywhere in the Western world who has enough sense to ask: “What if the Russians believe us? What if we convince Russia that we are going to attack her?”

  The same can be asked about China.

  The recklessness of the White House Fool and the media whores has gone far beyond mere danger. What do the Russians think when they see that the Democratic Party intends to elect Hillary Clinton president of the US? Hillary is a person so crazed that she declared the president of Russia to be “the new Hitler” and organized through her underling, neocon monster Victoria Nuland, the overthrow of the democratically elected government of Ukraine. Nuland installed Washington’s puppet government in a former Russian province that until about 20 years ago was part of Russia for centuries.

  I would bet that this tells even the naive pro-western part of the Russian government and population that the United States intends war with Russia.

  Ever since Russia stood up to Obama over Syria, the Russians have been experiencing hostile propaganda and military operations on their borders. These provocations are justified by Washington and its NATO vassals as a response to “Russian aggression.” Russian aggression consists of nothing but obviously false assertions that Russia is about to invade the Baltics, Poland, and Romania and recreate the Soviet Empire, the Eastern European part of which, together with the former Russian provinces of Georgia and Ukraine, now belong to the American Empire.

  The Russians know that the propaganda about “Russian aggression” is a lie. What is the purpose of the lie other than to prepare the Western peoples for war with Russia?

  There is no other explanation.

  Even morons such as Obama, Merkel, Hollande, and Cameron should be capable of understanding that it is extremely dangerous to convince a major military power that you are going to attack. To simultaneously also convince China doubles the danger.

  Clearly, the West is incapable of producing leadership capable of preserving life on earth.

  What can be done when the entire West demonstrates a death wish for Planet Earth?

  Until the criminal regimes of Clinton, George W. Bush, and Obama, American presidents from John F. Kennedy forward worked to reduce tensions with the Soviets. Kennedy worked with Khrushchev to reduce tensions caused by US missiles in Turkey and Soviet missiles in Cuba. President Nixon negotiated SALT I (the Strategic Arms Limitation Treaty) and the Anti-Ballistic Missile Treaty. President Carter negotiated SALT II, which was never ratified by the US Senate but was observed by the executive branch. President Reagan negotiated with Soviet leader Gorbachev the end of the Cold War. President George H.W. Bush in exchange for Gorbachev’s agreement to the reunification of Germany promised that NATO would not move one inch to the East.

  All of these achievements were thrown away by the neoconized Clinton, George W. Bush, and Obama regimes, each a criminal regime on par with Nazi Germany.

  Today life on Planet Earth is far less secure than during the darkest days of the Cold War. Whatever threat global warming poses, it is miniscule compared to the threat of nuclear winter. If the evil that is concentrated in Washington and its vassals perpetrates nuclear war, cockroaches will inherit the earth.

  I have been warning about the growing danger of a nuclear war resulting from the arrogance, hubris, ignorance, and evil personified by Washington. Recently, four knowledgable Russian-Americans spelled out the likely consequences of trying to drive Russia to submission with war threats: http://www.paulcraigroberts.org/2016/06/03/41522/

  See also: http://www.paulcraigroberts.org/2016/05/28/as-our-past-wars-are-glorified-this-memorial-day-weekend-give-some-thought-to-our-prospects-against-the-russians-and-chinese-in-world-war-iii/

  Don’t expect the brainwashed American population to have the moral conscience and fortitude to prevent nuclear war or even the intelligence to prevent their own vaporization. In a recent article in the Wall Street Journal Scott Sagan and Benjamin Valentino report that 59% of the US population support attacking Iran with nuclear weapons in the event that Iran sank one US Navy ship: http://www.wsj.com/articles/would-the-u-s-drop-the-bomb-again-1463682867

  Republicans were much more likely than Democrats to approve attacking Iran with nuclear weapons with 81% of Republicans approving nuclear war compared to 47% of Democrats. Yet, the Democrats are behind Hillary who would be the first to use nuclear weapons. After all, a feminized woman has to prove how tough she is, just as Margaret Thatcher was “the Iron Lady.”

  Before it it too late for Americans and all of humanity, arrogant Americans need to recall that “those who live by the sword, die by the sword.”

  The economic picture is equally dismal and unpromising. The latest payroll jobs report was even more awful than reported. Hardly any new jobs were created, but what largely escaped reporting is the fact that the economy actually lost 59,000 full-time jobs.

  Increasingly the US economy consists of part-time jobs that cannot support an independent existence. Thus, more Americans age 19-34 live at home with parents than independently with spouses or partners. Fully half of 25-year old Americans live in their childhood rooms in their parents’ homes.

  This is the “New Economy” that the filthy lying neoliberal economists promised would be reward for the American work force giving up their manufacturing and professional skill jobs to foreigners. What a monstrous lie the neoliberal economists told so that corporate executives and shareholders could put into their own pockets the living wage of the American work force. These neoliberal economists, and, alas, libertarian “free market” ones, have not been held accountable for their impoverishment of the American work force deeply buried in debt with no future prospects.

  Those few Americans who have any awareness are beginning to realize that the One Percent and the western governments that serve them are re-establishing feudalism. The brilliant and learned economist, Michael Hudson, has labeled our era the era of neo-feudalism.

  He is correct. The majority of young Americans come out of university heavily indebted, primed for debtor prison. When half of 25-year olds cannot marry and form households, how can anyone believe that housing sales and prices are rising except as a result of speculative investors banking on rental income from a population that cannot even pay its student loans.

  The United States is the sickest place on earth. There is no public or political discussion of any important issue or of the multiple crises that confront America or the crises that America brings to the world.

  The American people are so stupid and unaware that they are capable of electing a criminal and a warmonger like Hillary president of the United States and be proud of it.

  These “tough” Americans are so frightened of hoax dangers, such as “Muslim terrorists” and “Russian aggression” that they willingly sacrificed their depleted pocketbooks, the Constitution of the United States—an act of treason on the part of the American people who utterly failed their responsibility to protect the Constitution—and their own liberty to a universal police state that has all power over them.

  It is extraordinary that once-proud, once-great European peoples look for leadership from a country of moronic non-entities who have pissed away the liberty, security, and prosperity that their Founding Fathers gave to them.

  Fellow Americans, if you care to avoid vaporization and, assuming we do avoid it, live a life other than serfdom, you must wake up and realize that your most deadly enemy is Washington, not the hoax of “Russian aggression,” not the hoax of “Muslim terrorism,” not the hoax of “domestic extremism,” not the hoax of welfare bankrupting America, not the hoax of democracy voting away your wealth, which Wall Street and the corporations have already stolen and stuck in their pockets.

  If you cannot wake up and escape The Matrix, your doom will bring the doom of the planet.

  

  

• The "Crime" Of Offending Islam & Death Of Free Speech In Europe

  Across Europe, cartoonists, artists and writers are forced to live under police protection, and also often face criminal prosecution – all for the "crime" of offending Islam.

  "'Respect' means, for them, submission." It starts with censoring cartoons…

  Gatestone Institute's Giulio Meotti explains what is going on across Europe…

  As we concluded previously,

  Speech is either free or it isn’t. One cannot have it both ways, as the EU apparatchiks apparently think. As soon as restrictions on free speech are introduced, abuse is sure to follow.

  

  

• This Employment Trend Is Not Your Friend

  Submitted by Michael Lebowtiz of 720 Global

  Loan Delinquencies may be Signaling Recession
  

  On June 2, 2016 the Bureau of Labor Statistics (BLS) stunned economic prognosticators and the financial media when it reported that 38,000 new jobs were created in May. The consensus forecast of Wall Street economists was 160,000 new jobs, with estimates ranging from 110,000 to 219,000. Even the most pessimistic forecast turned out grossly optimistic!

  At 720 Global we do not forecast economic data, choosing, instead to focus on the bigger macroeconomic picture. That said, we were not surprised by the recent weakness of jobs data. In fact, unlike most forecasters, we do not view the recent employment data as a one-off event but as further proof of a worsening trend in economic activity. In this article, we share a few thoughts that explain why.

  Corporate Profitability and Loan Delinquencies

  As of the first quarter of 2016, S&P 500 annual earnings have declined for six consecutive quarters and reside at levels last seen in 2013 (data: Standard & Poor’s). Historically, as profitability falters an increasing number of corporate borrowers become delinquent on loans, or worse they default entirely. During such periods corporate executives focus on reducing expenses, which typically translates into reducing headcount. Accordingly, corporate and business loan delinquencies can serve as a barometer of future employment trends.

  Commercial and Industrial (C&I) loan delinquency rates, have a strong historical correlation with employment. C&I delinquency rates have risen over the last year and a half, in-line with the decline in corporate profits, to levels last seen four years ago. While the overall delinquency rate is still relatively benign, it is increasing sharply. Another important observation about the delinquency growth rate is that delinquencies tend to trend in one direction for long periods. Note: C&I loans are loans to corporations and businesses and not individuals. Data on these loans are reported on by the Federal Reserve.

  The graph below, courtesy of Cyril Castelli of R-Cube, highlights the relationship between the rate of change in C&I delinquencies and employment. The delinquency rates are inverted to better highlight the correlation.

  

  Based on the historical correlation and the sharp growth in C&I loan delinquencies recently, it is conceivable employment drops abruptly over the next 6 months.

  BLS Non-Farm Payrolls Data

  The graph below charts the three-month moving average of the change in Non-Farm Payrolls against a backdrop of recession periods shaded in light blue.

  

  Over the last 50 years, the U.S. was either in recession or just recovering from one every time three-month job growth went negative (below zero on the graph). In fact, on average a recession began when the three-month average of job growth was still well above zero at 104,000. Currently, the three-month average sits at 116,000. If next month’s report shows fewer than 151,000 jobs created, the three-month average will fall below 104,000.

  ISM Non-Manufacturing

  The Institute for Supply Management (ISM) produces two indices based on a monthly survey of manufacturing and non-manufacturing business leaders. Within the two ISM indices are component indices such as new orders, employment and prices. Most relevant to this discussion is the ISM Non-Manufacturing – Employment index. The graph below plots this index against a backdrop of recession periods.

  

  A monthly reading above 50 signifies that a majority of those surveyed believe employment conditions are improving. A reading below 50 denotes the majority think employment conditions are worsening. The most recent reading was 49.7 but the three-month average of the ISM Non-Manufacturing Employment index has yet to break below 50. Historically, each time it has dropped below 50, the U.S. was already in a recession. That said, the three-month average of 51.0 is currently below the three-month average the last two times the U.S. economy entered a recession.

  Summary

  If C&I loan delinquencies prove, once again, to be a leading signal of employment trends, ensuing job losses will send the BLS employment data and the ISM non-manufacturing employment survey well below levels that, in the past, were recessionary.

  Personal consumption represents 70% of GDP, therefore a financially healthy and employed consumer plays an outsized role in swaying economic trends. While the employment picture has generally been improving since the financial crisis/recession of 2008-2009, that improvement is showing signs of faltering. A worsening employment picture has serious implications for GDP growth, increasing concerns we have consistently raised about asset price valuations, which are heavily dependent upon the outlook for economic growth.

  

  

• Stunning Emails Reveal How Clinton Foundation Donor Bought Seat As Hillary's Nuclear Weapons Advisor

  Forget Hillary’s personal email server: this is what true cronyism and criminal corruption looks like, and this is the biggest threat from a Hillary presidency.

  It has been widely speculated, if not proven, that donors to the Clinton Foundation who over the years have transferred hundreds of millions of dollars to the “charitable organization”, bought political favors with the Clintons in exchange for their generosity. That has now been confirmed thanks to a stunning ABC report which reveals how a major foundation donor – one who previously had practically no experience on intellgience matters – mysteriously ended up as a nuclear weapons advisor to Hillary during her tenure as Secretary of State.

  Worse, the person in question Rajiv K. Fernando, had been the head of a high frequency trading company, Chopper Trading (recently acquired by HFT powerhouse DRW), which may explain the unprecedented pull of the HFT lobby throughout all ranks of the US political apparatus. In other words, Fernando bought a seat to not only have advance knowledge of all US foreign policy, but to directly shape it, something he could then parlay in the forms of massive policy frontrunning profits thanks to his trading company.

  In other words, the appointment qualified Fernando, a trader in the public markets, for one of the highest levels of top secret access.

  Just as shocking was the aggressive retaliation with which the State Department tried to cover up the cronyism that literally “bought” Fernando’s seat as one of Hillary’s closest political advisors, and how – as a result of ongoing media pressure – Fernando just as mysteriously resigned only days after his appointment was announced when the State Department was unable to come up with a legitimate reason for him to stay on.

  The full shocking story follows, courtesy of ABC.

  Newly released State Department emails help reveal how a major Clinton Foundation donor was placed on a sensitive government intelligence advisory board even though he had no obvious experience in the field, a decision that appeared to baffle the department’s professional staff.

  The emails further reveal how, after inquiries from ABC News, the Clinton staff sought to “protect the name” of the Secretary, “stall” the ABC News reporter and ultimately accept the resignation of the donor just two days later.

  Copies of dozens of internal emails were provided to ABC News by the conservative political group Citizens United, which obtained them under the Freedom of Information Act after more the two years of litigation with the government.

  A prolific fundraiser for Democratic candidates and contributor to the Clinton Foundation, who later traveled with Bill Clinton on a trip to Africa, Rajiv K. Fernando’s only known qualification for a seat on the International Security Advisory Board (ISAB) was his technological know-how. The Chicago securities trader, who specialized in electronic investing, sat alongside an august collection of nuclear scientists, former cabinet secretaries and members of Congress to advise Hillary Clinton on the use of tactical nuclear weapons and on other crucial arms control issues.

  “We had no idea who he was,” one board member told ABC News.

  

  A State Department photograph shows the 2011 International Security Advisory
  Board. Rajiv Fernando is seated on the far left of the image

  Fernando’s lack of any known background in nuclear security caught the attention of several board members, and when ABC News first contacted the State Department in August 2011 seeking a copy of his resume, the emails show that confusion ensued among the career government officials who work with the advisory panel.

  “I have spoken to [State Department official and ISAB Executive Director Richard Hartman] privately, and it appears there is much more to this story that we’re unaware of,” wrote Jamie Mannina, the press aide who fielded the ABC News request. “We must protect the Secretary’s and Under Secretary’s name, as well as the integrity of the Board. I think it’s important to get down to the bottom of this before there’s any response.

  “As you can see from the attached, it’s natural to ask how he got onto the board when compared to the rest of the esteemed list of members,” Mannina wrote, referring to an attachment that was not included in the recent document release.

  

  Fernando himself would not answer questions from ABC News in 2011 about what qualified him for a seat on the board or led to his appointment. When ABC News finally caught up with Fernando at the 2012 Democratic convention, he became upset and said he was “not at liberty” to speak about it. Security threatened to have the ABC News reporter arrested.

  

  At the 2012 Democratic Convention, ABC News’ Brian Ross asks Rajiv Fernando
  about his 2011 appointment to the State Department’s International Security Advisory Board.

  Fernando’s expertise appeared to be in the arena of high-frequency trading –– a form of computer-generated stock trading. At the time of his appointment, he headed a firm, Chopper Trading, that was a leader in that field.

  Fernando’s history of campaign giving dated back at least to 2003 and was prolific — and almost exclusively to Democrats. He was an early supporter of Hillary Clinton’s 2008 bid for president, giving maximum contributions to her campaign, and to HillPAC, in 2007 and 2008. He also served as a fundraising bundler for Clinton, gathering more than $100,000 from others for her White House bid. After Barack Obama bested Clinton for the 2008 nomination, Fernando became a major fundraiser for the Obama campaign. Prior to his State Department appointment, Fernando had given between $100,000 and $250,000 to the William J. Clinton Foundation, and another $30,000 to a political advocacy group, WomenCount, that indirectly helped Hillary Clinton retire her lingering 2008 campaign debts by renting her campaign email list.

  The appointment qualified Fernando for one of the highest levels of top secret access, the emails show. Among those with whom Fernando served on the International Security Advisory Board was David A. Kay, the former head of the Iraq Survey Group and United Nations Chief Weapons Inspector; Lt. Gen. Brent Scowcroft, a former National Security Advisor to two presidents; two former congressmen; and former Sen. Chuck Robb. William Perry, the former Secretary of Defense, chaired the panel.

  “It is certainly a serious, knowledgeable and experienced group of experts,” said Bruce Blair, a Princeton professor whose principal research covers the technical and policy steps on the path toward the verifiable elimination of nuclear weapons. “Much of the focus has been on questions of nuclear stability and the risks of nuclear weapons use by Russia and Pakistan.”

  The newly released emails reveal that after ABC News started asking questions in August 2011, a State Department official who worked with the advisory board couldn’t immediately come up with a justification for Fernando serving on the panel. His and other emails make repeated references to “S”; ABC News has been told this is a common way to refer to the Secretary of State.

  “The true answer is simply that S staff (Cheryl Mills) added him,” wrote Wade Boese, who was Chief of Staff for the Office of the Under Secretary of State for Arms Control and International Security, in an email to Mannina, the press aide. “Raj was not on the list sent to S; he was added at their insistence.”

  

   Mills, a former deputy White House counsel, was serving as Clinton’s chief of staff at the time, and has been a longtime legal and political advisor.

  Four minutes later, Boese wrote to his boss, Richard Hartman, to alert him that Ellen Tauscher, who was then the Undersecretary for State for Arms Control and International Security Affairs, would be meeting with Mills to devise a response to the ABC News request.

  “Sorry this has become a headache,” he wrote.

  Hartman wrote the next morning to say he would “come up and brief you… about where Raj Fernando stands and the ABC News investigative journalist inquiries. You do need to hear about it.” Separately, in an email to another official, Hartman noted that it was “Cheryl Mills, who added Mr. Fernando’s name to the list of ISAB nominees.”

  When ABC News sent a follow-up inquiry about the qualifications of another board appointee, Massachusetts state Rep. Harold P. Naughton, Jr., Boese wrote to Hartman to say the department would have a far easier time explaining Naughton’s credentials. “The case for Rep. Naughton is an easy one. We are on solid ground,” he said.

  

  By this point, Fernando himself had been looped into the discussion. He and Hartman exchanged emails, but the entire text of Fernando’s letter was redacted by the State Department prior to its release.

  Twice, Mannina was instructed to stall with ABC News, before Mills sent a public statement. It announced Fernando’s abrupt decision to step down.

  

  “Mr. Fernando chose to resign from the Board earlier this month citing additional time needed to devote to his business,” it reads, noting that membership on the board was required to be “fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee.”

  “As President and CEO of Chopper Trading, Mr. Fernando brought a unique perspective to ISAB. He has years of experience in the private sector in implementing sophisticated risk management tools, information technology and international finance,” the statement says.

  The statement was emailed to ABC News two days after Fernando’s resignation and four days after the initial ABC News inquiry.

  Fernando’s letter of resignation to Clinton says he “intended to devote a substantial amount of time to the work of ISAB in furtherance of its objectives. However, the unique, unexpected, and excessive volatility in the international markets these last few weeks and months require[d him] to focus [his] energy on the operations of [his] company.”

  Additional emails collected from Hillary Clinton’s personal server only hint at her possible involvement in Fernando’s selection to the board. The records request for documents about Fernando’s appointment produced a chain of correspondence from 2010 with the subject line “ISAB” — or International Security Advisory Board. In those, Mills writes, “The secretary had two other names she wanted looked at.” The names are redacted. Mills then forwarded the response to “H,” which is the designation for Clinton’s personal account. Three minutes later Clinton forwards the email chain to another State official and says simply, “Pls print.”

  The Clinton campaign declined requests from ABC News to make Mills available for an interview. Campaign spokesman Nick Merrill deferred to the U.S. State Department, which issued a statement saying the board’s charter specifically calls for a membership that reflects “a balance of backgrounds and points of view. Furthermore, it is not unusual for the State Department Chief of Staff to be involved in personnel matters.”

  

  Cheryl Mills, former State Department chief of staff under former Secretary of State
  Hillary Clinton, attends a House Select Committee on Benghazi hearing in Washington, Oct. 22, 2015

  Fernando did not respond to messages left by ABC News at home and mobile numbers listed for Fernando, nor to a letter left at the office of his current business.

  As is customary with a new administration, the make-up of the board changed substantially when Clinton took over the State Department, according to Amb. James Woolsey, who served on the panel from 2006 to 2009. But the seriousness of its mission remained the same.

  He said the board’s primary purpose was to gather an array of experts on nuclear weapons and arms control to constantly assess and update the nation’s nuclear strategy.

  “Most things that involve nuclear weapons and nuclear strategy are dealt with at a pretty sensitive basis — top secret,” he said, noting that participants meet in a secure facility and are restricted in what materials they can discuss.

  That is not typically the realm of political donors, Woolsey said. Though, he added, it would not be impossible for someone lacking a security background to make a contribution to the panel. “It would depend on how smart and dedicated this person was… I would think you would have to devote some real time to getting up to speed,” he said.

  Fernando is now a board member of a private group called the American Security Project, which describes itself as “a nonpartisan organization created to educate the American public and the world about the changing nature of national security in the 21st Century.” He also identifies himself online as a member of the Chicago Council on Global Affairs and says he’s involved with a Washington think tank.

  And he continued to donate to Democrats, and to Clinton. He emerged as one of the first “bundlers” to raise money for Clinton’s 2016 bid. And in July 2015, he hosted a fundraiser for Clinton at his Chicago home. Fernando has also continued to donate to the Clinton Foundation. He now is listed on the charity’s website as having given between $1 million and $5 million.

  About six months after Fernando resigned from the State Department advisory board, he was invited to attend a White House State Dinner, honoring the British Prime Minister. And this summer Fernando will serve as a super delegate at the Democratic National Convention. According to Chicago media reports, he has committed to supporting Clinton.

  * * *

  And that, for a mere $1-$5 million sunk cost, one can buy influence, and inside information, which – in this specific case – can then be traded and generate hundreds of millions in profits, an IRR that is too big for Excel to calculate.

  The punchline: with thousands of generous Clinton Foundation donating “Fernandos” waiting in the wings, it is only a matter of time before President Clinton’s entire staff is comprised of people who did their math and realized that the US government is merely a means to an end: the end, of course, being to get very, very rich at the expense of the American people whom they – and Hillary – should be serving.

  * * *

  The following emails were obtained by the conservative political group Citizens United, which obtained them under the Freedom of Information Act, and were provided to ABC News. ABC News has arranged the emails in chronological order. Scroll through the emails below or CLICK HERE to open them in a new window.

  
  

  

  

• Former Fed President: "All My Very Rich Friends Are Hoarding Cash"

  There were numerous interesting, informative and mostly bearish speakers during the latest Strategic Investment Conference held at the end of May.  Among them were Lacy Hunt, David Rosenberg, Neil Howe, Jim Grant, Mark Yusko, Gary Shilling, and  JohnMauldin (readers can watch video interviews with these speakers on Mauldin Economics’ Youtube channel and their full presentations can be found at the following page) all of whom painted a very pessimistic picture for the stock market but, as Tony Sagami points out, the most alarming comment came from Richard Fisher.

  Fisher was president of the Federal Reserve Bank of Dallas and a voting member of the Federal Open Market Committee (FOMC) from 2005 to 2015. He was one of, perhaps the only, skeptic on the Fed board going into the great financial crisis, warning on numerous occasions about the upcoming crash only to be ignored by his wiser peers and certainly Alan Greenspan and Ben Bernanke. He was also ignored in the post-Lehman era by both Bernanke and Janet Yellen.

  Among his biggest concerns:

  • Government Debt: he is worried about the $19 trillion US government debt (up $11 trillion since 2008) because the Fed has fired all its monetary bullets and can’t expand the balance sheet any further.
  • China and social instability: he thinks communist leaders care about production but not efficiency. “They might produce more, but our products work,” jokes Fisher. There are entire cities in China with nobody living in them, according to him. Fisher says the biggest problem in China is social stability. “I’m deeply worried about their ability to maintain social stability,” but… “It doesn’t affect us directly.” Another risk in China is that millions of people are pulling their money out of the country.
  • Low interest rates don’t work: “We had a long period of moderation and low interet rares, which did nothing to adjust.” The online countries that adjusted were Poland and Mexico, according to Fisher.
  • The failed Brazilian experiment: Fisher said Brazil is a symbol of what’s wrong with emerging markets. They lived through the crisis but learned nothing from it.“Brazil has always been a country with potential, and it’s never been realized.”
  • Raising rates is long overdue: he made the point that raising interest rates won’t ruin the economy. “The debt rollover is what we should be worried about. Yet nobody is talking about it.”
  • It’s all one big Ponzi scheme: “Our government has to borrow money just to pay interest.” Or as Minsky would say, this is the Ponzi finance stage, just before everything goes to hell. “We have a lot of unsound policy in place. It is agreeable, but in my view, it is unsound.”
  • The death of the middle class: Fisher says the lowest income quartile has seen an increase in income. The highest quartile has also seen a massive increase in income. The two middle quartiles were flat over a period of many years. “This is why we have such support for people like Donald Trump and Bernie Sanders.”
  • A ritalin monetary policy: “We have what I call a Ritalin based monetary policy.” Now Janet Yellen’s job is to wean it. “It has to do with taking the distortions out of the financial markets and letting the markets down easier.” “These are the lowest interest rates in 239 years of history.”

  But as Sagami points out, Fisher’s most telling comment came during the Q&A session when he was asked how his personal portfolio was positioned. Fisher’s response: “In the fetal position.” Moreover, he also said that “all my very rich friends are hoarding cash.” 

  Not some, not many. All.

  Which, incidentally may explain why as algos levitate markets on ever lower volume (volume which returns with a vengeance on even a moderate selloff such as today’s), “smart money“, insiders, retail investors and foreigners continue to quietly liquidate stocks for weeks on end. While it is unclear who is buying, what is clear is that increasingly more are getting out of risk assets and getting into cash.

  For the sake of Fisher’s friends we hope the cash they are hoarding is physical, and not of the electronic variety. After all, as Greece has shown vividly, it would only take the flick of a switch for the government to lock up, or Corzine, some or all of the $10+ trillion in bank deposits. And ultimately, since helicopter money is coming, even that physical cash will soon be worthless courtesy of near-infinite dilute, and the only monetary asset which would survive the hyperinflationary conflagration of the grand reset, is the same precious metals that have preserved their value through over 5,000 years of human stupidity. Which, ironically, reminds us that just because one is rich that does not make them smart..

  

  

• Government Failure: Audit Finds FDA's Inadequate Policies Are Leaving The Nation At Risk

  If it is ever discovered that tainted food has been released to the public for consumption, it is the Food and Drug Administration's (FDA) responsibility to ensure a recall of the product takes place.

  In a very disturbing audit finding Wednesday, the Department of Health and Human Services' Office of Inspector General has determined that due to inadequate policies and procedures, the FDA is too slow in ordering companies to recall tainted foods.

  

  Here are some comments from the memo sent to the FDA from the Inspector General regarding the audit findings.

  The audit memo opens by stating that the FDA doesn't have an efficient and effective food recall process to ensure the safety of the Nation's food supply.

  The purpose of this memorandum is to alert you to a preliminary finding from our ongoing audit of the Food and Drug Administration (FDA) food recall program. One of the objectives of our audit is to determine whether FDA has an efficient and effective food recall initiation process that helps ensure the safety of the Nation’s food supply.

   

  We found that FDA did not have an efficient and effective food recall initiation process that helps ensure the safety of the Nation’s food supply. Specifically, FDA did not have policies and procedures to ensure that firms1 or responsible parties2 (collectively referred to in this document as “firms”) initiated voluntary food recalls promptly. This issue is a significant matter and requires FDA’s immediate attention.

  Two examples from the findings were specifically called out, with one case being a strain of Salmonella found in nut butter in which 165 days passed before a recall was issued. Another example involved various cheese products in which people became ill from Listeria – 81 days passed before a recall was issued. In that instance, one infant even died.

  For all 30 voluntary recalls in our sample, after FDA first became aware that an adulterated or misbranded product could be in the food supply chain, it did not prescribe a timeline for each firm to initiate a recall. For two recalls, the firms did not initiate the recall of all potentially harmful products until 165 days and 81 days after FDA became aware of the potential contaminations. The delays in the firms’ recalls may have occurred because FDA did not have policies and procedures that instruct its recall staff to establish set timeframes for (1) FDA to request that firms voluntarily recall their products and (2) firms to initiate voluntary food recalls. As a result, consumers remained at risk of illness or death for several weeks after FDA knew of potentially hazardous food.

   

  For example: 

   

  • In a recall involving nut butter at least 14 people became ill with a strain of Salmonella indistinguishable from or linked to the strain found at the firm’s manufacturing facility. 165 days passed from the date FDA identified the potentially adulterated product and the date the firm initiated a voluntary food recall. See Attachment A for a timeline of events for this recall.

  • In a series of recalls involving various cheese products, at least nine people became ill from Listeria monocytogenes, including one infant who died. According to FDA records, the Centers for Disease Control and Prevention (CDC) also linked two fetal losses to these illnesses. 81 days passed from the date FDA became aware of the adulterated product and the date the firm had voluntarily recalled all affected products. See Attachment B for a timeline of events for this recall.

  And in conclusion, the memo reiterates its finding that there are inadequate policies in place to take prompt actions in order to initiate a recall, and that consumers remained at risk because of that.

  FDA does not have adequate policies and procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. As a result, consumers remained at risk of illness or death for several weeks after FDA was aware of a potentially hazardous food in the supply chain.

   

  We suggest that FDA revise its policies and procedures to instruct recall staff to establish set timeframes for (1) FDA to request that firms voluntarily recall their products and (2) firms to initiate voluntary food recalls.

  * * *

  In summary, everyone should feel good about the precision in which the government runs its programs, especially as it relates to the health and safety of an entire nation.

  Here is Attachment A, which walks through the timeline for the Salmonella finding.

  

  And attachment B, which walks through the timeline of the Listeria finding.

  

  

  

• A Donald Trump Voter Went To See Him Speak. Protesters Broke His Nose.

  Authored by Juan Hernandez, originally posted at The Washington Post

  This isn't how politics is supposed to work in the United States.

  

  SANTA CLARA, Calif. — Last Thursday, I left work about 5 p.m. and drove to the San Jose Convention Center to hear Donald Trump speak.

  I’ve been voting for conservative candidates for 15 years and a registered Republican since 2015. Now that the general election is underway, I believe Trump is the best candidate to fix our country’s many problems, and I believe he’s going to be the next commander in chief. So I was excited to hear him, and to show my support. Walking into the rally with a friend, I was a little wary: Trump’s speech to the California Republican convention in Burlingame had been disrupted by protesters, and I wasn’t sure whether to expect a similar scene in San Jose. But we got to the event early, and we must have been inside already by the time a crowd of protesters gathered in the streets near the convention center.

  The speech really got me energized. I got a new sense of appreciation and respect for Trump after a Bernie Sanders supporter interrupted him with a sign. Trump didn’t blink: “Darling, there’s no way he can win, but keep your sign high,” he said. That is the president that I want. It was great being around so many Republicans — in the Bay Area, we don’t have a lot of that, so it was great to feel the camaraderie of being part of the GOP.

  My trouble began once the rally was over.

  My friend and I joined a crowd of Trump supporters who had all left the convention center around the same time. The garage where we had parked our car was right next to the building, but police were directing everyone around the block to another garage entrance instead. The farther we walked, the fewer Trump fans were with us — people began peeling off to go to restaurants or bars in the area, or to other garages nearby.

  And suddenly, there were protesters everywhere. Some were holding Mexican flags, or burning American ones. They were yelling “F— Trump!” at us and cornering us. Some of them started grabbing Trump supporters — they were going up and slugging people, sucker-punching people, just picking random people out. As much as we wanted to help, because our fellow Republicans were getting hit, I knew any moment that could be me. So my friend and I just kept walking — sometimes, we’d be running. We saw police standing nearby, but they didn’t do anything. That scared me, because I thought, “Okay, if I’m next, there’s going to be no cops.”

  About a block from the garage entrance, we turned down the street and found a line of protesters standing in our way. To get back to our car, we’d have to go through them. My friend and I were wearing “Make America Great Again” Trump hats. We were targets, and I was terrified. I could feel it coming — they would look at me and start walking up to me.

  Before we could make it into the garage, four or five men surrounded me, and another four surrounded my friend. They just started swinging. We swung back as best as we could. My main thing was I didn’t want to fall; I didn’t want to be knocked down. I’m not a big guy, but I can defend myself as best I can if it’s one on one — but not when they have so much anger against us.

  One of the blows caught my nose, and blood just started pouring out. That kind of stunned them, and they backed off a quick second. My adrenaline kicked in; I felt punches on my head, and I felt the punch that hit my nose, but I was in survival mode by then, and I didn’t realize until later how much it hurt. I called my friend, “Okay, let’s go!”

  We ran into the parking garage, and we thought we were safe, but there were another few dozen protesters there, too. We got in our car and headed toward the exit. Some protesters jumped on the cars in front of us, but we eventually made it out. My friend drove me to the emergency room because my nose was pouring blood. I had a broken nose, and because I was covered with scratches, I had to get a tetanus shot, too. It took a lot out of me, much more than I realized at first; my headaches and soreness didn’t start to go away until a week later.

  

  I still can’t believe how poorly the police handled the protests. I live by Levi’s Stadium, where the Super Bowl was. They had every single cop out there. Yet knowing the violence that’s been breaking out near Trump rallies, San Jose wasn’t prepared for it last week? So the Los Angeles chapter of Log Cabin Republicans held a news conference back in San Jose on Wednesday, to get some answers from the city’s mayor, Sam Liccardo, and its police department about why they let me and other people get attacked and only made a few arrests.

  The whole thing made me angry. Here in Northern California, I feel like I’m a unicorn: I’m a gay Hispanic who’s a Republican. It was much harder to come out as a Trump supporter than it was to come out as gay — the minute you say you’re for Trump, everyone comes at you — but this has pushed me out of the closet about it completely.

  I should be able to vote for whom I want, and I shouldn’t have to deal with violence to go hear my candidate speak. If people really want to protest at rallies, they should do it peacefully. I have a young niece and nephew, and I don’t want them to think this is how politics work in the United States. We can’t let our freedom of speech and our freedom of assembly be tarnished by politicians like those in San Jose who do not have our safety at heart.

  

  

• Sterling Volatility Explodes To Record High As Brexit Looms

  With two polls being unleashed on the markets today indicating the largest lead for Brexit over Bremain yet with regard the UK referendum, it seems FX traders at least have begun to wake up to the short-term uncertainties a "leave" vote may entail. A short-term measure of expected price swings for the pound climbed for a third week as traders sought protection as two-week implied volatility, a period that covers the June 23 voting date, closed at its highest on record today.

  With just 13 days left, things are not looking good for Cameron and his cronies…

  • U.K. Poll on EU Shows 45% Remain, 55% Leave: ORB/Independent
  • "LEAVE" ON 53 PCT, "REMAIN" ON 47 PCT BEFORE BRITAIN'S EU REFERENDUM – SKY NEWS

  And it is having an effect…

  

   

  It seems this "wait til the last minute too panic hedge" behavior is not unusual in the new normal as Credit Suisse describes the same occurred last year in the lead up to Grexit...In the case of Brexit, equity markets waiting until last minute to price in equity risk premium similar to Grexit last year?

  If this is anything like the “Grexit” catalyst last year, equity markets may wait until the last minute to price in the appropriate risk premium.

   

  As you can see from the EFA vol chart below, even though “Grexit” was a well-known and well-anticipated catalyst last year, EFA 1M implied vol was still trading as low as 11.7% the week before Greece’s June 30th IMF repayment deadline.

   

  

   

  EFA 1M implied vol ended up surging 8 vol pts in the final week before the deadline and another 3 vol pts after a surprise referendum was called over the July 4th weekend last year.

   

  And it wasn’t just EFA. VIX also didn’t start reacting to “Grexit” risk until the final week when it jumped from 12 to 19.

   

  Will the same thing happen this time? If so, I think it makes sense to hedge now when you can (and when it’s cheap!), not when you have to in the final days before the deadline when implied vols will have already climbed higher.

  Is this merely another symptom of the now deeply embedded belief that markets are invincible thanks to The Central Bank Put? Why hedge? Why reduce exposure? When you know… because The Fed promised… that if stocks fall, they will magically levitated to confirm that all is well and the central planners are in control. But, as Charles Hugh-Smith recently noted, by making the stock market the only game in town, the Powers That Be can no longer afford to let it decline for any reason…

  This new rule simplifies trading, confidence and sentiment: Bulls can now relax, knowing that the market will never be allowed to decline. Sentiment can stay pegged at "extreme greed" forever, and there is no longer any need to hedge long positions because markets will only move higher.

   

  Volatility will drift lower because any decline will be mere signal noise, only of interest to high-frequency trading (HFT) machines skimming pennies.

   

  Too much is riding on stocks to let them drift lower. The stock market is not only the critical signaling device that tells the world all is well and everything is getting better every day, in every way, it's also the collateral for all sorts of highly profitable schemes, and the financial foundation of the institutions that are supposed to fund pensions and fulfill insurance redemptions.

   

  And even more important, the stock market is the money machine that enables CEOs and top management to push their stocks higher with buy-backs and then cash out their personal stock options for glorious millions.

   

  By making the stock market the only game in town, the Powers That Be can no longer afford to let it decline for any reason: technical, fundamental, quantitative, it no longer matters–stocks must drift higher forever without disruption.

   

  This is what happens when you strip out volatility and game the system: the system loses all natural resiliency and becomes increasingly brittle and fragile. The only way to make sure it doesn't tremble and shatter into pieces is to guarantee that no decline will be allowed.

  Of course then you don't have a market–you have a simulacrum market, a phony fragile shell propped up for PR purposes.

  That is until the powers that be allow a nation to exercise their own sovereignty, to vote not for a centralized totalitarian state but for democracy and the right to freely crash their economy (if Osborne and Cameron are to be believed). Will a Brexit vote be allowed to spoil the party? Perhaps an increasing number of Brits have had enough of 'Project Fear' and are uninterested in what the US president's view on their freedom is…

  

  

• Gawker Files For Bankruptcy

  Moments ago the financially challenged tabloid nemesis of Peter Thiel, Nick Denton’s Gawker Media, filed for bankrutpcy – an outcome predicted by many as inevitable – listing assets between $50 and $100 million, and liabilities between $100 and $500 million.

  No matter on which side of the Thiel-Denton debate one sides, we doubt many tears will be shed as yet another chapter in “new media” comes to a close.

  The WSJ adds that the company will be put for sale in bankruptcy auction, which will begin with an opening bid of $100 million from the digital media company and publisher Ziff Davis LLC, according to a person familiar with the matter. The sale was triggered after the judge overseeing the invasion-of-privacy case brought by Hulk Hogan—whose real name is Terry Bollea—declined to issue a stay pending Gawker’s appeal. That required the company to put up a $50 million bond.

  Why is the company filing now? Simple: to make Hulk Hogan’s aka Terry Bollea’s $130 million claim part of the prepetition, unsecured liabiltiies.

  

   

  “Whatcha gonna do when Chapter 11 runs wild on you”

  

   

  Proceeds from a sale will go into a fund to finance further litigation costs and cover whatever damages may ultimately be leveled following the appeals process, which could take years to resolve. Gawker has said that it expects to ultimately prevail.

  Whatever money is left at the end of the legal process will go to Nick Denton, Gawker’s founder who owns most of the company, and other shareholders. Earlier this year, Columbus Nova Technology Partners took an undisclosed minority stake in the media company as it shored up its books for the trial.

  Full filing below:

  

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