- How Europe Is Getting Rich by Fueling Its Own Terror Epidemic
Submitted by Darius Shahtahmasebi via TheAntiMedia.org,
Though Europe does not have the rates of gun violence the United States continues to grapple with, European governments have made over a billion euros by fueling gun violence in the Middle East and North Africa.
A report conducted by a team of reporters from the Balkan Investigative Reporting Network (BIRN) and the Organized Crime and Corruption Reporting Project (OCCRP) found a group of European nations has been funneling arms into the Middle East region since 2012, making at least 1.2 billion euros in the process.
According to the report, 68 flights that took place within 13 months transported weapons and ammunition to the Middle East, including to NATO member Turkey, which in turn “funnelled arms into brutal civil wars in Syria and Yemen.” The report also notes that these flights make up only a small portion of the 1.2 billion euros in arms deals between Europe and the Middle East since 2012.
The report’s conclusions are horrifying, to say the least. The report states:
“Arms export licenses, which are supposed to guarantee the final destination of the goods, have been granted despite ample evidence that weapons are being diverted to Syrian and other armed groups accused of widespread human rights abuses and atrocities.”
Considering Europe is battling a continually rising terrorist threat, they seem to be going about tackling this issue the wrong way.
Surely the best way to counter terrorism is to cease funding it in the first place.
One astounding aspect of the report is that the lucrative war-profiteering business involves nations the world would not usually regard as overly-interested in war. The countries contributing to the rising terror threat, as identified by the report, are Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, and Romania, among others.
This report adds to the already glaring problem of European countries making billions of dollars off the death and destruction of Middle Eastern civilian life. The Stockholm International Peace Research Institute (SIPRI) found the United Kingdom was second only to the United States in arms sales, making up 10.4 percent of the total $401 billion worth of arms sold around the world for the 2014 period.
Although these figures refer directly to companies selling arms, the fact remains that European governments do nothing to deter this. In fact, former U.K. Prime Minister David Cameron insists the U.K. has “one of the strictest regimes anywhere in the world for sales of defence equipment but we do believe that countries have a right to self-defence.”
Shamefully, the United Kingdom’s billion dollar arms sales have been fueling the conflict in Yemen — the poorest and most disadvantaged country in the Arab region — by arming the aggressive Saudi Arabian regime. Saudi Arabia’s ongoing intervention in Yemen merely benefits al-Qaeda.
Arms sales from Britain to human rights abusers are only increasing. The idea that European governments want to prevent terrorist attacks on the European mainland is ludicrous given the fact European governments continue to directly arm terrorist groups and brutal regimes that export jihadist philosophies.
But hey, at least they made a billion dollars, right?
- Musical Chairs
Musical Chairs
Posted with permission and written by Jeff Thomas (CLICK HERE FOR ORIGINAL)
You’re familiar with the children’s game of musical chairs. Ten children walk around nine chairs whilst listening to music. When the music stops, each must quickly find a chair and sit in it. One child is out of luck and is out of the game. Then a chair is removed and the nine remaining children walk around the eight remaining chairs, waiting for the music to stop again.
Economics is a bit like musical chairs. In a recession, the economy takes a hit and there are some casualties. Some players fail to get a chair in time and are out of the game. The game then goes on without them. The economy eventually recovers.
But a depression is a different game entirely. Since 2007, the world has been in an unacknowledged depression. A depression is like a game of musical chairs in which ten children are walking around, but suddenly nine of the chairs are taken away. This means that nine of the children will soon be out of the game. But it also means that all ten understand that the odds of them remaining in the game are quite slim and that desperate times call for desperate measures. It’s time to toss out the rule book and do whatever you have to, to get the one remaining chair.
Of course, the pundits officially deny that we have even been in a depression. They regularly describe the world as “in recovery from the 2008-2010 recession,” but the “shovel-ready jobs” that are “on the way” never quite materialize. The “green shoots” never seem to blossom. So, what’s going on here?
Depressions do not occur all at once. It takes time for them to bottom and, if an economy is propped up through economic heroin (debt) the Big Crash can be a long time in coming.
In that regard, this one is one for the record books. As Doug Casey is fond of saying, a depression is like a hurricane. First there are the initial crashes, then a calm as the eye of the hurricane passes over, then, we enter the trailing edge of the other side of the hurricane. This is the time when things really get rough – when even the politicians will start using the dreaded “D” word. We have entered that final stage, as the economic symptoms demonstrate, and this is the time when the game of musical chairs will evolve into something quite a bit nastier.
In normal economic times, even including recession periods, we observe financial institutions maintaining their staunchly conservative image. For the most part, they deliver as promised. But, as we move into the trailing edge of the second half of the hurricane, we notice more and more that the bankers are rewriting the rule book in order to take possession of the wealth that they previously held in trust for their depositors.
And they don’t do this in isolation. They do it with the aid of the governments of the day. New laws are written in advance of the crisis period to assure that the banks can plunder the deposits with impunity. Since 2010, such laws have been passed in the EU, the US, Canada and other jurisdictions.
Trial balloons have been sent up to ascertain to what degree they will get away with their freezes and confiscations. Greece has been an excellent trial balloon for the freezes and Cyprus has done the same for the confiscations. The world is now as ready as it’s going to be for the game to be played on an international level.
So what will it look like, this game of musical chairs on steroids? Well, first we’ll see the sudden crashes of markets and/or defaults on debts. Shortly thereafter, one Monday morning (or more likely one Tuesday after a long weekend) the financial institutions will fail to open their doors. The media will announce a “temporary state of emergency” during which the governments and banks must resolve some difficulties in order to “assure a continued sound economy.” Until that time, the banks will either remain shut, or will process only small transactions. (This latter announcement is a nice way of saying that the depositors will be on an allowance from the bank until further notice.)
Much as Greeks may now withdraw €420 per week, much of the rest of the world will be operated under a similar allowance. What about a business that would need to pay that amount for even one salary? What of a restaurant that would pay that amount for even a small food delivery? That remains to be seen – but business will not be robust.
Of one thing we can be sure. The banks will part with no more than they absolutely have to in order to avoid riots. Their wish will be to confiscate as much as possible themselves, and the new laws allow them to do just that.
And that’s when we’ll discover that nine chairs have disappeared.
Remember, what we’re looking at is the end-game. The banks will no longer maintain the ruse of client-concern beyond this point. Each player grabs as much as he is able, because banking as we know it will come to an end.
To be sure, a new banking system will rise from the ashes in a few years, but for now, the wealth that’s on the table will be swept up by those who have the laws on their side.
Many of the most august names in banking may well disappear over the next few years. Some institutions folded in 2008, but re-opened under new names (minus the debt that sank them in the first place). Others, like Bear-Stearns and Lehman Brothers are gone for good. They will be joined by a host of other stalwarts of the industry. Merrill Lynch, AIG, Royal Bank of Scotland, Fortis, Fannie Mae and Freddie Mac all teetered on the edge of collapse in 2008. These and many more stand to go off the cliff in the coming crisis.
And they will not go with dignity. They will go out with a last-minute grab of as much of the deposits as they can manage. (Those who have taken part in a bank liquidation will know that, what little the departing bankers leave behind on the table, the liquidators gobble up in fees. Depositors, at best, get the scraps.)
Well. Pretty grim. If history repeats, as it generally does, more than 95% of depositors will lose most or all of their savings. But there will be those who are only impacted in a minor way – those who decided to get their wealth (no matter how large or small) out of the banks before the crash.
How so? First, and most essential, remove all your wealth (except for a maximum of three months’ operating capital) from the bank. Second, move it to a jurisdiction that’s at a lesser risk than the jurisdictions stated above. (Pick the healthiest one you can find, with the lowest taxation rate and a reputation for stable government over decades.) Third, since banks in other jurisdictions may also be at risk, place your wealth in those forms of ownership that are least likely to be under attack from your home government (precious metals and real estate). Overseas real estate is the safest bet, as any attempt for a foreign government to confiscate it amounts to an act of war. However, real estate is not the most liquid means of holding wealth, so quite a bit must be held in precious metals – again in the overseas jurisdiction where it’s harder to confiscate.
Should you need a sudden cash infusion at home, precious metals are always easy to sell quickly and the proceeds are easily repatriated (countries in economic trouble never complain about money coming in, only money going out.)
Finally, if possible, create an overseas location for yourself, either where your wealth is, or another location – one that’s likely to be peaceful to live in, when crisis reaches your home jurisdiction.
In this game, the odds of being the lucky one who gets the last chair are very slim. The alternative requires more preparation, but is, by far, the safer choice.
Please email with any questions about this article or precious metals HERE
Musical Chairs
Posted with permission and written by Jeff Thomas (CLICK HERE FOR ORIGINAL) - War Or Peace: The Essential Question Before American Voters On November 8th
Submitted by Gilbert Doctorow via Russia-Insider.com,
In the 1992 presidential election, the campaign team of Bill Clinton had the remarkable insight to simplify the choice before the American electorate in November, encapsulating the whole thought process in the phrase “it’s the economy, stupid.” Following this advice, voters ignored the foreign policy triumphs of President George W. Bush’s administration, including the recently won war against Iraq to liberate occupied Kuwait, and the slightly more remote “victory” in the Cold War, which Bush recalled to the nation in the forlorn hope of eliciting gratitude. Indeed, going into the elections, the economy was anemic, for cyclical reasons, and it was not to the incumbent’s advantage that this fact be highlighted.
Today, as another Clinton faces off with an unconventional and widely demonized Republican candidate, the economy is once again anemic, though this time under the stewardship of a Democratic administration, and again for cyclical reasons, but the economy and the domestic welfare programs that are so dependent on vibrant performance are not what the election is all about.
Voters will not confront a typical Right-Left choice, although supporters of Hillary Clinton would like to play it that way. It will not be about who gets more of the economic pie and who gets less, who is more equal than others and who is less equal.
Charges that Hillary is in the pocket of Wall Street and big business, who have generously financed her campaign, were first brought against her very effectively and persistently by her opponent in the Democratic primaries, Bernie Sanders, who embodied the Left by his persona and points in his platform. He lost to Hillary, the Centrist. Meanwhile, across the court, notwithstanding the support he has consistently received from Tea Party Republicans for his anti-establishment rhetoric, Trump is in many ways more of a Nelson Rockefeller Republican on domestic economic issues, that is to say a Centrist, who, unlike that quintessential Tea Party campaigner, Ron Paul, has no desire to tear down the Federal Reserve and deconstruct the federal government.
In matters of substance as opposed to character assassination that both parties’ candidates have engaged in freely, what separates the candidates and makes it worthwhile to register and vote on November 8th is the domain of international relations. This, as a general rule, is the only area where a president has free hands anyway, whatever position his party holds in the Congress. Here the choice facing voters is stark, I would say existential: do we want War or Peace?
Do we want to pursue our path of global hegemony, which is bringing us into growing confrontation with Russia, meaning a high probability of war, (the policy of Hillary Clinton), or do we want a harmonious international order in which the U.S. plays its role at the board of governors, just like other major world powers (the policy of Donald Trump).
Let me go one step further and explain what “war” means, since it is not something that gets much attention in our media, whereas it is at the top of the news each day in Russia.
“War” does not mean Cold War-II, a kind of scab you can pick to indulge a pleasure in pain that is not life threatening. War means what our military like to call “kinetics” to mask the horror of it all. It means live ammunition, ranging from conventional to thermonuclear devices that can devastate large swathes of the United States if we play our hand badly, as would likely be the case for reasons I explain below should Hillary and her flock of Neocon armchair strategists take the reins of power in January 2017.
Let us consider the following:
1. Where we are presently in relations with the world’s only other nuclear superpower, Russia, which, I remind you, together with the United States, has 50:50 ownership of 95% of all nuclear warheads on earth.
Briefly, we are in an escalating confrontation with the Russians, who have said openly and clearly that they view our ongoing build-up of NATO forces at their borders in the Baltics and Poland as posing an unacceptable threat to their security. They have also said openly and clearly that our completion this spring of what is called an anti-missile defense base in Romania and construction of a similar base in Poland, due for completion in 2017, threatens to upset the strategic nuclear balance by giving the United States a first strike capability. Whether they are right or wrong in their assessment of our words and deeds is beside the point. They are laying down their response based on their view of us, not our view of us.
For the past year or more, the Kremlin has said vaguely that host countries of the missile defense bases would be in their “crosshairs.” Russian positions have become more specific and more threatening following the NATO summit in Warsaw in early July that approved an American led program of provocative military exercises near Russia’s borders and stationing in the Baltic States of 4 brigades with mixed NATO Member State contingents. This has forced the Russian military to move to the previously ‘safe’ and undefended Western frontier region near St Petersburg large masses of troops and equipment from the center of their country, east of Moscow. By their public statements, the Russians have made no secret of their intention to act preemptively, as necessary, to wipe out the US bases in Romania and Poland and restore what they see as strategic parity.
Just a couple of weeks ago, on a widely watched Russian state television run political talk show, Duma deputy and leader of the nationalist LDPR party Vladimir Zhirinovsky said that Germans risked utter destruction if they continued on their present track of operating Bundeswehr forces in the Baltics. Zhirinovsky would never make such threats without tacit Kremlin backing.
Vladimir Zhirinovsky explaining that NATO's current course will result in war
For his part, in a recent press conference, President Vladimir Putin asked rhetorically why Western leaders “don’t get it” – why they are not heeding Russia’s warnings on its determination to protect vital security interests, including by means of preemptive strikes.
In this press conference from June 2016, Putin explains in detail why Russia sees NATO's behavior as threatening, and why Russia will be forced to react unless NATO changes course. Strongly recommended!
Indeed, why are we tone deaf when our very survival is at risk?
2. Why is it that the American political Establishment, of which Hillary Clinton is the standard bearer in this presidential election, does not take the Russians seriously?
Back in the 1960s and 70s, when the bard Tom Lehrer was touring college campuses with his irreverent song devoted to the nuclear Armageddon “We’ll all go together when we go,” Americans feared and even respected the USSR for what its military arsenal signified.
Our sense that we had “won” the Cold War when the USSR collapsed in 1992 was followed by our witnessing the economic collapse of Russia as it struggled to make a transition from directed to market economy in the 1990s. Meanwhile Russia’s national wealth was siphoned off by newly emerged “oligarchs.” The vast majority of the population was pauperized in that period, as we plainly understood when our religious communities sent assistance packages to the Russian people.
And Russia’s political infrastructure fell apart, replaced by regional satrapies and would- be successor states from among minority nationalities. The net result is that the United States Establishment’s respect for Russia degraded into open mockery. The fact that Russia was led in the 1990s by a confirmed alcoholic with multiple health problems that took him away from his desk for weeks at a time, only contributed to the sense that Russia had become the “Sick Man of Europe” both literally and figuratively.
This image of Russia has persisted in the thinking of our Establishment, when it is not jostled by images of a tin-pot dictator named Vladimir Putin who holds onto power by making frightening poses against foreign powers, in particular, against the United States. For our establishment, Russia remains, as Barack Obama said a couple of years ago, “just a regional power,” “ a bully” in its neighborhood who has to be put in his place, and also a country that produces nothing that anyone wants, to which no one willingly emigrates (all patently false statements). In sharing all of these views, Hillary is no different from the rest of our political Establishment.
It is Donald Trump and his questioning the wisdom of poking the Russian bear in the eye who is the odd man out. What makes Hillary different from her Establishment peers is the opportunity she has had in the Obama administration to act on her beliefs with all the powers of Secretary of State.
We should have given our view of Russian capabilities a serious rethink following their military action in Crimea in March 2014, when they engineered a bloodless takeover of the peninsula notwithstanding the local presence of nearly the same number of Ukrainian armed forces (20,000) as their own. Another jolt back to present reality could have emerged from Russian military action in Syria as from October 2015, which they used as a proving ground for their most up-to-date military gear and troops.
However, the U.S. response, with Hillary as cheerleader, has been to double down, ignore the potential risks of conflict, and continue to drive the Russians to the wall, so as to “negotiate from a position of strength” if indeed we have any intention of negotiating with the Russians at all.
3. Why do I say that Hillary Clinton is the War Party candidate?
The record of Hillary Clinton on foreign policy issues has been very well documented in a recent article that appeared in Consortium News, entitled, The Fear Of Hillary's Foreign Policy, and was republished in Russia Insider. The author, James Carden, is a former State Department employee with concentration in Russia who left the service in the George Bush Jr. years to become a journalist and now is a regular contributor to The Nation.
I will not repeat blow for blow Carden’s chronology of Hillary's terrible foreign policy baggage, going back to the decisions taken in Bill's second term that brought us more US military interventions abroad than any other similar period in the country's history while also setting up the dangerous confrontation with Russia, the New Cold War, that dominates headlines today. As James Carden shows, the baggage carries through to Hillary's consistent behavior as Secretary of State in the Obama Administration, where she was always among the most hawkish, pro-military action voices, working hard to overcome the passive resistance of Obama to anything resembling policy decisions.
Here I will focus on one non-Russian issue, for the sake of simplification and clarification: Libya. No, not the Libya of the Benghazi catastrophe and the killing of our US consul. That has been discussed endlessly in our media, but misses the point entirely regarding Hillary's culpability and why she will be a disastrous president.
The Libyan intervention to remove Colonel Gaddafi had the full support of Hillary within the Administration. She was a cheerleader in this exercise of American global (mis)management and regime change leading to chaos. It was fully in line with her basic instincts, call it all-American hubris or arrogance. And the most revealing proof of her unfitness to be Commander in Chief is the now widely publicized video sequence of Hillary, face distorted in glee, celebrating (!) the savage murder of Gaddafi following his being sodomized and grievously wounded: "we came, we saw, he died."
It is not for nothing that the Neocon vultures that took control of US foreign and military policy under Bush-Cheney are now avid supporters of Hillary's candidacy.
As regards Russia, Hillary has been pouring oil on the flames of potential conflict for years now. She has publicly likened Vladimir Putin to Adolf Hitler, an insult that no one dared to apply to Russian (Soviet) leaders during the 50 years of the Cold War. That coming from our nation’s senior diplomat virtually closes the door on diplomacy and reason, leaving us with brute force to settle our differences. She has called repeatedly for providing lethal weapons to Ukraine, which, if implemented would put us on a direct collision course with Russia. She has called for establishing a no-flight zone in Syria well after the Russians introduced their air force assets, including a highly advanced air defense system covering all of Syrian air space/ The result of implementing her recommendations in Syria would be direct armed conflict with the Russian forces in the region if we attempted to enforce an interdiction. And de jure, we would be in the wrong, because Russian presence has the express support of the Syrian government, whereas ours does not.
Hillary’s public statements on Russia are highly irresponsible and make sense only if we were prepared to launch a war on that country here and now. I doubt that is the case. Meanwhile, the asymmetrical structures of political decision making in the USA and Russia, whereby the Russian President can act with full authority far more quickly than his American counterpart, render this kind of US bluffing and posturing extremely dangerous. Russia is not Iraq. Russia is not Libya. The Russian leadership is tough, experienced and…brave.
For reasons of Hillary’s past record of ill-considered adventurism abroad and for reasons of the mad advisers from the Neocon camp whom she has in her inner circle today, it could be a fatal mistake to vote Hillary Clinton on November 8th.
About Trump’s past record in power, there is not much to say. About his present promises on foreign policy, one may have doubts. However, the bad blood between him and the Neocons ensures us that a Trump presidency would finally put them out on the curb, where they belong. And if we step back from our present policies on Russia, Moscow will surely reciprocate and seek accommodation. After all, even as late as 2008 Vladimir Putin harbored hopes of his country joining NATO.
- The Bank of England Just Provided Us With More Reasons to Own Gold and Silver
Yesterday the Bank of England cut its main interest rate from 0.5% to 0.25% for the first time, marking its first interest rate change since March 2009, and provided all of us with more reasons to keep converting fiat currencies into physical gold and physical silver. In addition the BOE announced an increase in its QE bond-buying program of £60bn to £435bn. And in response, the British pound immediately fell by 1% to the USD and traders added to their British pound longs, exceeding previous record net long positions in the pound recorded three years ago. I understand that traders are seeking a stronger rebound in the British pound after its plunge post-Brexit, and since the process for the UK to exit the EU has not even begun since the yes referendum vote, traders may be right to assume that the British pound will eventually rebound significantly in strength following this rate cut after people realize that a Brexit yes referendum vote may translate into an indefinite stay of limbo for the UK within the EU.
However, believing that any strengthening of any global fiat currency will be sustained over time is folly as all Central Bankers have aptly illustrated for years that they have already moved beyond the point of no return from their indefinitely low-interest rate, weak currency purchasing power policy years ago and can not raise interest rates to anything close to a free market interest rate. Thus, even if the British pound rebounds much more significantly from its post Brexit and post BOE interest rate cut, and it should, the spiraling weakening of its purchasing power will resume long-term without a doubt. The same knee-jerk trader reaction happened in response to the US Federal Reserve raising their Fed Funds interest rate by a paltry amount from a 0.00% to 0.25% range to a 0.25% to 0.50% range on 16 December 2015. The very next day, traders responding by dumping precious metals due to the silly Central Banker Janet Yellen’s talk of a strengthening economy spurring their interest rate raise. When she publicly announced this interest rate hike decision, Yellen stated that their decision was based upon “the committee’s confidence that the economy will continue to strengthen. The economic recovery has clearly come a long way, though it is not yet complete…but with the economy performing well and expected to do so, the committee judged that modest increase in the Federal Funds rate is now appropriate.”
In response, gold and silver both dumped in price, with silver suffering an especially hard fall of more than 3.5% the next trading day. This undeserved weakness in gold and silver prices persisted for a couple of weeks in gold and for an entire month in silver, even though this paltry raise in the Fed Funds interest rate was the first hike in over 9 ½ years since 29 June, 2006, simply because this interest rate “hike” (if one can call a measly ¼ of 1% increase a hike) was accompanied by silly claims of a strengthening, robust US economy made by Fed Reserve Chairman Janet Yellen. I, for one, have never understood why traders lose their minds over such policy announcements, instigating sharp asset price spikes and falls depending upon the announcement, that are often very sharply reversed in the near future. Certainly the gold and silver price dumps that occurred in reaction to Yellen’s announcement of a 0.25% raise in the Fed Funds rate has been sharply reversed through all of 2016. Of course, I understand that traders don’t care about fundamentals and only care about profiting from any strong movement in asset price, even if the price move is very short-lived and counterintuitive.
However, does a 0.25% Fed Funds rate increase really change the Central Banker fiat currency destruction policy adopted for decades, and provide an impetus to sell one’s gold and silver in exchange for devaluing paper and digital fiat currencies? We’ve all seen massive spikes and falls in crude oil spikes happen within a span of days in recent years. Is it really possible for a trader to be on the right side of every unexpected intraday spike higher and lower, especially when sharp movements higher are often reversed just days later and vice versa? Why not just understand the long-term picture, and position yourself to be on the right side of this equation? I guess that may be too much to ask of a trader, however, and it may be tantamount to asking a newborn duckling not to take to water. In other words, during that press conference, Yellen stated the same bunk that Federal Reserve bankers had stated in their minutes eight times a year, for 7 years in a row in which they implied an interest rate hike could be coming, only to never raise interest rates. And after 7 years of deception in which they finally made good on their threat to raise interest rates, the interest rate “hike” turned out to be a measly 0.25% raise, because that’s all they could afford to raise it without risking greater ripples and sell-offs in the financial markets. In other words, bankers released somewhere around 55 statements in a row about possibilities of raising interest rates without actually raising interest rates, before executing what amounted to the lowest possible “hike” they could possibly execute. And today, analysts incredibly still wait upon the public statements of Central Bankers with unbridled anticipation, and still incredibly use their statements to guide their investment strategies.
For example, I randomly pulled a FOMC minutes statement from January 2011, more than five years ago, and that statement contained Central Banker affirmations of “strong” consumer spending, “improvements in household and business confidence and in labor market conditions [that] “would likely reinforce the rise in domestic demand”, talk of “gains” in employment and anticipation of “stronger growth” in the US economy for FY2011, with “gradual acceleration” of US economic growth in 2012 and 2013. In fact, one can pull any Federal Reserve FOMC statement from their archives over the past 5-½ years and you will find the same bunk and nonsense that they used to further inflate the US stock market bubble and to control gold and silver prices time after time after time. As I review the content of these statements every year, if one could go back and review years prior to 2011, though the Feds do not keep statements archived prior to 2011, one would discover that the Feds were using this same deceitful language since 2009. I, for one, at a complete loss for why big bank analysts still talk about “normalization” of interest rates and parrot Janet Yellen’s frequent press statements in regard to this topic as if this were even a remote, much less, a realistic possibility. If we stop and think about the definition of “normalized” interest rates, how high of a level should normalized rates be when Bank of Japan bankers adopted ZIRP (Zero Interest Rate Policy) for 16 years before deciding ZIRP was inadequate enough to stimulate their economy and plunged interest rates into negative territory this year, and US Federal Reserve bankers maintained ZIRP for 7 years before finally “raising” interest rates for the first time in nearly 10 years on 16 December 2015?
Thus, we’ve had 16 consecutive years of zero interest rate policy (and now negative interest rate policy) in Japan and 7 years of ZIRP (and now a paltry 0.25% to 0.50% Fed Funds rate) in the US to understand that normalization of interest rates is never happening, yet analysts from JP Morgan, Goldman Sachs, Citibank, etc. still frequently discuss the timeline for “normalized” interest rates in the mass media as if they will happen. That’s a whole lot of exhibited foolishness in not being able to read between the lines, especially when the lines are so clearly demarcated for all to see. Furthermore, my definition of “normalized” interest rates is the reinstatement of free market interest rates, which we all know will never happen during any of our lifetimes without Central Bankers being expelled out of nations. But what if we consider the Central Bankers’ definition of “normalized” interest rates, likely within a 0.50% to 1.00% interest rate range? Given the fact that the Fed Funds interest rates was as high as 20% in the early 1980s and consistently around 5% throughout most of the 1990s, a “normalized” 050% to 1.00% interest rate is not normal at all. Furthermore, if we understand how a rate hike today to 1.00% might cause a meltdown in the BIS last-reported figure of $493 trillion of global derivatives contracts and cause TPTB banks to fail, then we know that even an abnormally-low “normalized” interest rate is likely never to happen (furthermore, the amount of global derivatives contracts still outstanding in the world today, is in reality, still close to a quadrillion dollars and not the misleading figure reported by the BIS. Years ago, to arrive at their current figure of $493 trillion, the BIS cut the existing figure in half overnight by changing the metric to measure notional derivative contract valuations, which was tantamount to an Enron-like cooking of the books simply to significantly lessen the appearance of risk inherent in the global financial system.)
In the end, there is no end in sight to the fiat currency purchasing power devaluation objectives of Central Bankers, and for this reason, we should stop taking our cues from traders that try to profit on every single short-term move in asset prices. Rather, we need to understand that the global currency wars still firmly remains a race to the bottom in purchasing power, and that converting fiat currencies into wealth preserving physical gold and physical silver still makes a whole lot of sense.
To receive news about SmartKnowledgeU articles when we first release them, please subscribe to our article rss feed here. Click here for more information on the best junior gold and silver mining stocks and wealth preservation strategies.
- In Rare Interview, Jailed Jihadist Warns ISIS Plans "Loads Of Concurrent Attacks In England, Germany, & France"
It has been a dreadful 12 months for Europe, where last November, Islamic radical refugees unleashed a terrorist first in Paris in a dramatic suicide bombing and mass execution, and proceeded from there to Belgium and ultimately Germany in a trail of terror that gets worse by the week, if not day. And it’s about to get worse, because a jailed former Islamic State jihadist, German-born Harry Sarfo, has revealed that the terrorist group is actively seeking volunteers in Germany and the UK to carry out “loads of attacks at the same time in England, Germany and France.”
Members of the Islamic State’s intelligence service, called Emni in Arabic, told Sarfo they were first and foremost interested in waging terrorism across the globe. In an interview with the New York Times, Sarfo, who is currently serving a three-year term on terrorism charges at a maximum security prison near Bremen, recalled what one masked commander once told him.
“He was speaking openly about the situation, saying that they have loads of people living in European countries and waiting for commands to attack the European people. And that was before the Brussels attacks, before the Paris attacks.”
Almost approaching the sophistication of its western peers, according to French, Belgian, German and Austrian intelligence and interrogation records cited by the Times, Emni is a fundamental part of IS, made from an “internal police force and an external operations branch.” It is led by IS spokesman and propaganda chief Abu Muhammad al-Adnani, who has a range of operatives authorized to plan attacks worldwide, including a “secret service for European affairs,” a “secret service for Asian affairs” and a “secret service for Arab affairs,” the former jihadist told the Times.
Although Sarfo had initially desired to fight in Syria and Iraq, when he arrived in Syria to join the extremists there, IS operatives said they had a different plan for him. “They said, ‘Would you mind to go back to Germany, because that’s what we need at the moment,’” Sarfo told the Times. “And they always said they wanted to have something that is occurring in the same time: they want to have loads of attacks at the same time in England and Germany and France.
“They told me that there aren’t many people in Germany who are willing to do the job,” the newspaper quoted Sarfo as saying shortly after his arrest last year, citing the transcript of his interrogation by German detectives. “They said they had some in the beginning. But one after another, you could say, they chickened out, because they got scared — cold feet. Same in England.”
Following the recent spike in ISIS terrorist attacks on German soil, one can conclude that Emni has had success with its German recruiting. As for France…
“My friend asked them about France. And they started laughing,” Sarfo said, recalling a conversation that took place seven months before the coordinated killings in Paris in November last year. “They said, ‘Don’t worry about France.’ ‘Mafi mushkilah’ — in Arabic, it means ‘no problem.’”
According to the accounts of the arrested operatives, Emni’s members played a major role in the Paris attacks and built the suitcase bombs used in a Brussels airport and subway, adding that the secret group’s soldiers have also been sent to Austria, Germany, Spain, Lebanon, Tunisia, Bangladesh, Indonesia and Malaysia.
There is much more to come. According to Sarfo, Emni has been actively recruiting potential terrorists from across the globe. The group has sent “hundreds of operatives” back to the European Union, with “hundreds more in Turkey alone,” according to a senior United States intelligence official and a senior American defense official, both of whom spoke on the condition of anonymity to discuss intelligence.
The good news for the US is that one region where the secret service appears to have not sent its trained jihadists so far is North America, Sarfo said, with intelligence documents reportedly backing his words.
Though dozens of Americans have become members of the Islamic State, and some have been recruited into the external operations wing, “they know it’s hard for them to get Americans into America” once they have traveled to Syria, he said.
“For America and Canada, it’s much easier for them to get them over the social network, because they say the Americans are dumb — they have open gun policies,” Sarfo said.
“They say we can radicalize them easily, and if they have no prior record, they can buy guns, so we don’t need to have no contact man who has to provide guns for them.”
Although some details of Sarfo’s account cannot be verified, German prison officials and intelligence agents who debriefed him said they found him credible.
- China Regulator Tells Banks To Evergreen Loans Of Troubled Companies
From yesterday:
CHINA ASKS BANKS NOT TO SUSPEND, CALL IN LOANS TO COS.: DAILY. The Chinese bankruptcy cycle is officially on hold
— zerohedge (@zerohedge) August 3, 2016
And now the follow up by Valentin Schmid of Epoch Times
China Banking Regulator Tells Banks to Evergreen Loans of Troubled Companies
On the surface, China is talking the reform talk. But is it also walking the walk? There are many examples to demonstrate it isn’t. The most recent one is a directive from the China Banking Regulatory Commission (CBRC) to not cut off lending to troubled companies and evergreening bad loans. This first reported by The Chinese National Business Daily on Aug. 4.
“A Notice About How the Creditor Committees at Banks and Financial Institutes Should Do Their Jobs” tells banks to “act together and not ‘randomly stop giving or pulling loans.’ These institutes should either provide new loans after taking back the old ones or provide a loan extension, to ‘fully help companies to solve their problems,'” the National Business Daily writes.
“It’s big news. A couple of weeks ago they were threatening Liaoning Province to cut off all lending to them if they didn’t tighten loan standards,” said Christopher Balding, a professor of economics at Peking University in Shenzen. “This is a pretty significant turn-around for them to do and it indicates how significant the problem is.”
The official reform narrative is espoused in this Xinhua piece which claims China has to reform because there is no Plan B. “Supply-side structural reform is also advancing as the country moves to address issues like industrial overcapacity, a large inventory of unsold homes and unprofitable ‘zombie companies.'” Clearly resolving the bad debt of zombie companies is not high on the priority list.
Goldman Sachs complained in a recent note to clients that companies can default on payments and often nothing happens. The investment bank notes that companies like Sichuan Coal default on payments of interest and principal for weeks or months and then maybe pay creditors later. The company in question defaulted on 1 billion yuan ($150 million) worth of commercial paper in June but made full payments later during the summer, a somewhat arbitrary process.
Another case is Dongbei Special Steel, which missed at least five payments on $6 billion of debt since the beginning of the year, but has done nothing to resolve the problem. This is why creditors wrote an angry letter to the local government to help resolve the issue.
According to Goldman Sachs, Dongbei was the reason Liaoning Province came under pressure:
“A bondholders meeting took place … with bondholders requesting that the [regulators] halt fundraising by the Liaoning provincial government and the enterprises in Liaoning province, and that institutional investors should stop purchasing bonds issued by the Liaoning government and the enterprises in Liaoning province. According to news reports, this demand stems from disappointment in progress by the provincial government in resolving Dongbei Special Steel’s debt problems, with a lack of information and no clear resolution plan.”
“Going forward, we do expect this trend to continue, with more defaults given our expectation of slower growth in the second half, and continued uncertainties on how these defaults are resolved.”
With the blessing of the regulator, Goldman’s prediction is probably correct. The investment bank notes that 11 out of 18 high-profile defaults have not been resolved since the first official default of a Chinese company by Chaori Solar in 2014.
(Click to enlarge. Source: Goldman Sachs)Christopher Balding thinks the directive shows how serious the debt situation has gotten. “This does indicate that there is a relatively significant pressure on the system and people aren’t making their payments. ‘Look, don’t rock the boat and push people into default.’ To say it so publicly or bluntly is amazing.”
The notice did include a modifier stating that the companies to be supported “must have a good outlook in terms of either their products or services and have restructuring values,” and that the “the development of the companies should be in line with the macro-economic policy, industrial policy and financial supporting policy of the country.” How serious banks will take this modifier is open to debate.
Overall bankruptcies in China have surged 52.5 percent in the first quarter of 2016 compared to a year earlier with 1028 cases being reported by the Supreme People’s Court. Most cases that are resolved involve small companies with few employees. The small firms are liquidated rather than restructured, according to the Financial Times. As we have seen there is another measure applied to larger companies, much to the dismay of Goldman Sachs:
“A clearer debt resolution process … would help to pave the way for more defaults, which in our view are needed if policymakers are to deliver on structural reforms.” If they want to deliver.
- "It's A Sad Time In History" Clint Eastwood Rages “We're Really A Pussy Generation… F##king Get Over It"
Submitted by Mac Slavo via SHTFPlan.com,
The following requires no further commentary.
Actor, former mayor and true American legend Clint Eastwood nails it perfectly:
Excerpted from The Wrap via Drudge Report:
[Trump’s] onto something, because secretly everybody’s getting tired of political correctness, kissing up.
We’re really in a pussy generation. Everybody’s walking on eggshells. We see people accusing people of being racist and all kinds of stuff. When I grew up, those things weren’t called racist.
…
I’d have to go for Trump … you know… because she’s declared that she’s gonna follow in Obama’s footsteps.
There’s been just too much funny business on both sides of the aisle. She’s made a lot of dough out of being a politician. I gave up dough to be a politician.
On Trump’s “racist” comments to a Judge of Mexican descent presiding over a Trump University legal challenge:
Yeah, it’s a dumb thing to say. I mean, to predicate your opinion on the fact that the guy was born to Mexican parents or something. He’s said a lot of dumb things. So have all of them. Both sides.
But everybody — the press and everybody’s going, ‘Oh, well, that’s racist,’ and they’re making a big hoodoo out of it. Just fucking get over it. It’s a sad time in history.
Related:
“You see… in this world there’s two kinds of people my friend… those with loaded guns … and those who dig.”
- Previewing Tomorrow's Payrolls: Watch Out For Short-End Fireworks
As the world awaits the next in the series of "most important jobs numbers ever," which has now been shown as only relevant to the degree by which it moves the S&P 500 higher (or god forbid lower), consensus expectations are for a goldilocks 180k gain in jobs and flat 4.9% unemployment rate. The market will be looking to see if the Fed's recent optimism surrounding labor market conditions (despite a collapse in their own LMCI) are justified and if the employment figures of July and August demonstrate a new trend in conjunction with June ahead of the September meeting… and of course the 'election adjustment'.
Consensus Expectations:
- US Change in Nonfarm Payrolls (July) M/M Exp. 180K (Prey. 287K, May. 11K) – close to the average of 172K for the first half of the year.
- US Unemployment Rate (July) M/M Exp. 4.8% (Prey. 4.9%, May. 4.7%)
- US Average Hourly Earnings (July) M/M Exp. 0.2% (Prey. 0.1%, May. 0.2%)
So just ignore this… It's probably nothing…
Goldman expects a 190k increase in nonfarm payroll employment in July, slightly above consensus expectations for a 180k gain.
Most labor market indicators were roughly in line with their recent trends, though a couple of key indicators were somewhat stronger in July.
Arguing for a stronger report:
- Job availability. The Conference Board’s labor differential—the difference between the share of consumers saying jobs are plentiful vs. hard to get—moved back into positive territory in July, rising 1.2pt to +0.7. The index remains below the highs reached in the last few expansions.
- Jobless Claims. The four-week moving average of initial jobless claims leading into the payroll reference week fell 9k to just 258k in July, and claims during the survey week were just 252k. While seasonal adjustment is often challenging in July due to the annual auto plant shutdowns, we nonetheless take some positive signal from the very low recent level of jobless claims.
Neutral factors:
- Service sector surveys. The employment components of the service sector surveys were mixed in July. The ISM non-manufacturing survey (-1.3pt to 51.4) and the Richmond Fed survey (-5pt to +12) declined, while the Markit PMI, NY Fed (+3.9pt to +6.9), and Dallas (+1.8pt to +3.8) surveys improved. Service sector employment rose 256k last month and has increased 166k on average over the last six months.
- Manufacturing surveys. The employment components of the manufacturing surveys were also mixed in July. The Markit PMI, Chicago PMI, Philly Fed (+9.3pt to -1.6), Richmond Fed (+5pt to +6), and Dallas Fed (+8.9pt to -2.6) surveys improved, while the ISM manufacturing (-1pt to 49.4), NY Fed (-4.4pt to -4.4), and Kansas City Fed (-1pt to -5) surveys worsened. Manufacturing employment growth declined by an average of 4k over the last six months, but rebounded to +14k in June.
- ADP. ADP reported a 179k gain in private payroll employment in July, roughly in line with the increases seen in May and June. Service-sector job gains softened a bit to 185k, manufacturing employment rebounded by 4k, construction employment fell 6k, and energy-sector employment appeared to fall by 4k, the smallest reported decline in that sector since 2014.
- Online job ads. The Conference Board’s Help Wanted Online (HWOL) report showed increases in both new and total online ads in July, though to levels that remain below those seen earlier this year. We put only limited weight on this indicator at the moment in light of recent research by Fed economists that argued that the HWOL ad count—which had departed significantly from the job openings figures in the official Job Openings and Labor Turnover Survey (JOLTS)—has been influenced by price increases for online job ads.
- Job cuts. According to the Challenger, Gray & Christmas report, job cuts fell a touch on a seasonally adjusted basis in July. Announced job cuts in the energy sector spiked to 18k in July, indicating that energy job losses likely have a bit further to go.
- Weather. Weather effects on the monthly payroll numbers were a big story in the first half of this year, as we noted last month. At this point, however, the large swings in weather-sensitive industries are likely behind us, and we have found in past research that weather does not have a statistically meaningful effect on payroll growth from June to October.
We expect the unemployment rate to remain at 4.9% in July from an unrounded 4.899% in June, but see the risks as tilted to the downside. The headline U3 rate rose 0.2pp in June, while the broader U6 underemployment rate fell 0.1pp to 9.6% as a result of a very large drop in involuntary part-time employment. In our recent labor market status report, we estimated that there is about 0.5pp of broad slack remaining in full-time equivalent terms. With trend employment growth still running at roughly double our 85k estimate of the breakeven rate, we expect the labor market to reach full employment by early 2017 and to surpass it thereafter.
Average hourly earnings for all workers are likely to rise 0.3% in July, in part reflecting favorable calendar effects. This should leave the year-on-year rate unchanged at 2.6%, though we see the risks as tilted to the upside. Our wage tracker—which aggregates four measures of wage growth—has accelerated to 2.8% year-on-year in our preliminary Q2 estimate, a sign that diminishing slack is boosting wage growth.
Market Reaction
As ever with the NFP release, the headline is likely to garner much of the initial focus with algorithms and fast money moves jumping on any large discrepancies. Participants are likely to view the jobs report with a wide context, as recent months have seen two extreme numbers on either side of the spectrum, and any substantial revision to last month's large beat could weigh on the USD. However, how the report is received will ultimately be decided on whether it can justify more of the few calling for a September hike and to do so a very strong report must be seen.
And BNP's strategists Timothy High and Daniel Tangho warn risks to short-end yields appear underpriced…
Markets continue to discount the possibility of a rate hike in September; the Fed funds market estimates there is a 20% chance.
A strong NFP could push 2y Treasury yields higher by 20bp or more, which would match yield levels seen before the May NFP report derailed the odds of a hike in June or July.
The 2y Treasury yield was 0.90% in mid-May when market participants assigned a 55% probability of a July rate hike. While a weak NFP report could derail a September hike, a strong report is likely to force the markets to re-evalute the situation, in which case a 20% probability of a September rate hike is too low: 55% is more appropriate, and the 2y Treasury yielding about 0.90% is also appropriate.
- As Obama Slams Iran "Ransom" Allegations, He Refuses To Answer One Simple Question
Unable to keep the $400 million cash drop to Iran off the front pages, the Obama administration came out swinging today with denials, conspiracy-theory-accusations, and allegations of biased reportingas the mainstream media was forced by the striking actions of The White House to ask uncomfortable questions.
Bloomberg reports that critics of Obama’s nuclear deal with Iran say the payment was ransom, a contention the White House has strongly denied; that it will encourage Iran to take more Americans hostage; and that it’s likely the money will be funneled into terrorist groups.
“If true, this report confirms our longstanding suspicion that the administration paid a ransom in exchange for Americans unjustly detained in Iran,” House Speaker Paul Ryan, a Wisconsin Republican, said in a statement.
“It would also mark another chapter in the ongoing saga of misleading the American people to sell this dangerous nuclear deal.”
Obama administration officials have, of course, dismissed the controversy as old news, noting that the settlement was fully disclosed by the White House and State Department at the time the Iran nuclear deal was announced.
“The United States of America does not pay ransom and doesn’t negotiate ransoms with any country — we never have and we’re not doing that now,” Secretary of State John Kerry said Thursday in Buenos Aires.
As The Hill reports, President Obama chastised the press for their coverage of the payment, noting that the deal with Iran was announced months ago as part of a larger diplomatic settlement.
“This wasn’t some nefarious deal,” Obama said.
“It’s been interesting to watch this story surface,” the president said. “Some of you may recall, we announced these payments in January. Many months ago. There wasn’t a secret, we announced them to all of you.”
“What we have is the manufacturing of outrage on a story that we disclosed in January,” he added later.
“The notion that we would somehow start now in this high-profile way, and announce it to the world, even as we’re looking in the faces of other families whose loved ones are being held hostage and say to them, ‘we don’t pay ransom,’ defies logic,” Obama said.
Defies logic indeed, like the logic of “keeping your doctor if you like him” or the logic of “no boots on the ground in Syria”? But to summarize, today we got “look over there at Donald Trump”-distractions and “We do not negotiate ransoms with any country” jabbed Kerry; “We do not pay ransom for hostages” lambasted Obama; “it defies logic” snapped Earnest.
* * *
Still, one big question has yet to be answered, for the second day in fact. It’s a simple question: did the hostages’ plane leave before or after the plane arrived carrying pallets full of $400 million worth of non-USD-denominated cash?
Two days of State Dept not answering @JamesRosenFNC @APDiploWriter if hostage plane left before cash plane landed pic.twitter.com/BSqWZDrtZj
— Omri Ceren (@cerenomri) August 4, 2016
Yesterday the question was asked by James Rosen… and not answered: “I might be able to you an answer on that…”
,,, and today, none other than The Associated Press’ Matt Lee asked again: “we’re still looking into it”
Still no answer: Odd for the “most transparent adminstration ever” not to have this kind of basic, flight information at their fingertips: tracking $400 million worth of US taxpayer money – in cash – and the lives of four members of the American military?
Of course, we suspect the explanation is simple and the two planes just happened to coincidentally arrive on the tarmac at the same time and the hostages and the money carriers merely discussed grandkids and golf games.
* * *
And then, later today, we may have stumbled what really happened.
As a reminder, the four hostages that were allegedly exchanged for the $400 million ransom are the following.
L to R: Matt Trevithick (Photo Credit Robin Wright) Amir Hekmati, Jason Rezaian
(Photo Credit AP), Saeed Abedini (News 4).Today, one of the US Iranian hostage shown above, Saeed Abidini, spole to FOX Business and explained that the Iranian regime would not let his plane leave Tehran until the ransom plane arrived, Gateway Pundit reports.
They waited on the tarmac for hours.
Saeed Abidini: I just remember the night at the airport sitting for hours and hours there and I asked police— why you not letting us go — And he told me we are waiting for another plane and if that plane take off we gonna let you go.
Trish Regan: You slept there at the airport?
Abidini: Yes, for a night. They told us you going to be there for 20 minutes but it took hours and hours. And I ask them why you don’t let us go, because the — was there, pilot was there, everyone was there to leave the country. And he said we are waiting for another plane so if that plane doesn’t come we never let us go.
Hopefully, this can jog Mr. Toner’s memory if the hostage plane left before or after the “non-rasom” cash arrived.
Digest powered by RSS Digest
Saving...