• First The UK, Then Scotland… Then Texas?

  Submitted by Ryan McMaken via The Mises Institute,

  That didn't take long. Only hours after the final results came in for a British exit from the EU, political leaders in Scotland are talking about renewing their drive to secede from the United Kingdom. 

  Pointing to the fact that a large majority of Scots voted to remain in the EU, Scottish advocates for independence are now claiming (convincingly) that Scotland is leaving the EU against its will. 

  Many of us who advocated for Scottish secession in 2014 were, of course fine with Scottish secession at the time. And we're still fine with it now. Scotland should be free to say good bye and got its own way. 

  Some opponents of Scottish exit, however, have claimed that Scotland is too small "to go it alone." Defenders of Scottish independence call this the "too wee, too poor, too stupid" argument. 

  Even the most rudimentary analysis, however, shows that size is not an issue for Scotland. With an official GDP of approximately 245 billion, Scotland is not too much different from Ireland, Finland, and Denmark. It's economy is much larger than that of Iceland (16.7 bln) and New Zealand (172 bln).

  With a population of 5.3 million, this puts Scotland either similar to or larger than Denmark, Norway, Finland, New Zealand, and Ireland. 

  With a population this size, Scotland's GDP per capita comes out to around $45,000 which naturally is similar to the UK overall today, and also similar to Canada, the Netherlands, Austria, Finland, and a number of other European states, both large and small. 

  Some will argue that Scots cannot go it alone because they rely too much on English taxpayers for transfer payments such as pensions. This is no doubt partially true, although the UK government also extracts tax dollars from Scots, regulates Scottish trade with the EU and everyone else, and perhaps the Scottish simply want independence even if it means a temporary disruption in living standards. 

  Overall, though, there's no denying that Scotland even by itself is well within the realm of ordinary wealthy nation states, in terms of population, and the size of its economy. Scotland is in no way an outlier. 

  The claim that it is "too small" was repeated today, however, in this article by Roger Bootle at The Telegraph in which he writes: 

  Believe it or not, there is an extensive economic literature on the subject of the optimum size of a country, or more accurately, political association. From the economic point of view, as the size of political entities gets larger, there is scope for economies of scale in government and the provision of public goods such as defence. Equally, within a single political entity there are no restrictions on trade, such as tariffs or quotas so, other things being equal, the gains from trade are maximised as political entities grow larger.

   

  Yet there are limits to the desirable size of political entities, such that, as things stand anyway, a single world government would not be optimal. The larger, and certainly the more heterogeneous, a political entity is, the more resources are taken up with arguing about distribution, that is to say who should benefit from various sorts of public expenditure, and who should pay for it. The quality of government tends to deteriorate.

  Bootle is correct that there are certainly advantages of size when it comes to national defense. Obviously, it's much harder for a foreign invader to overrun Russia than Poland. What Bootle misses, however, is that these issues can be addressed through confederation rather than through political unification. The original purpose of the United States, of course, was to act as a confederation for purposes of national defense. Member, states, however, remained autonomous within their own borders. Similar structures have existed throughout history, from NATO to the Hanseatic league of northern Europe. 

  Scotland need not be part of the UK to enter into a defense agreement with the British. 

  The rest of Bootle's argument appears even more specious. It is not a given, for example, that larger states facilitate trade. As the UK experience has shown, membership in the EU has granted access to some markets, but it has cut off access and flexibility with other markets. (Norway and Switzerland have access to these same markets, by the way, without EU membership.) 

  This was also an enormous issue and source of conflict in the United States, in regards to southern states. Yes, membership in the United States facilitated trade among states, but trade between Southern states and foreign markets was hampered by US tariff policy. To claim that gains from trade are "maximised" by larger states is rather overstating it, to say the least. 

  In fact, there are many reasons to believe that the "optimal" size of state is considerably smaller than what Bootle suggests it is. (The subtext of Bootle's article, of course, is that Scotland is below the optimal size.)

  As Peter St. Onge wrote in 2014 about the Scottish referendum at the time: 

  So small is possible. But is it a good idea?

   

  The answer, perhaps surprisingly, is resoundingly “Yes!” Statistically speaking, at least. Why? Because according to numbers from the World Bank Development Indicators, among the 45 sovereign countries in Europe, small countries are nearly twice as wealthy as large countries. The gap between biggest-10 and smallest-10 ranges between 84 percent (for all of Europe) to 79 percent (for only Western Europe).

   

  This is a huge difference: To put it in perspective, even a 79 percent change in wealth is about the gap between Russia and Denmark. That’s massive considering the historical and cultural similarities especially within Western Europe.

   

  Even among linguistic siblings the differences are stark: Germany is poorer than the small German-speaking states (Switzerland, Austria, Luxembourg, and Liechtenstein), France is poorer than the small French-speaking states (Belgium, Andorra, Luxembourg, and Switzerland again and, of course, Monaco). Even Ireland, for centuries ravaged by the warmongering English, is today richer than their former masters in the United Kingdom, a country fifteen times larger.

   

  Why would this be? There are two reasons. First, smaller countries are often more responsive to their people. The smaller the country the stronger the policy feedback loop. Meaning truly awful ideas tend to get corrected earlier. Had Mao Tse Tung been working with an apartment complex instead of a country of nearly a billion-people, his wacky ideas wouldn’t have killed millions.

   

  Second, small countries just don’t have the money to engage in truly crazy ideas. Like Wars on Terror or world-wide daisy-chains of military bases. An independent Scotland, or Vermont, is unlikely to invade Iraq. It takes a big country to do truly insane things.

  A Lesson for American States 

  When Americans indulge in thought experiments about the possible secession of American states, it is often assumed that most US states are too small "to go it alone." Indeed, most Americans greatly underestimate the size of many American states in relation to numerous independent and prosperous existing nation-states. 

  Were Scotland a US state, for example, it would be only a medium-sized state, with a GDP smaller than the gross state products of both Missouri and Connecticut, making it about the 25th largest state in terms of GDP. Population-wise, Scotland is about equal to Minnesota and Colorado (I have removed China and the US combined economy from this graph to improve scale): 

  

  In this map, I've compared American states to foreign countries of similar GDP: 

  

  For more similar maps, see here. 

  Moreover, few Americans appreciate how enormous some American states are, especially the largest four states: California, Texas, New York, and Florida. 

  In terms of both population and GDP, California is about equal to Canada — and with much better weather. Texas is equal in economy and population size to Australia. Pennsylvania's economy is similar in size to Switzerland. 

  While secession of American states is often dismissed as absurd, there are few reasons to believe that a state like Texas – to name just one example – could not immediately transition from state to nation-state. With a large economy, port cities, oil, and easy access to European, Latin American, and even Asian economies by sea, economics arguments against such a separation fall flat. And of course, the success of smaller states like Norway, Denmark, and Switzerland illustrate that bigness is truly unnecessary. Naturally, many other states even beyond the biggest states — such as Pennsylvania, New Jersey, North Carolina and others — could do the same. These states would all be among the largest economies on earth were they to leave the US. 

  "But what about national defense!" some may argue. "Wouldn't Texas be constantly at war with the United States?" Experience suggests that Texas would be at war with the United States about as frequently as Canada has been at war with the United States: zero times since 1815. 

  International wars rarely erupt between countries with common languages, common histories, and common economic interests. Should Scotland secede, the UK won't be sending in the tanks, and Scotland could easily join the realm of independent nation states, just as many American states could do the same.

  

  

• Hillary's Official Calendar Is "Missing" A Lot Of Entries

  Little by little the public is starting to learn more about Hillary Clinton’s time as US Secretary of State, beyond the official narrative . Most recently it was revealed that the State Department disabled its own security software to accommodate emails being sent from Hillary’s private server, and also that Clinton omitted a key email discussing that very topic when turning over records to the State Department.

  And now, courtesy of the AP, we learn that the official calendar that Hillary kept as secretary of state did not closely mirror the more detailed records of Clinton’s daily meetings provided by her aides. The detailed schedules were included in files the State Department turned over to the AP after it sued the government in federal court.

  

  When the AP compared Clinton’s 1,500 page official calendar with the detailed planning schedules, what the AP found was stunning. The names of at least 114 outsiders who met with Clinton were missing from her calendar, and at least 75 meetings with longtime political donors, Clinton Foundation contributors and corporate and other outside interests were not recorded or omitted from the official calendar.

  Additionally, more than 60 other events listed on the detailed planners were omitted entirely from Clinton’s calendar, noted as “private meetings”, none of which named names of anyone who Clinton met with.

  For example, in an entry on Clinton’s schedule in September 2009 didn’t contain the identities of major Wall Street and business leaders who met with Clinton for a private breakfast discussion at the New York Stock Exchange. The meeting occurred minutes before Clinton appeared in public at the exchange to ring the opening bell. However, the detailed planning schedules from the same day listed all of the names that were omitted from the official schedule.

  More from AP

  Despite the omission, Clinton’s State Department planning schedules from the same day listed the names of all Clinton’s breakfast guests — most of whose firms had lobbied the government and donated to her family’s global charity. The event was closed to the press and merited only a brief mention in her calendar, which omitted all her guests’ names — among them Blackstone Group Chairman Steven Schwarzman, PepsiCo CEO Indra Nooyi and then-New York Bank of Mellon CEO Robert Kelly.

   

  Besides Schwarzman, Nooyi and Kelly, Clinton’s other guests were Fabrizio Freda, CEO of the Estee Lauder Companies Inc.; Howard Schultz, CEO of Starbucks Corp.; Lewis Frankfort, chairman of Coach Inc.; Ellen Kullman, then-CEO of DuPont; David M. Cote, CEO of Honeywell International Inc.; James Tisch, president of Loews Corp.; John D. Wren, CEO of Omnicom Group; then-McGraw Hill Companies chairman Harold McGraw III; and James Taiclet, chairman of the American Tower Corp. Also attending was then-NYSE CEO Duncan Niederauer, who later accompanied Clinton when she rang the stock exchange bell.

   

  Four of the attendees — Schwarzman, Nooyi, Cote and Kullman — headed companies that later donated to Clinton’s pet diplomatic project of that period, the U.S. pavilion at the 2010 Shanghai Expo.

   

  All the firms represented except Coach lobbied the government in 2009; Blackstone, Honeywell, Omnicom and DuPont lobbied the State Department that year. Schwarzman and Frankfort have personally donated to the Clinton Foundation, and the other firms — except for American Tower and New York Bank of Mellon — also contributed to the Clinton charity.

  The AP noted that Clinton’s calendar also repeatedly omitted private dinners with political donors, policy sessions with groups of corporate leaders and “drop-bys” with old Clinton campaign hands and advisers. Among the names that were omitted from Clinton’s schedule but again were found on the detailed planning documents were longtime adviser Sidney Blumenthal, consultant and former Clinton White House chief of staff Thomas “Mack” McLarty, former energy lobbyist Joseph Wilson and entertainment magnate and Clinton campaign bundler Haim Saban.

  The lengths that AP had to go to in order to obtain these documents were significant, and no documents showed who specifically logged entries in Clinton’s calendar or edited material. Once again, we find deputy chief of staff Huma Abedin’s name in the mix, as Abedin held weekly meetings and emailed almost every day about Clinton’s plans. Also, a stunning finding was made in that Clinton’s official calendar was edited after each event.

  The AP first sought Clinton’s calendar and schedules from the State Department in August 2013, but the agency would not acknowledge even that it had the material. After nearly two years of delay, the AP sued the State Department in March 2015. The department agreed in a court filing last August to turn over Clinton’s calendar, and provided the documents in November. After noticing discrepancies between Clinton’s calendar and some schedules, the AP pressed in court for all of Clinton’s planning material. The U.S. has released about one-third of those planners to the AP, so far.

   

  The State Department censored both sets of documents for national security and other reasons, but those changes were made after the documents were turned over to the State Department at the end of Clinton’s tenure.

   

  The documents obtained by the AP do not show who specifically logged entries in Clinton’s calendar or who edited the material. Clinton’s emails and other records show that she and two close aides, deputy chief of staff Huma Abedin and scheduling assistant Lona J. Valmoro, held weekly meetings and emailed almost every day about Clinton’s plans. According to the recent inspector general’s audit and a court declaration made last December by the State Department’s acting executive secretary, Clinton’s aides had access to her calendar through a government Microsoft Outlook account. Both Abedin and Valmoro were political appointees at the State Department and are now aides in her presidential campaign.

   

  Unlike Clinton’s planning schedules, which were sent to Clinton each morning, her calendar was edited after each event, the AP’s review showed. Some calendar entries were accompanied by Valmoro emails — indicating she may have added those entries. Every meeting entry also included both the planned time of the event and the actual time — showing that Clinton’s calendar was being used to document each meeting after it ended.

   

  The State Department said Friday that “extensive records” from Clinton’s calendars were preserved. Spokesman John Kirby said he couldn’t speak in more detail about practices during Clinton’s tenure because of the AP’s ongoing lawsuit.

  Former department officials as well as government records experts said that secretaries of state have wide latitude in keeping their schedules, despite federal laws and agency rulings overseeing the archiving of calendars and warning against altering or deleting records.

  “It’s clear that any outside influence needs to be clearly identified in some way to at least guarantee transparency. That didn’t happen. These discrepancies are striking because of her possible interest at the time in running for the presidency” said Danielle Brian, executive director of the Project on Government Oversight.

  * * *

  So we learn now that not only did Clinton omit key emails to the government, often times the official schedule omitted – if not outright “redacted” – key names and events as well while Clinton was the Secretary of State. Ironically, just as the case was with Abedin submitted an email that Hillary chose to keep from the government, the daily planning schedules from Hillary’s aides now shines a light on the detail Clinton tried to keep from the public record once again. We’re sure that’s just an oversight on Clinton’s part though, she was probably just too busy to make sure the official calendar accurately reflected what was taking place and who the US Secretary of State was meeting with.

  Will anyone ask the question of what exactly was discussed when Hillary had these so called “private” meetings with Wall Street and big business? Probably not. However, for the sake of our readers and the so-called “posterity”, we have decided to document what the rest of the media will ignore, and we will not forget.

  

• Peter Schiff: "Brexit Is Just What The Doctor Ordered"

  Submitted by Peter Schiff via Euro Pacific Capital,

  Janet Yellen should send a note of congratulations to Nigel Farage and Boris Johnson, the British politicians most responsible for pushing the Brexit campaign to a successful conclusion. While she’s at it she should also send them some fruit baskets, flowers, Christmas cards, and a heartfelt “thank you.“ That’s because the successful Brexit vote, and the uncertainty and volatility it has introduced into the global markets, will provide the Federal Reserve with all the cover it could possibly want to hold off on rate increases in the United States without having to make the painful admission that domestic economic weakness remains the primary reason that it will continue to leave rates near zero. 

  For months the corner that the Fed has painted itself into has gotten smaller and smaller. It continues to say that rate hikes will be appropriate if the data suggests the economy is strong. Then its representatives continually cite (arguably bogus) statistics that suggest a strengthening economy, which cause many to speculate that rate hikes are indeed on the horizon. But then at the last minute the Fed conjures a temporary reason why it can’t raise rates “right now,” but stresses that they remain committed to doing so in the near future. But each time they conduct this pantomime, they lose credibility. Sadly, Fed officials are discovering that their supply of credibility is not infinite, even among those who would like to cut them a great deal of slack.

  But the Brexit vote saves them from all this unpleasantness. Now when critics question the Fed’s unwillingness to deliver on the suggested rate hikes, given what they believe to be a strong economy, all the Fed needs to do is point to the “uncertainty” that will be in play now that the world’s fifth largest economy is disengaging from the European Union. And since this process is bound to be long, messy, and fraught with uncertainties (as there is no precedent for a country leaving the EU), this will be a handy excuse that the Fed will be able to rely on for years.

  Brexit could also place severe strains and uncertainties on the global currency markets. The fear of financial losses could encourage investors to seek safe haven assets like gold and, at least for now, the U.S. dollar. Given that there is already much concern that the dollar is valued too highly against most currencies, and that this has created imbalances in the global economy, any surge in the dollar that results from Brexit may have to be fought by the Federal Reserve through lower interest rates and quantitative easing. This would rule out the potentially dollar-strengthening interest rate hikes that they supposedly planned on delivering. So as far as Janet Yellen is concerned, the British have given her the gift that keeps on giving.

  On another level, the vote in the UK illustrates the fundamental inefficacy of the monetary and financial policies that have been implemented by the world’s dominant central banks and central bureaucracies. For years, global elites have been telling us that deficit spending, government regulation, and central bank stimulus is the best way to cure the global economy in the wake of the 2008 Financial Crisis. To prove these points, elite economists associated with the government, academia, and the financial sector have pointed to all kinds of metrics to show how their policies have been successful. But the man on the street perceives a very different reality. They know that their living standards have fallen, their cost of living has risen, and that their job prospects have deteriorated. They see a loss in confidence and economic stagnation when they are being assured the opposite.

  This disconnect has fueled anti-establishment sentiment on both sides of the Atlantic. In the United States, it has given rise to the insurgent candidacies of both Donald Trump and Bernie Sanders. The unexpected successes of both reflect a deep distrust of the establishment. Such discontent would not be in play if the positive stories being told by the elites had made any resonance with rank and file voters.

  The same holds true with the unexpected strength of the anti-EU voters in Britain. The “Remain” camp had the support of virtually all the elite members of the major UK political parties, the media, and the cultural world.  In addition, foreign leaders, including President Obama in a state trip to England, harangued British voters with warnings of economic catastrophe if the British were to make the grave error of defying the advice of their “best” economists.

  Given all this, poll numbers that suggested the vote could be close had been dismissed. The elites, as evidenced by recent drifts in currency and financial markets, had all but assumed that British voters would fall into line and vote to remain. Instead, the people revolted. After having been misled for so many years by the very elites who urged them to remain, the rank and file finally asserted themselves and voted with their feet.

  British voters may not know what they will get with an independent Britain, but they knew that something was rotten, not just in Denmark, but all over the European Union. The same holds true in the United States. Until our leaders can paint more realistic pictures of where we are and where we are going, we should expect more “surprises” like the one we got yesterday.

  

  

• Friday Humor: What Comes After Brexit

  On a day full of tears, jeers, and fears for many, we thought a little humor might help…

  What comes after Brexit?

  Brexit. Grexit. Departugal. Italeave. Fruckoff. Czechout. Oustria. Finish. Slovakout. Latervia. Byegium.

  — Rahul Goma Phulore (@missingfaktor) June 21, 2016

  In other words…

   

  

  

  

• Was This The Deciding Factor For Brits To Vote "Leave"?

  While the blame for today’s historic moment in the collapse of crony capitalism could be laid at many feet – from Brussels totalitarianism to Cameron and Osborne’s scaremongering blowback – one look at the charts and it becomes pretty clear when exactly the inflection point occurred…

  April 22nd, Obama wrote his “Stay or screw the special relationship” Op-Ed followed by his apology tour visit.

  It appears The Brits don’t like being told what to do by other nations’ leaders…

  

  And then there is this little know fact…

  

   

  Good luck Hillary!

  

  

• If The Public Shouldn't Have Them, Why Does The IRS Need AR-15s?

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Here we go again. Stuck in the aftermath of a horrific shooting and all politicians think to do is scheme about how to take more rights from the citizenry. There are no good guys here. The Democrats want to railroad over due process by denying firearms to people on Orwellian watch lists, while Republicans plot to give the FBI more warrantless surveillance powers. This is the authoritarian knee-jerk response to tragedy we get from the U.S Congress.

  

  Hypocritically, when it comes to foreign policy, all we hear are incessant calls for more militarism, more war and more regime change. As I warned in yesterday’s post, Is the Syrian War About to Experience a Major Escalation? — 51 State Department officials just issued a cable calling for the bombing of Syria’s Bashar al-Assad. An event likely to lead to direct confrontation with Russia.

  While all of that is bad enough, the U.S. government continues to eagerly and aggressively arm non-defense federal employees with weapons of war.

  As Adam Andrzejewski of Open the Books and former U.S. Senator Tom Coburn noted in a recent Wall Street Journal op-ed:

  The number of non-Defense Department federal officers authorized to make arrests and carry firearms (200,000) now exceeds the number of U.S. Marines (182,000).

  For more, let’s take a look at a few excerpts from their piece, Why Does the IRS Need Guns?

  Special agents at the IRS equipped with AR-15 military-style rifles? Health and Human Services “Special Office of Inspector General Agents” being trained by the Army’s Special Forces contractors? The Department of Veterans Affairs arming 3,700 employees?

   

  The number of non-Defense Department federal officers authorized to make arrests and carry firearms (200,000) now exceeds the number of U.S. Marines (182,000). In its escalating arms and ammo stockpiling, this federal arms race is unlike anything in history. Over the last 20 years, the number of these federal officers with arrest-and-firearm authority has nearly tripled to over 200,000 today, from 74,500 in 1996.

   

  What exactly is the Obama administration up to?

   

  On Friday, June 17, our organization, American Transparency, is releasing its OpenTheBooks.com oversight report on the militarization of America. The report catalogs federal purchases of guns, ammunition and military-style equipment by seemingly bureaucratic federal agencies. During a nine-year period through 2014, we found, 67 agencies unaffiliated with the Department of Defense spent $1.48 billion on guns and ammo. Of that total, $335.1 million was spent by agencies traditionally viewed as regulatory or administrative, such as the Smithsonian Institution and the U.S. Mint.

  • The Internal Revenue Service, which has 2,316 special agents, spent nearly $11 million on guns, ammunition and military-style equipment. That’s nearly $5,000 in gear for each agent. 

  • The Department of Veterans Affairs, which has 3,700 law-enforcement officers guarding and securing VA medical centers, spent $11.66 million. It spent more than $200,000 on night-vision equipment, $2.3 million for body armor, more than $2 million on guns, and $3.6 million for ammunition. The VA employed no officers with firearm authorization as recently as 1995.

  • The Animal and Plant Health Inspection Service spent $4.77 million purchasing shotguns, .308 caliber rifles, night-vision goggles, propane cannons, liquid explosives, pyro supplies, buckshot, LP gas cannons, drones, remote-control helicopters, thermal cameras, military waterproof thermal infrared scopes and more.

   

  People from both ends of the political spectrum have expressed alarm at this trend. Conservatives argue that it is hypocritical, unconstitutional and costly for political leaders to undermine the Second Amendment while simultaneously equipping nonmilitary agencies with heavy weapons, hollow-point bullets and military-style equipment. Progressives like Sen. Bernie Sanders have raised civil liberties concerns about the militarization of local police with vehicles built for war and other heavy weaponry.

   

  Our data shows that the federal government has become a gun show that never adjourns. Taxpayers need to tell Washington that police powers belong primarily to cities and states, not the feds. 

  For more detail, check out the full report here: OpenTheBooks Oversight Report – The Militarization Of America.

  Open the Books is a nonpartisan, non-profit organization focused on providing transparency in government.

  

  

• Donald Trump’s Entire Financial History In One Short Video

  Courtesy of The Money Project, a collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

  Donald Trump’s Entire Financial History In One Short Video

  In this motion graphic video, we break down the full story behind Donald Trump’s wealth.

  Not only do we examine his major business successes and failures, but we even look back at real estate’s prominent role in the history of the Trump family. To conclude, the video breaks down Trump’s net worth and financial history, while highlighting some of the help he has gotten along the way in building his fortune.

  Family Matters

  The story started well over a century ago with Donald’s grandfather, Frederick Trump. Real estate runs deep in the blood of the Trump family, and Frederick was actually the first Trump to own a hotel. During the famous Klondike gold rush in Canada, Frederick owned an inn and restaurant that served gold miners. When he passed away, he left an estate worth just under $500,000 in today’s dollars to his heirs.

  His eldest son, Fred Trump, carried on the Trump legacy by going into business with his mother, using the nest egg for seed money. Fred became a very successful builder in New York City’s outer boroughs. He built single family houses in Queens in the 1920s, helped pioneer the supermarket with the “Trump Market” during the Great Depression, and even built barracks for the Navy during World War 2.

  But Fred’s real cash cow came in 1949, when he got a government loan to build Shore Haven Apartments in Brooklyn. The Federal Housing Administration paid him $10.3 million, but he was able to build the apartments for significantly less.

  The government kept overpaying for houses in Brooklyn and Queens, and Fred kept building them. According to Donald, his father became “one of the biggest landlords in New York’s outer boroughs”. By the time of Fred’s death in 1999, it’s said that Fred Trump was worth between $250 and $300 million.

  Donald’s Vision

  Born in Queens, Donald J. Trump would join his father’s company early on in his career. His father’s cash cow was now gone, but Donald had a different vision for the Trump name anyways. He envisioned the “Trump” brand as being synonymous with luxury worldwide.

  To do this, in the mid-1970s, Donald went into real estate in Manhattan. Relying on the business connections and creditworthiness of his old man, he borrowed a “small sum” of 1 million dollars to get started.

  Trump’s Biggest Successes

  Trump’s top three business successes include the Grand Hyatt, 40 Wall Street, and the Apprentice.

  1. Grand Hyatt

  In 1976, Donald Trump and Hyatt partnered to buy the rundown Commodore Hotel near Grand Central Station. At the time, the whole neighborhood was in disarray with many nearby buildings on the verge of foreclosure. Trump negotiated contracts with banks and the city in an effort to fund the hotel and rejuvenate the area.

  The end result was the Grand Hyatt, a 25-story hotel, which Trump sold his share of for $142 million in 1996.

  2. 40 Wall Street

  Another big win for Trump was with 40 Wall Street, once the tallest building in the world. He bought it for $1 million after years of vacancy. Today, it’s prime real estate in the financial district, worth more than $500 million – a huge return.

  3. The Apprentice

  The Apprentice was also a financial home run for Trump. As the show’s host and executive producer, he raked in $1 million per episode for a whopping 185 episodes.

  Trump’s Biggest Failures

  Like many businessmen, Donald Trump’s career has also had his share of failures.

  1. Atlantic City

  Donald’s biggest failure may be his ill-fated venture into casinos in Atlantic City.

  The bleeding started in 1988 when he acquired the Taj Mahal Casino. Funded primarily by junk bonds, the massive casino would be $3 billion in debt within just a year of opening. Trump, who racked up $900 million in personal liabilities, had the business declare bankruptcy. To stay afloat, he ditched many personal assets such as half of his stake in the company, a 282-foot megayacht, and his airline.

  Things were dire, and Trump’s dad chipped in by providing a $3.5 million loan in the form of casino chips to help make a loan payment.

  Trump’s casino holding company would enter bankruptcy two additional times: in 2004, after accruing $1.8 billion in debt, and in 2009, after missing a bond payment during the Financial Crisis. Each time, Trump’s stake in the company fell.

  2. Other Businesses

   While three of Trump’s four bankruptcies involved Atlantic City casinos, he has also struggled in other ventures outside of real estate: Trump airlines, Trump Vodka, Trump: The Game, Trump Magazine, Trump Steaks, and Trump University were all destined for failure. Trump Mortgages was launched in 2006 right before the real estate crash, and it also imploded.

  Trump’s Net Worth

  According to Trump’s campaign, he is worth “in excess of TEN BILLION DOLLARS”. However, he has also been accused in the past of artificially inflating his net worth. Forbes and Bloomberg News both have drastically different estimates of his wealth at $4.5 billion and $2.9 billion respectively.

  Using the middle of the road figure from Forbes, here is how Trump’s wealth breaks down:

  • 48% is in New York City real estate
  • 7% is in cash and liquid assets such as investments
  • 8% is in golf courses
  • 4% is in “toys” such as helicopters, penthouse, or his Boeing 757 plane

  The remainder includes other real estate assets outside of New York City, as well as the value of the licensing agreements for hotels, real estate, or other Trump products.

  

  

• Brexit: Individualism > Nationalism > Globalism

  Submitted by Jeff Deist via The Mises Institute,

  Decentralization and devolution of state power is always a good thing, regardless of the motivations behind such movements.

  Hunter S. Thompson, looking back on 60s counterculture in San Francisco, lamented the end of that era and its imagined flower-child innocence:

  So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark — that place where the wave finally broke and rolled back.

  Does today’s Brexit vote similarly mark the spot where the once-inevitable march of globalism begins to recede? Have ordinary people around the world reached the point where real questions about self-determination have become too acute to ignore any longer? 

  Globalism, championed almost exclusively by political and economic elites, has been the dominant force in the West for a hundred years. World War I and the League of Nations established the framework for multinational military excursions, while the creation of the Federal Reserve Bank set the stage for the eventual emergence of the US dollar as a worldwide reserve currency. Progressive government programs in Western countries promised a new model for universalism and peace in the aftermath of the destruction of Europe. Human rights, democracy, and enlightened social views were now to serve as hallmarks of a post-monarchical Europe and rising US.

  But globalism was never liberalism, nor was it intended to be by its architects. As its core, globalism has always meant rule by illiberal elites under the guise of mass democracy. It has always been distinctly anti-democratic and anti-freedom, even as it purported to represent liberation from repressive governments and poverty.

  Globalism is not, as its supporters claim, simply the inevitable outcome of modern technology applied to communication, trade,and travel. It is not “the world getting smaller.” It is, in fact, an ideology and worldview that must be imposed by statist and cronyist means. It is the civic religion of people named Clinton, Bush, Blair, Cameron, and Lagarde.

  Yes, libertarians advocate unfettered global trade. Even marginally free trade has unquestionably created enormous wealth and prosperity for millions around the world. Trade, specialization, and an understanding of comparative advantage have done more to relieve poverty than a million United Nations or International Monetary Funds.

  But the EU, GATT, WTO, NAFTA, TPP, and the whole alphabet soup of trade schemes are wholly illiberal impediments masquerading as real commercial freedom. In fact, true free trade occurs only in the absence of government agreements. The only legislation required is a unilateral one-sentence bill: Country X hereby eliminates all import duties, taxes, and tariffs on all Y goods imported from country Z.

  And as Godfrey Bloom explains, the European Union is primarily a customs zone, not a free trade zone. A bureaucracy in Brussels is hardly necessary to enact simple pan-European tariff reductions. It is necessary, however, to begin building what globalism truly demands: a de facto European government, complete with dense regulatory and tax rules, quasi-judicial bodies, a nascent military, and further subordination of national, linguistic, and cultural identities.

  Which brings us to the Brexit vote, which offers Britons far more than simply an opportunity to remove themselves from a doomed EU political and monetary project. It is an opportunity to forestall the juggernaut, at least for a period, and reflect on the current path. It is a chance to fire a shot heard around the world, to challenge the wisdom of the “globalism is inevitable” narrative. It is the UK’s last chance to ask — in a time when even asking is an act of rebellion — the most important political question of our day or any day: who decides?

  Ludwig von Mises understood that self-determination is the fundamental goal of liberty, of real liberalism. It’s true that libertarians ought not to concern themselves with “national sovereignty” in the political sense, because governments are not sovereign kings and should never be treated as worthy of determining the course of our lives. But it is also true that the more attenuated the link between an individual and the body purporting to govern him, the less control — self-determination — that individual has.

  To quote Mises, from his 1927 classic (in German) Liberalismus:

  If it were in any way possible to grant this right of self-determination to every individual person, it would have to be done.

  Ultimately, Brexit is not a referendum on trade, immigration, or the technical rules promulgated by the (awful) European Parliament. It is a referendum on nationhood, which is a step away from globalism and closer to individual self-determination. Libertarians should view the decentralization and devolution of state power as ever and always a good thing, regardless of the motivations behind such movements. Reducing the size and scope of any single (or multinational) state’s dominion is decidedly healthy for liberty.

  

  

• Tony Robbins Asks Everyone To "Storm Across A Bed Of Hot Coals" – Dozens Get Injured

  Tony Robbins, the motivational speaker and author held an "Unleash the Power Within" seminar Thursday night in Dallas, and as a routine part of the seminar there was a fire walking event whereby participants walk over hot coals to practice mind over matter. It appears, however, that some attendees weren't quite focused enough that evening.

  Good morning Dallas,Texas! Welcome to Unleash the Power Within!
  Tweet me your UPW stories & why you're attending – using #UPWDallas2016

  — Tony Robbins (@TonyRobbins) June 23, 2016

  Dozens of people who attempted the feat were injured reports the Dallas Morning News, and Dallas Fire-Rescue paramedics were called to the Kay Bailey Hutchison just after 11pm where 30 to 40 people were seen onsite. The severity of the injuries was unknown, but most people elected not to be taken to the hospital said Fire-Rescue spokesman Jason Evans.

  Pujan Patel from Dallas said thousands of people walked across the coals without a problem, and the people that burned their feet should have done a better job mentally preparing – "It was very easy, but there's always going to be 1 percent of people that are idiots"

  Ah, the old "the beatings will continue until morale improves" point of view.

  Zoe Tentoglou flew to Dallas from Sunnyvale, California to attend her first Robbins event and said that participants were told to repeat the phrase "cool mas" to themselves as they walked across the coals. "The crew walked us through every step. They were very cautious. They told us not to look at the coals as we walked across, to visualize walking across the coals, and then afterwards they sprayed our feet with water."

  I'm a fire walker! #UPWDallas2016 pic.twitter.com/dhzlHcCXcP

  — Daniel Jens (@danieljens) June 24, 2016

   

  All is possible in a beautiful state ???? ?????? #firewalker #UPWDallas2016 @TonyRobbins pic.twitter.com/quLnQHDVKi

  — Regina Felice (@reginafelice) June 24, 2016

  Participants say firewalk is about facing fears & anyone who was injured wasn't in right mental state #UPWDallas2016 pic.twitter.com/bgj6fgOmWP

  — Shannon Murray (@ShannonMFox4) June 24, 2016

  Watch: Dozens burned during @TonyRobbins 'firewalk' at #UPWDallas2016 https://t.co/HTslKDTdng @NBCDFW #NBCDFWNow pic.twitter.com/YS9dV6AHZ6

  — Ben Russell (@BenRussellNBC5) June 24, 2016

  * * *

  Robbins's website says: "Overcome the unconscious fears that are holding you back. Storm across a bed of hot coals"

  We can't help but liken this to central planning. Just as Tony Robbins asked people to walk across hot coals, and as a result people got burned, central planners are asking everyone to trust the process of monetary policies – and the world is getting burned. Sometimes, things such as overcoming fears by walking over hot coals and central planning entire global economies are best left in theory instead of practice.

  

  

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• Bund Yields Crash Most Ever To Record Lows As Peripheral Sovereign Risk Explodes

  With 10Y German Bunds yields collapsing 26bps to a record -17bps low, European capital markets have gone a little but “turbo.”

   

  

   

  And Peripheral bond spreads are exploding…

  

  For some context, Portuguese bond risk is up 80bps today (the most since Feb 2012), Spanish and Italian spreads spikd 38bps (the most since Aug 2012).

  We are going to need more “whatever it takes”…

  

  

• "Our Views Coincide" – Putin Talks Up Russia's Alliance With China

  In what should come as a surprise to nobody, as the United States continues to poke and prod at China and Russia, those two countries have become even closer friends.

  

  In an interview conducted with Xinhua, Russian President Vladimir Putin talked up his relationship with Chinese President Xi Jinping, and praised the level of trust the two governments have for one another. "To say we have a strategic cooperation is not enough anymore. This is why we have started talking about a comprehensive partnership and strategic collaboration. Comprehensive means that we work virtually on all major avenues; strategic means that we attach enormous inter-government importance to this work" Putin told Xinhua.

  Putin spoke of the important role that China has played in its trade, specifically the energy market and high-speed rail projects. Recall that in April we reported that China imported a record amount of Russian oil in April, as the two nations continue to push for the de-dollarization of global trade. Putin also pointed out that Russia and China were cooperating on military-technical items as well.

  As RT reports

  China is increasing its presence in our energy market, it is a major shareholder in one of our significant projects, Yamal LNG, and it has acquired 10 percent of the shares in one of our leading chemical holdings, SIBUR. We welcome these Chinese investments not only as a means of placing financial resources but also as a means of further developing our partnership.

   

  Intensive work is underway on the famous Moscow-Kazan High-Speed Rail Line Project. Some railway sections will allow for a train speed of up to 400 kilometers per hour. We pay considerable attention to these prospects; this can be only the beginning of our large-scale infrastructure cooperation.

   

  Our interaction in the humanitarian field is no less important. Thus, we have held cross?years of China in Russia and Russia in China, the Year of Youth Exchange, the Year of the Russian Language and, accordingly, the Year of the Chinese Language, the Year of Tourist Exchange, etc. Some events were initiated by the Russian side, and others – by the Chinese side; but they all have been very successful and will undoubtedly contribute to building an atmosphere of confidence between our peoples. These projects are as important as, for example, those in the energy sphere, such as the huge Power of Siberia project to supply up to 38 billion cubic meters of Russian gas per annum via a newly established eastern route from Russia to China. Add to this diplomatic, military, and military-technical cooperation.

  In regards to collaborating on international affairs, Putin said that China and Russia's views are quite similar, and that the two consult each other on global and regional issues.

  Apart from our joint work in the Shanghai Cooperation Organization, we cooperate within BRICS, which in fact was jointly established by us, and we actively collaborate at the UN.

   

  I would take the liberty to recall that it was this country, the Soviet Union at that time, which made every effort to give the People's Republic of China its deserved place among the permanent members of the Security Council. We have always believed that this is the place for the People's Republic of China. Today, we are particularly pleased that this has happened, since our views on international affairs, as diplomats say, are either very similar or coincide. At the same time, this similarity or coincidence is backed by concrete work, including efforts on the technical level. We are in constant contact and we consult on global and regional issues. Since we consider each other close allies, naturally, we always listen to our partners and take into account each other’s interests.

   

  I am certain that our joint work during my visit to the People's Republic of China will proceed in the same way.

  * * *

  So, while the US provokes, ties are strengthening between Russia and China. We're sure China's order of 1,000 heavy transport aircraft and Russian vessels being spotted near disputed islands in the East China Sea are both just a coincidence and not a red flag that if the US engages with one, it will wind up with two problems.

  Full interview here.

  

  

• "Victory For Freedom" – Le Pen Demands Referendum For France

  First, The Dutch; and now, The French…

  French far-right leader Marine Le Pen says there should be a similar referendum about EU membership in France after Britons voted to leave the 28-nation bloc.
  
  

  

  

  

• European Stocks Crash Most In History

  Euro Stoxx 50 Futures have collapsed over 11% at the open… the biggest single-day crash in Rhhistory…

  
  

  The question is – do the central banks rush in to save the world (and prove Brexit wasn’t so bad after all), or do they fiddle while Rome burns?

  

  

• Key Brexit Question: Is Cameron The Biggest Liar In History?

  Submitted by Michael Shedlock via MishTalk.com,

  Please recall that Prime Minister David Cameron repeatedly stated there will be no second vote.

  Cameron also stipulated that he would invoke article 50 of the Lisbon treaty, which represents formal notification of a decision to leave the EU.

  Unfortunately, the battle is not over. A key question remains: Is Cameron an even bigger liar than we all know?

  Now that the vote is in, I fully expect all the other liars, notably French president Francois Hollande and German Chancellor Angela Merkel to propose a second vote with added sweeteners.

  Also note the Brexit vote is not legally binding. Cameron could easily resign, leaving this up to the next parliament to decide.

  Either of those is arguably more likely than straight-up leave negotiations.

  And we have yet to hear from European Commission president Jean-Claude Juncker who now doubt will promise (lie) anything and everything to get another vote.

  Vote by Country

  

  I captured that snapshot earlier in the evening. I have no update but it is likely reasonably close.

  What I am certain of is the two biggest votes for remain were Scotland and Northern Ireland.

  Final Question

  I leave you with one final question: Whose country is this, and will Cameron support it?

  

  

• "Now It's Our Turn" – Geert Wilders Calls For A Dutch Referendum

  Just as we warned, the historic British rejection of the EU’s totalitarian rule has sparked renewed ambitions to leave the clutches of Brussels across Europe. First to congratulate Britain was Holland’s Geert Wilders, who calls for a Dutch referendum as soon as possible…

  Thursday, June 23, 2016, will go down in history as Britain’s Independence Day.

   

  The Europhile elite has been defeated. Britain points Europe the way to the future and to liberation. It is time for a new start, relying on our own strength and sovereignty. Also in the Netherlands.

  A recent survey (EenVandaag, Dutch television) shows that a majority of the Dutch want a referendum on EU membership. It also shows that more Dutch are in favour of exit than of remaining in the EU.

  The Dutch people deserve a referendum as well. The Party for Freedom consequently demands a referendum on NExit, a Dutch EU exit.

   

  As quickly as possible the Dutch need to get the opportunity to have their say about Dutch membership of the European Union.

  Geert Wilders: “We want be in charge of our own country, our own money, our own borders, and our own immigration policy. If I become prime minister, there will be a referendum in the Netherlands on leaving the European Union as well. Let the Dutch people decide.”

  Meanwhile, Europe is a bloodbath…This is the biggest drop in EURUSD (DEMUSD) since 1978!!

  

   

  as NExit looms…

  

   

  Just as we warned in April.

  

  

• Brexit Wins! Next Stop: Frexit, Italexit and Swexit

  Congratulations to Great Britain!

  They’ve voted to exit the European Union.

  Next up: Frexit, Italexit, Swexit, Netherlexit… etcexit?

   

  

• S&P Futures Halted Limit Down As VIX Spikes Above 26

  S&P Futures are down halted limit down as carnage washes across every and any asset class on the heals of Britain’s historic vote…

   

  

   

  This has smashed the S&P down to its 200DMA…

  

   

  Charts: Bloomberg

  

  

• Morgan Stanley Explains "What Leave Means" (Spoiler Alert: A Lot Of Pain For The Longs)

  With the voting out of the way, the only thing left is the crying. Oh, and the margin calls which start in just a few hours. And, alongside all of that, forecasts of doom that have to comply with all the scaremongering that was unleashed over the past few months as part of the Remain campaign. Sure enough, here is Morgan Stanley’s Andrew Sheets explaining “What Leave Means.”

  It’s not pretty. Here is the summary answer:

  We see GBP moving to 1.25-1.30 and 15-20% downside to European equities relative to Thursday’s levels. Corporate and sovereign credit present the best opportunities to buy on weakness

  
  

  • Economic implications: The UK faces a prolonged period of uncertainty which should lead both investment and consumption to wane. Longer term, a less open economy could lower the UK’s rate of potential growth. Risks to the economy will likely lead the Bank of England to keep an easing bias – staying on hold through 2017-18, or a rate cut to 10bp with further QE depending on exit negotiations.
  • What has furthest to fall: Negative implications extend beyond the UK. We see the most downside in GBP and EU equities, and would also be sellers of AUDJPY (target 70), USDJPY (90) and EURCHF (1.02) on a flight to safety. Gilt yields could rally 30-35bp to all-time lows, but breakeven inflation could ultimately rise, given weaker GBP. In EM FX and local rates, sell Poland and South Africa.
  • Where to be brave: ECB support, both potential and existing, argues for buying corporate and sovereign credit into weakness. We discuss levels and our expected central bank response.
  • FX: Poor fundamentals could support 10%+ downside in GBP. Higher global volatility favours JPY and CHF. Increased concerns over eurozone vulnerabilities make PLN the best short in EM.
  • European equities: We expect significant downside for European stocks – SX5E at 2400-2550 and FTSE 100 at 5000-5300. Financials and Consumer Discretionary will likely lead the market lower, while Staples and Healthcare should outperform.
  • Credit: We expect a strong response from the ECB – we’d add risk in CSPPeligible assets and ‘A’-rated ineligible non-fins on initial weakness. We’d also add bank credit selectively on what we expect will be materially lower prices today – UK banks’ LT2 and AT1s have best asymmetric returns.
  • European rates: We reiterate our long duration recommendations and believe UK yields could rally 30-35bp. GBP depreciation should be a dominant force on inflationary pressures over the next two years – long Nov-18 UKTi breakevens. The decline in global yields could see 30y UK real yields return to all-time lows; we reiterate long Mar-46 UKTi real yield. BTP spreads moving more than 25bp would represent value to ‘buy on weakness’, in our view.
  • EM fixed income: We expect risk-aversion to widen the impact beyond countries with direct UK links. We see Poland and South Africa most exposed in rates and FX, and South Africa and Turkey most exposed within EM credit.

  

  And the full one:

  Cross-asset implications: Bracing for volatility, by  Andrew Sheets

   

  It looks likely that the UK has voted to leave the EU. This result will come as a surprise to markets, based on Thursday’s pricing, and creates material political and economic uncertainty in Europe. Both are negative for risk premiums, and the question over the next several days is not whether prices fall, but by how much, and whether central banks respond.

   

  What level of sell-off is warranted? A great deal of uncertainty hovers around all of our estimates in this scenario. Generally speaking, we see the most downside in European FX and equities. We think both European corporate and sovereign credit will be better insulated, given central bank support.

   

  Specifically, we think GBPUSD could trade down to 1.25-1.30, as valuations need to adjust sharply before the currency is ‘cheap’, in our view. EURUSD could fall to 1.05 over the next six months as its correlation with risk flips, reverting back to the pattern seen in 2011-12, when EUR served as a proxy for European cohesion. JPY and CHF, in contrast, should be well-supported. We think European equities could sell off by 15-20%, on a ~5% hit to earnings and de-rating the P/E back to near historical averages. Within equities, we prefer to be defensive,  favouring Staples and Healthcare, and our ‘Weaker EUR beneficiaries’ basket (MSSTWKEU). 

   

  While spreads should also widen, we think corporate and sovereign credit stand to outperform FX and equities significantly, given the ECB’s outstanding purchase programmes for both. We expect CDS to materially underperform cash, with XOver moving out towards 450bp.

   

  What to watch for? All eyes are now on the ECB, and how aggressively it decides to intervene in order to protect its member states and deflect downside risks to inflation that could result from increased economic uncertainty. In the very short term, we think the ECB could reassure markets about liquidity provision (including via FX swap lines and emergency liquidity assistance) today. We would also watch MS GRDI* (STGRDI <Index>), our preferred sentiment measure, dropping below -3, for assessing if the sell-off has run its course. We see US assets across the spectrum – stocks, FX, credit and government bonds – becoming relative safe havens: We reinforce our preference for US versus ROW in equities. We think EM equities are more vulnerable to contagion risks from Europe than US equities.

   

  We see US assets across the spectrum – stocks, FX, credit and government bonds – becoming relative safe havens: We reinforce our preference for US versus ROW in equities. We think EM equities are more vulnerable to contagion risks from Europe than US equities.

  * * *

  What else? Oh yes: central banks to the rescue, of course.

  Statements and actions by central bankers

   

  Elga Bartsch and Chetan Ahya, our global economists, think that in the immediate aftermath of a vote to leave key global central banks will make statements that they stand ready to support markets by providing liquidity and by reopening existing FX swap lines. Such statements could well be coordinated across the G7. Central banks with active QE programmes could make operational adjustments to their asset purchase programmes, if needed. Beyond these emergency measures, however, they do not expect changes in the monetary policy stance in the immediate aftermath of a vote to leave.

  Good luck.

  

  

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• British Discontent About The EU: Only A Precursor To Unrest On The Continent

  Authored by Peter Cleppe, originally posted at Euro Insight,

  If Brexit marks the beginning of the end for the European project, Brussels will take its share of the blame

  If Britain leaves the EU and if the reaction to Brexit causes years of uncertainty, the EU will reap what it has sowed. British discontent is only a precursor to unrest on the Continent, where populists from across the political spectrum feel they have lost control over their fate, and are gaining popularity.

  We’ve seen the transfers of power to the European level after ignoring the referendums on the European Constitution in France and the Netherlands in 2004. We’ve witnessed the refusal to allow Grexit, which could have been an alternative for continued fiscal transfers and interventions into national budgetary decisions. Both have created a lot of discontent and anti-EU sentiment since 2010.

  Last year, there was the decision to outvote Central and Eastern Europe on the sensitive issue of forcing countries to accept refugees, which isn’t even possible in a passport-free zone, as people can travel freely, but which was decided to divert attention from criticism on Angela Merkel’s controversial refugee policy and to organize yet another transfer of power to the EU level.

  Finally, we could see how Prime Minister David Cameron’s proposals to bridge the gap between the EU and citizens were met with a lukewarm reaction. His proposal, for example, to allow national parliaments to block EU proposals was watered down to make it harder to implement.

  If the British vote to ‘Remain’, they most likely won’t do so with a majority of more than 60%. That however is the threshold needed, according to pollster Comres, to really settle the debate for the next few years.

  With a narrow victory for the ‘Remain’ camp, it is therefore more than likely that the debate would just start over the next day, very much like the Scottish demand for independence which has remained a prominent feature in UK politics after 44.7% of Scots voted to secede from the UK in a referendum in 2014.

  If people vote to ‘Leave’ the EU, the government is likely to activate article 50 of the EU Treaty, which foresees that the status quo is maintained for two years and that both parties are given the chance to renegotiate their relationship.

  Many think that two years will be much too short for this. The British government thinks that there could perhaps be 10 years of uncertainty, while EU Council President Tusk has mentioned seven years. Some in the ‘Leave’ camp have claimed that there may even be a second referendum after a Brexit vote, whereby Britain would get the chance to remain in the EU after all, but under better conditions than those negotiated by Cameron in February this year.

  It’s unlikely that the UK would want a relationship similar to that between Norway and the EU. Norway may have complete access to the European single market because of its membership of the European Economic Area but in exchange it needs to comply with over a set of EU rules without having any influence over them within the EU institutions. That surely won’t be an option for a country which just would have left the EU because of a desire to have more sovereignty.

  Also, to have the EU-Canada trade deal (CETA) as a model, as advocated by the ‘Leave’ campaign’s Boris Johnson, may not be appealing, given the lack of access the financial services industry would enjoy to the EU market.

  The British may prefer something like the Swiss model instead, which means that the UK and the EU would negotiate which markets they would open to each other and which rules they would harmonise or mutually recognize. At the moment, a Swiss firm like Credit Suisse is based in London in order to be able to access the EU’s single market, so some extra hurdles may emerge.

  Whatever trade relationships are pursued by a post-Brexit Britain, it’s very possible that a Brexit vote would unleash protectionist sentiment on the Continent and that the EU would want to punish the “naughty pupil” by means of limiting market access for British financial firms. Diplomats have already made clear that both France and the EU Commission are keen to “punish” the UK if it would vote to leave, while Germany, which exports a lot to Britain, is planning to be more conciliatory in the event of a vote for Brexit.

  This protectionism would both hurt Britain and the Continent, given that the City of London can be seen as its financial lifeline. It would in any case be similar to the EU’s reaction to Switzerland, after the Swiss expressed in a referendum the desire to restrict free movement for EU citizens and the EU Commission essentially refused to negotiate.

  British proponents of EU membership have made the case that Cameron’s deal guarantees that the “high-watermark” of EU intervention in British policy has been reached.

  But EU opponents have questioned how legally binding the deal is, leading to obscure debates on the relationship between international and EU law. They have claimed that even after threatening the nuclear option – a referendum on Brexit – Cameron didn’t manage to obtain more than what they consider to be peanuts.

  One thing is certain: if Brexit marks the beginning of the end of the EU project, many of those responsible are to be found in Brussels.

  

  

• Brexit: Why The Wrong Question Is Being Asked

  By Chris at www.CapitalistExploits.at

  Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.

  Welcome to this weeks edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all it’s insanity.  

  

  While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drivers.

  Selfishly we also know that the biggest (and often the fastest) returns come from asymmetric market moves. But, in order to identify these moves we must first identify where they live.

  Occasionally we find opportunities where we can buy (or sell) assets for mere cents on the dollar – because, after all, I’m a capitalist.

  In this week’s edition of the WOW we’re covering Brexit.

  In a show of just how disjointed British society has become with previously held cultural values, London’s mayor just banned all advertisements of models who are essentially non-sharia compliant.

  “Sadiq Khan, London’s first Muslim mayor, announced Monday that “body shaming” advertisements will no longer be allowed in London’s public transport.”

  I admit to having a fondness for London, having previously called it home for 6 years of my life. One of the reasons I chose to live there – instead of say Kabul or Riyadh – was because I never much fancied girls dressed like ninjas. And together with friends I quite liked the fact that we could enjoy a few pints at the pub and wouldn’t be jailed and flogged for doing so.

  As little as ten years ago it would have been unthinkable that either of these things would have been in question. And yet here we stand today, watching events unfold in real time. These little pieces of culture are under ever increasing threat, and it’s not just in Britain. Is it any wonder we are having a sweeping backlash and change in the zeitgeist?

  What the political class in both Europe and Britain has miraculously failed to understand is that Brexit is much more about failures on multiple levels than it is about the concept of the EU. The EU has been so bastardised that it’s completely unrecognisable from the creature first established 23 years ago. This is understandable as the business of government is to grow cancer like never relinquishing power once established.

  Having seen the slow but accelerating effects of a bureaucracy on tilt, the average Joe Citizen is now waking up to the fact that he finds himself with an oppressive and suffocating external form of government, an imperial overseeing force which understands his needs less and less.

  Like an intestinal worm, the bureaucracy has grown to the point where the following areas of governance are now essentially dictated by a foreign imperial power:

  1. Immigration (the freedom of movement between EU member states works only if the EU’s external borders are controlled)
  2. Crime (closely tied to the flood of immigrants already pouring into Britain and other EU countries)
  3. Trade (44% of trade is with EU member states and nobody wants to see that hurt)
  4. Law (laws applying to British Citizens are increasingly made by the EU and not by the UK judicial system)
  5. Jobs (closely tied to trade)
  6. Finance (as the financial centre for Europe, London is subject to EU laws)
  7. Sovereignty (Britain’s parliament is no longer sovereign)
  8. Defence (Does Europe have defence?)

  Is it any surprise that Joe Citizen is questioning the status quo?

  It certainly shouldn’t be. This questioning has been met with a level of desperation by the establishment which can only be described as unprecedented.

  Yes to Brexit or no to Brexit is less important a question than why Brexit in the first place?

  The vote to stay or leave the EU is as much a vote for or a rejection of the establishment than any other European or British referendum I can think of.

  We’re seeing an increasing divide across the developed world. The Trump vs Hillary debate is characterised by Hillary Clinton representing the establishment vote and Donald Trump positioning himself as a rejection of the establishment.

  This is less a Republican vs Democrat vote than ever before and the rejection vote grows every day across the developed world.

  Consider the following:

  • Austria recently experienced something which would have been completely unimaginable just a decade ago. They came within a whisker (just 0.6%) of electing to power the Austrian Freedom Party, an openly racist, extremely anti-immigrant and anti-muslim party.

  

  • According to a recent poll, over 90% of Dutchmen want a referendum on leaving.
  • Italy’s right-wing party, Beppe Grillo’s Five Star Movement, look like they’ll have their guy elected mayor of Rome.
  • Marine Le Pen, France’s right-wing hopeful, looks like an increasingly likely candidate for presidency next year.

  Der Spiegel has a nice map showing the trend. Countries with far right parties which have a presence in parliament are shown with yellow dots and those where far right parties are already part of the government are shown with red dots. 

  

  The xenophobic right-wing and rising backlash – a direct result of the European Union having lost control of its borders – has seen countries such as Sweden, Holland, and the UK experiencing surging right wing popularism.

  Previously moderate Europeans no longer watch from the safety of their living rooms the Jihadi cauldron boiling in Damascus, Khartoum, or Islamabad, but instead find it exploding onto the streets of their own cities.

  Nearly half of citizens in eight European countries polled want to hold a referendum on membership. Bottom line: Europe is in trouble and Brexit is simply bringing it to life in vivid colour for all to see.

  As traders and investors it’s of no consequence what we may wish to happen. As incredibly important, wonderful, talented, intelligent, good looking, and well deserving readers of Capitalist Exploits are, the market doesn’t actually give a toss about us. Depressing, I know. But what actually takes place and how that affects asset prices is what matters.

  And so the question to ask isn’t whether Britain leaves the EU, but rather from where will the next crisis of confidence come?

  Cast your vote here and also see what others think

  

  Or do you think it will be some other country? Let me know in the comments here.

  Know anyone that might enjoy this? Please share this with them.

  We’d love your feedback and if you have a market you think worthy of covering please send it to me here.

  – Chris

  “Darlin’ you got to let me know, should I stay or should I go?” – The Clash, Should I Stay Or Should I Go?

  ============

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• Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market

  Gold Lower Despite “Panic” Due To “Supply Issues” In Inter Bank Gold Market

  Gold fell again today to its lowest in a week despite continuing uncertainty about the outcome of the Brexit referendum. This is contributing to very significant high net worth and institutional demand in recent days, particularly in the UK, which is leading to “panic” and “supply issues” in the interbank gold market.

  Supply issues which respected gold analysts and ourselves have warned in recent years were taking place, would deepen and would ultimately lead to a reset of gold prices to much higher levels.

  

  Click chart for more

  Increasing speculation that Britain may vote to stay in the European Union and hedge fund liquidations are being blamed for the recent price falls. However, bullion dealers such as GoldCore, mints and refineries that cater to the UK market have seen minimal selling this week and in fact there has been a surge in demand again this week.

  We believe the price falls are due to hedge funds and banks liquidating positions and shorting the market. As ever, there is the risk that algo and high frequency trading (HFT) may be manipulating prices lower despite very robust physical demand and increasing liquidity issues in the interbank gold market.

  Informed, senior sources at the highest level of the gold bullion industry have told us that there is “panic” in the inter bank or institutional gold market. According to the sources one of whom is from a leading Swiss gold refinery, we are in a “unique trading climate” that they have never seen before. This is not just due to Brexit but to “a number of factors” and so is likely to continue even after the Brexit referendum.

  The market is subject to absolutely “unprecedented conditions” and a degree of illiquidity and “supply issues” not seen even in the immediate aftermath of September 11th, Lehman Brothers and the height of the Eurozone crisis.

  Refineries and mints are being advised that bullion banks may take the unprecedented step of “suspending the trading of physical gold.” Premiums have risen on larger orders creating the situation where spreads are higher on larger orders. An example of this is that a 1,000 ounce order worth $12.66 million at current prices is trading at a premium of $0.33 per ounce over a smaller order of 500 ounces.

  There is also warnings that stop loss orders above 5,000 ounces may not be filled at agreed prices and could be filled at much lower prices. In addition, a number of large liquidity providers in the gold market, such as Intl FC Stone, have increased margins.

  Thus counter intuitively, larger high net worth and institutional orders are costing more than somewhat smaller relative orders. This has the effect of discouraging larger buy orders for physical – whether by accident or by design. “Officialdom” does not want surging gold prices in advance of the referendum due to the risks that this poses to the financial and monetary system and therefore prices may be being “capped” prior to the vote tomorrow.

  This bodes well for prices in the aftermath of the vote – whether the UK votes to remain or leave in the EU.

  Bullion banks “have been panicking” and advising that soon, they may no longer be able to quote prices on large gold bar orders. This response is previously unheard of and indicates the increasing illiquidity in the large gold bar market due to a recent surge in HNW, UHNW and institutional (wealth managers, hedge funds, banks etc) demand across the world coupled with already robust central bank demand.

  The increasingly illiquid physical gold market where supply cannot keep up with demand underlines the importance of owning physical bullion coins and bars – either in your possession or having direct legal title to your individual coins and bars. Bullion should be owned in your name or your company’s name and be stored directly in the safest vaults in the safest jurisdictions in the world – outside the financial, banking system.

  
  

  

• Who Is The "European Movement" And Why The Answer May Change How You Vote On "Brexit"

  Submitted by Professor Richard A. Werner, D.Phil. (Oxon)

  EU Basics – Your Guide to the Referendum

  The British people should be clear about just what they will be voting on at the EU referendum this Thursday. What does it actually mean to stay in the EU? What does it mean to exit?

  Concerning the second question, the dominant issue in the debate has been the question whether there will be a significant negative economic impact on the UK from exiting the EU. Prime Minister David Cameron, together with the heads of the IMF, the OECD and various EU agencies have given dire warnings that economic growth will drop, the fiscal position will deteriorate, the currency will weaken and UK exports will decline precipitously. George Osborne, the chancellor of the exchequer has threatened to cut pensions if pensioners dare to vote for exit. But what are the facts?

  I have been trained in international and monetary economics at the London School of Economics and have a doctorate from the University of Oxford in economics. I have studied such issues for several decades. I have also recently tested, using advanced quantitative techniques, the question of the size of impact on GDP from entry to or exit from the EU or the eurozone. The conclusion is that this makes no difference to economic growth, and everyone who claims the opposite is not guided by the facts. The reason is that economic growth and national income are almost entirely determined by a factor that is decided at home, namely the amount of bank credit created for productive purposes. This has sadly been very small in the UK in recent decades, thus much greater economic growth is possible as soon as steps are taken to boost bank credit for productive purposes – irrespective of whether the UK stays in the EU or not (although Brexit will make it much easier to take such policy steps). We should also remember that a much smaller economy like Norway – thought more dependent on international trade – fared extremely well after its people rejected EU membership in a referendum in 1995 (which happened against the dire warnings and threats from its cross-party elites, most of its media and the united chorus of the heads of international organisations). Besides, Japan, Korea, Taiwan and China never needed EU membership to move from developing economy status to top industrialised nations within about half a century. The argument of dire economic consequences of Brexit is bogus.

  As for the first question, namely what it means to stay inside the EU, we should consult the EU itself. Happily, the EU released a major official report about its key policies and what it plans to achieve in the near future in October 2015. This report was issued in the names of the “Five Presidents“ of the EU. In case you had not been aware that there was even a single, let alone five presidents of the EU, these are: The unelected president of the European Central Bank, Goldman Sachs alumnus Mario Draghi, the unelected president of the European Commission, Jean-Claude Juncker, the unelected Brussels Commissar and “president of the Eurogroup“, Jeroen Dijsselbloem, the “president of the Euro Summit“, Donald Tusk, and the president of the European Parliament, Martin Schulz. What is the message of this not negligible number of EU presidents concerning the question of where the EU is going? The title of their joint report is a give-away: “The Five President’s (sic) Report: Completing Europe’s Economic and Monetary Union“. https://ec.europa.eu/priorities/publications/five-presidents-report-completing-europes-economic-and-monetary-union_en

  The report starts with the frank admission that “with 18 million unemployed in the euro area, a lot more needs to be done to improve economic policies” in the EU. Well said. But what exactly needs to be done?

  “Europe’s Economic and Monetary Union (EMU) today is like a house that was built over decades but only partially finished. When the storm hit, its walls and roof had to be stabilised quickly. It is now high time to reinforce its foundations and turn it into what EMU was meant to be…“

   

  “ we will need to take further steps to complete EMU.”

  The central planners in Brussels and at the ECB in Frankfurt are not unaware that under their command, a historically unprecedented economic dislocation has taken place in the EU during the past ten years, including massive asset and property bubbles, banking crises and large-scale unemployment in all the periphery countries – with over 50% youth unemployment in Greece, Spain and Portugal, as well as the lack of any serious controls of the EU external borders to prevent an influx of unparalleled numbers of illegal immigrants and economic migrants.

  However, the EU central planners are in denial about the fact that these problems have been caused entirely by their own misguided and disastrous policies. As a result, they argue that the solution to such problems can only be further concentration of powers into their hands: “We need more Europe“, as Mrs Merkel put it (source: please read these Merkel claims about the EU http://www.euractiv.com/section/eu-priorities-2020/news/merkel-calls-for-political-union-to-save-the-euro/) This is what they propose to implement in the coming years, by turning all EU members into one single country.

  So the Five Presidents‘ Report makes clear that the EU is not simply a free trade area. That project had been left behind with the 1992 Maastricht Treaty and a very different kind of Europe has become enshrined with the 2007 European Constitution (called ‘Lisbon Treaty‘, since the people of Europe in several referenda rejected it. Source: please read what the author of the rejected European Constitution says: http://www.independent.co.uk/voices/commentators/valeacutery-giscard-destaing-the-eu-treaty-is-the-same-as-the-constitution-398286.html ). Instead, the EU is the project to abandon all national sovereignty and borders within and melt away all European nations that don’t succeed in exiting in time, into a merged, joint new single country, with one central European government, centralised European monetary policy, centralised European fiscal policy, centralised European foreign policy, and centralised European regulation, including of financial markets and banking. This United States of Europe, an undemocratic leviathan that the European peoples never wanted, is the culmination of the much repeated mantra of “ever closer union“.

  This project has been implemented steadily and stealthily over several decades, despite major and consistent policy blunders and scandals involving the central planners (e.g. in 1999 the entire European Commission – the unelected government and cabinet of the European superstate – resigned in disgrace, as it was found to have taken bribes and engaged in fraud, while the EU’s own Court of Auditors has repeatedly refused to sign off the EU’s official books).

  The economics is clear: there is no need to be a member of the EU to thrive economically, and exiting does not have to impact UK economic growth at all. The UK can remain in the European Economic Area, as Norway has done, or simply agree on a trade deal, as Switzerland did, and enjoy free trade – the main intention of European agreements in the eyes of the public. The politics is also clear: the European superstate that has already been formed is not democratic. The so-called ‘European Parliament‘, unique among parliaments, cannot propose any legislation at all – laws are all formulated and proposed by the unelected European Commission! As a Russian observer has commented, the European Parliament is a rubber-stamping sham, just like the Soviet parliament during the days of the Soviet Union, while the unelected government is the European Commission – the Politibureau replete with its Commissars.

  Big business and big banks, as well as central bankers and the IMF, constitute the financial elite that is behind this purposeful concentration of power – giving ever more power into the hands of ever fewer people. The undemocratic nature of EU institutions has reached such an extent that I have heard a recently retired member of the ECB governing council in private confessing that his biggest worry is the undemocratic nature and extent of the ECB’s powers, which have increasingly been abused for political ends. These facts have been drowned out by the constant drip of propaganda emanating from the powerful elites behind the creation of the United States of Europe.

  During these years and decades of steady transfers of powers and sovereignty from nation states and their democratically elected assemblies to the unelected Brussels bureaucracy, I had always been puzzled by the apparent strong US support for all this. Whenever the ‘process‘ of ‘ever closer union‘ seemed to have hit an obstacle, a US president – no matter the post holder’s name or party affiliation – would intervene and in no uncertain terms tell the troublesome Europeans to get their act together and speed up unification of Europe into one state. In the naivety of my youth this had struck me as surprising. Likewise, the British public has recently been told by US president Obama that dropping out of the EU was not a good idea and they had better vote to stay in.

  While it is not surprising that the global elite that has benefitted from the trend towards concentration of power is getting increasingly hysterical in their attempts to cajole the British public into voting to stay inside the EU, it is less clear why the US president and his government should be so keen on the EU project. We had been told in the past by the European media that the concentration of economic and political decision-making in Europe was being engineered in order to create a counter-weight against the US dominance. This seemed to motivate some pro-EU voices. Surely the US president must have heard about that?

  There is another mystery. Only yesterday, an impressive-looking leaflet was dropped into the letterbox of my Winchester home, entitled “EU Basics – Your Guide to the Referendum“. It was issued by an organisation called the “European Movement“. The 16-page colour and high gloss booklet argues for Britain to stay in the EU. Who is this “European Movement“, and who is funding it? This little-known organisation seems financially powerful enough to drop a high-quality print booklet into every household in the entire UK.

  The declassification of formerly secret records has solved both mysteries. For as it turns out, they are connected. In the words of Nottingham University academic Richard Aldrich:

  “The use of covert operations for the specific promotion of European unity has attracted little scholarly attention and remains poorly understood. … the discreet injection of over three million dollars between 1949 and 1960, mostly from US government sources, was central to efforts to drum up mass support for the Schuman Plan, the European Defence Community and a European Assembly with sovereign powers. This covert contribution never formed less than half the European Movement’s budget and, after 1952, probably two-thirds. Simultaneously they sought to undermine the staunch resistance of the British Labour government to federalist ideas…. It is also particularly striking that the same small band of senior officials, many of them from the Western [note: this means US] intelligence community, were central in supporting the three most important transnational elite groups emerging in the 1950s: the European Movement, the Bilderberg Group and Jean Monnet’s Action Committee for a United States of Europe [ACUE]. Finally, at a time when some British antifederalists saw a continued ’special relationship‘ with the United States as an alternative to (perhaps even a refuge from) European federalism, it is ironic that some European federalist initiatives should have been sustained with American support.“

  There is much more to read in this explosive piece of scholarly research (Richard J. Aldrich (1997), OSS, CIA and European unity: The American committee on United Europe, 1948-60, Diplomacy & Statecraft,8(1), pp. 184-227, online at http://www.tandfonline.com/doi/abs/10.1080/09592299708406035#.V2exrU36voo )

  UK journalist and former Brussels correspondent Ambrose Evans-Pritchard was the only journalist to report on such academic research findings, in two articles in 2000 and 2007:

  “DECLASSIFIED American government documents show that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. … US intelligence secretly funded the European Movement, paying over half its budget. Some of Europe’s founding fathers were on the US payroll….

   

  “The documents confirm suspicions voiced at the time that America was working aggressively behind the scenes to push Britain into a European state. Lest we forget, the French had to be dragged kicking and screaming to the federalist signing table in the early 1950s. Eisenhower threatened to cut off Marshall aid unless Paris agreed to kiss and make up with Berlin. France’s Jean Monnet, the EU’s mastermind, was viewed as an American agent – as indeed, he was. Monnet served as Roosevelt’s fixer in Europe during the war and orchestrated the failed US effort to stop de Gaulle taking power.

   

  “One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA. … Washington’s main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948. The chairman was Donovan, ostensibly a private lawyer by then. The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA’s first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years. In 1958, for example, it provided 53.5 per cent of the movement’s funds. The European Youth Campaign, an arm of the European Movement, was wholly funded and controlled by Washington.

   

  “The leaders of the European Movement – Retinger, the visionary Robert Schuman and the former Belgian prime minister Paul-Henri Spaak – were all treated as hired hands by their American sponsors. The US role was handled as a covert operation. ACUE’s funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government.

   

  “The head of the Ford Foundation, ex-OSS officer Paul Hoffman, doubled as head of ACUE in the late Fifties. The State Department also played a role. A memo from the European section, dated June 11, 1965, advises the vice-president of the European Economic Community, Robert Marjolin, to pursue monetary union by stealth.

   

  “It recommends suppressing debate until the point at which “adoption of such proposals would become virtually inescapable“.

   

  “Fifty years after the Treaty of Rome, the architects of post-war US policy would be quite pleased, I think, if they were alive today. …

  (excerpted from: Ambrose Evans-Pritchard (2000), Euro-federalists financed by US spy chiefs, The Daily Telegraph, 19 September 2000; http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html and Ambrose Evans-Pritchard (2007), The scare of a superstate has passed, but do we want to lose the EU altogether? The Daily Telegraph, 7 April 2007)

  No wonder Mr Evans-Pritchard has now concluded that he will vote for Brexit: http://www.telegraph.co.uk/business/2016/06/12/brexit-vote-is-about-the-supremacy-of-parliament-and-nothing-els/

  The revelation that the EU is the result of a major US secret service operation – effectively just yet another secret creature of deception launched by the CIA (taking seat of honour in the hall of infamy that includes false flag operations, invasions, coup-detats, and the establishment of organisations such as Al Qaida and ISIS) solves the third mystery, namely how on earth the allegedly democratic European nations could design such an undemocratic, virtually dictatorial structure. With the EU/United States of Europe the US not only achieves its geo-strategic goals in Europe, but it has also eliminated the role of pesky national parliaments that could on occasion get in the way of US or CIA foreign policy. And another puzzle is solved, namely why the EU had so readily agreed to a US request a few years back that US spy agencies get access to all European emails and telephone calls….

  A vote to stay in the EU thus is a vote to abolish the United Kingdom as a sovereign state and merge it into the undemocratic United States of Europe which the European elites are building under US tutelage. That the European public – and, it seems, even European politicians – have little or no input in key European decisions can be seen from the increasingly aggressive NATO stance against Russia (Brussels-based NATO being the military arm of the EU, which is overtly under direct US control), and the one-sided sanctions against Russia that the US could simply order the Europeans to implement (causing significant losses in incomes and jobs in Europe, while boosting US business interests). Immigration policies are another case in point. If the US had in the past considered the largely homogeneous European populations a source of potential European resistance against its plans for Europe, then the policy to replace them with balkanised failed ‘melting pots‘ also makes sense.

  Norway voted in 1995 on EU membership. Leading parties were all in favour. Big business and central banks, major media outlets and the talking heads on TV were frantically bullying and cajoling the Norwegian public to vote ‘in‘. The people remained steadfast and voted ‘out‘. Norway did splendidly. And so much more will the UK.

  Professor Werner is Director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton. He is known for proposing the concept of ‘Quantitative Easing‘ in Japan. His 2003 book Princes of the Yen warned of the dangers of excessive central bank independence and predicted that the ECB was likely to create credit bubbles, banking crises and recessions in the eurozone.

   

  

  

• Silver Options Traders Follow Gold To Longest Bullish Bet Since 2009

  Where gold goes, silver often follows, and in the options markets that is increasingly so…

  3 month Puts have now been cheaper than Calls for more than 97 days…

  

  As the chart shows, bearish options on exchange-traded funds tracking the metals have been cheaper than bullish ones for the longest time since at least 2009.

  It doesn't appear the trend is set to change anytime soon, as Fed credibility collapses (red line – inverted expectations of rate-hike-pace) so Gold (gold line) and global developed market bonds (green line) have soared tick for tick…

  

   

  So what happens next?

  

   

  “There’s more upside risk for gold than there is downside,” Josh Crumb, the chief strategy officer who helps oversee $1.7 billion at Toronto-based GoldMoney, said in an interview in New York. “For gold to fall, they would have to raise interest rates more than the market expects, and I think that’s a very unlikely scenario.”

  

  

• Brexit: Global Trigger Event, Fake Out Or Something Else?

  Submitted by Brandon Smith via Alt-Market.com,

  Those people who do not avidly track global economic events may be a bit confused by the growing tensions surrounding the U.K. referendum to exit the European Union, otherwise known as the “Brexit.” Or, they are completely indifferent. Unfortunately, the potential fallout surrounding the event could very well affect the entire world, but perhaps not in the manner the mainstream media and international financiers would have us believe…

  I would point out that under normal global economic conditions, the Brexit really shouldn’t matter much to anyone outside of the U.K. If the EU was fiscally stable, if its banks were solvent and its national debts well in hand, if the EU was actually a practical and successful supranational body, then the damage done by a British vote to leave the union would be minimal. Of course, this is not the case. As many other independent economic analysts and I have been outlining for years, the European Union is on the verge of economic breakdown. Look at it this way — if financial turmoil in a tiny member state like Greece can cause widespread doubts about the EU’s stability, then there is something fundamentally volatile about the entire structure.

  The Brexit matters greatly to the future of the EU because, theoretically, if one of its most prominent members says adios, then other members may do the same. As it stands now, the EU cannot afford to have even one member, economically large or small, drop out of the system.

  The Brexit matters to the rest of the world including the U.S. because of the brilliantly-destructive program of interdependency and globalism that has shaped our financial house for decades. Interdependency leads to extreme economic weakness because no piece of the global system has the tools to survive without the other pieces; and on top of this, when one part of the machine goes down, ALL the other parts are affected.

  It is a truly horrible and seemingly idiotic system; but not so idiotic if you accept the reality that it is deliberately engineered to fail.

  When you examine the fiscal foundations of every major economy in the world today, what you find is a financial shell game. The fundamentals tell us the truth; with global exports and imports in decline, global shipping of raw materials in decline, manufacturing in decline, retail in decline, employment in decline, real unemployment numbers including those people no longer counted by the Labor Department skyrocketing and the number of people on welfare and food stamps skyrocketing.

  In reality, the global economy is one massive thin-skinned bubble searching for a sharp object to impale itself on. The Brexit may very well be that sharp object.

  Before I go into the various details surrounding Thursday’s vote, I want to state that I am in full support of the British movement to leave the European Union. The reasoning behind a successful Brexit is solid. The European Union’s rabid socialist tendencies have created a doom scenario for all those shackled to the supranational body. Forced multiculturalism and cultural Marxism has opened a floodgate of Islamic refugees which hold ideological beliefs completely incompatible with western principles and heritage while at the same time introducing a massive vampiric drain on the prevailing social welfare systems.

  The EU’s governing body is a mostly faceless and unaccountable bureaucracy that hands down legal dictates from on high while the general population of the member states have little or no input. The European Central Bank’s monetary policies support failed financial institutions and fraudulent markets while siphoning tax dollars from stronger and more successful nations in order to feed the debt addictions of weaker countries. The very philosophical engine behind the EU is one of collectivism; it is a system that requires a hive mentality in order to function. Only a fool would WANT to participate in such a political and financial farce.

  That said, I think we need to take stock of certain underlying realities.

  First, as mentioned earlier, the EU, like most other economies today, is an interdependent structure and is thus designed to fail. The EU is not the golden goose for globalists, it is just another appendage that can be sacrificed or rearranged in order to achieve greater goals. The EU is a means to an end, it is not the ultimate prize.

  The ultimate prize for globalists would be a system like the EU with a single currency and a single monetary authority, but this new system would erase all sovereign borders and install a single governmental authority as well.

  What does this mean? It means that the failure of the EU does not necessarily mean a failure for the internationalists. For groups of globalists that promote an ideology of Fabian Socialism, a breakdown of the EU, whether partial or total, can be used as leverage for a larger and more centralized global power structure in the long term.  Mark my words, when the system comes crashing down (whether after the Brexit or after another trigger event), internationalists will say that the EU failed not because it was centralized, but because it was not centralized ENOUGH.

  Even though I support the Brexit movement based on the principle that supranational unions are a heinous affliction upon free individuals and nations, I have no illusions that a successful Brexit vote will actually harm the globalists. In fact, they may very well desire the U.K. to leave the EU.

  Why? As noted, the global economy is on the verge of implosion. The ONLY elements of the system that are not yet crashing are stock markets. This is because stock markets do not in any way reflect the fundamentals of the economy, they only reflect investor perceptions of the economy. Perceptions can be manipulated for a time, and public psychology can be subdued by false optimism and lies. It can take years for a population to psychologically accept the idea that they are in the midst of a recession or depression. Therefore, it can take years for stock markets to finally reflect the legitimate dangers within the economy.

  Central banks at the behest of globalist institutions like the International Monetary Fund and the Bank For International Settlements have spent incredible amounts of capital and energy managing public perception. Through subversive monetary policies, they have weakened national economies to the point of collapse, and this collapse is meant to create enough chaos to inspire the masses through fear to support greater centralization.

  While certain banking institutions may fall, the bankers themselves have no intention of taking any blame for the inevitable collapse.

  If you examine modern history (the past century), you will find in the aftermath of every crisis that globalist organizations have consistently blamed nationalism and sovereignty while promoting socialism and centralization as the most civilized solution. That is to say, globalists create widespread war and financial terror, blame conservative ideals such as sovereignty, then argue that such ideals must be eradicated for the greater good of the greater number.

  We have to be honest in our exploration of the Brexit event and admit that in this case the globalists win either way.

  If the Brexit succeeds, the globalists can allow the market systems they have been inflating for years to finally crash. They can then blame those dastardly "far-Right extremists" in the U.K. for triggering a domino effect within the global financial system, conveniently scapegoating British conservatives, moderates and sovereigns for a breakdown that was going to happen eventually anyway. Their solution will once again be to argue for the end of “barbaric” conservative principles and install complete centralization and socialism as the cure.

  If the Brexit fails, or if it is a controlled fake out, they can artificially boost markets for perhaps another month while distracting the public away from the negative fundamentals yet again.

  We should also not overlook the possibility that the referendum vote may be rigged one way or the other. Current polls indicate a tie between the “Leave” crowd and the “Remain” crowd. Any vote this close is the easiest kind of vote to rig a few percentage points to either side.

  I believe the Brexit vote may be allowed to succeed, here’s why…

  1) Elites including George Soros have suddenly decided to dive into the market to place bets on the negative side. Dumping large portions of their stock holdings, shorting equities and buying up gold and gold mining shares. Soros has been preparing his portfolio for a successful Brexit vote while at the same time publicly warning of the supposed dire consequences if the referendum passes.  The last time Soros put this much capital into the markets was in 2007, just before the crash of 2008.

   

  2) The IMF and the BIS have been warning since late 2015 (for six to eight months) that a global economic downturn is on the way in 2016. We saw considerable volatility at the beginning of this year, and markets are due for another shock. The last time the BIS and IMF were so adamant about an impending crash was in late 2007, just before the 2008 market plunge.

   

  3) While the Federal Reserve has not yet implemented a second rate hike (I still believe they could use a rate hike this year to stab markets in the back if necessary), Janet Yellen pulled a maneuver which was almost as upsetting to investors. After the Fed policy meeting last week, markets were moderately exuberant and stocks were rising, then, Yellen opened her mouth and blamed the Brexit for the rate hike delay… Here is what the Fed has done: By delaying the second hike for another month, and then blaming the Brexit vote as a primary reason, they have created a bit of a paradox. If the Brexit vote passes, the Fed is asserting that they may not hike rates for a while, giving market investors the impression that the global economic recovery is not all that it is cracked up to be. If the Brexit vote fails, then the Fed MUST hike rates in July, otherwise, they lose all credibility. I believe Yellen’s claim that the Brexit vote was the cause of the hike delay was highly deliberate. It has triggered what may become a growing firestorm in equities and commodities.

  From the point of view of investors, if the Brexit passes, then all hell breaks loose. If the Brexit fails, then the Fed will hike rates and once again, all hell breaks loose. Or, the Fed refuses to hike rates even though its number one scapegoat is out of the picture, it loses all credibility, and all hell breaks loose.

   

  It’s a lose/lose/lose scenario for the investment world, which is probably why global markets plunged after Yellen’s remarks. Investors have been relying on the predictability of central bank intervention for so long that now when ANY uncertainty arises, they run for the hedges.

   

  The Fed decision to blame the Brexit for their rate hike delay could indicate foreknowledge of a successful Brexit vote.

   

  4) The recent murder of British lawmaker Jo Cox is perhaps the weirdest piece in the puzzle of the Brexit. For one thing, it makes no sense for a pro-Brexit nationalist (Thomas Mair) to attack and kill a pro-EU lawmaker when the polls for the “Leave” group were clearly ahead. One could simply argue that the guy was nuts, but I’m rather suspicious of “lone gunman,” and his insanity has yet to be proven.  I see no reason for this man, insane or not, to be angry enough to kill while the Brexit side was winning in all the polls.

   

  If someone was using him as a weapon only to discredit the Brexit vote or sway the public towards staying in the EU, you would think that they would have initiated the murder closer to the day of the referendum when it would have the most effect. The information flooded public has days to digest new data and forget Jo Cox.

   

  My theory? Thomas Mair has handlers or he is just a mentally disturbed patsy, and his purpose is indeed to paint the Brexit movement as “angry” or crazy. But this does not necessarily mean the intent behind the assassination of Jo Cox was to break the back of the Brexit movement. Rather, the goal may only be to perpetuate a longer term narrative that conservatives in general are a destructive element of society. We kill, we’re racists, we have an archaic mindset that prevents “progress,” we divide supranational unions, we even destroy global economies. We’re storybook monsters.

   

  Even the cultural Marxists at the Southern Poverty Law Center somehow produced documents allegedly linking Mair (a veritable unknown) to Neo-Nazi groups in 1999. Wherever the SPLC is involved, the official story is always skewed.

   

  The murder of Jo Cox has had a minimal effect on Brexit polling numbers.  In the end, the elites may find Thomas Mair more useful as a mascot for the Brexit AFTER the vote, rather than before the vote.

   

  So now the Brexit movement, which is conservative in spirit, is labeled a “divisive” and “hateful group”, and if the referendum is triumphant, they will also be called economic saboteurs.

  There is also the possibility that the Brexit is yet another fake out. We have seen many of them over the past few years. So many in fact that a lot of analysts in the Liberty Movement have grown pretty cynical, as if the system could be propped up forever. The issue is always, of course, one of timing. All fundamentals indicate that the global economy is going down regardless of what central banks and international financiers do in the long run. The only question is whether or not they feel it is time to pull the plug on one of the last remaining bubbles (stocks). A successful Brexit could be a perfect scapegoat for the next leg down in the economy, or it could be a perfect placebo to boost markets for a short time if it fails. In either case, I have no doubt that the outcome has already been decided.

  

  

• China Warns The US That It Is "The Wrong Opponent To Play Games With"

  Two US aircraft carriers, the John C. Stennis and Ronald Reagan, began joint operations in the seas just east of the Philippines over the weekend the US Navy announced on Monday. The operations come during a tense time in the region, as China recently announced that it would not adhere to any unfavorable ruling that may come from The Hague regarding the Philippines formal challenge of territorial claims in the South China Sea.

  

  China has been very clear in its position that the US should stay out of the maritime disputes in the region, however the US has already made it clear that it intends to be the policeman in the region for decades to come, so the move comes as no surprise. Admiral John Richardson, the chief of US Naval Operations said that it was not often the US had two carrier strike groups in the same waters and it was a sign of US commitment to regional security.

  According to Reuters, Richardson made a correlation between the Asian deployment and the deployment the US recently sent to the Mediterranean Sea in order to send a message to Russia.

  "Both here and in the Mediterranean, it's a signal to everyone in the region that we're committed, we're going to be there for our allies, to reassure them and for anyone who wants to destabilize that region. And we hope there's a deterrent message there as well."

  A US Pacific Command (PACOM) statement quoted Rear Admiral John D. Alexander, commander of the Ronald Reagan carrier group, as saying it was an opportunity to practice techniques needed to prevail in modern naval operations.

  "The US Navy has flown, sailed and operated throughout the Western Pacific in accordance with international law for decades, and will continue to do so."

  One additional piece to this story is that as Reuters points out, the People's Daily (the official newspaper of China's ruling Communist Party, which is often used to express foreign policy views), had the following to say about the US decision to send carriers in.

  Via Google Translate

  Conveying a so-called message about security through the exhibition of military might, and furthermore describing the events as an act of deterrence is something that the U.S. has done far too many times. Regardless of how many times it may have gone smoothly in other parts of the world the U.S. has chosen the wrong opponent by selecting China for this type of game. Behind all of this is lack of patience and brassy moves and it also reveals a nature of hegemony beneath the surface.

  * * *

  It is obvious that China is getting tired of the games that the US is playing in the region, and no matter how many times China has warned that the US should stay out of its affairs, the US remains steadfast in its effort to police the region. It is only a matter of time before a confrontation takes place, intentional or otherwise, and then the world will be undoubtedly pushed to the brink of war – which would be bullish for stocks of course.

  

  

• BREXIT EXPLaiNeD…

  

   

  If Brexit passes Goldman won’t be able to sodomize Greece from London…

  

• Trump's Anti-Interventionism – Neocons Hate It As Anti-War Left Comes Around

  Submitted by John Walsh via LewRockwell.com,

  Until recently the progressive mind has been resolutely closed and stubbornly frozen in place against all things Trump.

  But cracks are appearing in the ice.  With increasing frequency over the last few months, some of the most thoughtful left and progressive figures have begun to speak favorably of aspects of Trump’s foreign policy.  Let us hear from these heretics, among them William Greider, Glen Ford, John Pilger, Jean Bricmont, Stephen F. Cohen and William Blum.  Their words are not to be construed as “endorsements,” but rather an acknowledgment of Trump’s anti-interventionist views, the impact those views are having and the alternative he poses to Hillary Clinton in the current electoral contest.

  First, let’s consider the estimable William Greider, a regular contributor to The Nation and author of Secrets of the Temple.  He titled a recent article for the Nation, “Donald Trump Could be The Military Industrial Complex’s Worst Nightmare: The Republican Front Runner is Against Nation Building.  Imagine That.” 

  Greider’s article is brief, and I recommend reading every precious word of it.  Here is but one quote: “Trump has, in his usual unvarnished manner, kicked open the door to an important and fundamental foreign-policy debate.”  And here is a passage from Trump’s interview with the Washington Post that Greider chooses to quote:

  “’I watched as we built schools in Iraq and they’d be blown up,’ Trump told the editors.  ‘And we’d build another one and it would get blown up. And we would rebuild it three times. And yet we can’t build a school in Brooklyn.… at what point do you say hey, we have to take care of ourselves. So, you know, I know the outer world exists and I’ll be very cognizant of that but at the same time, our country is disintegrating, large sections of it, especially in the inner cities.’”

  Trump talks about building infrastructure for the inner cities, especially better schools for African American children, rather than bombing people of color halfway around the world!  That is hardly racism.  And it is not how the mainstream media wants us to think of The Donald.

  Next, Glen Ford, the eloquent radical Left executive editor of Black Agenda Report, a superb and widely read outlet, penned an article in March 2016, with the following title: “Trump Way to the Left of Clinton on Foreign Policy – In Fact, He’s Damn Near Anti-Empire.” Ford’s piece is well worth reading in its entirety; here are just a few quotes :

  “Trump has rejected the whole gamut of U.S. imperial war rationales, from FDR straight through to the present.”

   

  “If Trump’s tens of millions of white, so-called ‘Middle American’ followers stick by him, it will utterly shatter the prevailing assumption that the American public favors maintenance of U.S. empire by military means.”

   

  “Trump shows no interest in ‘spreading democracy,’ like George W. Bush, or assuming a responsibility to ‘protect’ other peoples from their own governments, like Barack Obama and his political twin, Hillary Clinton.”

   

  “It is sad beyond measure that the near-extinction of independent Black politics has placed African Americans in the most untenable position imaginable at this critical moment: in the Hillary Clinton camp.”

  Next, let’s turn to John Pilger, the Left wing Australian journalist and documentary film maker who has been writing about Western foreign policy with unimpeachable accuracy and wisdom since the Vietnam War era.   Here are some of his comments on Trump:

  “..Donald Trump is being presented (by the mass media) as a lunatic, a fascist.  He is certainly odious; but he is also a media hate figure.  That alone should arouse our skepticism.”

   

  “Trump’s views on migration are grotesque, but no more grotesque than those of David Cameron. It is not Trump who is the Great Deporter from the United States, but the Nobel Peace Prize winner, Barack Obama.”

   

  “In 1947, a series of National Security Council directives described the paramount aim of American foreign policy as ‘a world substantially made over in [America’s] own image’.  The ideology was messianic Americanism. We were all Americans. Or else. …”

   

  “Donald Trump is a symptom of this, but he is also a maverick. He says the invasion of Iraq was a crime; he doesn’t want to go to war with Russia and China. The danger to the rest of us is not Trump, but Hillary Clinton. She is no maverick. She embodies the resilience and violence of a system whose vaunted ‘exceptionalism’ is totalitarian with an occasional liberal face.”

  The money quote is: “The danger to the rest of us is not Trump, but Hillary Clinton.”  When Pilger submitted his article to the “progressive” magazine Truthout, this sentence was deleted, censored as he reported, along with a few of the surrounding sentences.  Such censorship had not been imposed on Pilger by Truthout ever before.  Truthout’s commitment to free speech apparently has limits in the case of The Donald versus Hillary, rather severe ones.  So one must read even the progressive press with some skepticism when it comes to Trump.

  Trump has also been noticed by the Left in Europe, notably by the sharp minded Jean Bricmont, physicist and author of Humanitarian Imperialism who writes here:

  (Trump) “is the first major political figure to call for ‘America First’ meaning non-interventionism.  He not only denounces the trillions of dollars spent in wars, deplores the dead and wounded American soldiers, but also speaks of the Iraqi victims of a war launched by a Republican President. He does so to a Republican public and manages to win its support. He denounces the empire of US military bases, claiming to prefer to build schools here in the United States. He wants good relations with Russia. He observes that the militarist policies pursued for decades have caused the United States to be hated throughout the world. He calls Sarkozy a criminal who should be judged for his role in Libya. Another advantage of Trump: he is detested by the neoconservatives, who are the main architects of the present disaster.”

  And then there is Stephen F. Cohen, contributing editor for The Nation and Professor Emeritus of Russian History at Princeton and NYU.  Cohen makes the point that Trump, alone among the presidential candidates, has raised five urgent and fundamental questions, which all other candidates in the major parties have either scorned or more frequently ignored. The five questions all call into question the interventionist warlike stance of the US for the past 20 plus years. Cohen enumerates the questions here, thus:

  “Should the United States always be the world’s leader and policeman?

   

  “What is NATO’s proper mission today, 25 years after the end of the Soviet Union and when international terrorism is the main threat to the West?

   

  “Why does Washington repeatedly pursue a policy of regime change, in Iraq, Libya, possibly in Ukraine, and now in Damascus, even though it always ends in “disaster”?

   

  “Why is the United States treating Putin’s Russia as an enemy and not as a security partner?

   

  “And should US nuclear weapons doctrine include a no-first use pledge, which it does not?”

  Cohen comments in detail on these questions here. Whatever one may think of the answers Trump has provided to the five questions, there is no doubt that he alone among the presidential candidates has raised them – and that in itself is an important contribution.

  At this point, I mention my own piece, which appeared late last year.  Entitled “Who is the Arch Racist, Hillary or The Donald”?  Like Cohen’s pieces, it finds merit with the Trump foreign policy in the context of posing a question.

  Finally, let us turn to Bill Blum, who wrote an article entitled, “American Exceptionalism and the Election Made in Hell (Or Why I’d Vote for Trump Over Hillary).”  Again there is little doubt about the stance of Blum, who is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II, a scholarly compendium, which Noam Chomsky calls “Far and away the best book on the topic.”

  Blum begins his piece:

  “If the American presidential election winds up with Hillary Clinton vs. Donald Trump, and my passport is confiscated, and I’m somehow FORCED to choose one or the other, or I’m PAID to do so, paid well … I would vote for Trump.”

   

  “My main concern is foreign policy. American foreign policy is the greatest threat to world peace, prosperity, and the environment. And when it comes to foreign policy, Hillary Clinton is an unholy disaster. From Iraq and Syria to Libya and Honduras the world is a much worse place because of her; so much so that I’d call her a war criminal who should be prosecuted.”

  And he concludes:

  “He (Trump) calls Iraq ‘a complete disaster’, condemning not only George W. Bush but the neocons who surrounded him. ‘They lied. They said there were weapons of mass destruction and there were none. And they knew there were none. There were no weapons of mass destruction.’ He even questions the idea that ‘Bush kept us safe’, and adds that ‘Whether you like Saddam or not, he used to kill terrorists’.”

   

  “Yes, he’s personally obnoxious. I’d have a very hard time being his friend. Who cares?”

  I conclude with Blum’s words because they are most pertinent to our present situation.  The world is living through a perilous time when the likes of the neocons and Hillary Clinton could lead us into a nuclear Armageddon with their belligerence toward Russia and their militaristic confrontation with China.

  The reality is that we are faced with a choice between Clinton and Trump, a choice which informs much of the above commentary.  Survival is at stake and we must consider survival first if our judgments are to be sane.

  

  

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• Britain Doesn't Need The EU To Thrive

  Submitted by Frank Hollenbeck via The Mises Institute,

  The United Kingdom will tomorrow vote either to leave or remain in the European Union. This is the most important European event of this century since it will likely have important domino effects for the rest of Europe.

  A recent poll showed that if the UK could keep free trade with EU nations, the British people would vote overwhelmingly to leave the EU. To drum up support for staying in the EU, the UK government and quasi-government agencies, like the IMF and OECD, have issued continuous warnings about the costs of such a divorce. The IMF recently reiterated its forecasts that Brexit would have a significant negative effect on the UK economy with a drop in GDP anywhere between 1% and 9% over the long term.

  The reality is that Brexit would probably only have a minor initial impact on trade or GDP and, on the contrary, would open up vast possibilities for the UK to exploit trade relations with other faster growing regions of the world without having to reach complex trade agreements that satisfy the vested interests of the other 28 members of the EU. 

  The impact of Brexit on trade has been grossly exaggerated. In today's world, a product has parts coming from all over the world. A BMW is only called German because of historical association. In reality, the steel in a BMW may come from Brazil or China, the upholstery from the UK, the engine from France, and the electronics from the USA. Labor costs are only 10% of a car and some may even be foreign labor. Also, profits are distributed to BMW shareholders and bondholders which are more likely to be sent to a hedge fund in Japan than to the mechanic in Dusseldorf. The world is massively economically integrated. Relatively free trade and free movement of capital is no longer an option for most countries, whether it is the UK or any of the other countries in the EU. That boat sailed years ago!

  Trade restrictions and capital controls are no longer a countries’ choice: either you participate in the world economy or accept living standards equivalent to that of North Korea or Venezuela. So the issue is NOT whether the UK will continue to trade mostly freely with the EU: it will, because today there is no other choice: and the same is true for the other countries of the EU. Despite French threats of a bloody Brexit, Germany, which runs its second largest  bilateral trade surplus with the UK, has little interest in starting a trade war, nor do most of the private interests in the rest of Europe.

  If the UK government is really concerned about trade, it has the power to significantly increase both its exports and living standards. It only has to remove any impediments to imports. We must never forget that imports are intractably linked to exports. What is true of the individual is also true for a nation. The ability to buy (foreign purchase of UK exports) is linked to the ability to sell (UK purchases of imports).

  The history of mankind is a struggle between the individual trying to retain freedoms and tyrannical governments trying to take it away from him. The EU was created to increase freedoms: the freedom of the movement of goods, capital, and people. As expected, it has devolved into an entity that does just the opposite with a myriad of rules and regulations that benefit large crony capitalist firms at the expense of small and medium sized enterprises that do not have the resources to jump through every EU hoop that is necessary to bring a product to market. Furthermore, the EU is moving in the wrong direction: that of limiting freedoms. It recently established a code of conduct to limit what it considers illegal hate speech. This code is so vague that it could include almost anything including criticisms of the EU. If this sounds familiar, it should! It was called the “ministry of truth’ in Orwell’s 1984.

  If the UK votes to leave the Union, the EU would lose a significant source of revenue since the UK pays a net amount of about 136 million pounds a week and historically has paid more to the EU that it has received from the EU. Since the EU already has unpaid bills of 19.6 billion pounds, it will find it very difficult to find additional resources from cash strapped countries such as France, Italy, or Spain whose debt to GDP ratios are already over 100%. With a higher contribution ratio, Germany will be required to fund more of the EU budget and may find it difficult to cover those countries that may soon find themselves unable to assume their share of funding. For example, Greece does not really contribute anything to the EU budget since Germany covers a majority of its contribution indirectly through EU loans to Greece. The same is likely to occur when Spain or Italy run into trouble.

  Germany already envies Britain’s decision not to join the monetary union. It laments losing monetary control of its currency. If Brexit is successful, Germany will find the option of regaining control over its monetary and regulatory policies seductive. We may shortly be talking about Germanexit. Yet, without Germany, the EU would then be a non-entity: good riddance, it would not be missed!

  

  

• Did Bank Of Japan's Kuroda Just "Capitulate" Too?

  First it was The Fed's Janet Yellen coming "as close to capitulation on monetary policy's lack of efficacy," and now The Bank of Japan's Kuroda appears to have had an epiphany. In a stream of truth-filled consciousness unheard of for central planners, the governor admitted, among other things, that "monetary policy doesn't always turn out as expected," and that "many economists don't think financial markets always right," implying, of course, that he and his brethren know better. It appears that as central bank credibility collapses, so the central bankers themselves are having their own 'Greenspan'-moment when their life's work is finally proven entirely pointless.

  The results of monetary and fiscal policies don’t always turn out as expected, Bank of Japan Governor Haruhiko Kuroda says in an interview on TV Tokyo, aired early on Wednesday.

  Nope!

  

  His additional comments were just as ironic:

  • FX and stock markets sometimes move too much.
  • Many economists don’t think financial makets are always right.
  • Kuroda says his personality is cautiously optimistic.

  Nope!

  

   

  Given all that, now consider the following, excerpted from Kuroda’s opening remarks at the 2015 BOJ-IMES Conference:

  The issues I have raised so far are all complex, and there are no quick, definitive solutions for them. Nevertheless, I strongly believe that, at this one-and-a-half day conference, we will address the issues we currently face and find our way forward through lively discussions. I trust that many of you are familiar with the story of Peter Pan, in which it says, "the moment you doubt whether you can fly, you cease forever to be able to do it." Yes, what we need is a positive attitude and conviction. Indeed, each time central banks have been confronted with a wide range of problems, they have overcome the problems by conceiving new solutions. 

   

  

  *  *  *

  With that, Kuroda has just confirmed that DM central banks are literally relying on a fairy tale to keep the global economy and financial system afloat.

  

  At least he's being honest for once.

  

  

• Is This The Big One? Large-Scale Motion Detected Near San Andreas Fault

  Submitted by Mac Slavo via SHTFPlan.com,

  As if California doesn’t have enough problems already…

  The big one is believed to be due every century or so along major fault lines – and California is long overdue. Eventually, there is just too much built up pressure that must be released.

  Although experts don’t know when a major earthquake may hit the San Andreas fault, they expect that it is simply inevitable and have warned for years about mitigating the disaster to come.

  Sadly, few of those warnings have been heeded, and major destruction is likely to someday affect, directly or indirectly, most of the tens of millions of residents who live in or near Los Angeles and the surrounding area.

  Here are some of the simulations of what they officially say could happen. In reality, the damage and the secondary effect on social order could have an even greater impact:

   

  And the real world data is troubling as well.

  Now, researchers have been able to model that build up of pressure along the tectonic plates of the San Andreas using new GPS techniques that have allowed more information:

  Analysis of GPS data has revealed new areas of motion around the San Andreas Fault System.

   

  Using data collected by the EarthScope Plate Boundary Observatory’s GPS array, researchers identified 125-mile-wide “lobes” of uplift and subsidence. Over the last several years, the lobes, which straddle the fault line, have hosted a few millimeters of annual movement.

   

  […]

   

  Lead author Samuel Howell, a researcher at the University of Hawaii at Manoa, explained in a news release. “Using this technique, we were able to break down the noisy signals to isolate a simple vertical motion pattern that curiously straddled the San Andreas fault.”

   

  Researcher Bridget Smith-Konter said: “The powerful combination of a priori model predictions and a unique analysis of vertical GPS data led us to confirm that the buildup of century-long earthquake cycle forces within the crust are a dominant source of the observed vertical motion signal.“

  

   

   "Using this technique, we were able to break down the noisy signals to isolate a simple vertical motion pattern that curiously straddled the San Andreas fault."

  As SHTF recently reported, the news is not good.

  According to the leading scientists in the study of tectonic plates and movements, earthquakes must periodically relieve plate pressure (about 16 feet worth of movement every century), but that has not happened on the San Andreas fault during that time period – in fact, the event is overdue.

  Scientists have renewed their warnings that the faultline “looks like it’s locked, loaded and ready to go.” As the L.A. Times reported:

  Southern California’s section of the San Andreas fault is “locked, loaded and ready to roll,” a leading earthquake scientist said Wednesday at the National Earthquake Conference in Long Beach.

   

  The San Andreas fault is one of California’s most dangerous, and is the state’s longest fault. Yet for Southern California, the last big earthquake to strike the southern San Andreas was in 1857, when a magnitude 7.9 earthquake ruptured an astonishing 185 miles

  […] “The springs on the San Andreas system have been wound very, very tight.

  If/when a major earthquake does hit the L.A. metro area, there will be a significant danger of societal collapse – with every major service from water, food, gas, electricity, transportation, sewage and more under threat of severe – and potentially prolonged – disruption.

  

  

• A Week In The Life Of The American Police State

  Submitted by John Whitehead via The Rutherford Institute,

  “Those who corrupt the public mind are just as evil as those who steal from the public purse.”—Adlai Stevenson, 23rd Vice President of the United States

  If you’ve been caught up in the circus that is the presidential election, you’ve likely missed the latest news about all the ways in which the government continues to erode our freedoms, undermine our sovereignty, abuse our trust, invade our homes, invade our privacy, destroy our property, hijack our bank accounts, and generally render itself above the law.

  Then again, this is all par for the course from a militaristic government that is armed to the teeth, wages war against its own people, imprisons its citizens for profit, marches in lockstep with the corporate elite, and treats human beings as little more than cattle to be branded, bought, sold and butchered.

  The following incidents constitute a typical week in the life of the American police state.

  Not content with merely spying on our emails and phone calls, the NSA wants to spy on thermostats, refrigerators, and pacemakers.

   

  Reinforcing fears about how easily surveillance technology can be abused by government officials, local police in California are using money acquired through asset forfeiture to buy surveillance equipment that was then used to blackmail city council members.

   

  Small-town police departments continue to militarize their forces, acquiring military equipment such as BearCat armored vehicles and SWAT teams at an alarming rate.

   

  According to the Government Accountability Office, the majority of people in the government’s criminal face-recognition database have never committed a crime.

   

  The private prison business is booming, signaling a profitable windfall for investors and a death knell for any American unfortunate enough to run afoul of the many laws criminalizing otherwise legitimate behavior such as growing a garden on one’s front lawn or hosting a Bible study in one’s backyard.

   

  In fact, one Florida couple recently sued their town council after being threatened with fines under a law banning front-yard gardens.

   

  The Second Circuit Court of Appeals recently ruled that as long as the government shows “good faith,” it can search your digital files as much as it wants.

   

  The FBI and other government agencies have been hiding cameras in city utility poles in order to carry out warrantless, covert surveillance on Americans.

   

  The USDA and EPA have been using SWAT teams to conduct raids on raw milk producers, beekeepers and lemon growers, among others.

   

  The Eighth Circuit Court of Appeals has ruled that Americans have no expectation of privacy when it comes to credit card magnetic strips. Translation: swiping a credit card to determine its legitimacy is not a search under the Fourth Amendment.

   

  Sex scandals involving police officers—the latest involving police and sex workers in California—are revealing yet another sordid side of the abuses being perpetrated by government officials as they carry out their “official” duties.

   

  The University of Oklahoma is preparing to launch a 24/7 hotline for students to report incidents of microaggressions and bias.

   

  The government’s active shooter, crisis actor terror drills continue to blur the line between what is real and staged. In Fenway Park, a multi-agency counterterrorism exercise managed to fool even local media with its simulated explosions and gunfire, reports of active shooters and bombs, bomb-sniffing dogs, and fake victims, blood smeared on their faces, running from the park with hands in the air.

   

  The Drug Enforcement Administration is fighting for warrantless access to Americans’ private medical files, including what prescriptions you might be on, as part of its so-called war on drugs.

   

  Two police training academies have been suspended for what appears to be teaching the use of excessive force.

   

  Belying its claims of neutrality, among the 426 organizations the IRS has been accused of targeting for increased scrutiny, a large subsection of the groups have the word “tea” in their name, 33 have “patriot,” 26 refer to “liberty,” and several others have “occupy” in their name.

   

  The FBI is pushing Congress for access to Internet browser history without a warrant. The agency also wants to keep its biometric database secret and exempt from privacy laws.

   

  Using video analytics technology that can detect “suspicious” behavior, the government is looking to tap into surveillance cameras in order to identify “people and objects who could present a threat, or individuals and items that might have been involved in a past crime.”

   

  According to recent figures, people with severe untreated mental illness are 16 times more likely to be killed in a police encounter.

   

  Michigan is creating a pilot program to allow police to carry out roadside drug testing, opening the door to further forced searches in violation of a driver’s right to bodily integrity.

   

  If a new tech start-up gets its way, landlords and employers will eventually be able to strip-mine intimate data from your Facebook page, including entire conversation threads and private messages.

   

  Facebook may also be listening in on your phone conversations all of the time.

   

  According to EPA data, drinking water sources in communities across America may be contaminated beyond what is being reported.

   

  Despite government efforts to appear transparent and receptive to input on its drone programs, secret documents reveal that the government’s secret drone task force ignored public concerns about drone surveillance.

   

  Taking the risk of government surveillance to all-new levels and moving us that much closer to realizing the fictional world of Minority Report, “biohackers” are putting microchips and magnets in their bodies to enable them to communicate electronically with their surroundings.

   

  Further legitimizing corrupt asset forfeiture schemes, the Texas Supreme Court has ruled that law enforcement can seize private property that was used in the commission of a crime, even if evidence of wrongdoing was illegally obtained by police.

   

  Despite a mounting body of evidence—and dead bodies—proving that tasers can kill, police officers continue to use the so-called nonlethal weapons recklessly, leaving those victims who survive the shock permanently disabled.

   

  As a testament to the transformation of the nation’s public schools into quasi-prisons, more than 1.6 million high school students now attend schools with police on campus but not a single guidance counselor.

   

  In Oklahoma, highway patrols are rolling out a new asset forfeiture program that allows them to access and transfer any funds on prepaid credit cards directly to police bank accounts.

   

  Finally, in a recent interview, former congressman Ron Paul voiced what so many of us have  been warning for years now: we no longer really have democracy in America.

  Rather, as I point out in my book Battlefield America: The War on the American People, what we have is a political distraction that keeps us oblivious to the steady advance of the police state, deaf to the cries of its victims, blind to the damage its wreaking on our communities and silent in the face of tyranny.

  As always, I am asked: what can Americans do about the incessant assault on their freedoms?

  For starters, wake up. Stop allowing yourselves to be easily distracted by pointless political spectacles and pay attention to what’s really going on in the country.

  The real battle in 2016 for control of this nation is not being waged between Republicans and Democrats in the ballot box. The real battle for control of this nation is taking place on roadsides, in police cars, on witness stands, over phone lines, in government offices, in corporate offices, in public school hallways and classrooms, in parks and city council meetings.

  Wake up, America. The real battle between freedom and tyranny is taking place right in front of our eyes, if we would only open them.

  

  

• Indonesian Navy Fires Warning Shots At Chinese Fishing Boats In The South China Sea

  There was another incident in the South China Sea this weekend, and shockingly it did not involve the US.

  

  The Indonesian navy said that it had fired warning shots on Friday at Chinese fishing boats operating in the Natuna Sea, an area that Indonesia claims as an exclusive economic zone. The incident is the third confrontation of its kind this year the FT reports. China's foreign ministry said that one boat had been damaged and one sailor shot (a claim that Indonesia has denied) during the altercation, which China believes to have occurred in "traditional Chinese fishing grounds."

  Indonesia's fisheries minister Susi Pudjiastuti reportedly said on Twitter that the shots were fired "according to procedure" as the navy defended Indonesia's sovereignty.

  Aaron Connelly, a Southeast Asian researcher at the Lowy Institute added some insight as to why the Chinese fishing vessels were down near the Natuna Sea "Chinese fishing fleets, whether directed by the state or not, are going further and further south because they have overfished the waters near Hainan. It may also be strategically driven because Indonesia has stepped up fisheries enforcement in the Natuna Sea and China may want to send a message that it won't be pushed around." Again we note that it is critical to understand that China is quite focused on mitigating any further social unrest, and as pork prices have increased, another source of protein would be from the fishing industry. If the waters near Hainan are indeed overfished, then it makes complete sense that the vessels would extend further south.

  As a quick reminder, here is a map showing the overlapping claims that many countries believe they have in the South China Sea:

  

  Here is a different version that shows China's claim being noticeably close to the Natuna Sea where this incident took place:

  

  The incident further drives tensions in the region, and occurs just as China has threatened to leave the UN Sea Convention if a court ruling from The Hague sides with the Philippines in a South China Sea territorial dispute.

  

  

• Hillary Clinton Rants That "Trump Would Throw Us Back Into Recession"

  After a Gallup poll was released earlier this month showing that 53% of Americans prefer Donald Trump for handling the economy compared to 43% who prefer Hillary Clinton, the presumptive Democratic presidential nominee felt the need to address the issue during a speech on Tuesday.

  

  "Liberals and conservatives say Trump's ideas would be disastrous. The Chamber of Commerce and labor unions. Mitt Romney and Elizabeth Warren, economists on the right, the left and the center all agree: Trump would throw us back into recession." Clinton said in Columbus, Ohio, adding that "Trump would take us back to where we were before the crisis. He'd rig the economy for Wall Street again. That will not happen on my watch, I guarantee you."

  Clinton also took the time to criticize Trump on his comments about debt: "The United States of America doesn't do business Trump's way, and it matters when a presidential candidate talks like this, because the world hangs on every word our president says. The full faith and credit of the United States is not something we just gamble away. That could cause an economic catastrophe, and it would break 225 years of ironclad trust that the American economy has with Americans and the rest of the world."

  Hillary also took a page out of Trump's book and let loose a barrage of Twitter posts. One tweet said that Trump's tax plan would add $30 trillion to the national debt over 20 years:

  Donald Trump's tax plan would add $30 trillion to the national debt over 20 years. That's "trillion"—with a "t." pic.twitter.com/o79WRixL9A

  — Hillary Clinton (@HillaryClinton) June 21, 2016

  Which is quite ironic since the Obama administration has almost doubled the national debt by itself.

  

  

  Here are some additional tweets from Hillary that look to continue the narrative.

  "Imagine him being in charge when your jobs and savings are at stake. Is this who you want leading us in an emergency?” —Hillary on Trump

  — Hillary Clinton (@HillaryClinton) June 21, 2016

  .@realDonaldTrump, only someone who’s never actually faced the consequences of his mistakes would brag, “I play with bankruptcy.”

  — Hillary Clinton (@HillaryClinton) June 21, 2016

  "The same people [Trump's] trying to get to vote for him now are people he’s been exploiting for years” —Hillary: https://t.co/dJYqAjRoC8

  — Hillary Clinton (@HillaryClinton) June 21, 2016

  Trump has written a lot of books about business—but they all seem to end at Chapter 11.

  — Hillary Clinton (@HillaryClinton) June 21, 2016

  * * *

  Speaking of rigging the economy for Wall Street, we seem to remember Goldman Sachs paying Clinton a lot of money to give speeches, the transcripts of which still have not yet been released. However, that is something that many Americans will choose to overlook we have no doubt.

  And of course, Trump has responded on Twitter:

  Obama-Clinton inherited $10T in debt and turned it into nearly $20T. They have bankrupted… https://t.co/1COtt0RPY7

  — Donald J. Trump (@realDonaldTrump) June 21, 2016

  

  

• UBS Warns Its Clients They May Not Be Able To Trade At All After Brexit

  With less than two days until the outcome of the Brexit referendum, traders around the world know two things: in a scene reminiscent of Lehman Sunday, everyone will be ready to trade the nanosecond the first results are released resulting in a supernova of volatility and an unprecedented burst in volume or… markets will simply grind to a halt as banks refuse to take risk positions and execute client orders, all bids and offers are withdrawn as the last trace of liquidity evaporates, and central banks are forced to start trading with each other in the open market.

  As the following just released warning from UBS to its clients reveals, it will probably be the latter, to wit:

  Regardless of the outcome, we may see an increase in volatility and an impact on trading volumes. In the event that extreme market moves occur in an environment of limited liquidity, our principal spreads may widen for both electronic and voice trading, liquidity may reduce and prices may turn indicative (i.e., non-tradable) for periods of time.

  Full UBS email.

  

   

  

  

• Japanese Mint Employee Stole 15Kg Gold Bar "To Cover FX Trading Losses"

  With USDJPY collapsing in fits and starts and the nightly nattering nabobs of Japanese officialdom sparking mini risk flare-ups in FX markets, we can easily comprehend a part-time currency trader mounting up some losses. But it appears 54-year-old Japanese Mint employee Yutaka Umeno turned the leverage dial to 11 and having lost it all, decided the appropriate solution was to to steal a 15 kilo bar of gold "to cover his FX losses."

  

  As Asahi.com reports, a Japan Mint worker is accused of swiping a 15-kilogram gold bar valued at around $650,000 from under the noses of his colleagues…

  Yutaka Umeno, an officer at the Japan Mint's Tokyo Branch near Ikebukuro Station in Tokyo’s Toshima Ward, has been arrested and charged with stealing the gold bar, which was displayed in the Tokyo Branch’s Mint Museum, Saitama prefectural police announced June 20.

  The ingot, which measures about 20 centimeters in length, 10 cm in width and 6 cm in height, was found at a pawn shop here, north of Tokyo.

  Umeno, 54, who lives in Saitama city’s Nishi Ward and works for the general affairs division at the Japan Mint, has admitted to a charge of theft and told police he did it to “compensate losses made by foreign exchange trading.”

  According to the investigators, Umeno made a subordinate remove the gold bar from its display case in the museum on Jan. 5 this year. He lied to the colleague, saying that he needed it for work purposes, which was a plausible reason as the museum sometimes loans the ingot for educational use.

  Perhaps even more intriguing is The Mint did not realize the large gold ingot was missing for five months!!

  The crime came to light when the worker who removed the bar from the case became suspicious after Umeno, who kept working there, did not return it for five months and reported it to another superior officer.

   

  On a number of occasions after the theft, staff members inquired with Umeno about the location of the bar. Umeno left his post at the Tokyo branch in the middle of the day on June 14. Three days later, a member of his family contacted police after he had not returned home. Saitama Prefectural Police apprehended him therafter.

   

  Yasuhiro Ichiba, the mint’s assistant director of the general affairs department, offered an apology at a press conference in Osaka on Monday. “We will endeavor to ensure that a recurrence does not take place,” he said.

  We wonder why the Mint worker did not steal share certificates or Yen… maybe it's a 'tradition' to steal 'valueless' yellow rocks?

  

  

• Blackouts Loom With California In Power Grid Emergency: "All Customers Should Expect 14 Days Without Power"

  Submitted by Mac Slavo via SHTFPlan.com,

  The entire Los Angeles metropolitan area and most of Southern California can expect blackouts this summer.

  The power grid is under direct threat as a result of the unprecedented, but little reported, massive natural gas leaks at Alisco Canyon that was ongoing for  four months as an intense summer heat wave sets in.

  According to Reuters:

  California will have its first test of plans to keep the lights on this summer…

   

  With record-setting heat and air conditioning demand expected in Southern California, the state’s power grid operator issued a so-called “flex alert,” urging consumers to conserve energy to help prevent rotating power outages – which could occur regardless.

   

  Electricity demand is expected to rise during the unseasonable heatwave on Monday and Tuesday, with forecast system-wide use expected to top 45,000 megawatts, said the California Independent System Operator (ISO), which manages electricity flow through the state. That compares with a peak demand of 47,358 MW last year and the all-time high of 50,270 MW set in July 2006.

   

  That could put stress on the power grid, particularly with the shut-in of Aliso Canyon, following a massive leak at the underground storage facility in October [Editor’s Note: which was not stopped fully until mid-February 2016].

  The large-scale natural gas disaster – which curiously escaped media frenzy and widespread environmental concern – has resulted in the shutdown of key storage facilities that supply most of the power for the southern portion of the state.

  As summer demand for electricity to cool homes and businesses kicks into high gear, power plants are planning to shut down, with supply shortages triggering controlled blackouts and brownouts.

  Reports say that “all customers” should expect to be without power a total 14 days – 2 weeks time – out of this summer. Some 21 million Californians stand to be directly affected:

  All customers, including homes, hospitals, oil refineries and airports are at risk of losing power at some point this summer because a majority of electric generating stations in California use gas as their primary fuel. In April, millions of electric customers in Southern California were warned they could suffer power outages on up to 14 days this summer due to the closure.

   

  […]

   

  Unlike some other gas transmission systems that can store large amounts of so-called linepack gas in pipelines, like PG&E Corp in northern California, SoCalGas cannot function with only pipeline or storage supplies.

  Planned rolling brownouts have been done on a regular basis in Southern California since the days of Enron and the California energy crisis of 200o-2001, but the situation is getting more dire.

  As demand spikes, customers can expect to pay more for electricity, even as supplies threaten to be cut off, leaving families, residents and businesses in the dark.

  All this, as California’s historic drought problems continue to plague the state and restrict available services.

  As Tess Pennington notes:

  This puts stress of the other electrical grids who then compensate for the loss of energy to that existing grid. When these events take place, there is an overwhelming increase of power in homes and commerce to either generate heat, air conditioning or electricity. When this need overwhelms the grid, the utility company intentionally “shuts off the power to an area in order to reduce the load on an electricity generation and grid. The utility company turns it back on, and then shuts the power off in a different area, with outages in any given area typically lasting 60 to 90 minutes, according to the California Energy Commission. This is a last resort measure of utility companies to avoid an even worse situation — a total power blackout.

  Of course, there is plenty of room for unplanned blackouts as well, as an increasingly vulnerable power grid nears the perfect conditions for a grid down scenario.

  In the worst case scenario, these massive power outages, particularly if they are sustained for longer periods (authorities estimate up to 2 weeks without electricity is likely, though not necessarily in consecutive days), could interrupt other vital services – including grocery deliveries, water, gasoline at the pumps, and even communications.

  The larger question is whether or not they want the grid to fail.

  It is simple economic fact that the power companies stand to make more money of a power shortages during a crisis than they do during abundant and cheap energy.

  Homeland Security and other government agencies have been preparing in secret for a grid disaster for several years now

  Former DHS secretary Janet Napolitano ominously warned ahead of the Grid Ex II multi-agency drill that an unprecedented collapse of the power grid is imminent, and could result from a cyber attack, an EMP or a massive natural disaster:

  The outgoing Homeland Security Secretary has a warning for her successor: A massive and “serious” cyber attack on the U.S. homeland is coming, and a natural disaster — the likes of which the nation has never seen — is also likely on its way.

   

  […]

   

  An electrical grid joint drill simulation is being planned in the United States, Canada and Mexico. Thousands of utility workers, FBI agents, anti-terrorism experts, governmental agencies, and more than 150 private businesses are involved in the November power grid drill.

   

  If the power grid fails, a lack of electricity and food delivery are only the first wave of troubles facing the American people. Police could face major problems with civil unrest. Of course, there also would not be any electric heating or cooling, which easily could lead to many deaths depending on the season. (source)

  It seems that it is a matter of when, not if.

  That’s why having an off-grid, alternative source of energy is essential for any prepper or level-headed individual, though many communities are now discouraging solar by requiring that it be connected to the grid and regulated by energy companies.

  At a minimum, with an admitted potential for two weeks with the light out, you should have a one month supply of food for your family, as well as basic emergency supplies (including candles, flashlights, batteries and other light sources).

  It is also prudent to:

  1. Follow energy conservation measures to keep the use of electricity as low as possible, which can help power companies avoid imposing rolling blackouts.
  2. Look into alternative power sources to supply your home with power.
  3. Have ways to prepare food off the grid.
  4. Keep your car tank at least half full because gas stations rely on electricity to power their pumps.
  5. Be aware that most medication that requires refrigeration can be kept in a closed refrigerator for several hours without a problem. If unsure, check with your physician or pharmacist.
  6. Know where the manual release lever of your electric garage door opener is located and how to operate it. Garage doors can be heavy, so know that you may need help to lift it.
  7. Keep a key to your house with you if you regularly use the garage as the primary means of entering your home, in case the garage door will not open.
  8. Have money on hand in case stores are not processing credit cards.

  (Among other good ideas. Read more from Tess Pennington’s Are You Ready Series: Rolling Blackouts and Power Outages)

  This isn’t just planning for the possible, this is planning for the inevitable, and even the California authorities admit it.

  

  

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• Why A UK Billionaire Believes Brexit Would Be "Good For The UK"

  The City of London and the pound would both benefit from the U.K. leaving the EU, says billionaire Peter Hargreaves. Brexit may knock the pound initially, but it would rebound, the co-founder of Hargreaves Lansdown — the largest U.K. retail broker, with more than $84.1 billion equivalent in assets — told Bloomberg Briefs' Geoff King in a June 17 interview.

  Q: Why do you support "Leave"?

  A: Every year in the EU it gets more political, it gets more legislative, more regulative; we don’t seem to get very much benefit from it. We will be far better out. The EU as an economic mark is declining in the world, when there were only nine countries in it was 30 percent of the world's GDP, now there are 28 it is only 17 percent. That's some serious decline. Other countries that are growing — India, parts of Africa, Brazil, China and even Russia — are the places we should be trading with.

  Q: How do you counter strong economist/analyst support to remain?

  A: There's a huge amount of vested interest, a lot people making these comments are politically motivated and also work for big banks that aren’t British. They’ve built these enormous dealing rooms and offices in the City of London and Canary Wharf and their bosses are saying we don't want to endanger this huge investment of ours. I don't think it will endanger that huge investment. You can't move the City of London to anywhere else in Europe. It's madness to suggest it. Frankfurt, the place everybody keeps talking about, only has a population of 700,000, it could not accommodate anything like the City of London. The City of London is absolutely guaranteed, it is bound to survive. The only center that could take over would be Zurich and that's not in the EU either. It's absolute drivel that the City of London will be affected. The City of London will go out and it will deal with these emerging economies in the Pacific Basin, Southeast Asia, Africa —  they're all going to want finance for different things. You can't set up the City of London anywhere else. It takes years, and during that time the City of London will have grown stronger. Any attempt at usurping it will fail.

  Q: How will London's role change?

  A: It will become more global. There are only two global financial cities: New York and London. The fact London is no longer shackled to the EU means it will go out and deal with the rest of the world. New York is not in a great place, it is only in a great place for dealing with America and South America. The London time-zone is perfect for almost everywhere else in the world.

  Q: What will happen to the EU?

  A: The EU will disintegrate when we leave. They will realise there is nothing left. The political union is going to be a disaster and they'll want a free-trade area. Do you know who'll be the first country invited to that free trade area? The U.K.

  Q: What happens to interest rates with a Brexit?

  A: I don't think there'll be any change. One thing every country in the world is trying to do is get the value of their currency down. That's why interest rates are low. It is quite likely the pound will come under a bit of pressure, initially it will go down. That will be compensation for any tariffs, so the tariffs won't bother us. Not that they will instigate tariffs anyway, but any worry about it will already be compensated by the pound. The pound will become strong again, just like after we left the ERM snake under John Major. [At that time] the pound came under enormous pressure, but within 12 months was one of the strongest currencies in the world because we weren't shackled to the euro.

  Q: How will factors holding down inflation differ?

  A: Everyone is trying to increase inflation by reducing their interest rates and reducing the value of their currencies. We don't know what the impact of us leaving will be. I can't make any suggestion on how we get the currency to the level we want and inflation to level we want until I know how markets react to us leaving the EU. It is a hypothetical question, it may do it automatically, we may have measures to take. I think there'll be a knee-jerk reaction, but afterwards there'll be calm with people realizing it is no big deal us leaving. I think everyone is going to realize it is actually going to be good for the British economy.

  Q: Would leaving the EU impact savings and investment?

  A: I have more money in the stock market than any other person in the U.K., I have 2 billion pounds in the U.K. stock market. No one has anything like that. Do you think I would be intent on leaving if I thought that was going to endanger my wealth?

  

  

• The New Iron Curtain – A Monument To Washington's Imperial Folly

  Submitted by Justin Raimondo via Anti-War.com,

  A foreign army consisting of 31,000 soldiers from an anti-American alliance are conducting military “exercises” a few miles from San Diego. Hundreds of tanks converge on the Rio Grande, while jets from 24 countries converge in attack formation, darting through Mexican skies.

  It isn’t hard to imagine Washington’s response.

  Yet that’s precisely what has been happening on Russia’s border with the NATO alliance, as the cold war returns. Economic sanctions aimed at sinking Russia’s fragile economy, plus a propaganda campaign designed to characterize Russian President Vladimir Putin as the second coming of Stalin – or, in Hillary Clinton’s view, Hitler – have history running in reverse. Once again, an iron curtain is descending across Europe – only this time it’s the West’s doing.

  The European Union renewed sanctions against Crimea on Friday: their “crime” – holding a referendum in which the overwhelming majority of voters opted for union with Russia, restoring what had been the status quo since the days of Catherine the Great. And the EU is slated to extend sanctions against the Russian Federation later this week.

  Yet dissent against this revival of the cold war is rising in Europe, notably in Germany, where Foreign Minister Frank-Walter Steinmeier is calling for the “gradual” lifting of sanctions to reflect progress in the implementation of the Minsk accords, which call for the demilitarization of Ukraine and elections in rebel-held territory. This reflects a division within Germany’s left-right coalition government: Angela Merkel’s Christian Democrats are holding out for “full” implementation of the accords. Yet it is the government in Kiev – held hostage by far-right crazies – that has been dragging its feet over Minsk, refusing to grant autonomy to east Ukraine and vowing to continue the war against the rebels in spite of Kiev’s lack of success in pacifying the rebellious region.

  Steinmeier went further in another interview, characterizing provocative military exercises conducted near Russia’s borders as “warmongering.” The “drill,” which ended Friday, simulated a Western response to an improbable Russian attack on Poland. “What we shouldn’t do now is inflame the situation further through saber-rattling and warmonger,” averred Steinmeier:

  “Whoever believes that a symbolic tank parade on the alliance’s eastern border will bring security is mistaken. We are well-advised to not create pretexts to renew an old confrontation. [It would be] fatal to search only for military solutions and a policy of deterrence.”

  The reality is that it is NATO that has to be deterred: ever since the collapse of the Warsaw Pact and the implosion of international communism the West has been advancing eastward, gathering its forces at the very gates of Moscow. They didn’t call the recent exercises “Spearhead” for nothing. Herr Steinmeier is correct that the “tank parade” within spitting distance of the Kremlin is “symbolic,” but neglects to tell us what it symbolizes, which is nothing less than World War III.

  The Germans are rebelling against the EU/NATO war on Russia because, as in the old cold war, they will be caught in the middle: if the unthinkable becomes thinkable and hostilities break out Germany will become a battlefield, i.e. a smoking ruin. As Cold War II rears its ugly head, it’s hardly surprising that Euro-neutralism is making a comeback.

  Aside from that, the post-cold war structures erected by the new cold warriors are coming apart at the seams: the EU itself is disintegrating, with Euro-skepticism threatening to take Britain out of the Union and the rise of anti-EU parties across Europe challenging the legitimacy of the Brussels bureaucracy.

  And here in the US, questions are being raised about the utility of the main bulwark of the anti-Russian foreign policy of the West: former defense secretary Robert Gates wants to know why our European protectorates are failing to pay their fair share of NATO’s mounting costs. And presumptive GOP presidential candidate Donald Trump has gone much further, declaring that NATO is “very obsolete” and raising the possibility that, if he makes it to the White House, the Western alliance will be no more, or will, at least, take on a much different form.

  With the focus of US foreign policy on the Middle East, and the alleged threat of ISIS preoccupying US policymakers, the impending collapse of the post-World War II international order has taken a back seat in the public eye. Yet this development is far more important, in the long run, for the simple reason that relations with Russia far outweigh whatever is happening in, say, Syria – where the Russian factor is key to solving that seemingly intractable problem.

  Here, again, the political class and their journalistic camarilla split with the American people: most Americans want nothing to do with Ukraine and its many problems. The elites, however, have taken up the cause of what is one of the world’s most corrupt regimes as if it is a paragon of virtue and democratic liberalism. It is neither: the present rulers came to power in a violent coup, chasing out the democratically-elected President, and paving the way for a far-right regime that openly celebrates World War II collaborators with the Nazis.

  The demonization of Putin’s Russia is based on historical illiteracy. It was only a short time ago that Russia was a one-party dictatorship where millions were enslaved by a regime that had as much blood on its hands as Nazi Germany. To fail to acknowledge the enormous progress that country has made, against overwhelming odds, is beyond ridiculous.

  The neoconservatives have long held a grudge against Putin for denouncing the Iraq war as a foolish adventure: American liberals use Putin as a piñata, the puncturing of which is supposed to prove how “tough” they are. Indeed, the Clintons have long been among the worst of the Russia-bashers, and a Clinton Restoration will see the US go head-to-head with Putin, not only in Europe but also in Central Asia, where Bill has long been canoodling with various despots.

  It’s time to lift the new iron curtain that is descending across Europe. Russia and the United States have many interests in common: a new cold war, which could easily escalate into a hot war, is in no one’s interests.

  

  

• The Chinese Real-Estate Bubble Has Gone Parabolic: Land Prices Soar 50% In One Year

  The saying goes “when in a hole, stop digging.” In China, conventional wisdom appears to be flipped on its head as follows: “when facing a massive real estate bubble, keeping blowing.” That is the case at least according to the following chart showing the average price of land, the main ingredient of the property world, in the top 100 Chinese cities, which as of May has hit a record 3,100 Yuan per square meter.

  

  As the WSJ calculates, the average land price per square meter for the top 100 Chinese cities in the first five months of this year jumped nearly 50% from same period last year, citing Wind Information. More stunning is that according to Wind, some land prices are even higher than asking prices for fully-built houses nearby.

  You read that right: unbuilt land in many places in China now costs more than fully-finished apartments.

  Some examples of how the government itself, through SOEs, is pushing the real-estate bubble on a parabolic path that will lead to an unmitigated bubble explosion.

  • State-owned developer Poly Real Estate bought a piece of land in a Shanghai suburb for 5.5 billion yuan ($835.5 million) last month. This translates to roughly 44,000 yuan per square meter of buildable space. This is more than what full-built houses in the region sell for, with the average price at around 40,000 yuan per square meter. After taking into account construction costs, taxes and other expenses, property prices would have to nearly double for the developer to make money.
  • A property subsidiary of China Gezhouba Group, a state-owned builder of power plants and dams, spent 3.3 billion yuan last month to buy the most expensive land, in terms of price per square meter, in Nanjing. Another state dam construction company, Power Construction Corp. of China, snapped up a piece of land in China’s bubbliest property market, the southern metropolis of Shenzhen, for 8.3 billion yuan.
  • Cinda Real Estate, a subsidiary of state-owned “bad bank” China Cinda Asset Management, has splurged on at least 35 billion yuan of land over the past year, even though the market value of the company, listed in Shanghai, is just 7.3 billion yuan.

  Behind all the ludicrous transaction? The Government. And while we understand that the ultimate debt issuers are government-owned entities, the question of where the money comes – ignoring the ultimate guarantor – from is still applicable.

  The answer: mountains of new debt.

  The WSJ reports that to fund the purchases, Cinda’s net debt has swelled to more than three times its shareholders’ equity. It still managed to raise 3 billion yuan last month in a bond financing at 5.5%, mostly because of its state backing.

  And since the company is backstopped by the government, it will be able to issue even more debt before it inevitably defaults on its obligations, leading to yet another zombie company which can not be liquidate due to Beijing being on the hook, yet which can no longer operate.

  As the WSJ puts, it, “the domestic bond market and growth in asset-backed securities have made financing easier for developers, causing companies to chase whatever assets they can.”

  Which really boils down to one simple admission: it’s a bubble.

  It gets better: continuing “reforms” of state-owned enterprises could also be a trigger, as these firms have incentives to inflate their balance sheets to gain clout in consolidation talks. For some which have already invested heavily in real estate, keeping land prices high makes sense. In other words, to keep the value of their collateral high and avoid insolvency, the firms are forced to “paint the tape” and buy even more assets at ever higher prices.

  And since the money comes from naive bondholders who are convinced they may even get repaid one day, this reflexive charade will continue for a long time until one day China, too, will realize that one can’t create money out of thin air in perpetuity and live happily ever after.

  

  

• A Perfect Recipe For Mayhem

  Submitted by Howard Kunstler via Kunstler.com,

  At a most troubled moment in history, both major political parties appear set to nominate time-bomb candidates for president with a fair percentage chance of blowing up their own campaigns and the parties themselves.

  We’ve been living in the era of anything goes and nothing matters — that is, the era of no consequences — but at some point between now and November 8 someone surely will press FBI chief James Comey as to why his agency issued neither a criminal referral nor an explanatory memorandum in the matter of Hillary Clinton’s private email server and its role in the money-gathering activities of the Clinton Foundation while she was Secretary of State.

  Hapless Bernie Sanders blew his chance to call her on that months ago — “The American people are sick and tired of hearing about your damn emails!” — but it’s absolutely certain that Trump will jump up and down and shout woo-woo-woo about it during the general election campaign, if he manages to not get dumped at the GOP convention. Or his as-yet-hypothetical replacement will.

  The email issue won’t go away because it entails serious issues of racketeering in public office, not just niceties of security procedure. One of the Secretary of State’s duties is to approve weapons sales to foreign countries. During her three years at State, Hillary signed off on $165 billion worth of sales by private commercial arms contractors to Clinton Foundation foreign donors. On top of that was an additional $151 billion of separate Pentagon-brokered deals for 16 of the countries that gave to the Clinton Foundation. It also happened that the weapons contractors themselves and companies connected financially to them made substantial donations to the Clinton foundation — and paid whopping speaking fees to Hillary’s husband ex-president Bill, during her years at State.

  Salon Magazine has also reported that in contradiction of a 1995 directive signed by then-president Bill against arms sales to nations violating human rights, Hillary approved such weapons sales. Salon’s David Sirota writes:

  As just one of many examples, in its 2011 Human Rights Report, Clinton’s State Department slammed Algeria’s government for imposing “restrictions on freedom of assembly and association,” tolerating “arbitrary killing,” “widespread corruption” and a “lack of judicial independence.

   

  That year, the Algerian government donated $500,000 to the Clinton Foundation and the next year Clinton’s State Department approved a one-year 70 percent increase in military export authorizations to the country. The jump included authorizations for almost 50,000 items classified as “toxicological agents, including chemical agents, biological agents and associated equipment.” The State Department had not authorized the export of any of such items to Algeria the year before.

  There’s no way that the shady doings of the Clinton Foundation will not become a campaign issue whether Trump emerges as the eventual GOP nominee or not, and of course the other noisome matter of exactly what Hillary told Too-Big-To-Fail banks in exchange for many quarter-million dollar “speaking fees” still lurks behind all that. Hillary’s partisans at the The New York Times and The WashPo have ignored these stories for months, but the telltale stench remains, like a dead body under the floorboards.. In contrast to her beaming victory lap after the California primary, all this stuff promises some serious frowny-face for Mz. It’s-My-Turn in the months ahead.

  As for Trump, the hand-wringing and Maalox-gulping among GOP nabobs got a lot more intense since the Orlando Club massacre, and the (as usual) disjointed utterances by the presumptive Republican Party nominee. This guy is not just a loose artillery shell rolling around on the deck — he’s a dirty bomb wrapped in a smallpox blanket threatening to turn the Grand Old Party into a political Flying Dutchman. Speaker of the House Paul Ryan underscored his extremely conditional endorsement of Trump on the Sunday TV chat forums, hinting that even if Trump got where he is playing by the rules, the rules can be changed at the convention.

  That would set the stage for a melee both inside and outside the GOP convention in Cleveland a month from now. The tragedy of a legitimately irate populace vested in such an obviously inept champion will lead to a political explosion when the party poobahs try to maneuver him off-stage. The only worse alternative is if they actually go ahead and nominate the ham-headed sonofabitch. Either way, the Republican Party comes out as burnt toast.

  Remember, too, the Black Lives Matter movement and its affiliates promised months ago to bring a disruptive presence to both conventions. Imagine how they will get on with thousands of outraged Trumpsters moiling in the streets. Add a dash of Mexican hot sauce to this farrago and you’ve got a perfect recipe for mayhem.

  

  

• The IMF Tells Japan: Abenomics Is A Miserable Failure, Recommends "Forcing Companies To Raise Wages.. Or Else!"

  For those confused as to whether or not Abenomics was working, all one has to do is glance at the recent export data released by the Ministry of Finance for confirmation that it's been a complete disaster.

  Japan's exports fell 11.3% in May on a y/y basis, the eighth consecutive month that exports have fallen according to Bloomberg. Exports to the US fell 10.7% from a year earlier, and exports to China, Japan's largest trading partner plummeted 14.9% y/y.

  

  However, do not be alarmed, as the IMF is all over the matter. In a statement released on Monday, the IMF had a lot of sage advice to provide Prime Minister Abe about his Abenomics policies that have failed to produce literally any of the intended results.

  As the Nikkei Asian Review summarizes, the IMF said that "Abenomics needs to be reloaded", arguing that income policies and labor market reforms should be moved to the forefront. What stands out immediately here, is that the IMF is advocating a policy whereby companies are made to raise wages by at least 3%, and if they fail to do so, penalties are imposed. If central planning hadn't jumped the shark a long time ago, we'd submit that this would be that point.

  From the Nikkei Asian Review

  Despite initial success, progress under Abenomics, Prime Minister Shinzo Abe's trademark economic policies, has stalled in recent months. The inflation rate has dropped to negative territory again, while economic growth has remained anemic.The IMF now expects Japan's economy to grow by about 0.5 percent in 2016, before slowing to 0.3 percent in 2017, with potential growth sliding to close to zero by 2030, due to the declining demographic.

   

  "Abenomics needs to be reloaded," the IMF said in its report and argued that income policies combined with labor market reforms should "move to the forefront" of the country's fight against lagging growth.

   

  "The government can introduce a 'comply or explain' mechanism for profitable companies to ensure that they raise base wages by at least 3% and back this up by stronger tax incentives or — as a last resort — penalties," the IMF wrote. Promoting intermediate contracts that balance job security and wage increases will "reinforce income policies," it added.

   

  "Our perception is that much of the stasis of inflation [in Japan] comes from the legacy, the history of having negative inflation," said David Lipton, first deputy managing director at the IMF, in a press conference in Tokyo. "Certainly firms have at this point the cash flow and resource at hand to provide some wage increases. There are wage increases evident in a wide range of companies across this economy, so our thought is to suggest that this be a broader practice and that it be more uniform."

  Upon learning of the news that Abe delayed Japan's long awaited tax hike, we pointed out that it was an admission of failure for Abenomics, and Japan had no hope of ever reducing its debt load. The IMF is now pushing Japan to not only put the tax hikes back on the table, but incresae the percentage to "at least 15%." as part of a "credible fiscal plan." – good luck with all of that.

  The fund noted that these reforms need to be backed up by measures to support demand as well as credible fiscal plans, and argued that the consumption tax hike to 10%, which the government delayed until October 2019, should be replaced by a gradual increase towards "at least 15%."

   

  "Starting the increases soon and replacing the currently planned 2019 hike with such a pre-announced, gradual path would enhance the credibility of the long-run fiscal adjustment, reduce uncertainty for consumers and avoid large intertemporal shifts in spending around the time of the tax hikes," the IMF said.

  The IMF even admits that NIRP has failed to generate any domestic demand at all, and is calling for the BOJ to scrap any expectation of inflation in order to be more realistic.

  The Bank of Japan in February introduced a negative interest rate in part to support domestic demand. However, in the event that the IMF's suggestions will not be implemented, Japan will lack growth and therefore would need a longer time to get its fiscal books in order. In that scenario, the IMF called on the bank to scrap its time frame for achieving its 2% inflation target, which the BOJ now sets at somewhere in fiscal 2017.

   

  "The monetary policy framework would need to become more flexible, with the BOJ abandoning the use of a specific calendar date for achieving its inflation target," the IMF said. "While such a shift should raise BOJ credibility by setting a more realistic goal, the transition will need to be well-communicated to avoid perceptions that the BOJ is reducing its commitment to achieving its inflation target and to limit the potential for adverse market reactions, including yen appreciation."

  * * *

  So in summary, the IMF has studied Japan's economy and has come to the conclusion that Abenomics has been a miserable failure. The advice now is to scrap all of the plans for hitting any kind of economic targets, and just start forcing companies to raise wages, while simultaneously raising everyone's taxes 15%. The central planners are literally starting to lose their collective minds.

  

  

• When Brexit Has Come And Gone, The Real Problems Will Remain: A Reminder From Socgen

  In a few days, Brexit will come and go, and just a few days later it will be forgotten, as either outcome will be far less dramatic than has been widely predicted by the same fearmongering economist pundits who have been wrong about everything else for the past 8 years. Ironically, the better outcome for the market is precisely a Brexit as the panic selloff will prompt central banks around the globe to boost enough monetary stimulus to send risk assets to new all time highs.

  What will remain, however, are the real problems.

  Here is SocGen with a useful reminder of just what those are, and why the market may have already forgotten that just one week ago the Fed threw in the towel when addressing precisely these problems.

  From SocGen’s Andrew Lapthone:

  Global equity markets continued to struggle last week, with the MSCI World index off 1.8% pushing the index back into red for the year. Big losses were seen in Japan with the Topix 500 down 6% and the volatile Mothers index crashing 18.5% over the week as the yen continued to strengthen. According to the BOE measure, the trade-weighted yen is now up more than 20% over the past year and back to where it stood three years ago. In the battle for the weakest currency, Japan looks to have thrown in the towel.

   

  Whatever the outcome of the Brexit vote this week investors will still be facing the prospect of negative rates and negative yields on a huge range of bonds, massive corporate leverage with worryingly rising delinquencies and of course expensive equity markets and falling profits. To that extent these political events are a distraction from the main event, weak global economic growth and perverse asset markets. So whilst the market preference for the status quo might be celebrated in the short-term, actually when the fog clears all of the problems will still be there.

   

  Let’s take the UK for example. The market will most probably rally as it is doing today if Brexit is rejected, but rally to where? We have already highlighted the excessive leverage and payout ratios in the UK, but these are not the only problems. On a disaggregated basis, median valuations are at the upper end of historical estimates (see below), profitability whether measured on an ROE, ROA or ROIC basis has rarely been this weak outside of an economic slump, and these figures do not materially change whether the problematic commodity and financial sectors are included or not. Brexit or not, the UK equity market hardly looks healthy.

  

  

  

• Why An Ex-Credit Suisse Banker In Brazil Made More Money Than The CEO

  Ever had to testify in a trial involving your father's dealings in corrupt activities, and as a result had your tax records leaked for all of the public to see? Sergio Machado, the ex-head of Credit Suisse's Brazil fixed-income business has, and now everyone knows how much he made in 2015.

  Sergio's father, who goes by the same name, is a former Brazilian politician who went on to head the state run oil company Petrobras before being investigated for corrupt activities involving bid-rigging and bribery. During the case (which the elder Machado has since agreed to a plea bargain) Sergio was called on to testify about an HSBC account he opened in Switzerland that some of the illegal funds allegedly moved through. As part of the court proceedings, Sergio had submitted tax records for 2015, and those records were released to the public.

  What the tax record shows has left many bankers thoroughly confused – in 2015, the younger Sergio Machado made $14 million with Credit Suisse as the head of Brazil's fixed income business. What makes it curious, is that this was during a year where, as Bloomberg reports, deal fees plummeted 42% to the lowest level in a decade, and as we discussed, in an economy that fell off a cliff in 2015. In addition to the Brazilian elements, Credit Suisse overall suffered its first annual loss since the financial crisis in 2015, with its global markets and investment banking operations performing horrendously.

  

  Machado's $14 million in compensation for 2015 was much higher than the highest paid CS executive board member Rob Shafir, who earned $8.2 million. Additionally, CEO Tidjane Thiam earned $4.7 million for six months of work in 2015, which annualized doesn't even come close to Machado's haul. Bloomberg notes that the $14 million did include deferred bonuses from prior years, however those would be some significant bonuses to get the banker up to $14 million. Then again, under Machado's watch, CS lent $1.27 billion to Minas Gerais State in 2013, and then promptly turned around and sold it to investors a month later for a cool $116 million profit, so perhaps Machado got a large cut of that deal – we'll never know.

  Credit Suisse declined to comment, saying it doesn't discuss employee earnings.

  Machado left the firm in April amid global cutbacks after spending 17 years at the bank, and perhaps the removal of Machado's lofty paycheck will be spun by Thiam as evidence that the CEO is serious about turning the organization around in hopes that the stock will stop crashing. Then again, probably not.

  

  Also, for those interested in the other piece to the story, which is how the younger Machado testified to the fact that illegal funds were moving through his bank account, Sergio said that he had been kept in the dark about any allegedly illegal activities:

  "The whole time, I believed in the lawful purposes of the account."

  And just in case anyone gets any ideas of prosecution, don't, because the trail may lead to the very top and that is not acceptable.

  

  

• FBI Tried To 'Lure' Omar Mateen Into A Terror Plot Before Orlando Shooting

  Submitted by Max Blumenthal & Sarah Lazear via AlterNet.org,

  Before Omar Mateen gunned down 49 patrons of the LGBTQ Pulse Nightclub in Orlando, the FBI attempted to induce him to participate in a terror plot. Sheriff Ken Mascara of Florida’s St. Lucie County told the Vero Beach Press Journal that after Mateen threatened a courthouse deputy in 2013 by claiming he could order Al Qaeda operatives to kill his family, the FBI dispatched an informant to "lure Omar into some kind of act and Omar did not bite."

  While self-styled terror experts and former counter-terror officials have criticized the FBI for failing to stop Mateen before he committed a massacre, the new revelation raises the question of whether the FBI played a role in pushing Mateen towards an act of lethal violence. 

  Since 9/11, the FBI has relied heavily on informants to entrap scores of young, often mentally troubled Muslim men and send them to prison for as long as 25 years. As Aviva Stahl reported for AlterNet’s Grayzone Project, the FBI recently encouraged an apparently mentally disturbed recent convert to Islam named James Medina to bomb a South Florida synagogue and pledge allegiance to ISIS, a militant group with which he had no prior affiliation. On trial for planning to commit an act of terror with a weapon of mass destruction, Medina has insisted through his lawyer that he is mentally ill.

  Trevor Aaronson, a journalist and author of “Terror Factory: Inside the FBI’s Manufactured War on Terror,” revealed that nearly half of terror cases between 9/11/01 and 2010 involved informants, including some with criminal backgrounds raking in as much as $100,000 from the FBI. The FBI's assets have often preyed on mentally ill men with little capacity to resist their provocations. “Is it possible that the FBI is creating the very enemy we fear?” Aaronson wondered.

  The revelations of FBI manipulation have cast Mateen’s case in a troubling light. Though he refused to bite when an FBI asset attempted to push him into a manufactured plot, he wound up carrying out an act of spectacular brutality years later and allegedly swore loyalty to ISIS in the midst of it.

  “It looks like it's pretty much standard operating procedure for preliminary inquiries to interview the subject or pitch the person to become an informant and/or plant an undercover or informant close by to see if the person bites on the suggestion,” Coleen Rowley, a former FBI agent and division counsel whose May 2002 memo to the FBI Director exposed some of the FBI’s pre-9/11 failures, told AlterNet.

   

  “In the case of Mateen, since he already worked for a security contractor [G4S], he was either too savvy to bite on the pitch or he may have even become indignant that he was targeted in that fashion. These pitches and use of people can backfire.”

  To highlight the problematic nature of informants, Rowley pointed to the case of Humam Khalil al-Balawi, a Jordanian physician whom the CIA used to gather intelligence on Al Qaeda,. The CIA ignored obvious warning signs like Balawi’s extremist online manifestos and never subjected him to a vetting process. While Balawi claimed to have penetrated Al Qaeda’s inner circle, he was actually exploiting his CIA security clearance to plan a major attack. On December 30, 2009, Balawi strode into Camp Chapman in Khost, Afghanistan, and detonated an explosive vest that killed seven CIA agents and wounded six more — the deadliest attack on CIA personnel in 25 years.

  Mateen, for his part, displayed many of the psychological characteristics that typify both FBI informants and those they attempt to ensnare in bogus terror plots. Raised in a troubled home by an abusive mother and an apparently eccentric father, Mateen exhibited signs of erratic, violent behavior throughout his life. His ex-wife told reporters that he physically abused her and was “unstable and mentally ill.” He transformed from a chubby adolescent to a burly young man with the help of steroids, yearning for a career in law enforcement.

  Seven months into a job as a prison guard in 2007, Mateen was fired for threatening to bring a gun to class. He settled on a career as a low level security guard for G4S Security Solutions, a global security firm that employed him for nine years. Though Mateen’s applications to two police departments were rejected, he was able to pass a G4S background check and receive several guard assignments. (The world’s third largest private employer, G4S has accumulated a staggering record of human rights abuses, including accusations of child torture.)

  While the full extent of Mateen’s contact with the FBI is unknown, the fact that an informant encouraged Mateen to agree to carry out a terror attack should provoke serious questions and further investigation. Whether or not manipulation by a FBI informant had any impact on Mateen’s deadly decision, there is no denying that the attempt to entrap him did nothing to protect the public.

  “The FBI should scrutinize the operating procedure where they use undercovers and informants and pitch people to become informants,” said Rowley. “They must recognize that, in this case [with Mateen], it had horrible consequences if it did, in fact, backfire.”

  

  

• China Threatens To Leave UN Sea Convention If Court Invalidates Maritime Claims

  As an arbitration court in The Hague gets ready to make a decision regarding an ongoing territorial dispute between China and the Philippines, China has reportedly told some other Asian countries that it may leave the UN Convention on the Law of the Sea if it disagrees with the ruling.

  The Philippines has been the most vocal critic of China's activities in the South China Sea, and filed a case with the Permanent Court of Arbitration in The Hague in 2013 in an attempt to invalidate China's "nine-dash line", China's version of what territory it owns.

  Here is a map showing different maritime claims each country has, many overlap each other.

  

  Zoomed version

  

  China believes the worst outcome would be for the tribunal to rule that Beijing's claim over the sea has no international legal grounds, and invalidates its line.

  From Kyodo News

  China thinks the worst outcome would be for the tribunal, constituted by the 1982 convention, or UNCLOS, to rule that Beijing's claim of "historic rights" over the sea has no international legal grounds and invalidate its expansive line, according to the sources.

   

  China has told some diplomats of the Association of Southeast Asian Nations that it does not rule out withdrawing from the convention, often referred to as the constitution of the oceans, if that happens, the sources said.

   

  Many experts believe that the ruling will not be favorable for China, which also has territorial disputes in the South China Sea with three other members of the 10-member association, namely Vietnam, Malaysia and Brunei.

  The significance of the claim is understood when realizing what is at stake. The territory encompasses a key international shipping route for trade, is rich in fisheries (key for China, as protein is expensive for its citizens right now), and is believed to have large oil and gas deposits. Due to these reasons, it is not a surprise that China claims it won't honor any unfavorable decision, nor does it like the fact that outside parties (read: United States) intervene in the dispute.

  China's massive reclamation in recent years of islands in the South China Sea — a key international shipping route that is rich in fisheries resources and is also believed to hold large oil and gas deposits — and its building of military facilities on them have generated widespread concerns, not only among the claimants, which also include Taiwan.

   

  China, which ratified UNCLOS in 1996, has said it will neither accept nor honor the upcoming ruling by the tribunal. It has criticized the Philippines for filing the case "unilaterally" and breaking their past agreement of trying to settle territorial disputes through bilateral negotiations.

   

  China has also asserted that the court has no jurisdiction over the case.

   

  However, the Philippines' action has been backed by numerous countries including the United States and Japan, which regard it as a step toward resolving disagreements and easing tensions peacefully through international law.

   

  While China has urged non-claimants not to meddle in territorial disputes in the South China Sea, those countries described by Beijing as "outsiders" have said they do not take sides in the feuds but have a say in opposing to any attempt to undermine rule-based order in the region.

   

  They have put pressure on China to respect the forthcoming ruling if it wants to be a responsible major country in the international community.

   

  China has accused the United States, not a signatory to UNCLOS, of having no right to talk about the arbitration case and argued that it is part of Washington's attempt with its allies in the region to contain Beijing's growing influence in the name of international law.

   

  China's noncompliance with the decision is likely to damage its international image, but the tribunal has no enforcement mechanism.

  * * *

  If the tribunal has no enforcement mechanism, this begs the question will the United States step in and try to enforce any ruling that is handed down from the court. If so, already elevated tensions between the US and China could get exponentially worse.

  

  

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• 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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