The One Hundredth Monkey

Jun 17

Today’s News 17th June 2016

By admin in Economy

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

The BoG states:

– Suicides increased. “The risk of suicidal behavior 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.

– 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="??? ?????? ???????? ??? ??????? ????????????? ?????? ??? ?? ??????? ????????? ???? ???????? ??????? ??? ???????????? ??? ??????? ??? ???????? ??? ?????????? ?????? ???? ?? ???????????? ?? ????????? ??? ???? ????? ????????? ???????,.

“>-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.”

The report of the Governor of the Bank of Greece reckons surveys conducted by Greek Statistic Authorities (ELSTAT) and according to which:
1. a significant increase of 24.2% of people aged 15+ suffering from chronic health problem or chronic disease.
2. increase of more than 15% of people who limited their activities 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.

Digest powered by RSS Digest

Jun 16

Today’s News 16th June 2016

By admin in Economy

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.

Digest powered by RSS Digest

Jun 15

Today’s News 15th June 2016

By admin in Economy

NATO Begins Encirclement Of Russia

Via German Economic News, translated by Eric Zuesse,

NATO prepares a veritable military buildup in Eastern Europe: German soldiers are operating in Lithuania, the British take over Estonia, and US soldiers move in to protect Latvia. The Canadians will be in Poland. Also in the Mediterranean, combat units are being increased. Russia perceives the activity as a threat, but hasn’t yet announced any countermeasures.

Source: RiskAdvisory

At the NATO summit during July 8th-9th in Warsaw, the Alliance will adopt a massive military presence along Russia’s border. Russia is classified by NATO as a threat. NATO Secretary General Jens Stoltenberg recently said in Washington that the US and the EU have the right in the form of NATO to defend its territories on foreign soil. Critics of this strategy believe that it’s possible this upgrade will increase significantly the danger of a conflict between the superpowers. Wednesday in Brussels, the defense ministers want the military alliance to take decisions which will then be sealed by the leaders in Poland. NATO wants to strengthen its military presence on its eastern borders significantly, and to position foreign combat troops battalions in Poland and the three Baltic states. Germany is the core of the Association in Lithuania, the British in Estonia, and the United States is expected to be that in Latvia. What remains unclear, however, is who will be sending troops to Poland.

Maybe Canada will take on this task, it was last reported from Polish diplomatic sources as quoted by Reuters. “’The summit in Warsaw will be President Obama’s last (NATO summit) and the U.S. wants it to be a success. It will ensure that the fourth framework country is found, possibly by leaning on Canada,’ the source said. ‘Washington will bend over backwards here.’”

Germany wants to send at least 600 soldiers to Lithuania, which will constitute the core of the local battalion there with about 1,200 soldiers.

The battalions are to include around 1,000 soldiers each, and are not permanently stationed in the eastern countries, but replaced regularly. By means of this rotation, the military alliance wants to avoid a formal breach of the NATO-Russia Founding Act 1997, which prohibits the permanent stationing of a “substantial” number of combat troops in the east. What specifically “substantial” means, however, is controversial. [In other words: Obama wants to be more aggressive than the NATO-Russia Founding Act of 1997 might allow; he wants to violate the treaty in such a way that he’ll be able to say he’s not really breaking the treaty.]

Poland and the Baltic countries want to push NATO to be even more aggressive. They demand among other things, increased aerial surveillance by fighter jets of the alliance partners on the Baltic. Poland had in the past also repeatedly demanded the permanent stationing of NATO combat troops [which would clearly violate the NATO-Russia Founding Act]. The Baltic States and Poland have been feeling threatened since Russia’s March 2014 annexation of the Ukrainian peninsula of Crimea.

NATO defense ministers will also discuss a new mission in the Mediterranean. What exactly is planned there, is difficult to judge. Officially the rise of extremist ISIS militias and the refugee crisis are given as reasons for that expansion of NATO. ISIS is financed and otherwise supported by Saudi Arabia, the closest ally of the West in the Middle East. A good reason why NATO, the most powerful fighting force in all of the world’s military, have not coped with that group of more or less random ragtag mercenaries, is not known. Russia is fighting on the side of Syria against ISIS and against previously officially the US-backed al-Nusra Front [Al Qaeda in Syria — the Syrian affiliate of the group that did 9/11].

The NATO alliance is looking for a new combat mission in the Mediterranean, as the 11 September 2001 NATO response “Active Endeavor” patrolling the Mediterranean to stop terrorists there, has actually become obsolete. The ministers therefore want to consider whether the mission should be transformed into a more general one to strengthen security in the Mediterranean. Also being considered is to transform that mission to a closer cooperation with the European Union, which maintains its own naval deployment off the Libyan coast against human traffickers and the rescue of refugees in distress under the name “Sophia”. At dinner on Tuesday therefore also the EU foreign policy chief Federica Mogherini and government representatives from the non-NATO countries Finland and Sweden will also be in NATO headquarters.

The agenda on Wednesday also includes the future of the NATO mission in Afghanistan. According to current plans, the US wants to reduce the number of its troops in Afghanistan from its current 9800 to 5500. Whether Obama will hold to that objective despite the poor security situation in Afghanistan isn’t yet clear.

Show teaser normally
Decoupling FOREX investing from trading

Forex is a trader’s market. So many complex factors go into foreign exchange rates, it’s really impossible to conclude what will be the EUR/USD in 1 year, 10 years, or 50 years – as explained in Splitting Pennies. Investing in Forex is like betting on the weather. And frankly speaking, given the right climate, it can work. For example, during the post 9/11 global market, it was assumed that USD would go down, and it did – thus propping currencies like NZD, EUR, GBP, and others. Take a look at the monthly GBP/USD chart – interesting to ponder also because of possible Brexit looming:

It took the credit crisis of 2007 to reverse the trend. And in the end – looking back 15 years, what changed with the GBP/USD rate? Right back to where it was, 1.41 handle. With talk of Brexit, Bremain – what is a Forex investor to think? Flip a coin – you’ll have better odds. Psychological factors in Forex work against investors as well. Do you really have what it takes, to sit on a GBP/USD position for 6 years? From 2001 to 2007, it would have been without leverage, a 48% gain – with 10x leverage, or 10:1 – that’s 480% – plus the swap (which still would have been positive for a GBP/USD long in that time). So here’s a situation where the climate was ripe for long term Forex investment. Since then, such an opportunity hasn’t presented itself, with the majors. Maybe Brexit will be a new trend of GBP/USD – the start of a new super cycle. But it’s too complicated to bet on. There are other examples, such as the 4 decade long CHF bull run that ended with the SNB (Swiss National Bank) bending over for their US masters. Investors who bought CHF post Nixon shock, would have had without leverage 400% + return, since the recent super cycle top, and final meltdown and manipulation of the Swiss Franc.

Everyday, we wake up and check the markets – what’s the news? Even with a 24/7 dedicated analysis team, it’s difficult to even conclude what the market outcome will be, based on the facts. Market perception in Forex can be completely off. For example there are those that believe Brexit can be GBP positive post vote.

Investing in Forex requires years of experience, a crack analysis team, loads of investment capital to weather any short term storm, and nerves of steel.

Trading Forex

So, let’s explore ‘trading’ Forex – meaning – day trading, short term, to capture price movements, regardless of direction – as an investment strategy PER SE.

If anyone has ever tried trading Forex manually – it’s nearly impossible. Statistics about individual Forex traders can be misleading. Brokers are now required to publish statistics about accounts, how many are positive, and other data. But this data doesn’t include how many accounts are managed, or use signals, algorithms, or other robot-assisted trading. Because trading Forex is so difficult, many traders will develop or purchase trading algorithms (such as this one named “Liquidity”) to assist their trading. It’s similar to hiring a manager such as an RIA (Registered Investment Advisor), the difference being it’s a software system that manages your account, placing trades based on a proprietary algorithm. (An algorithm is a series of steps)

This type of algorithmic trading in Forex is so common, it’s almost unheard of that someone will blindly trade Forex without the aid of an algorithm, signal system, or other aid. A technical indicator system such as technical analysis, qualifies as a signal system. So, is it possible in Forex to find good algorithms, and trading systems, that work? Yes – of course it is! Companies such as Fortress Capital, offer Forex Managed Accounts services (in the case of Fortress, for QEP (Qualified Eligible Person) only ). Other companies such as Elite E Services, offer algorithms for purchase and lease, for traders to trade their own accounts. But of course, it’s an ever growing problem for US Citizens, who are only allowed a few small choices of Forex brokers, who are over regulated (due to the overwhelming Forex fraud which is .. knock knock .. a thing of the past).

One day, perhaps the Forex regulations will change, and robo-advisors will be an asset class by itself. This is happening outside of the US, as the lax rules and higher leverage allow algorithms to live and breathe. Until that day, US investors who are interested in Forex, are left with the difficult choices of expatriation, qualifying themselves as QEP, or sticking to the good ol’ stock market, where it’s possible to buy products that you enjoy every day, like Microsoft (MSFT).

In conclusion, here we have simply decoupled Forex investing from trading, and hinted at the hybrid mix – when a trader uses an algorithm, it becomes an ‘investment’ just as one invests in a currency, one ‘invests’ in a robotic strategy. But the good news about robots, they can be tested, and used in a plethora of ways. Whereas, with simple vanilla currency investing, there’s only so many ways to sell a covered call on a GBP/USD position to earn extra ‘dividends.’

If you’re interested in learning more about what Forex is – the starting place is to checkout Splitting Pennies – Understanding Forex. It’s only $6.11 on Kindle, about $1 in 1970 when Forex was created. For those who remember when markets were traded on paper, there’s a paperback edition of the book Splitting Pennies for only $14.98. The book was published by Elite E Services, Inc. – a Forex technology company.
Paul Craig Roberts' Skeptical Take On The Orlando Shooting

Authored by Paul Craig Roberts,

Some readers have asked for my take on the Orlando Shooting.

I don’t have one. Let’s see if together we can form a reasonable view.

Let’s start with the basic first question. Before there can be a murder declared, there must be a body. Has anyone seen on TV or in newspapers pictures of dead bodies? Bodies should be readily available if the reports are correct that fifty people were killed and 50 or more were wounded and in hospital.

I cannot bear the presstitute TV and print media. These are full-time propaganda organizations. Hopefully, some of you hold your nose and watch the news and can fill in the spaces. Has anything we have been told been confirmed by any real evidence?

Initially, I saw a CNN newscast and a RT report. The reports were heavy with verbiage of blood being all over the place, but the only visual evidence offered were three people, supposedly injured, being helped, not by medics or first responders, but by ordinary folks. A couple of people were helping a guy with tattoos in place of a shirt, but there was no sign of blood. Several people were helping people in police uniforms to carry a person who they dumped in the back of a pickup truck, not in the cab. About 6 people were carrying a person stretched out prone (no stretcher) down a street.

There was no blood and it looked like a crisis acting performance. Why prone? Is an injured person really able to keep his body stiff so that he can be carried along prone parallel to the ground? Where are they taking him? Is this just a camera walk-by? http://www.cnn.com/videos/us/2016/06/12/orlando-nightclub-shooting-witness-sot.cnn/video/playlists/orlando-nightclub-shooting/ What has become of the protocol that untrained people are not to attempt to help injured people? When police arrive at a scene, they usually run off bystanders, not recruit them to assist their activities or allow them to carry away the wounded and dead.

Readers have noticed that the visual evidence does not match the verbal reports. Readers report that Fox “News” and MSNBC repeatedly show the same footage described above of bystanders carrying supposedly injured victims whose facial expressions are completely unstressed and show no pain, fear, or blood.

So has anyone seen any dead bodies? Any body bags? Any wounded taken to hospitals in ambulances? Any of the hospital wounded interviewed by TV reporters? Has any reporter checked with the morgue?

Allegedly, people inside the massacre location made cell phone calls and texted. But no one took photos or videos? Are there no security cameras? No doormen to notice a heavily armed person enter?

With 50 people killed and 50 or more wounded and reports of oceans of blood, there should be plenty of evidence Have any of you seen any of it?

As far as I know, dead bodies, other than those of the perpetrators themselves, seldom if ever emerge from the terrorist attacks. No dead bodies materialized from the Paris attacks except those of the alleged perpetrators. No dead bodies ever emerged from the Sandy Hook shootings. The only dead bodies I recall from the San Bernardino shooting were the husband-and-wife-alleged-perpetrators, and their hands were handcuffed behind their backs. Do police handcuff dead people who the police have shot to pieces? I don’t remember dead bodies from Brussels, just reports of dead bodies.

One could say that the media is averse to invading the privacy of dead people and their relatives by showing dead bodies, or that the media doesn’t want to show gruesome scenes—except for the videos of Muslim terrorists cutting off people’s heads. But by now the unanswered questions from the various shootings have created so much skepticism that a person would think the media would provide corroborative evidence for the official claims.

Maybe they have. As I admit, I don’t watch the presstitute news.

In order to shoot 100 people, the principal weapon allegedly used, an AR-15, would have had to have been reloaded several times, a procedure that takes enough time for people to rush the shooter and overpower him.

Is it possible for one person to shoot 100 people successfully but not be able to shoot even one cop when police appear? Remember the Charlie Hebdo event. The two killers were highly professional when they wiped out the magazine staff and a policeman in the street, but later when confronted by police they were so hapless and incompetent as to suggest that they were not the same people. Remember the San Bernardino shootings. Three eyewitnesses said that the shooters were three muscular males dressed in black, not a husband and diminutive wife with a new baby.

What is most troublesome about these shootings is that the story seems already prepared by the government and is immediately set. We are fed the story before there is time for investigation by government or media. The media never investigate. The media just repeat the government’s story over and over until it is set in everyone’s mind. Contrary evidence is just discarded.

The alleged perpetrators are always killed, so we never hear from them. The only survivor of the various terrorisms is the younger Tsarnaev brother who has been held incommunicado. We have never heard directly from him.

One might think that by now the US media would have at least a smidgen of skeptcism. After all, for the past 15 years we have wasted trillions of dollars in wars in the Middle East based on lies that Saddam Hussein had weapons of mass destruction and Assad used chemical weapons against his own people. So why is the media willing to accept whatever the government says without any investigation or even raising a question?

The chairman, co-chairman, and legal counsel of the official 9/11 Commission have said publicly that the commission was lied to by the US government, that information was withheld from the commission, and that the commission was “set up to fail.” If the government will not tell the truth to the 9/11 Commission, why would the government tell us peons the truth?

It is not reporting merely to repeat the government’s claim. But that is all we get from the payroll jobs, unemployment and inflation reports to terrorism reports and claims of “Russian aggression.”

Send your emails with URLs of news broadcasts showing dead bodies and other real evidence. Don’t send in your speculations. They might be interesting and on the mark, but what we are trying to do is to see if there is any real evidence in behalf of this latest story of mass slaughter inside a night club.

It will be difficult, perhaps even impossible, to get any truth out of the Orlando shooting. Too many vocal and well organized interest groups have a strong stake in the government’s explanation. It comes to the aid of the anti-Muslim lobby and the Trump campaign which want Muslims kept out of the US and those here arrested and deported. It comes to the aid of the gun control lobby. It comes to the aid of the progressive-left that wants to normalize homosexual and transgendered people, thus the outpouring of sympathy for those shot in the homosexual night club. It comes to the aid of the spy industry and the police state that want no check on their activities. It comes to the aid of Washington’s murderous foreign policy—so what if we blow up Muslim children—look what they do to us when they grow up, which is what the Israelis say about the Palestinians. It comes to the aid of the neoconservatives and the military-security complex for whom wars against Muslims advance their agenda and fatten their pocketbook.

All of these interests are far more powerful than the right of peons to know the truth.

Show teaser normally
Visualizing The Over-Education Bubble – Student Loan Delinquencies Are Soaring

What do you get when you combine skyrocketing tuition costs, a lack of growth in high-paying jobs, moral hazard, and America’s largest-ever generation of students?

As VisualCapitalist's Jeff Desjardins explains, it’s a recipe for a mountain of $1.3 trillion in student loan debt – much of which is not being paid for.

Courtesy of: Visual Capitalist

Very Delinquent Students

With many students graduating with high debt loads, a growing number of students are becoming delinquent on their loans. The most recent estimate by the Federal Reserve Bank of New York estimates the percent of 90+ day delinquent loans to now be at 11.0%.

This puts student loans at a higher delinquency rate than credit cards (7.6%), auto loans (3.5%), and mortgages (2.2%). It’s also particularly interesting because historically credit cards have had the highest rates among all types of consumer credit. Despite this, student loans “passed” credit cards in delinquency frequency at the end of 2012.

Why are student loans the most troubled form of consumer debt right now? It’s the result of a clear mismatch between supply and demand for college-educated workers.

The Overeducation Bubble

Have college graduates been oversold on the prospects of a college degree? Or is the market for high-paying jobs not materializing as expected in the current low-growth economy?

Either way, many college grads are punching below their weight in the job market. In a 2014 study, economists affiliated with the Federal Reserve Bank of New York found that up to 49% of recent college graduates aged 22 to 27 were working in careers that do not requite any college education.

Based on this and other factors, renowned investor Peter Thiel has called higher education to be a bubble:

If a college degree always means higher wages, then everyone should get a college degree. But how can everyone win a zero-sum tournament? No single path can work for everyone, and the promise of such an easy path is a sign of a bubble.

He’s backed up his opinion with the Thiel Fellowship, a $100,000 grant for would-be students who want to “build something” rather than sit in a classroom.

Some Students Left Behind

A recent survey shows that many graduates are regretting their choices around student debt and education. Roughly 57% of millennials now say they regret how much they borrowed, and over one-third of respondents said they wouldn’t have gone to college if they knew the true price tag.

Massive debt loads and the increasing student loan delinquency rate translate into real consequences for the economy. Many graduates are deferring having families or owning homes. One study even says that a modest student loan debt of $30,000 could cut $325,000 from a person’s 401(k) balance by retirement time.

Show teaser normally
The FBI And NSA Won't Keep Us Safe

Submitted by Ryan McMaken via The Mises Institute,

The NSA was too busy spying on your family to stop the Orlando gunman. But why aren't night clubs keeping tabs on people who walk in with rifles?

According to various sources, the gunman in Orlando's Saturday massacre, Omar Mateen, was being investigated by the FBI. (See Judge Napolitano's interview for more, here.) But, as was the case before 9/11, the FBI keeps such a long list of so many many people, that the list tells them nothing about who is a real threat. Meanwhile, we have been told countless times that the NSA should be able to spy on anyone it wishes in order to "keep us safe." Given that Mateen was already on an FBI threat list, was the NSA eavesdropping on Mateen? If not, why not? Was the NSA too busy spying on dirt-poor backwoods members of "militias" to bother keeping track on Mateen, who, by many accounts, was a man who spoke often of his sympathy for terrorists? It's becoming increasingly evident the NSA simply collects so much information on so many people and casts far too wide of a net. What the NSA does is great for blackmailing powerful people. It's less useful in actually catching terrorists.

We have also learned that Mateen worked for a taxpayer-funded "private" security agency that is under contract with numerous government agencies around the world including the CIA. The company often provides security for Federal buildings, and presumably has access to numerous federal installations. His co-workers believed he was unhinged.

Basically, it sounds just like another "success" story we've come to expect from the FBI and the US federal government in general. The Feds maintain huge lists of "suspects" but have no way of separating out the real threats from the people who just say things. The Feds insist they should be able to spy on everyone, but ignore crucial information. The Feds pay private security firms that hire people like Mateen.

Meanwhile, the federal government insists on the prerogative to regulate the lives of ordinary people right down to whom they can hire, what sorts of plants they can grow, and of course — what kinds of self-defense they can obtain for themselves. Violations often come with long, draconian prison sentences.

But rest assured, the FBI and NSA will no doubt "rectify" the situation by lobbying for bigger budgets for themselves and giving pay increases to all involved.

Where Was the Private Security?

It should surprise no one that the FBI, yet again, has failed to use its already-vast powers to prevent a major act of terrorism. But, we're still left asking ourselves why it was so easy for a man with a long gun to walk into a private establishment and shoot dozens of people? Did the Pulse club in Orlando keep any tabs on its entrances, and did it allow anyone to enter?

By state law, the Pulse club was a "gun free zone" as people with a conceal-carry license are not allowed to carry in an establishment that serves alcohol.

In other words, the patrons at the club were denied the ability to defend themselves by state law. So, why did the club not provide any meaningful security of its own?

Will the Pulse club hide behind the claim that it could not "foresee" an event like this, and therefore need not provide any security?

That was the strategy used by the Aurora movie theater where James Holmes murdered 12 people. In that case also, the theater could not be bothered with noticing that someone had propped open a back door and walked to his car to put on body armor and walk back with several weapons, a gas mask, and tear gas grenades. Now that mass shootings have occurred at various types of theaters (including the Paris theater where dozens were shot in 2015), will owners continue to claim that there is no way to foresee such events?

Night clubs have been targets for terrorists for many years. The La Belle club in Berlin was bombed in 1986, resulting in 3 deaths and 230 people injured. The 2002 Bali Bombings — at a night club — resulted in 203 deaths. There have been other cases of shootings and arson attacks at night clubs. Was an attack on a night club so "unforeseeable" that it was no problem to allow a man with an assault rifle access to a dance floor?

Lawsuits will be sure to come alleging that the establishment in question should have provided better security. It will be interesting to see what arguments will be employed to demonstrate that private owners need not take steps to exclude bombers and gunmen from their clubs, presumably on the grounds that such events are "unforeseeable." How many bombings and shootings at public entertainment venues must take place before it is considered prudent to take steps to prevent such events?

Private Security Addresses Immediate Threats And Casts a Far Smaller Net

Indeed, decentralized, private security is far more likely to actually work — especially considering the "safety" provided by the NSA and FBI — than are broad regulatory approaches at the national level.

After all, harsh and broad gun control laws in France did not prevent the 2015 Paris massacres. More adequate private security at the Bataclan theatre in Paris, on the other hand, might have actually done some good.

Unfortunately, many people still subscribe to the idea that governments can "keep us safe" with gun control laws and mass spying programs and other massive nationwide programs that target the entire population. Not only are these programs extremely costly (in terms of both enforcement and administration) but they are incapable to identifying when and where these acts of violence will occur. After all, a nationwide program that targets everyone, must monitor and regulate 300 million people. Immense amounts of resources are spent monitoring, prosecuting, and regulating harmless people. Private security at a night club need only regulate the people seeking access to that specific location.

Private Security Is Prudent Even when Peaceful Individuals Can Carry Weapons

Naturally, many opponents of gun control will point out that private gun ownership is effective in providing both direct and indirect deterrence to gunman. That is often true.

Oddly, though, many of the same people who advocate for private gun ownership also deny that owners of public shops and venues bear any responsibility in securing their own property from bombers and gunmen. Not only is this view naive, but it also provides fodder to gun control advocates who believe that only centralized, regulatory efforts by governments can provide meaningful safety from attackers.

Patrons at public businesses should demand that the owners have taken steps to prevent gunmen with malicious intent from entering the premises. Not all citizens — a group that includes children and old people and the disabled — have the time and resources to train in self defense with firearms. Similarly, one might point out that not all people have the resources to train in other essential activities, including keeping automobiles in safe, working order, and building structures that don't fall down on us. While some amateurs are trained in those skills, most people rely on trained professionals for these services.

Naturally, we expect private owners to provide buildings that are structurally sound before we are willing to enter them. So, why should security be just an afterthought?

I suspect that many reasons for the the disconnect here is that people have a nostalgic and fanciful view of the world in which safety should just a "given" that is provided cheaply and easily by some government agency that's out of sight and out of mind. There is also a naive view that government can effectively prevent and combat violence everywhere by passing some laws. We've been conditioned to believe that we shouldn't have to worry about things like safety from murderers when we go to the hardware store. In the real world, though, it is extremely important to consider the real costs and benefits of providing private and decentralized safety measures at private establishments. As the Orlando massacre has demonstrated yet again, relying on government agencies for safety just isn't cutting it.

Show teaser normally
Islamic State Leader Reportedly Killed After Coalition Bombing

Several months ago, when ISIS’ oil money started to dry up as a result of Russian airstrikes severing key supply routes with Turkey, we predicted that it is only a matter of time before the entire conflict (because technically there is no war) involving the Islamic State would quietly be swept away from the front pages, since the primary objective behind ISIS – the removal of Syria’s president al-Assad – had failed, with the arrival of Russian military forces in Syria. We also suggested that the most effective way to achieve this would be through the elimination of the Islamic State’s figurehead, Abu Bakr al-Baghdadi.

And now that the conflict against Islamic State forces is making rapid progress both in Iraq and in Syria, with forces rapidly closing in on the ISIS capital of Raqqa for one final major battle before ISIS is relegated to the trash heap of US-funded “has been” terrorist organizations alongside Al-qaeda, it is only fitting to have a bin Ladinesque send off to Baghdadi as well.

Which is perhaps why on Tuesday morning, Asian, Iranian and Arab media all reported that Islamic State leader Abu Bakr al-Baghdadi died on Sunday after his hideout was bombed by the U.S. led-coalition. The news about al-Baghdadi’s death, first reported by Western Journalism, came after an Iraqi TV channel reported last week that the ISIS boss had been wounded near the Iraqi-Syrian border.

Iraq’s Al Sumariya TV cited local sources in Iraq’s Nineveh province who told the channel that al-Baghdadi and other ISIS leaders had been injured by a coalition airstrike on the Islamic State’s headquarters near the Syrian border. When Col. Chris Garver, a spokesman for the U.S.-led coalition, was asked if he could confirm the Al Sumariyah report, he said that he had “nothing to confirm” at that moment.

It wasn’t just the Iraqis: on Tuesday Indian and Iranian media also reported they had evidence of al-Baghdadi’s death and released a video with images of what seems to be the corpse of the ISIS leader. In Khabar, a Hindi-language news channel in India, was the first outlet that published the images.

Other media reported that Amaq News Agency, an outlet that is linked to ISIS, had published an official statement that read: “Abu Bakr al-Baghdadi has been killed by coalition air strikes on Raqqa on the fifth day of Ramadan.” Meanwhile, the British news site Mirror, cited Iraqi security officers who claimed al-Baghdadi died in Mosul, Iraq.

“Iraqi aircraft hit Baghdadi’s convoy as it was moving towards Karabla to attend a meeting of the Daesh [ISIS] terrorist leaders,” the Mirror reported, citing an unnamed source in Iraq.

A statement from Amaq news agency linked to Islamic State said: “Abu Bakr al-Baghdadi has been killed by coalition air strikes on Raqqa on the fifth day of Ramadan.” Another source claimed he died in Mosul, Iraq – another ISIS-held stronghold.

As we have reported previously, Al-Baghdadi has been traveling around to avoid being captured or killed by his many enemies. He traveled from Syria to Mosul at least twice over the last six months and reportedly visited Libya, where he helped organize the conquest of a large part of Libya’s coastal plain.

The self-proclaimed caliph was born as Ibrahim Awwad Ibrahim al-Badri in 1971 in Samarra, Iraq. Al-Baghdadi later claimed the tribe he belonged to descended from the Prophet Muhammad. The ISIS leader obtained bachelor’s degree, a master’s degree and a doctorate in Islamic studies from the Islamic University of Baghdad. After the American invasion of Iraq, al-Baghdadi helped to found the Islamist group Jamaat Jaysh Ahl al-Sunnah wa-l-Jamaah. He was arrested by U.S. forces on Feb. 2, 2004, but reportedly was released in December that year after he was designated “a low-level prisoner.” Other reports claim that al-Baghdadi remained in custody until 2009 and that he was imprisoned with other future ISIS leaders.

In May 2010, according to folklore, al-Baghdadi became the leader of Islamic State in Iraq, the official al-Qaida branch in the country, and organized a string of deadly suicide attacks that escalated after the withdrawal of U.S. forces from Iraq. He remained the group’s leader until the founding of ISIS, the Islamic State of Iraq and the Levant that came into being after the group expanded its activities into Syria.

On June 29, 2014, out of the blue, al-Baghdadi announced the establishment of a worldwide caliphate, a move that was harshly condemned by many Islamic governments and led to a conflict with al-Qaida leader Ayman al-Zawahiri. The move was also facilitated with the funding of various nations, including Qatar and Saudi Arabia, while according to declassified reports, the CIA was also instrumental in ISIS’ formative years which would be used as a blunt object to eliminate Al-Assad from power.

The death of al-Baghdadi will likely be a serious blow to the Islamic State after the organization already lost more than 40 percent of its territory in Iraq and Syria and suffered a string of battle losses recently.

Show teaser normally
Dear Janet, "No Surprises!" – China Devalues Yuan To Weakest Since Jan 2011

Just in case The Fed had any ideas of surprising markets with a “confidence-inspiring” rate-hike tomorrow, The PBOC just sent a message loud and clear to Janet as they devalued the Yuan fix by over 2 handles, above 6.60 for the first time since January 2011.

This is the 3rd major devaluation step in the last 10 months (remember when China said August was a “one off”?)

Bear in mind this kind of currency turmoil has not ended well for US equities in the past…

Which may help explain why funding market stress is starting to appear in Libor/OIS and basis-swaps (demand for USDollars), and why US and European banks are tumbling…

Charts: Bloomberg

Show teaser normally
An Inconvenient Truth: How The Obama Administration Became Earth's Largest Arms Dealer

With the Obama presidency in its final year, there is one central element of his foreign policy that has received little attention – the dramatic acceleration of lethal weapons exports by the U.S. military and defense contractors. As Ammo.com details, the Obama administration has approved more lethal weapon sales to more foreign countries than any U.S. administration since World War II. Many billions more than G.W. Bush's administration, in fact. And some of these sales will likely result in unintended consequences i.e. "blowback" – especially as more than 60 percent of them have gone to the Middle East and Persian Gulf.

(After all, U.S. weapons supplied to the mujaheddin in Afghanistan to fight the Soviets were then used to help launch Al-Qaeda. Arms supplied to Iraqi security forces and Syrian rebels have been captured by ISIS. And “allies” from Bahrain to Egypt to Saudi Arabia have used U.S.-supplied weapons to defeat homegrown democracy movements.)

On May 23rd, President Obama announced at a press conference in Hanoi that the U.S. would be lifting its decades-long embargo on sales of lethal weapons to Vietnam. Such a reversal in U.S. foreign policy raises questions: How does the U.S. arms export market actually work? Which companies in the military-industrial complex profit from these sales? Who really ends up with U.S. weapons? And most importantly, how many of those weapons could eventually be used against us?

Source: Ammo.com

Show teaser normally
Rent In London Is Consuming 57% Of Millennials' Income

While the luxury housing bubble has burst in the UK, one-bedroom rentals that are popular among millennials are still putting a dent in their discretionary cash flow.

A new study by Countrywide Plc, the UK's largest realtor, reports that a one-bedroom apartment in London now consumes 57% of a millennials net income on average, up 16% from 2007 which saw rent consume 41% of income.

The average cost of a small home in London now stands at $1,609 a month, up 48% in the past nine years, and well surpassing wage growth of 11% over the same period Bloomberg reports.

In Great Britain overall, one-bedroom apartment rents are taking up over 45% of income for millennials, up from 2007 levels as well.

With the price to own completely unaffordable due to the influx of foreign investors and cheap money, many individuals and especially millennials, have turned to renting, pushing rent higher as a result. It seems as though those millennials who expect to make hundreds of thousands after graduating school better track those jobs down quickly, lest they want to end up like many of their counterparts in the US who increasingly live with their parents.

Show teaser normally

Digest powered by RSS Digest

Jun 14

Today’s News 14th June 2016

By admin in Economy

How Muslim Countries Treat Homosexuals
Submitted by Jim Quinn via The Burning Platform blog,

The left wingers are spouting gibberish about this having nothing to do with Islam or Muslim beliefs. Bullshit. Muslims hate gays and think they should die for their lifestyles. It’s their law.

Source: WaPo

10 nations where the penalty for gay sex is death

By Colin Stewart

Ten nations with large Muslim populations have laws providing for the death penalty for same-sex activity.

Only a few actually impose the death sentence. Exactly how many is a difficult question.

The 2016 State-Sponsored Homophobia report from ILGA, the International Lesbian, Gay, Bisexual, Trans and Intersex Association, lists 13-14 places that threaten the death penalty for homosexuality, including the basic 10 plus several specific variations:
- One where executions occur — and go unpunished — despite the fact that there is no death-penalty law (Iraq);
- One that has approved a death-penalty provision but has not yet incorporated it into the nation’s laws (Brunei);
- One that conducts executions but is not recognized as a nation (the Islamic State, also known as Daesh, ISIS and ISIL);
- One where, in theory, a particular interpretation of its laws would provide for the death penalty but, in practice, no executions have been reported (United Arab Emirates)
The ILGA list is quite similar to this blog’s list of those 14 countries, printed below:

A best-information-available list of countries/regions where executions for homosexual activity are carried out or are provided by current or future law:

Nations with such laws on the books; executions have been carried out

1. Iran
2. Saudi Arabia

Nations with such laws on the books; no recent executions reported

3. Sudan
4. Yemen

Nations with such laws on the books in part of the country; no verified executions for homosexual activity

5. Nigeria
6. Somalia

Nations with such laws on the books; no executions reported

7. Afghanistan
8. Mauritania
9. Pakistan
10. Qatar

Those are the “ten nations with large Muslim populations” mentioned in this article’s first paragraph.” In addition, executions and possible executions are an issue in four other places:

Nation with no such a law on the books; executions are carried out by militias and others

11. Iraq

Not recognized as a nation; carries out executions

12. Daesh/the Islamic State (ISIS/ISIL)

The Sultan of Brunei, Hassanal Bolkiah

Nation where such a law was scheduled to take effect in 2016 (but might not)

13. Brunei Darussalam

Nation where some interpretations of existing law would provide for the death penalty, but no executions have been reported

14. United Arab Emirates

News coverage in all of those nations is unreliable at best, so specific evidence of executions for same-sex intimacy is rare. What’s known about some specific countries is cited below.

In Somalia, a gay teenager was reportedly stoned to death in 2013, but those reports have not been verified.

In Nigeria, the BBC reported in 2007, “More than a dozen Nigerian Muslims have been sentenced to death by stoning and for sexual offences ranging from adultery and homosexuality. But none of these death sentences have actually been carried out as they were either thrown out on appeal or commuted to prison terms as a result of pressure from human rights groups.”

In Sudan, the death penalty is in frequent use, but there are no recent reports of executions for same-sex intimacy. In 2014, Sudan ranked at No. 6 worldwide in number of executions (23+) for various offenses, just below the United States, with 35, according to Amnesty International.

Similarly, Yemen is No. 7 in frequency of executions overall, but the death penalty apparently has not been imposed recently for homosexual activity. Researchers for Canada’s Immigration and Refugee Board reported more than 10 years ago, “Information on whether such sentences have been carried out was not found.” More recently an article on Yemen’s gay community in The Tower magazine stated, “Traditionally, that death penalty is not enforced, but citizens have been imprisoned for their sexual orientation.”

Saudi Arabia is No. 3 among the world’s most avid executioners, with 90+ in 2014. At least in the past, beheadings were imposed for homosexual behavior, including three men in 2002. Imprisonment and lashings are a more common punishment for same-sex activity.

Iran is No. 2 in the world for frequency of executions, behind China. Those include executions for homosexual activity, although the facts are often unclear or misrepresented in such cases. (See, for example, “Bogus hanging in Iran, bogus tweets in Egypt” and “Series of public hangings in Iran, including 2 for sodomy.”)

Evidence is a bit clearer about two war-torn areas — Iraq and the territory controlled by Daesh/the Islamic State (ISIS/ISIL). The ILGA report of 2015 noted that “Iraq, although [the death penalty is] not in the civil code, clearly has judges and militias throughout the country that issue the death sentence for same-sex sexual behaviours. … We are also aware that in the Daesh(ISIS/ISIL)-held areas the death penalty is implemented (although a non-State actor, it is listed in the report). ” For examples, see:
- Iraq has become a death trap for gay men (September 2012)
- ‘Islamic State’ has reported 15 LGBTI executions (May 2015)
In some nations, the death penalty is on the books but is not imposed. ILGA in 2015 stated:

Brunei Darussalam is due to activate the death penalty for same-sex sexual acts in 2016, but it seems likely that like Pakistan, Afghanistan and Qatar although it is on the statute, it will not be implemented.

ILGA reported in 2016 about Brunei: “there is no sign that the threatened death penalty is to be implemented.”

According to the U.S. Department of State, Mauritania belongs in this category too. A U.S. Department of State cable from 2009, released by WikiLeaks in 2011, indicated that Mauritania has never imposed the death penalty for homosexual activity or any other crime.

ILGA reported in 2016 that “although is understood that the United Arab Emirates has not implemented [the death penalty] under the Sharia code, it remains a possibility under interpretations current in the Emirates.”

Show teaser normally
17 Facts About The Orlando Shooter That Every American Should Know

Submitted by Michael Snyder via The End of The American Dream blog,

America is in shock. On Sunday, a 29-year-old Islamic terrorist named Omar Mateen shot 102 people at a gay club known as Pulse in the heart of Orlando, Florida. 49 of those that were shot died, and 53 were wounded. So how in the world did this happen?

Well, when you combine radical political correctness with extreme government incompetence and the dramatic growth of radical Islam inside the United States, you create an environment which is absolutely primed for Islamic terror.

The truth is that the FBI knew about this guy well in advance. In fact, they had even interviewed him three separate times over the years. And at one point the government had been investigating the mosque that he had been attending, but that investigation was shut down by Hillary Clinton’s State Department. Mateen had told the FBI that he hoped to be a martyr someday, and those were not just idle words. His twisted ideology fueled his actions, and so the choices that he ultimately made should not have come as a surprise to law enforcement authorities. But now that this has happened, will it change the way that the government approaches Islamic terror?

The following are 17 facts about the Orlando shooter that every American should know…

#1 According to the Director of the FBI, Mateen had “links to al-Qaida, Hezbollah, and the Islamic State“.

#2 Mateen’s father has openly expressed support for the Taliban on YouTube.

#3 Despite those links to terror organizations, Mateen was allowed to work “as a security guard at a local courthouse“.

#4 Mateen wasn’t directly hired by the courthouse. Instead, he was officially an employee of the largest security services company in the world…

The Orlando nightclub terrorist who pledged allegiance to ISIS worked almost a decade for a major Department of Homeland Security contractor, raising alarms that ISIS sympathizers and agents have infiltrated the federal agency set up after 9/11 to combat terrorists.

Officials say Omar Mir Seddique Mateen, an Afghan-American who held two firearms licenses and a security officer license, was employed by the security firm G4S Secure Solutions USA Inc. since Sept. 10, 2007. The Jupiter, Fla.-based company merged with the Wackenhut Corp. after 9/11 and assumed federal contracts.

#5 It turns out that this U.S. subsidiary of G4S is a company that works very closely with “the Department of Homeland Security, the US Army, and federal and local law enforcement.”

#6 Mateen’s ex-wife says that he would repeatedly beat her while they were married.

#7 He started to become radicalized after separating from his first wife. While they were together, she said that he didn’t show much interest in religion.

#8 He made pilgrimages to Saudi Arabia in 2011 and 2012.

#9 He claimed to personally know the Boston Marathon Bombers.

#10 According to the FBI, Mateen has “been on the radar before“, he was interviewed by them three separate times, and they conducted a 10 month investigation of his activities in 2013.

#11 He is being described as “unhinged and unstable” by his former coworkers.

#12 Mateen once declared that he hoped to martyr himself someday, and the FBI knew all about this.

#13 Despite everything that the federal government knew about Mateen, he was still permitted to legally buy guns just last week.

#14 In an odd twist, it also turns out that Mateen was a registered Democrat.

#15 A respected Islamic scholar was urging Muslims in Orlando to “get rid” of homosexuals just a couple of months before this shooting took place…

Farrokh Sekaleshfar – a British-born doctor and Muslim scholar – has gained a following by urging Muslims to ‘get rid of’ homosexuals.

And in April, he took his speech titled ‘How to deal with the phenomenon of homosexuality’ to the Husseini Islamic Center in Sanford, just outside Orlando, Florida.

Two months later, 29-year-old Omar Mateen carried out the worst massacre in US history by opening fire on a gay club in the same city.

#16 Hillary Clinton’s State Department shut down an investigation of the mosque that Mateen attends because it “unfairly singled out Muslims“.

#17 Just moments before the attack, Mateen reportedly called 911 to swear his allegiance to ISIS.

When is it going to finally sink in for our politically correct politicians that Islamic terror is a major threat?

There are lots of other Omar Mateens out there. And as radical Islam continues to spread both inside and outside this country, the threat is only going to get a lot worse.

Barack Obama is a perfect example of just how clueless many of our top politicians are about all of this. During his speech to the nation, he did not connect this act of terror with radical Islam in any way, shape or form. But the only reason why Mateen did what he did was because of his worldview. He felt perfectly justified in picking up a weapon and gunning down dozens of people, and martyrdom was a reward in his eyes. If he had not been immersed in the world of radical Islam for years, he never would have done such a thing.

Wrong beliefs lead to wrong actions. We see this in action all around us every day, but most of the time the consequences are not as dramatic as we just witnessed in Orlando.

As I have been warning about for some time now, Islamic terror attacks inside the United States are going to continue to get worse.

If you think what happened in Orlando was bad, just wait until these terrorists get their hands on chemical, biological or nuclear weapons.

The detonation of a single weapon of mass destruction in one of our major cities would instantly change life as we know it for every man, woman and child in this entire nation.

The ideology that fuels these terrorists continues to grow, and over time it is inevitable that they will acquire increasingly more powerful weapons.

So yes, gunning down dozens of people in a crowded nightclub is an atrocity that is so evil that it is hard to find words to describe it.

But someday we will see far, far worse in this nation, and at this point we are completely unprepared to deal with that reality.

Show teaser normally
Multiple Suspects On The Loose In Orlando – Why The Media Blackout Of Eyewitness Accounts?

Submitted by Shepard Ambellas via Intellihub.com,

According to heavily censored eyewitness reports, totally suppressed from the mainstream, there were likely several other radicalized perpetrators involved with Saturday night’s terror attack, which led deaths of 49 club-goers at Pulse and over 50 others being injured.

One eyewitness to the attack, who was inside the nightclub when it happened, was giving his testimony to the attack, after being trapped inside the club, live on-air, to a mainstream news source when he was abruptly cut off after providing a crucial detail. The eyewitness said that during the attack “there was a guy there that was trying to […] hold the door closed so that we couldn’t exit,” as pointed out by an investigative reporter on YouTube.

Additionally, there were reports that police could be seen quietly conducting an “active search” for accomplices who may have already exited the nightclub after the attack.

Another eyewitness that was inside Pulse when the attack occurred told reporters, “I’m pretty sure it was more than one person, you know, like I said, I heard two guns going at the same time.” The eyewitness said that the event lasted “like eight minutes.”

Another crucial detail that the press is leaving out is that the shooter or shooters were initiating “rapid fire;” which means that the weapons used were likely fully automatic, as depicted by the same eyewitness when he made an animated machine gun-like sound with his mouth for the press to hear.

The witness said that he could smell the gun smoke in the air and that the attackers were “working together.”

“It was not one shot at a time,” but rather from a machine gun,” another witness said, who eventually made it out of the club into the “alleyway.”

Raw footage from the scene also reveals that officers may have been engaging an additional perpetrator outside of the nightclub, backing up other reports.

It has also been reported that both FBI and police, around the country, are increasing their security protocols, dispatching undercover officers and specifically beefing up security measures at the annual Gay Pride Parade which is still currently underway in Los Angeles.

Moreover, officials also are concerned that there is a ‘gaping hole’ in the nation’s security net and that more attacks may occur.

Authorities and even the President of the United States, Barack Obama, are currently downplaying the fact that there is a definite radicalized Islamic ideological connection to the attack and again, are covering up the fact that multiple suspects are likely still on the loose.

Show teaser normally
No More "$1,000 Dinners & Champagne" For "Above The Law" Bankers At Standard Chartered

Standard Chartered CEO Bill Winters is fighting the battle to right the ship at the bank on two fronts. First, Winters needs to figure out a way to deal with plunging revenues and billions in NPLs. On the other front, the CEO is working to change a culture in which he is finding many bankers consider themselves "above the law."

Since taking over as CEO in the middle of 2015, Winters has replaced much of the senior executive team and initiated a probe into employee conduct and ethics. The result of the probe into misconduct has led Winters to add significant firepower to the bank's internal investigation team, including former detectives from the FBI, Scotland Yard, Hong Kong police and the New Zealand intelligence agency Bloomberg reports.

Winters said that he has encountered "a looseness" in the way the bank was managed since coming in as CEO, and said he's uncovered a culture where senior managers felt they were "above the law." In a memo to employees titled #knowtherules, Winters wrote "I am concerned that a small number of employees, including some senior managers, have willfully disregarded our policies – sometimes for personal gain – and set a poor example for their peers and teams. I am deeply disappointed and angry at some of the examples we are finding."

Still licking its wounds from a 2012 deferred prosecution agreement in which the bank was fined $667 million for violating US sanctions by engaging in $250 billion in transactions with Iran, Winters is on high alert when it comes to ethics violations and employee misconduct because as Bloomberg notes, the bank could potentially lose its US banking license if it slips up again.

In one memo, Winters described a culture where managers felt they were "above the law" and was very clear on the fact that there would be a zero tolerance policy going forward for anyone not taking bank policies seriously.

"I want this to be clearly understood – we have zero tolerance for any employee that deliberately flouts and circumvents our rules and policies, without regard for their seniority or role."

At the moment, it appears as though Winters is putting some bite behind the bark. In the memos, Winters is providing real examples of rule breaking, and what has happened to those employees. One memo cites three senior employees who didn't disclose their investment in an unlicensed money lender that charged high interest rates, and they were all subsequently dismissed.

The risk and controls committee will dock bonus if compliance or risk officers report that policies aren't being taken seriously enough, and General Counsel David Fein who is heading the effort has made sure that the new rules have been communicated clearly to the staff of 84,000 and excuses such as "I didn't know what the policy was" will no longer fly. "They are not going to have the same mitigating factors, that stuff's gone." Fein said.

Everything is being scrutinized at the bank, along with the big things, "smaller" things such as expense reports are now being controlled more diligently. Pam Walkden, new HR chief says "we've done a lot of training around what is the right way to submit your expenses and what are legitimate expenses. You cannot go and spend $1,000 on a fancy dinner with champagne. If you accidentally charge an orange juice from the mini bar, that's not the end of the world. But if you take out 20 people and make the most junior person pay for it, that's big trouble."

Winters has a lot of ground to make up in order to make shareholders happy. The bank spent $243 million on regulatory costs alone in Q1 of this year, which is 10.8% of the entire operating costs of the bank, and the effort is something that Winters feels important, even as the bank trades at a significant discount to book value according to Bloomberg.

* * *

While we are skeptical that any bank CEO is truly cleaning house, on the surface it appears as though Winters is actually trying to so so, which is a positive. However as usual, its a deeds not words type of thing, so whether or not the CEO can get the misconduct under control remains to be seen. One final observation, and most importantly, how are bankers supposed to survive if they're unable to spend $1,000 on fancy dinner and champagne?

Show teaser normally
Former CIA Agent To Americans: Time To Talk About What's Really Causing Terrorism

Submitted by Carey Wedler via TheAntiMedia.org,

In the wake of yet another terrorist attack, a former CIA counterterrorism agent has shared her insight into what causes such tragic, intentional carnage. Amaryllis Fox spoke for the first time publicly with Al Jazeera Plus (AJ+) about terrorism, misguided narratives on why it happens, and the underlying motivators driving it — ultimately urging Americans and those in power to adopt a different approach in comabating the ongoing violence.

“If I learned one lesson from my time with the CIA, it is this: everybody believes they are the good guy,” says Fox, who is currently “in the process of getting her CIA cover rolled back,” AJ+ reports. She is now a peace activist and runs Mulu, “an e-commerce company supporting at-risk communities around the world.”

Fox worked as a counterterrorism and intelligence official for the clandestine services during the 2000s. In her first public statement on her time there, she discussed the limitations on the American public’s perception of the war on terror:

“The conversation that’s going on in the United States right now about ISIS and about the United States overseas is more oversimplified than ever. Ask most Americans whether ISIS poses an existential threat to this country and they’ll say yes. That’s where the conversation stops.”

Indeed, while a majority of Americans fear terrorism, reaching a consensus on how to tackle ISIS has proved contentious. Fox explained the simplicity of the way the conflicts are viewed on both sides:

“If you’re walking down the street in Iraq or Syria and ask anybody why America dropped bombs, you get: ‘They were waging war on Islam.’”

In America, the question is: “Why were we attacked on 9/11?”

Fox says if you pose this question, “You get: they hate us because we’re free.”

However, she contests the validity of these assumptions, pointing to the powerful forces that drive conflict in the first place:

“Those are stories manufactured by a really small number of people on both sides who amass a great deal of power and wealth by convincing the rest of us to keep killing each other.”

Indeed, both sides of the conflict expend significant effort campaigning to prove their crusades are justified. In the United States, after decades of prolonged conflict, the populace is largely desensitized to war and often ignorant of its current manifestations.

Fox challenges this paradigm:

“I think the question we need to be asking, as Americans examining our foreign policy, is whether or not we’re pouring kerosene on a candle. The only real way to disarm your enemy is to listen to them. If you hear them out, if you’re brave enough to really listen to their story, you can see that more often than not, you might have made some of the same choices if you’d lived their life instead of yours.”

Of course, as Americans mourn the most recent mass shooting, it is doubtful many citizens are well-versed in the U.S. foreign policy that provokes such terrorism. Rather, they focus, understandably, on the wrong done to their nation. But Fox offered a unique perspective that lends insight to the “enemy.”

“An Al-Qaeda fighter made a point once during debriefing,” she recounted. “He said all these movies that America makes — like Independence Day, and the Hunger Games, and Star Wars — they’re all about a small scrappy band of rebels who will do anything in their power with the limited resources available to them to expel an outside, technological advanced invader. ‘And what you don’t realize,’ he said, ‘is that to us, to the rest of the world, you are the empire, and we are Luke and Han. You are the aliens and we are Will Smith.’”

However, she also challenged the Al-Qaeda fighter’s take, arguing that on both sides of conflict, those fighting on the ground often provide the same reasons for doing so:

“But the truth is that when you talk to people who are really fighting on the ground, on both sides, and ask them why they’re there, they answer with hopes for their children, specific policies that they think are cruel or unfair,” she says.

“And while it may be easier to dismiss your enemy as evil, hearing them out on policy concerns is actually an amazing thing, because as long as your enemy is a subhuman psychopath that’s gonna attack you no matter what you do, this never ends. But if your enemy is a policy, however complicated — that we can work with.”

As terror attacks become an increasingly normal occurrence in the West — and as Western intervention trudges ahead unabated — hearing out enemies’ concerns may, at this point, be the most effective counterterrorism gesture the United States can make; that is, if it is truly determined to bring an end to the violence.

Show teaser normally
Arrest Of Accomplice Of "Lone Wolf" Orlando Shooter Expected Soon

As we reported first thing this morning, contrary to media reports that Omar Mateen had acted as a “lone wolf” when he singlehandedly killed 49 and injured over 50 – a monumental task outside of video games and Hollywood – something about this story just did not make sense, especially since according to eyewitness reports, suppressed from the mainstream, there were likely several other perpetrators involved with Saturday night’s terror attack.

As it turns out, the police and the FBI may have to “adjust” the narrative, because according to WFTV, an arrest of an alleged accomplice of Mateen will be “made soon.”

@KRayWFTV reporting on law enforcement angle of #pulseshooting #wftv pic.twitter.com/bfw7bgEAT2

— Daralene Jones (@DJonesWFTV) June 13, 2016

#BREAKING: Arrest to be made soon of alleged accomplice in #PulseShooting #WFTV @KRayWFTV pic.twitter.com/bNS5UEGYW2

— WFTV Eyewitness News (@WFTV) June 13, 2016

As WFTV further reports, “sources told Channel 9 Monday that law enforcement could possibly make an arrest in the next few days of someone who allegedly helped the Orlando gunman carryout the mass shooting inside Pulse nightclub that killed 49 people on Sunday.”

However, the station adds, citing US Attorney Lee Bentley, “We have no reason to believe that anyone connected to this crime is placing the public in imminent danger at this time.” Unless, of course, there is a “reason to believe” that the narrative that had been peddled all along about a lone-wolf style killing, when in fact there was at least two or more perpetrators, was a glaring lie.

For now, however, the authorities are scrambling to create the new story, and as WCVB adds, a US government official said that no arrest is imminent.

A US Government Official briefed on the Orlando case tells us no arrest is imminent #wcvb #5investigates

— Karen Anderson (@karenreports) June 14, 2016

It’s almost as if the government itself can no longer keep its official story straight.

Show teaser normally
Thanks America: Spending On Military Weapons Saw Its Largest Yearly Increase In A Decade

For those who who thrive on conflict (ie: countries with a strong military industrial complex – read: United States), 2015 was a year to be proud of.

The world defense market climbed to $65 billion in 2015, up by $6.6 billion from 2014 the consulting company IHS Inc said in its Global Defence Trade Report. That's the largest yearly increase in the past decade, led by Saudi purchases which jumped about 50% to $9.3 billion in 2015 according to Bloomberg.

As it continues its conflict in Yemen, and with an eye on countering Iran, Saudi Arabia's purchases consisted of Eurofighter Typhoon jets, F-15 warplanes and Apache helicopters, as well as precision-guided weapons, drones and surveillance equipment according to Ben Moores, a senior defense analyst at IHS Aerospace, Defence & Security who wrote the report.

Egypt became the world's fourth-biggest weapon's importer, spending almost $2.3 billion in 2015, ramping up from spending $1 billion or less before 2013. Moores says the higher spending by Egypt is being underwritten by France and other Gulf Arab states.

Iraq spent nearly as much as Egypt as it shifts money from operations and personnel toward procurement, IHS said. The country is battling Islamic State militants in the Anbar province and is preparing for the eventual battle to retake the northern city of Mosal.

Moores says that the IHS doesn't foresee oil prices recovering beyond current levels for another three years, which means oil exporters may have to cut back on procurement in the future – (or the US can just offer a discount for "slightly used" equipment, one or the other).

Another interesting point from the reports, as Bloomberg notes, is that states bordering the South China Sea increased defense spending by 71% since 2009 in attempt to deter China. Those purchases were for items such as aircraft and anti-ship missiles the IHS added.

From an export perspective, everyone will be shocked to learn that the United States was the top weapons exporter in 2015, supplying almost $23 billion in goods and equipment, of which $8.8 billion went to the Middle East.

"Going forward, the total may exceed $30 billion as deliveries of the F-35 begin to ramp up" the report said, referring to the next-generation fighter aircraft built by Lockheed Martin.

Russia came in at the world's No. 2 exporter, and is likely to increase its trade with Iran as the country begins to replace its aging air force equipment, a massive undertaking that could cost $40 to $60 billion according to Moores.

France is poised to further its exports as well, as it builds a $39 billion submarine order it won from Australia earlier this year.

As we previously noted, the global arms trade is absolutely huge, and is continuing to grow as exporters stir up conflict in order to grow GDP look to help keep the peace with global arms sales. Remember this information the next time we hear about the imminent threat Russia poses, or about how the US just needs to make sure it sticks its nose into the South China Sea disputes.

* * *

Bonus:

Here is a graphic (more here) showing the global arms trade between 2011-2015, with the usual suspects exporting and the Middle East significantly increasing imports.
How A Venezuela Food Protest Turned Into A Deadly Police Gunfight

After last week’s first reported casualty during a Venezuela looting, things have, as expected, gotten exponentially worse and according to Reuters, the recent wave of lootings and food riots in crisis-hit Venezuela has left another three people dead in just the past few days. The state prosecutor’s office is investigating the deaths of a 21-year-old man in eastern Sucre state on Saturday, another 21-year-old man in the Caracas slum of Petare on Thursday, and a 42-year-old woman in the western state of Tachira last Monday.

All three suffered gunshot wounds during chaotic scenes outside supermarkets, which have become a flashpoint for violence and looting amid scarcities of basics across the South American OPEC member country, according to local rights group Provea. A policeman has been arrested over the Tachira death, which as we reported was most likely the result of police gunshots.

With basics such as flour and rice running short, crowds chanting “We want food!” are thronging supermarkets daily, presenting a major problem for the struggling leftist government of President Nicolas Maduro.

More than 10 incidents of looting are occurring daily, according to the Venezuelan Observatory of Violence, a local monitoring group.

Meanwhile, here is a video of just how deadly Venezuela has become: what started as a food protest in the Caracas parish of La Vega last Friday, quickly tuned into a gunfight with several wounded police officers and who knows how many shot protesters.

Show teaser normally
Dramatic Footage Emerges From Inside Orlando Nightclub During Deadly Shooting

As the world continues to learn more about the tragic events that occurred over the weekend at a gay nightclub in Orlando, in what ultimately was the deadliest mass shooting in US history, a dramatic video has emerged that captures the very moment the shooting began that fateful evening.

Amanda Alvear, a 25 year old nursing student, was streaming footage on snapchat showing club goers enjoying themselves just as a hail of gunfire rang out in the club. The brief clip was posted on Facebook by Amanda's brother Brian according to the Daily Mail.

The Mail reports that Brian indicated on his Facebook account that Amanda received and answered one call after the video. Sadly, the last thing he had heard about his sister was that she was hiding in the bathroom before learning of her death.

Here is the snapchat video – Warning: May be disturbing for some viewers.

Show teaser normally

Digest powered by RSS Digest

Jun 13

Today’s News 13th June 2016

By admin in Economy

The EU Is Coming To Close Down Your Free Speech
Submitted by Douglas Murray via The Gatestone Institute,
- The German Chancellor was not interested in the reinforcement of Europe's external borders, the re-erection of its internal borders, the institution of a workable asylum vetting system and the repatriation of people who had lied to gain entry into Europe. Instead, Chancellor Merkel wanted to know how Facebook's founder could help her restrict the free speech of Europeans, on Facebook and on other social media.
- Then, on May 31, the European Union announced a new online speech code to be enforced by four major tech companies, including Facebook and YouTube.
- It was clear from the outset that Facebook has a definitional problem as well as a political bias in deciding on these targets. What is Facebook's definition of 'racism'? What is its definition of 'xenophobia'? What, come to that, is its definition of 'hate speech'?
- Of course the EU is a government — and an unelected government at that — so its desire not just to avoid replying to its critics — but to criminalise their views and ban their contrary expressions — is as bad as the government of any country banning or criminalising the expression of opinion which is not adulatory of the government.
- People must speak up — must speak up now, and must speak up fast — in support of freedom of speech before it is taken away from them. It is, sadly, not an overstatement to say that our entire future depends on it.
It is nine months since Angela Merkel and Mark Zuckerberg tried to solve Europe's migrant crisis. Of course having caused the migrant crisis by announcing the doors of Europe as open to the entire third-world, Angela Merkel particularly would have been in a good position actually to try to solve this crisis.

But the German Chancellor was not interested in the reinforcement of Europe's external borders, the re-erection of its internal borders, the institution of a workable asylum vetting system and the repatriation of people who had lied to gain entry into Europe. Instead, Chancellor Merkel was interested in Facebook.

When seated with Mark Zuckerberg, Frau Merkel wanted to know how the Facebook founder could help her restrict the free speech of Europeans, on Facebook and on other social media. Speaking to Zuckerberg at a UN summit last September (and not aware that the microphones were picking her up) she asked what could be done to restrict people writing things on Facebook which were critical of her migration policy. 'Are you working on this?' she asked him. 'Yeah', Zuckerberg replied.

In the months that followed, we learned that this was not idle chatter over lunch. In January of this year, Facebook launched its 'Initiative for civil courage online', committing a million Euros to fund non-governmental organisations in its work to counter 'racist' and 'xenophobic' posts online. It also promised to remove 'hate speech' and expressions of 'xenophobia' from the Facebook website.

It was clear from the outset that Facebook has a definitional problem as well as a political bias in deciding on these targets. What is Facebook's definition of 'racism'? What is its definition of 'xenophobia'? What, come to that, is its definition of 'hate speech'? As for the political bias, why had Facebook not previously considered how, for instance, to stifle expressions of open-borders sentiments on Facebook? There are many people in Europe who have argued that the world should have no borders and that Europe in particular should be able to be lived in by anyone who so wishes. Why have people expressing such views on Facebook (and there are many) not found their views censored and their posts removed? Are such views not 'extreme'?

One problem with this whole area — and a problem which has clearly not occurred to Facebook — is that these are questions which do not even have the same answer from country to country. Any informed thinker on politics knows that there are laws that apply in some countries that do not — and often should not — apply in others. Contrary to the views of many transnational 'progressives', the world does not have one set of universal laws and certainly does not have universal customs. Hate-speech laws are to a very great extent an enforcement of the realm of customs.

As such it is unwise to enforce policies on one country from another country without at least a very deep understanding of that country's traditions and laws. Societies have their own histories and their own attitudes towards their most sensitive matters. For instance in Germany, France, the Netherlands and some other European countries there are laws on the statute books relating to the publication of Nazi materials and the propagation of material praising (or even representing) Adolf Hitler or denying the Holocaust. The German laws forbidding large-scale photographic representations of Hitler may look ridiculous from London, but may look less ridiculous from Berlin. Certainly it would take an enormously self-confident Londoner unilaterally to prescribe a policy to change this German law.

To understand things which are forbidden, or able to be forbidden, in a society, you would have to have an enormous confidence in your understanding of that country's taboos and history, as well as its speech codes and speech laws. A ban on the veneration of communist idols, for instance, may seem sensible, tasteful or even desirable in one of the many countries which suffered under communism, wish to minimise the suffering of the victims and prevent the resurrection of such an ideology. Yet a universal ban on images or texts which extolled the communist murderers of tens of millions of people would also make criminals of the thousands of Westerners — notably Americans — who enjoy wearing Che Guevara T-shirts or continue their adolescent fantasy that Fidel Castro is an icon of freedom. Free societies generally have to permit the widest possible array of opinion. But they will have different ideas of where legitimate expression ends and where incitement begins.

So for Facebook and others to draw up their own attempt at a unilateral policy of what constitutes hate-speech would be presumptuous even if it were not — as it is — clearly politically biased from the outset. So it is especially lamentable that this movement to an enforced hate-speech code gained additional force on May 31, when the European Union announced a new online speech code to be enforced by four major tech companies, including Facebook and YouTube. Of course, the EU is a government — and an unelected government at that — so its desire not just to avoid replying to its critics — but to criminalise their views and ban their contrary expressions — is as bad as the government of any country banning or criminalising the expression of opinion which is not adulatory of the government.

That these are not abstract issues but ones exceedingly close to home has been proven – as though it needed proving – by the decision of Facebook to suspend the account of Gatestone's Swedish expert, Ingrid Carlqvist. In the last year Sweden took in between 1 and 2% additional people to its population. Similar numbers are expected this year. As anyone who has studied the situation will know, this is a society heading towards a breakdown of its own creation, caused (at the most benign interpretation) by its own 'open-hearted' liberalism.

Countries with welfare models such as Sweden's cannot take in such numbers of people without major financial challenges. And societies with a poor integration history cannot possibly integrate such vast numbers of people when they come at such speed. As anyone who has travelled around there can tell, Sweden is a country under enormous and growing strain.

There is a phase in waking up to such change which constitutes denial. The EU, the Swedish government and a vast majority of the Swedish press have no desire to hear critiques of a policy which they have created or applauded; the consequences will one day be laid at their door and they wish to postpone that day, even indefinitely. So instead of tackling the fire they started, they have decided to attack those who are pointing to the fact that they have set the building they are standing in on fire. In such a situation it becomes not just a right but a duty of free people to point out facts even if other people might not want to hear them. Only a country sliding towards autocracy and chaos, with a governing class intent on avoiding blame, could possibly allow the silencing of the few people pointing out what they can clearly see in front of them.

People must speak up — and speak up now, and speak up fast — in support of freedom of speech before it is taken away from them, and in support of journalists such as Carlqvist, and against the authorities who would silence all of us. It is, sadly, not an overstatement to say that our entire future depends on it.
Immigration Economics: Illegal Aliens Are Our Bread and Butter

This article by David Haggith was first published on The Great Recession Blog.

Have you ever wondered why politicians make some immigration illegal and then turn a blind eye to illegal immigration wherever it is happening … for decades? What about why they talk so much about building walls to keep out the vast hoards, rather than simply arresting the much smaller number of people who hire illegal immigrants. Surely drying up the jobs that are available to illegal immigrants would be much more economical than building a thousand-mile wall. This article will tell you why we make some immigration illegal and then turn a blind eye to it.

Have you also wondered why politician make it illegal for millions of people to enter the country and then eventually support naturalizing those people who broke the laws these very politicians made? This article will answer that, too.

First, I’ll state that immigration is largely about economics; and by that I do not simply mean that people are coming to the U.S. to gain economic opportunity, though, of course, they are. Nor do I simply mean immigrants are taking jobs away from Americans, though, of course, they are.

There is an elephant in the room that no one is talking about, and it’s not just a GOP elephant. Immigration economics has a dark underbelly that neither party ever talks about. Since immigration reform is one of the major planks of the Republican’s top candidate for the presidency, there is no time like the present to talk about the elephant.

Neither party wants to end illegal immigration nor make all immigration legal

The fact is both parties have created an immigration dance that they love. First, they both turn a blind eye toward illegal immigration. That, in turn, causes the number of illegal aliens to grow quickly as word travels that “they won’t really do anything about it. Eventually, a large subculture of illegal immigrants becomes a serious social problem that demands political resolution because citizens of the country start getting worked up over the social conflicts they are feeling and the jobs they see going to illegal immigrants.

The next step of the dance is the tricky one. We saw it happen in Reagan’s day. Both parties compromise in order to fix the problem without fixing it. They fix it by creating amnesty, which they always say is not amnesty because the citizens don’t like amnesty. They don’t fix it in in that they promise all the citizens who are angry about illegal immigration they will only let these illegal aliens in the door because turning them away would create a humanitarian crisis because the number has grown so large.Then they will batten the gates much tighter and never let it happen again. Only … they never do batten the gates at all, and so it happens all over again. Never mind that the number of illegal immigrants only grew to the point of becoming a humanitarian crisis because those same politicians turned a blind eye to illegal immigration for years.

This article will also answer why that continues on a rinse-and-repeat basis. By the end of the article you may think, “Wow, he is really jaded about politicians,” or you might thing, “Wow, that makes total sense from an economic standpoint, and it really, really stinks.” You’d be right either way.

Illegal aliens are our bread and butter, and we eat them for lunch. More particularly, politicians know what side their bread is buttered on. They get paid to provide cheap labor for rich people. Let’s break it down to some obvious facts.

The economics of Illegal immigration

The answer to all these questions is really pretty simple: Illegal immigrants provide the closest thing the U.S. has to a peasant class. It is important that politicians make them illegal so that they will be true peasants (people with nor native rights nor any say in the laws that govern them). It’s important that politicians turn a blind eye to them so that we will have peasants here … where we want them. It doesn’t accomplish anything toward creating a class of surfs to do work for the rich if we keep them out of the country. But, if they have rights as citizens, they will not remain surfs. We’ll have a peasant revolt.

The wealthy business owners have wanted a peasant class ever since they could no longer have a slave class. A peasant class is the next best thing. Often, they have lusted for such laborers overseas, and they have gotten politicians into office who made it possible for them exploit an offshore peasant class with sweat shops.

However, there are many jobs that cannot go overseas. They have to be done by more expensive American workers. If only we had a resident peasant class to do the work that American workers don’t want to do because it doesn’t pay enough.

The Bush dynasty opened the doors to outsourcing as many jobs to lower-wage workers outside the country as possible in order to help wealthy stock holders amass more wealth, but there wasn’t anything either Bush could do about those jobs that have to be done inside the country … such as cleaning hotels and bussing dishes at restaurants or picking tomatoes grown domestically…. or was there?

For those jobs, they needed to insource the outsourcing. In other words, they need to find ways to get peasant labor into the country. You know, the kind of labor that doesn’t expect health insurance and doesn’t cry about working conditions and most of all, works cheap.

Strong immigration laws make that possible. When someone is illegal they are willing to work without benefits and with fewer rights and for less money because they have to stay under the radar. They are afraid of standing up for their rights. Heck, they hardly have rights to stand up for; but if they did stand up, they’d be deported instantly. (Those are the ones who particularly get to be sent home and made a show of so the p0liticians can convince the citizens that they are trying to uphold the laws.)

Making some people’s presence in the country illegal while turning a blind eye to their being here assures a peasant class of workers. It’s as simple as that: Illegal immigrants are willing to work at subsistence levels because that is what they come from. They don’t need a wage that makes an American living. They have no say in what the government does to them or with them because, like peasants, they have no vote; but also because they have to keep their heads low. The fact that they have almost no status in society at all assures they will remain cheap.

As always, if you want to know why things happen, follow the money.

If you think I’m being cynical and that the government is not intentionally letting illegal aliens in to take jobs at low wages, then ask yourself this simple question: What would happen if, instead of trying to arrest and return home millions of illegal aliens, the government just started arresting and jailing the thousands people who have hired them … starting with just the top one-hundred? The jobs would dry up before you even made it through the top one hundred.

That’s what would happen, and you know it. People will hire illegal aliens if there is only a financial penalty if you get caught and if they’re pretty sure the government will keep turning a blind eye to the situation; but start putting those employers in jail, and all employers will quickly be checking the ID and green cards of their migrant workers to make sure they have a legal right to work here.

As soon as the jobs dried up, illegal immigrants who could get no work would find their plight worse here than in their home country, and they would return home of their own free will … unless, of course, you put them on welfare because you’re softhearted, but also softheaded about the costs … and you feel it is the United State’s obligation to save the entire world from poverty and to make your kids and grandkids pay for your benevolence by financing the welfare with national debt.

You see, you really don’t have to round up millions of people hiding in bushes. You have to round up only hundreds of big employers whose whereabouts are easily known by their big houses. Notice that does not happen. Not ever. You really don’t have to build a wall either. Notice the wall has been talked about for thirty years and still isn’t finished.

Big business wants cheap labor, and politicians protect their benefactors. The cheapest labor is that which is illegal but knowingly allowed to happen anyway. The justification for turning a blind eye is always, “Americans don’t want these jobs.” If your head is dumber than a turnip and stuck equally deep in the dirt, then you have long accepted that as truth. Actually, it’s just that it sounded reasonable, so you didn’t think it through. If you were dumber than a turnip you wouldn’t be reading this economics blog.

To think it through, ask yourself why Americans don’t want those jobs. Is it because they’re dirty jobs? That’s the party line. And that may be a small part if it, but cleaning hotels isn’t that bad. Washing and bussing dishes isn’t that bad. Picking tomatoes isn’t that bad.

Before you say, “Hold on; it’s bad enough,” let me agree that none of it is desirable work to be sure. I mean, I don’t want to go do it. However, American citizens line up to do a lot worse jobs … such as cleaning out and repairing sewer lines. So, why will an American worker clean out a sewer line but not pick a pretty tomato?

The answer, again, is pretty straight forward when you think it through: the guy who cleans out your sewer line is a plumber, and he makes a whole lot more money per hour to do that work than he could doing those other jobs. If he could make the same amount doing dishes, don’t you think he’d rather be inside cleaning dishes than outside in the mud cleaning sewer pipes? Bending over the tomato plants will also work just as well for sporting that plump plumber derrière.

Americans don’t want certain jobs because wages for those particular jobs have been suppressed for decades by the availability of cheap, illegal immigrant labor. If there had been a ready pool of people willing to take those jobs at bottom wages, then the wages would have had no choice but to rise over the decades to a level that would attract workers. The dishes have to be washed for the grand hotels to stay in business, and there is a wage at which Americans will line up for the job.

That’s just market dynamics, but that wages sink to whatever the lowest common denominator will accept is also just market dynamics.

Now we come to the point where immigration economics really kicks in. The dirty secret is that it is not just the politicians who want the cheap labor and not just big business owners. American citizens want a peasant class, too. That’s why the politicians get away with it.

Americans want cheap tomatoes and cheaper dinners out. (Well, many of them; not all.) We all know that, if the pickers and the dish washers made more money, we’d have to pay more for the food we eat in and more for the food we eat out. We’d have less to spend on video games and larger televisions. That’s also just a market dynamic. You’re going to pay more for a lot of things if illegal aliens don’t do the jobs for less.

So, from the bottom to the top, illegal immigration is all about the economic benefits of having a peasant class to do the dirty work in order to afford all the citizens a little better lifestyle.

But if establishing some people as an illegal class that many citizens turn a blind eye to is something many Americans want, why do politicians eventually always come around to talking about making more immigration legal?

The economics and politics of immigration reform

The rub in all of this is that the peasant class eventually gets large enough to stage a peasant revolt. That’s when the federal government starts to talk once again about amnesty — the politically correct term for which is “immigration reform.”

Naturally, the politicians do all they can to avoid the term “amnesty” because all previous amnesties left a bad taste in Joe and Jolene Citizen’s mouths because the government promised not to let illegals in again and then did so anyway. (And Americans are ambivalent about having a peasant class; they want the cheap tomatoes but they don’t want their own jobs taken, or they feel bad about seeing people work so cheaply, and guilt kicks in.)

In the guilt cycle, we atone for our sins and then go back to repeating them. So, the politicians atone for guilt by granting citizenship and then keep letting lots more illegals in to maintain the peasant worker class. (And Joe and Jolene really don’t think too much about this because they like those cheap tomatoes. If you think about it too much, the guilt kicks in, and its hard to enjoy the cheap tomato.)

Bear in mind, they have to be illegal to remain a peasant class because that’s what forces them to keep their heads down. Just letting in more legalized labor would not do as much to hold the price down.

Sooner or later, however, you have to give that growing peasant class citizenship. What you forgot about when building up the peasant labor pool is that those people also suffer from this thing we call the “human condition.” So, they start to expect citizenship because they are tired of seeing everyone else around them have more rights and more money than they do. At first, they were glad to come here just for the economic benefit, but now they reach for a higher brass ring. We all rise to a plateau and then feel we could be happy with just thirty percent more.

If you don’t grant a path to citizenship eventually for all your indentured servants, you face a peasant revolt. Their shear numbers give them power. So, the gates finally open under pressure to allow citizenship for the vast bulk of those who are here illegally. And then they shut again, and all eyes turn blind again in order to develop a new peasant class. We are currently at the peasant revolt point where we have to deal with this.

Of course, President Obama has been intimating openly for seven years now that he will open those gates to citizenship. Naturally that has attracted hoards of people to migrate to the U.S. illegally in hopes that they will make it through the gates of the city before they close again. This has made the problem grow fast enough that the time for resolving a peasant revolt is happening during Obama’s own shift as president. That’s advantageous because, if he can be the one who gets the hoards in the door, they will probably all become good Democrats to bestow their blessed new votes upon him and his.

Most good citizen Democrats will support open-door policies toward mass immigration because it is the soft-hearted thing to do. So, he won’t find much resistance from his own party.

At the same time, many Republicans in Congress will support it because the revolt is happening. There is no getting around it. Republicans know that even legalimmigrants are willing to work for less than native citizens because of the situations they came out of; so it’s good for big business. Still helps keep down the cost of labor, even if not as much as illegal immigration does.

There is no will on either side of the aisle to do anything real to stop illegal immigration for good. That’s why the Republicans capitulated overnight in granting money for immigration reform without a word … once the last elections were over. The last thing they would want to do is talk about this elephant in the room and expose the real underpinnings of illegal immigration.

At the same time, they created funding for more border security for political cover. That’s all smoke and mirrors to appease the concerns of rank and file Republicans who are tired of being unemployed. You know now that it was smoke and mirrors because you can see that, after a couple of years, it has done nothing to stem the problem.

The real solution — if everybody wanted one — is obvious, and I already completely covered it in just one sentence. Jail the employers, and the problem goes away on its own. It’s not about bolting the gates at the border. Illegal immigrants are not coming here because they love the culture; they are coming here for economic opportunity because the peasant class here is a lot better off than the peasant class at home. You can’t blame them. I don’t. Bad as the wages and benefits may be, they’re much better than what they had.

So, that’s how the game is played and why Republican politicians are ready to allow amnesty without calling it that and while making a lot of noise about spending money to bar the gates. That’s why they’ll continue to turn a blind eye toward the employers who hire illegal aliens.

It would be a simple thing to create a law that awards jail time based on the number of illegal aliens hired and to start auditing companies now. It’s not that hard for auditors to see if all employees have the right proof of citizenship, and it’s not hard as the person doing the hiring to make sure that all employees have the right documentation and to prove it with facsimiles. You do need good quality documentation that’s hard to counterfeit, but that’s doable, and no system has to be perfect in order to be much better than what we have.

You won’t hear that talked about by any politician — not even Donald Trump, who is still stuck on the wall.

What is the cost of immigration economics?

The New York Times just published an article about some of the costs of immigration that I find to be far worse than paying more for my tomatoes. Frankly, I’ve been coming across these kinds of articles a lot lately. This one talks about the Islamization of England through attempted control of its public schools by Islamic immigrants. It is stunning how far they have gone in turning some schools into a Muslim cultural institution.

I read a lot of major European newspapers, and I’ve been seeing this all over Europe for a couple of years. It’s a high social cost.

Articles in The Telegraph, The Guardian, The Daily Mail, The Jerusalem Post, and numerous other major news sites show me a pattern happening in countries that have been too liberal in their immigration policies. Britain, Germany, France, Norway and Sweden, to name a few are all starting to see internal revolt from their native citizens against immigration because certain immigrants truly do not like the culture they are moving into. They seek to turn the country into what they are used to.

I think the resulting homogenization of cultures that happens when immigrants try to turn their new land into their old land is also a great loss of diversity and interest.

Here’s an article on Germany that describes the problem there. Germany has the second-most liberal immigration policy in the world. Guess which nation has the most liberal immigration policy in the world? The U.S.

My own experience of immigration in my neck of the woods

I feel strongly that mmigration in the U.S. needs to be slowed way down. Liberals are creating huge culture clashes by not giving people time to get used to each other’s ways, and they’re creating overpopulation and environmental harm.

I see this happening all around me. The county I live in is experiencing gridlock for the first time in its existence. Almost all population growth has been from immigration. The county has nearly doubled in size in two decades. While it is about as far from Latin American as you can get, billboards and signs are now starting to use Spanish with no English.

Prior to to the last two decades, population growth and immigration in this county were gradual. Rapid population growth is resulting in tighter and tighter building regulations to avoid the problems of overdevelopment; so how is such immigration good for the people who live here? Why are we better off with more gridlock? (Simple. It sells more real estate, so again it’s all about money.)

To me it is not about where the people come from, it’s about the shear number of people. Why do I want them? I wouldn’t want this level of immigration even if they all came from merry old England where my ancestors came from. We have enough people, thanks, and far too few good paying jobs.

Nevertheless, the group of Latino immigrants is different than all others — much different. Have you noticed television programming is becoming increasingly dominated by Spanish all over the nation. That’s never happened with any other language in this county, and yet this country was made from immigrants from all over the world. All other people accepted the language and culture they moved into and made it their own and became a part of it.

This pressure to Latinize our own culture in order to accommodate is not because the people are different than other immigrants. They’re just as nice as any other group of people. What’s different is the volume. Latin American immigrants provided such a major portion of the carefully engineered peasant population that they have become such a large group they don’t have to make those changes. They are large enough to demand others change to accommodate them. This is the cost of creating a large peasant population.

Lest anyone mistake me in an oversensitive manner to thinking I’m calling them peasants because they are Latin, I want to place a reminder here that race has nothing to do with it. They are peasants because they are part of an illegal population made up of all races that exists intentionally to provide cheap labor for the United States. They exist because politicians intentionally turn a blind eye to them but keep them illegal so they have to hold their heads down.

Big businesses love cheap labor. Big real estate developers love population growth. The locals aren’t having babies fast enough, so immigration means a lot more construction of everything and cheap labor to do the construction so the developers make more money all around.

I have seen vast acres of beautiful, fertile agricultural land and entire forested mountainsides turn into housing developments entirely bought up by immigrants. In this case, Russian and Indian. In my area, its has turned a beautiful rural county into a sprawling suburb. It’s certainly not an environmental positive, but Democrats love it, too.

The cultural cost of mass migration

The current European immigration crisis has become a political inferno because Islamic immigrants try to change the cultures they move into. Just so this discussion is not about Islam, let’s imagine that it was Jewish mass migration into the United States. In my opinion, if Jews moved to this nation and wanted to speak Hebrew at home and to practise all the rules of Judaism, no one should have a problem with that; but if many Jews moved here and because they had the power of numbers, insisted that government documents be written in Hebrew, we should all have a major problem with that. If they insisted Torah be fought in public schools we should have a problem with that. If they went further an insisted that Torah law become the law of the land, we should have a very big problem with that.

That, however, has not happened with Jewish immigration, but in some European countries Muslim immigrants are demanding public school classes teach their religion and that government institutes Sharia law. Read the New York Times article above. It will open your eyes about a pattern that is recurring in a number of Western nations.

I certainly would not move to France and expect the French to speak English to me or to write government documents in English for me. Yet, people are moving to France from Islamic nations and demanding that courts start recognizing Sharia or that the country create special courts for Muslims.

Culture clashes like this are unavoidable when immigrants are brought in from one culture in huge numbers. If we do not slow immigration to a level where migrants can assimilate with the culture the culture of the country they are moving into, then we will certainly create more and more internal conflicts that will begin to boil over.

What may seem like a liberal dose of love toward immigrants will prove to be naiveté about human interactions. You have to allow time for people to adjust to each other. When you force people together as Obama has done (doubling the immigration rate) or as Merkel has done in Germany, you continually spawns greater conflict. People do not adjust to each other just because they are forced to.

We are going to see a lot more racial and nationalistic conflict in Western countries because of the huge increase in legal immigration and the blind eye turned toward illegal immigration along with the amnesty that is coming.

One of my problems is that I love different cultures so much

I like to see lots of difference in culture. Viva la difference. I don’t like homogeneity. And that’s why people need to assimilate when they move into a country, rather than try to transform it into something more like their own culture and country.

Each country’s culture has its own beauty, and we are losing that all over the world rapidly due to globalization. People in those cultures are feeling that loss. And it’s not inevitable. It’s something politicians are forcing.

Before you throw the race card at me, you need to know this is written by a guy who thinks interracial children are the most beautiful children on earth, who loves the different looks of different races for all the exotic variety of beauty race gives to this world, who loves accents and who loves to travel and who hopes that nations will have distinctive cultures when he travels to them. Since I was a child I was brought up to love all people of all races and to believe that each race is a different kind of flower in God’s flower garden. The world teams with creative diversity, and that’s beautiful.

But I’d like Norway to be Norwegian in culture and England, English and Germany, German and Morocco, Moroccan. I don’t want an homogenized world. I want a world with different nations and cultures that respect each other and get along, and that is not what we are getting with mass migration. We are getting a lot more racial conflict from people who seem to have an agenda of forcing others together.

I don’t think crashing people together like neutrons in a particle accelerator is going to create any chemistry other than a great big bang. People who want to migrate to another country should not go with any intention of changing that nation’s culture, which particularly includes language. Go to appreciate and mix with the culture that is there and become a part of it. If you don’t like that culture as it is, just don’t go!

I also don’t think that overpopulation is a good thing. Bringing in hundreds of thousands of immigrants into a state like Florida or California that is, in my opinion, already overpopulated makes now sense. Flooding them into rural areas also makes no sense, as it completely destroys the rural nature of those areas.

I don’t see that we need more people or that we have a duty to take them. But I DO see that it serves the interest of real estate developers and of businesses that want cheap labor and of politicians that think they can bolster the vote for their party if they give thousands of migrant workers citizenship so they can vote.

What you see in all the fury around Donald Trump’s rallies is the anger that comes from forcing people together in mass finally starting to express itself. And you’re going to see a lot more of it! The cost in civil unrest is going to become quite high as a result of people who think they know how to do good by forcing others together.

The most liberal nations of the world are destroying their own cultures and creating racial and nationalistic strife because many of their citizens value their culture and many of the immigrants do not. In Europe you can see that immigrants treat the culture they are moving into with contempt. Violent crime has surged. While some politicians may be advocating rapid immigration out of a sense that they are doing good (acting benevolent toward underprivileged or persecuted people) and others are doing it just to add voters or bring in cheap labor for their Wall Street benefactors, the cost is going to be great.

Just know that what you are seeing on both sides of Trump rallies is just the tip of the flame unless politicians start backing down from forcing immigration in their already overpopulated nations.
False flag, blow-back, or incompetence? A FOREX look at Orlando Pedassacre

This tragic event in Orlando is an opportunity to connect the dots in an ever simple global world; as explained in Splitting Pennies – key to understanding Forex markets and how our global financial system includes understanding international politics, and specifically US foreign policy, and how it is connected to the US Dollar as a world reserve currency. Forex is information brokerage, both as a facilitator and as primary emission of that information. It is by itself, information – as well, those who play ‘the great game’ use it to execute their strategem.

This event, is a domestic event with no implications on the markets (although maybe a short term boom for Smith & Wesson (SWHC) ). It’s not going to affect Forex, directly. But it will affect foreign policy – not by itself, but as one woven yarn in a policy sweater. There will be in the days and months ahead, political aggressiveness to ‘fight terrorism.’ This event alone, would not be sufficient to go to war with Syria for example, but in the area of domestic support of foreign actions, such events are key to seizing the hearts and minds of the average American, and in this case also the LGBT community – embroiled in domestic disputes of their own.

The fact that the shooter was in contact with the FBI isn’t necessarily suspicious. The FBI is in contact with millions of people all around the world, connected to cases, and their daily operations. The fact that shooter worked for this G4S, as reported first here on Zero Hedge – is highly suspicious. Omar Mateen effectively worked for DHS, although through a subcontracted private company. This is the “Department of Homeland Security” designed to protect us from such ‘terrorists.’

Let’s examine 3 motives:

False Flag

If you are one of these TV watchers that believe ‘it doesn’t happen in America’ read the following report from PNAC (Project for a New American Century) in full here – note the DATE and note the SIGNERS of this ‘research’ that says, before 9/11:

Further, the process of transformation,
even if it brings revolutionary change, is
likely to be a long one, absent some
catastrophic and catalyzing event – like a
new Pearl Harbor.

What an interesting coincidence, that a Washington based think tank that worries about a declining budget (because of declining real military threats) and declining power, should within a short year after publishing their report have the justification they need to increase their budgets and power by 10. Or more recently, look at evidence of Sandy Hook false flag here and here.

So was this pedassacre a false flag – to escalate our involvement in Syria, Ukraine, or a number of other global hotspots? Possible, but not probable.

Blowback

Omar’s parents were from Afghanistan. He’s a first generation US Citizen refugee child. How they came to America, is not really important – during any war there is a flood of refugees, not only to America, but often they do flee to their captors (and in many cases, providing information to save their lives). Being born into these circumstances, watching your country burn (even if his current country was America – his family was still connected to Afghanistan) affects your subconscious. In this case, the programming of American culture works against the establishment. It’s telling him to be free – live his desires, and kill kill kill – murder murder murder. Violent video games, movies, and culture encourage such events – they foster a hostile warlike environment. A culture of violence is necessary for programming a domestic population sufficient to justify foreign entanglements of war, looting foreign resources, and empire. We bring war into your living room, tonight at 11 – watch how we spend billions of dollars and ‘help people’ in the middle east.

“Blowback” is when, the people who America bombs are not happy, and come back for ‘revenge’ – now they are called “Terrorists.” Blowback rarely makes its way back to the continential United States, because it takes funding, planning, intelligence, and a well oiled machine to slip through the cracks of a security apparatus. This is where cultural blowback can be devastating, because there are thousands of disgruntled children of immigrants now being born in America, who will grow up to be flag waving homegrown terrorists in 10, 20, and 30 years. These children will not be on any Terrorist watchlist, and they will have normal childhoods, not knowing that they’ll join a terror group when they become teenagers.

The foreign policy of the United States of America post 9/11 breeds terrorists, at home and abroad. Whether there were or were not many Terrorists in the world in the year 2000, now they are growing exponentially. Until the US Military pulls out of the middle east, and as long as the US blindly supports Israel, there’s going to be “Terrorists” who “Hate our freedoms.” The only “Freedom” the US enjoys is to bomb these countries into oblivion with virtually no repercussions. Well, now we are seeing the repercussions.

Incompetence

DHS, FBI, and others – somehow ‘missed’ a potential attack, by not properly connecting the dots. This is an extremely unlikely scenario – the event happened 15 minutes from a local FBI field office, who has their “Pulse” on the local community. Just last month, the FBI foiled a terror plot involving a man who wanted to apparently bomb a synagogue. They monitor all electronic activity, are we to believe they didn’t pick up any ‘chatter’ ? We can’t disprove a negative, there’s no evidence supporting the incompetence theory – that it was a ‘mistake.’ Many will say it was incompetence, because Omar was in contact with the FBI previously – and the thinking goes, they already ‘knew’ about his connections to Islam, and so – should have stopped him from buying guns at the first checkpoint, and at the second checkpoint – from any preliminary preparations that were made minutes leading into the event (such as communication with his Terrorist friends). Not incompetence.

Forex in focus

So what does such an event have to do with Forex trading? Well – it’s all part of a plan to support US Dollar hegemony. How does that work? As we explain in detail in Splitting Pennies – there’s a policy in washington that goes something like – use US Dollars or we’ll bomb you. If you do use US Dollars, maybe you’d like to buy our nice US Treasuries, such as TIPS? One leg supporting the Petro Dollar is no longer a secret – data has been released that show Saudi’s holdings – about $116 Billion as of March. How does this support the US Dollar? Well, imagine that the $116 Billion was sitting in Russian Ruble instead. Also, as they buy US Treasuries, they first need to buy US Dollars. Converting from Riyal to USD provides natural support for USD – also, by pricing their oil in USD – buyers of oil must first convert to USD. It’s really a genius method to support the US Dollar, created by Richard Nixon. It is long term thinking, that isn’t subject to daily market pressures. Anyway, shortly before the most recent US invasion of Iraq, they wanted to price oil in Euros. USA said – NO. Wrong answer. Must buy USD. It’s really a simple policy, let’s not be sensational or dramatic about it. Without this long term support of the USD, America wouldn’t enjoy such import advantages, things in China wouldn’t be ‘cheap’ – and America wouldn’t be able to carry such a hudge debtload as it does, and other advantages. This also virtually eliminates the need for any domestic Forex programs – because the USD is unchallenged. There’s a natural tendency for those policies that support US Dollar hegemony, to crush anything that smells like “Forex” – and to further justification of foreign entanglements du jour. On today’s menu, we have Syria, Ukraine, Russia, and NATO expansion in East Europe. From Tyler Durden:

With tensions between Russia and the West at post-cold war highs, a former NATO deputy military chief is now saying that anuclear war with Russia over the Baltic nations in 2017 is “entirely plausible” according to RT.

This example contrasts brightly what many understand is Forex – the day to day trading of Euros for Dollars that drive the EUR/USD rate up and down. And practically, it’s easier for many to make a business out of rate speculation in Forex than in many other markets. But to understand Forex, one must understand its origin, why it exists, by what powers and authority.

To conclude, the US Dollar is backed by something, although it’s not Gold. It’s backed by bombs. That’s more than can be said for many competing currencies, including the popular Bitcoin. Unless you have a world class super army behind you – good luck launching a new currency.

To learn more about Forex, try starting by reading Splitting Pennies – Understanding Forex. If you want to learn about Forex day-trading, checkout Baby Pips – free Forex education & resources. When you’re ready to open an account – sign up for our Elite FX Service first – it can make you or save you a bundle.
Markets In Turmoil As Brexit Fears Mount And Japan, China Data Tumbles
FX, equity, and bond markets are in turmoil as Asian markets begin trading with Japan ugly, Sterling getting spanked, China devaluing FX (stocks down hard), and crude ($48 handle) and US equity futures (Dow -70) extending losses (as bond markets are all tumbling to record low yields). The hangover from further brexit concerns is not helped by the weakness in Japanese and Chinese data tonight.

First Japanese manufacturing data was a disaster…

Then Chinese data largely disappointed. A "meet" in Industrial Production – hovering at multi-year lows…

*CHINA MAY INDUSTRIAL OUTPUT RISES 6.0% FROM YEAR EARLIER

Retail Sales missed…*CHINA MAY RETAIL SALES RISE 10.0% FROM YEAR EARLIER (lowest since 2006)

And FAI missed… *CHINA JAN.-MAY FIXED-ASSET INVESTMENT EXC. RURAL RISES 9.6% (lowest since 2000)

And if the anxiety over global growth and Brexit were not enough, this China data has sparked even more turmoil in markets as Asia gets going…

First, Japan…
- *JAPAN'S TOPIX INDEX EXTENDS DROP TO 3%; NIKKEI 225 FALLS 3%
Japanese stocks shorts biggest since 2008…

And Japanese 10Y Yields record lows (along with 20Y and 5Y)…

But it's not just Japan, Germany, and Switzerland…
- TAIWAN 10-YR GOVT BOND HITS RECORD LOW OF 0.76%
In China, as we could have guessed by Bitcoin's surge, the Yuan is tumbling…

PBOC devalues the Yuan fix by over 2 handles – back near 5 year lows…

As the Yuan basket plunged to lowest since Nov 2014

Chinese stocks are down most in 6 weeks:
- *HANG SENG INDEX FALLS 2%
- *CHINA'S SHANGHAI COMPOSITE INDEX FALLS 1.3% TO 2,889.91 AT OPEN
And anything Brexit-related…

Cable at 2mo lows…

Sterling shorts biggest in 3 years…

and GBPJPY is a bloodbath… Pound plunging to lowest since Aug 2013…

And finally, gold is holidng its recent gains…

Despite the monkeyhammering it got earlier…

Which must be very upsetting for The BIS. Given this much turmoiling, one can only imagine the central bank efforts to make sure Monday opens green on the NYSE.

Charts: Bloomberg
Bill & Hillary Clinton: Republicans' Fifth Column In Democratic Politics

Authored by Ben Tanosborn,

Forty days left until the Democratic Party’s convention in Philadelphia, and Bernie, just like Jesus did two millennia ago, will be trying to find answers in solitude… and fight temptation from the devil of “accommodating politics.” Jesus would do it, according to the Gospels, in the wilderness without food; Bernie is likely to do it at home, in pretty Burlington (Vermont), keeping a normal diet and the company of a smart phone.

The demonstration of affection for progressivism by Democrats and honest-to-heart Independents was dealt a heavy blow by Tuesday’s election results; results likely to be reinforced by President Obama’s imminent endorsement of Hillary Clinton… triggered by a battle cry urgency to stop this 2016-boogeyman, Donald Trump, from branding the nation as his psycho-political casino: Fantasy-Trump-America.

It’s beginning to look as if the $200 million spent by Bernie believers to bring about and promote a progressive sociopolitical agenda for America may prove not to have been in vain, as the voice of progressivism that Clinton-Husband silenced in the 1990’s, might not remain totally muzzled in Clinton-Wife’s prospective centrist-right platform.

Resurgent progressivism and loyal conservatism both appear to be undergoing painful castration in this 2016 presidential election; one by undemocratic and corrupt insider party politics, the other by the uglier face of bigoted-populism which might represent well over 25 percent of the nation’s population. No, folks… not 5, 10 or 15 percent, but upwards of a quarter, maybe a third! This populism is responding to a demographic change in America of major transformational proportions; populism with a latent bigotry now finding an opportunity to surface as champion-du-jour, Donald Trump, singularly leads the way in “finally!” making acceptable both the vocalization and the behavior that up to now has been considered taboo, politically incorrect.

Once again we are politically marching towards another presidential election with the limited prospect of choices, most based on aesthetics, not substance; a chance to select the proverbial lesser evil or failing to select at all. Next January, either odious-Donald or odious-Hillary will be taking up White House residency, Johnson (Libertarian) and Stein (Green) having only non-critical influence in the outcome of the election thanks to our electoral system. And that brings us to why America is in such dire straits.

It’s been eight decades since the start of the Spanish Civil War and the advent of that cloak-and-dagger term, “fifth column,” coined by a Spanish general, Emilio Mola, and popularized in the works of an American writer, Ernest Hemingway.

A fifth column referred to a secret group that surreptitiously undermined the efforts of a larger group from within; a term perhaps a bit distant and esoteric for us today, but its meaning, whether we associate it with patriotism or with treason, remains with us no matter what we call it, or how we prefer to explain its aims and behavior.

Some of us feel that the Clintons, given the major transformation that has taken place in Democratic national politics in the past generation, did become the quintessential fifth column for the G.O.P., instrumental in sowing, cultivating and harvesting such change. A change that drastically disconnected the Democratic Party from the progressive nerve center of old, its “new and improved” Clintonian party ideology finding a permanent home in the center-right confines of America’s political spectrum.

Bill Clinton, and his then bride, Hillary, may have entered elective politics in Arkansas back in the mid-1970’s using the Democratic front door, but in chameleonic fashion, as Ronald Reagan consolidated the tenets of his presidency in the 1980’s, Governor Clinton was quick to mimic his own right turn in politics in the hinterlands of Arkansas. Heck, if President Reagan was then making hay advocating a smaller government and welfare reform, Bill and his Little Rock cadre of young New Democrats certainly was able to see an immediate personal future following suit embracing both issues, a plagiarized version of what The Old Gipper was preaching from the White House. After all, old soldiers may never die, but young politicians must adopt change – ideology forever damned! Or they too, like the old soldiers, could slowly (or speedily) fade away.

And Bill Clinton then, just as Bill Clinton now, was proving to be masterful at remaining politically relevant without the slightest intention of fading away. And that feverish desire for relevance as qualified and quantified in his mind by both money and power, appeared to consume not just him but his spouse as well throughout their lives. Such intense desire might have given this duo the cavalier attitude many of us see in them. It’s as if this couple is intent to prove to any and all Americans that fidelity has little or nothing to do with the rule of morality, and everything to do with faithfulness to a cause, particularly when that cause is close, personal and meritoriously deserved; even if characterized by most as personal selfishness, totally lacking honesty and decorum.

Bernie will give his all to bring back progressivism to the Democratic Party, but it will be to no avail… for Americans are not yet ready for a revolution; we may still need a few more darker days in both the economy and our unintended quest in world affairs.

By election time the Clintons political machine will be humming, well-greased, courtesy of Wall Street… and the fifth column will no longer have to operate in the shadows, Hillary and Bill having made fifth column deception a mainstream virtue.
Big Names Are Bailing

Submitted by John Rubino via DollarCollapse.com,

The list of heavy hitters who are saying bad things about this world and its financial markets – while acting aggressively on their pessimism – is growing to alarming proportions. A few examples:

Stan Druckenmiller: The bull market is exhausted; move to gold

(MineWeb) – Legendary investor Stan Druckenmiller, founder of Duquesne Capital Management LLC, told the Sohn Investment Conference in New York last week that he is bullish on gold and bearish on the stock market. Gold, he told the conference, “is our largest currency allocation.”

Druckenmiller recommended that investors sell their equity holdings. “The bull market is exhausting itself,” he told the conference. A major factor has been the Federal Reserve’s easy money policy, which has resulted in “reckless” corporate behavior.

Growing corporate debt is increasingly used for financial engineering, rather than in R&D that could lead to productivity improvements, Druckenmiller said. According to him, from 2012 to 2015, use of debt for U.S. nonfinancial firms for stock buybacks and M&A increased from $1.25 trillion to $2 trillion, while debt for R&D and office equipment grew from $1.55 trillion to only $1.8 trillion.

“The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins and growing indebtedness,” Druckenmiller added.

The slowing Chinese economy as another reason to sell equities, according to Druckenmiller. He believes that stimulus measures by China have “aggravated the overcapacity in the economy.” While he had hope two years ago that the Chinese were willing to accept the tradeoff of a slowdown to gain reform, the Chinese “have opted for another investment-focused fiscal stimulus, which may buy them some time but will exacerbate their problem. They do not need more debt and more houses.”

Instead, Druckenmiller has made a move to gold. “It has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates,” he said. “Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,” he added. Among his investments are holdings in the SPDR Gold Trust.

————————————-

A Bearish George Soros Is Trading Again

(Fox Business) – Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors view gold as a haven during times of turmoil.

Mr. Soros’s recent hands-on approach reflects a gloomier outlook than many. His worldview darkened over the past six months as economic and political issues in China, Europe and elsewhere have become more intractable. While the U.S. stock market has inched back toward records after troubles early this year and Chinese markets have stabilized, Mr. Soros said he remains skeptical of the Chinese economy, which is slowing.

The fallout from any unwinding of Chinese investments likely will have global implications, Mr. Soros said.

“China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency,” Mr. Soros said in an email. “China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues.”

Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.

“If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable, ” he said. Still, Mr. Soros said recent strength in the British pound is a sign that a vote to exit the EU is less likely.

Mr. Soros’s bearish firm bought over 19 million shares of Barrick Gold Corp. in the first quarter, according to securities filings, making it the firm’s largest stockholding at the end of the quarter. That position has gained more than $90 million since the end of the first quarter. Soros Fund Management also bought a million shares of miner Silver Wheaton Corp. in the first quarter, a position that has increased 28% so far in the second quarter.

The last time Mr. Soros became closely involved in his firm’s trading: 2007, when he became worried about housing and placed bearish wagers over two years that netted more than $1 billion of gains.

————————————-

If the Markets Crash Then Carl Icahn Could Win Big

(Barrons) – If financial markets crash, one of the biggest beneficiaries could be billionaire investor Carl Icahn.

An investment fund run by the 80-year-old Icahn had a net short position of 149% at the end of the first quarter. Icahn is considerably more bearish than he was at the end of 2015, when the fund’s net short position was 25%. A year ago, the fund had a net long position of 4%. It’s rare to see a fund outside a dedicated short fund with such a large bearish stance.

Asked about the big bearish stance, Icahn Enterprises CEO Keith Cozza said on the conference call that “Carl has been very vocal in recent weeks in the media” about his negative views. “We’re much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that.” Icahn was not on the call.

————————————-

The Sam Zell Indicator – Time to Get Out of Real Estate?

(Value Walk) – Talk about exquisite timing.

Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities.

But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. “Is he cashing out too early?” asked a Bloomberg headline when the deal was announced.

We all know the answer, of course.

Billionaire Sam Zell deftly sidestepped the coming real estate carnage. Then, with prices at generational lows a few years later, Zell bought hundreds of apartment complexes at dirt-cheap prices.

And today? Well, that’s the ominous part…

Once again, Zell is selling his real estate holdings. Last fall, he unloaded a quarter of his portfolio, buildings totaling about 23,000 rental apartments, to Starwood Capital Group for more than $5 billion.

Zell next sold off apartment buildings in South Florida and Denver, with complexes in Phoenix, Boston and other metro areas expected to be sold before the year is out.

“No one has ever accused me of not being a realist,” Zell told CNBC’s talking heads recently.

Of course for every seller there has to be a buyer, so to the extent that these guys are bearish, an equal amount of optimistic capital disagrees with their assessment. Still, between Soros, Druckenmiller, Icahn and Zell there’s about a thousand years of successful, audacious experience, so at a minimum their sudden bearishness should be a comfort to smaller players who have reached the same conclusion.

The fact that they see gold as the antidote to crashing financial markets is also reassuring for long-suffering gold bugs.

If these and the several other big names now saying scary things (see Bill Gross’s supernova comments) are right, the short stocks/long gold trade is finally about to pay off.
Workaholic? This Study Finds You May Have Other Issues

Being a workaholic comes along with being grown up and having responsibilities (well, it comes along with it for some people). Late nights out at the bar turn into firing up the laptop and putting the finishing touches on that presentation that is due first thing in the morning, weekends that used to be filled with keggers turn into all day working sessions just to catch up on all of the emails that got missed during the week – it happens (even if one works at the US Treasury, but only on occasion don't be alarmed).

However, there is a rather disturbing study that the World Economic Forum reported earlier in the month that may convince some to schedule that vacation that's been put off for the last decade.

As the WEF reports, a study of 16,426 working adults in Norway found that those with workaholism are significantly more likely to have psychiatric symptoms.

From the WEF

Psychology researchers, led by Cecilie Schou Andreassen from the University of Bergen in Norway, found a strong link between workaholism and ADHD, OCD, anxiety, and depression. They found:

-32.7% of workaholics also met ADHD criteria, compared to 12.7% of non-workaholics

-25.6% of workaholics also met OCD criteria, compared to 8.7% of non-workaholics

-33.8% of workaholics also met anxiety criteria, compared to 11.9% of non-workaholics

-8.9% of workaholics also met depression criteria, compared to 2.6% of non-workaholics

The authors speculated that there are several reasons those with ADHD might suffer workaholism, including inattentiveness forcing them to spend excess hours trying to make up work, working extra hard to counter misperceptions of laziness, or working to alleviate restlessness. For those with OCD, workaholism could become a compulsion. Meanwhile, working hard is “praised and honored in modern society,” write the authors, and so could be used as a means to counter anxiety or depression.

The study, which was co-authored by researchers from Yale University and Nottingham Trent University, did not determine whether workaholism caused the psychiatric symptoms or vice versa.

Marianna Virtanen, an epidemiologist at UCL and the Finnish Institute of Occupational Health was not involved in the study but says that many psychiatric disorders begin at a young age, they precede workaholism. "It is also possible that the association is bidirectional; workaholism may exacerbate psychiatric symptoms in the long run. It is paradoxical, however, that people may first try to cope with their symptoms by excessive working." Virtanen added.

Those in the US and Germany have put in the most time working prior to even heading into the office.

"Taking work to the extreme may be a sign of deeper psychological or emotional issues. Whether this reflects overlapping genetic vulnerabilities, disorders leading to workaholism or, conversely, workaholism causing such disorders, remains uncertain." said Dr. Schou Andreassen

* * *

Well then, since everything is still inconclusive – there is more work to be done.
Paul Craig Roberts On The "Frustrations Of Telling The Truth"

Authored by Paul Craig Roberts,

Some examples of the 'abuse' one gets when telling the truth:

If I criticize the Israeli government for abusing Palestinians and stealing their country, the Israel Lobby accuses me of being an anti-semite who wants to repeat the holocaust. In the same batch of emails, anti-semites denounce me for being too easy on Israel and covering up for the Jewish conspiracy against mankind.

When I write about the One Percent using the government to loot the economy, I receive emails blaming me because I worked for Reagan “who started it all by cutting tax rates for the rich.” These people have no conception of supply-side economics, its purpose, success, and the way it prepared the way for Reagan to negotiate the end of the Cold War. At one point in their lives they read a left-wing screed against Reagan, and that is the extent of their understanding. But they are full of blind hate.

When I write about Washington’s crimes against other countries, I receive emails asking me where I was during Iran-Contra and Grenada. Apparently, they think that a Treasury official can run the State Department and Pentagon. Some of the readers are so confused that they think Reagan overthrew Allende in Chile. Alllende was overthrown in 1973. Reagan was inaugurated in 1981. It is dispiriting that there actually are people this ignorant and so proud of it that they will accuse me of helping Reagan to overthrow Allende.

When I point out the dangers of the reckless folly of Washington’s aggressions against Russia, China, and the independent Muslim world, superpatriots denounce me for being anti-American. There is a stratum of the US population that thinks that it is a criminal act to disbelieve the government or to question its judgment and motives. “You are with us or against us.”

When I document the death of the US Constitution and the rise of the American Police State, “law and order” conservatives admonish me that the police state only appies to terrorists and criminals and does not apply to law abiding citizens. They are convinced that Snowden and Assange are traitors, and no amount of evidence or reason can convince them otherwise. Neither can they be convinced that in the 21st century, law has become a weapon in the hands of government and no longer is a shield of the people. The Rule of Law in America is dead.

All of my life I have confronted the vast bulk of humanity living in a false reality created by self-serving powerful interest groups and the government that they control. People believe the lies that define their reality, because they lack the education and the emotional and intellectual strength to confront the obvious lies.

Every truth-teller confronts this barrier every day of his or her life. Every truth-teller wishes he/she could force red pills down the throat of the population.

In American today there is nothing true that you can say that does not result in a heaving of abuse. The safe course is to repeat all the lies that come out of Washington and the presstitute media.

To go against the Matrix, you need all of the superpowers of The One.
This Is What The Unprecedented Chinese M&A Scramble In America Looks Like

The raging need for Chinese oligarchs and corporations to park their cash offshore, and as far away as possible from the the mainland and the risk of sudden, sharp (10%-15%) devaluation, has resulted in not only an epic Vancouver housing bubble, or the predicted parabolic surge in bitcoin price (which has soared by 50% in just a few weeks), but an unprecedented M&A spree for US-based assets. We profiled as much in late March in a post titled “Eight Things The Chinese Are Scrambling To Buy In America.”

And while overall M&A in the US is down substantially YTD, sliding 28% by volume (but only 4% in number of deals) mostly as a result of the volatile market in the early part of the year as well as the chilling effect of Congressional crackdown on tax-inversion deals (such as the pulled Pfizer-Allergan mega-merger), and the lack of any blockbuster mega-cap (>$25 billion) deals, China not only refuses to go away, but the level of Chinese cross-border M&A chasing after US targets is literally off the charts.

Here are the details from Goldman:

Cross-border, while down in aggregate, continues to gain share at 34% of total YTD volumes (a 6-year high). While the distribution of acquirers and targets remains relatively well diversified, one trend has been increased Chinese volumes. Notably, China has accounted for 26% of global cross-border activity YTD, which is nearly 3x higher than the next highest year (2013).

While the vast majority of US targets continue to be bought by US acquirers, there has been a trend towards international purchasers, particularly from China, in recent years (see Exhibit 5). At $28 bn YTD, US-inbound deal flow from Chinese acquirers is already a record level and nearly 2x last year’s volumes ($17 bn). On the flip side, there have been relatively few deals of US acquirers going after Chinese targets, which is a change vs. the last M&A cycle in 2004-2008. See Exhibit 6.

So is it time to panic yet? No, first China has to buy Rockefeller Center, because what is taking place now is nothing that didn’t take place almost 30 years ago when Japan was likewise facing a comparable epic liquidity bubble and unleashed a massive wave of US-based acqusitions. Recall from 1989:

Japanese Buy New York Cachet With Deal for Rockefeller Center

The Rockefeller Group, the owner of Rockefeller Center, Radio City Music Hall and other mid-Manhattan office buildings, said yesterday that it had sold control of the company to the Mitsubishi Estate Company of Tokyo, one of the world’s biggest real estate developers.The deal, which comes almost exactly 50 years after Rockefeller Center opened on Nov. 1, 1939, is only the latest instance of the Japanese buying a vital piece of the American landscape, from Hollywood to Wall Street. In September, the Sony Corporation bought Columbia Pictures for $3.4 billion.

And of course, “Japanese Buy Pebble Beach Golf Course“

The property includes four golf courses and the famous lone cypress tree, used as a Pebble Beach logo, which stands on a point of land along the scenic 17-Mile Drive around the peninsula. The deal also includes two resort hotels, the Lodge at Pebble Beach and The Inn at Spanish Bay. ”It’s right up there in the deal-of-the-year category,” said Jack Barthell, a partner at Kenneth Leventhal, the Los Angeles-based accounting firm that specializes in real estate.

As most know, the Japanese acquisition spree in 1990 ended with disaster, if only for the acquirors. This time will be absolutely the same, only this time it will be China that is bent over. And, more importantly, once the Japanese M&A wave ended, it has nearly 30 years of relentless contraction, deflation and demographic devastation.

If China is next – and there is no reason the believe it won’t be now that even Goldman admits China’s total debt is somewhere in the 350% ballpark – watch out as ultra long bond yields plummets right into subzero territory, as the world finally realizes that absent helicopter money and hyperinflation, only a deflationary black hole awaits.

Digest powered by RSS Digest

Jun 12

Today’s News 12th June 2016

By admin in Economy

Economists DESTROY the Myth that War Is Good for the Economy

Debunking the Stubborn Myth that War Is Good for the Economy

About.com notes:

One of the more enduring myths in Western society is that wars are somehow good for the economy.

It is vital for policy-makers, economists and the public to have access to a definitive analysis to determine once and for all whether war is good or bad for the economy.

That analysis is below.

Top Economists Say War Is Bad for the Economy

Nobel prize winning economist Paul Krugman notes:

If you’re a modern, wealthy nation, however, war — even easy, victorious war — doesn’t pay. And this has been true for a long time. In his famous 1910 book “The Great Illusion,” the British journalist Norman Angell argued that “military power is socially and economically futile.” As he pointed out, in an interdependent world (which already existed in the age of steamships, railroads, and the telegraph), war would necessarily inflict severe economic harm even on the victor. Furthermore, it’s very hard to extract golden eggs from sophisticated economies without killing the goose in the process.

We might add that modern war is very, very expensive. For example, by any estimate the eventual costs (including things like veterans’ care) of the Iraq war will end up being well over $1 trillion, that is, many times Iraq’s entire G.D.P.

So the thesis of “The Great Illusion” was right: Modern nations can’t enrich themselves by waging war.

Nobel-prize winning economist Joseph Stiglitz agrees that war is bad for the economy:

Stiglitz wrote in 2003:

War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon. Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy.

Stiglitz has also said that this decade’s Iraq war has been very bad for the economy. Seethis, this and this.

Former Federal Reserve chairman Alan Greenspan also said in that war is bad for the economy. In 1991, Greenspan said that a prolonged conflict in the Middle East would hurt the economy. And he made this point again in 1999:

Societies need to buy as much military insurance as they need, but to spend more than that is to squander money that could go toward improving the productivity of the economy as a whole: with more efficient transportation systems, a better educated citizenry, and so on. This is the point that retiring Rep. Barney Frank (D-Mass.) learned back in 1999 in a House Banking Committee hearing with then-Federal Reserve Chairman Alan Greenspan. Frank asked what factors were producing our then-strong economic performance. On Greenspan’s list: “The freeing up of resources previously employed to produce military products that was brought about by the end of the Cold War.” Are you saying, Frank asked, “that dollar for dollar, military products are there as insurance … and to the extent you could put those dollars into other areas, maybe education and job trainings, maybe into transportation … that is going to have a good economic effect?” Greenspan agreed.

Economist Dean Baker notes:

It is often believed that wars and military spending increases are good for the economy. In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment.

Professor Emeritus of International Relations at the American University Joshua Goldstein notes:

Recurring war has drained wealth, disrupted markets, and depressed economic growth.

***

War generally impedes economic development and undermines prosperity.

And David R. Henderson – associate professor of economics at the Naval Postgraduate School in Monterey, California and previously a senior economist with President Reagan’s Council of Economic Advisers – writes:

Is military conflict really good for the economy of the country that engages in it? Basic economics answers a resounding “no.”

The Proof Is In the Pudding

Mike Lofgren notes:

Military spending may at one time have been a genuine job creator when weapons were compatible with converted civilian production lines, but the days of Rosie the Riveter are long gone. [Indeed, WWII was different from current wars in many ways, and so its economic effects are not comparable to those of today’s wars.] Most weapons projects now require relatively little touch labor. Instead, a disproportionate share is siphoned into high-cost R&D (from which the civilian economy benefits little), exorbitant management expenditures, high overhead, and out-and-out padding, including money that flows back into political campaigns. A dollar appropriated for highway construction, health care, or education will likely create more jobs than a dollar for Pentagon weapons procurement.

***

During the decade of the 2000s, DOD budgets, including funds spent on the war, doubled in our nation’s longest sustained post-World War II defense increase. Yet during the same decade, jobs were created at the slowest rate since the Hoover administration. If defense helped the economy, it is not evident. And just the wars in Iraq and Afghanistan added over $1.4 trillion to deficits, according to the Congressional Research Service. Whether the wars were “worth it” or merely stirred up a hornet’s nest abroad is a policy discussion for another time; what is clear is that whether you are a Keynesian or a deficit hawk, war and associated military spending are no economic panacea.

The Washington Post noted in 2008:

A recent paper from the National Bureau of Economic Research concludes that countries with high military expenditures during World War II showed strong economic growth following the war, but says this growth can be credited more to population growththan war spending. The paper finds that war spending had only minimal effects on per-capita economic activity.

***

A historical survey of the U.S. economy from the U.S. State Department reports the Vietnam War had a mixed economic impact. The first Gulf War typically meets criticism for having pushed the United States toward a 1991 recession.

The Institute for Economics & Peace (IEP) shows that any boost from war is temporary at best. For example, while WWII provided a temporary bump in GDP, GDP then fell back to the baseline trend. After the Korean War, GDP fell below the baseline trend:

IEP notes:

By examining the state of the economy at each of the major conflict periods since World War II, it can be seen that the positive effects of increased military spending were outweighed by longer term unintended negative macroeconomic consequences. While the stimulatory effect of military outlays is evidently associated with boosts in economic growth, adverse effects show up either immediately or soon after, through higher inflation, budget deficits, high taxes and reductions in consumption or investment. Rectifying these effects has required subsequent painful adjustments which are neither efficient nor desirable. When an economy has excess capacity and unemployment, it is possible that increasing military spending can provide an important stimulus. However, if there are budget constraints, as there are in the U.S. currently, then excessive military spending can displace more productive non-military outlays in other areas such as investments in high-tech industries, education, or infrastructure. The crowding-out effects of disproportionate government spending on military functions can affect service delivery or infrastructure development, ultimately affecting long-term growth rates.

***

Analysis of the macroeconomic components of GDP during World War II and in subsequent conflicts show heightened military spending had several adverse macroeconomic effects. These occurred as a direct consequence of the funding requirements of increased military spending. The U.S. has paid for its wars either through debt (World War II, Cold War, Afghanistan/Iraq), taxation (Korean War) or inflation (Vietnam). In each case, taxpayers have been burdened, and private sector consumption and investment have been constrained as a result. Other negative effects include larger budget deficits, higher taxes, and growth above trend leading to inflation pressure. These effects can run concurrent with major conflict or via lagging effects into the future. Regardless of the way a war is financed, the overall macroeconomic effect on the economy tends to be negative. For each of the periods after World War II, we need to ask, what would have happened in economic terms if these wars did not happen? On the specific evidence provided, it can be reasonably said, it is likely taxes would have been lower, inflation would have been lower, there would have been higher consumption and investment and certainly lower budget deficits. Some wars are necessary to fight and the negative effects of not fighting these wars can far outweigh the costs of fighting. However if there are other options, then it is prudent to exhaust them first as once wars do start, the outcome, duration and economic consequences are difficult to predict.

We noted in 2011:

This is a no-brainer, if you think about it. We’ve been in Afghanistan for almost twice as long as World War II. We’ve been in Iraq for years longer than WWII. We’ve been involved in 7 or 8 wars in the last decade. And yet [the economy is still unstable]. If wars really helped the economy, don’t you think things would have improved by now? Indeed,the Iraq war alone could end up costing more than World War II. And given the other wars we’ve been involved in this decade, I believe that the total price tag for the so-called “War on Terror” will definitely support that of the “Greatest War”.

Let’s look at the adverse effects of war in more detail …

War Spending Diverts Stimulus Away from the Real Civilian Economy

IEP notes that – even though the government spending soared – consumption and investment were flatduring the Vietnam war:

The New Republic noted in 2009:

Conservative Harvard economist Robert Barro has argued that increased military spending during WWII actually depressed other parts of the economy.

(New Republic also points out that conservative economist Robert Higgs and liberal economists Larry Summers and Brad Delong have all shown that any stimulation to the economy from World War II has been greatly exaggerated.)

How could war actually hurt the economy, when so many say that it stimulates the economy?

Because of what economists call the “broken window fallacy”.

Specifically, if a window in a store is broken, it means that the window-maker gets paid to make a new window, and he, in turn, has money to pay others. However, economists long ago showed that – if the window hadn’t been broken – the shop-owner would have spent that money on other things, such as food, clothing, health care, consumer electronics or recreation, which would have helped the economy as much or more.

If the shop-owner hadn’t had to replace his window, he might have taken his family out to dinner, which would have circulated more money to the restaurant, and from there to other sectors of the economy. Similarly, the money spent on the war effort is money that cannot be spent on other sectors of the economy. Indeed, all of the military spending has just created military jobs, at the expense of the civilian economy.

Professor Henderson writes:

Money not spent on the military could be spent elsewhere.This also applies to human resources. The more than 200,000 U.S. military personnel in Iraq and Afghanistan could be doing something valuable at home.

Why is this hard to understand? The first reason is a point 19th-century French economic journalist Frederic Bastiat made in his essay, “What Is Seen and What Is Not Seen.” Everyone can see that soldiers are employed. But we cannot see the jobs and the other creative pursuits they could be engaged in were they not in the military.

The second reason is that when economic times are tough and unemployment is high, it’s easy to assume that other jobs could not exist. But they can. This gets to an argument Bastiat made in discussing demobilization of French soldiers after Napoleon’s downfall. He pointed out that when government cuts the size of the military, it frees up not only manpower but also money. The money that would have gone to pay soldiers can instead be used to hire them as civilian workers. That can happen in three ways, either individually or in combination: (1) a tax cut; (2) a reduction in the deficit; or (3) an increase in other government spending.

***

Most people still believe that World War II ended the Great Depression …. But look deeper.

***

The government-spending component of GNP went for guns, trucks, airplanes, tanks, gasoline, ships, uniforms, parachutes, and labor. What do these things have in common? Almost all of them were destroyed. Not just these goods but also the military’s billions of labor hours were used up without creating value to consumers. Much of the capital and labor used to make the hundreds of thousands of trucks and jeeps and the tens of thousands of tanks and airplanes would otherwise have been producing cars and trucks for the domestic economy. The assembly lines in Detroit, which had churned out 3.6 million cars in 1941, were retooled to produce the vehicles of war. From late 1942 to 1945, production of civilian cars was essentially shut down.

And that’s just one example. Women went without nylon stockings so that factories could produce parachutes. Civilians faced tight rationing of gasoline so that U.S. bombers could fly over Germany. People went without meat so that U.S. soldiers could be fed. And so on.

These resources helped win the war—no small issue. But the war was not a stimulus program, either in its intentions or in its effects, and it was not necessary for pulling the U.S. out of the Great Depression. Had World War II never taken place, millions of cars would have been produced; people would have been able to travel much more widely; and there would have been no rationing. In short, by the standard measures, Americans would have been much more prosperous.

Today, the vast majority of us are richer than even the most affluent people back then. But despite this prosperity, one thing has not changed: war is bad for our economy. The $150 billion that the government spends annually on wars in Iraq and Afghanistan (and, increasingly, Pakistan) could instead be used to cut taxes or cut the deficit. By ending its ongoing wars … the U.S. government … would be developing a more prosperous economy.

Austrian economist Ludwig Von Mises points out:

That is the essence of so-called war prosperity; it enriches some by what it takes from others. It is not rising wealth but a shifting of wealth and income.

We noted in 2010:

You know about America’s unemployment problem. You may have even heard that the U.S. may very well have suffered a permanent destruction of jobs.

But did you know that the defense employment sector is booming?

[P]ublic sector spending – and mainly defense spending – has accounted for virtually all of the new job creation in the past 10 years:

The U.S. has largely been financing job creation for ten years. Specifically, as the chief economist for BusinessWeek, Michael Mandel, points out, public spending has accounted for virtually all new job creation in the past 1o years:

Private sector job growth was almost non-existent over the past ten years. Take a look at this horrifying chart:

Between May 1999 and May 2009, employment in the private sector only rose by 1.1%, by far the lowest 10-year increase in the post-depression period.

It’s impossible to overstate how bad this is. Basically speaking, the private sector job machine has almost completely stalled over the past ten years. Take a look at this chart:

Over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.

But even that gives the private sector too much credit. Remember that the private sector includes health care, social assistance, and education, all areas which receive a lot of government support.

***

Most of the industries which had positive job growth over the past ten years were in the HealthEdGov sector. In fact, financial job growth was nearly nonexistent once we take out the health insurers.

Let me finish with a final chart.

Without a decade of growing government support from rising health and education spending and soaring budget deficits, the labor market would have been flat on its back. [120]

***

So most of the job creation has been by the public sector. But because the job creation has been financed with loans from China and private banks, trillions in unnecessary interest charges have been incurred by the U.S.

And this shows military versus non-military durable goods shipments: [Click here to view full image.]

So we’re running up our debt (which will eventually decrease economic growth), but the only jobs we’re creating are military and other public sector jobs.

Economist Dean Baker points out that America’s massive military spending on unnecessary and unpopular wars lowers economic growth and increases unemployment:

Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.

A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

The scenario we asked Global Insight [recognized as the most consistentlyaccurate forecasting company in the world] to model turned out to have vastly underestimated the increase in defense spending associated with current policy. In the most recent quarter, defense spending was equal to 5.6 percent of GDP. By comparison, before the September 11th attacks, the Congressional Budget Office projected that defense spending in 2009 would be equal to just 2.4 percent of GDP. Our post-September 11th build-up was equal to 3.2 percentage points of GDP compared to the pre-attack baseline. This means that the Global Insight projections of job loss are far too low…

The projected job loss from this increase in defense spending would be close to 2 million. In other words, the standard economic models that project job loss from efforts to stem global warming also project that the increase in defense spending since 2000 will cost the economy close to 2 million jobs in the long run.

The Political Economy Research Institute at the University of Massachusetts, Amherst has also shown that non-military spending creates more jobs than military spending.

High Military Spending Drains Innovation, Investment and Manufacturing Strength from the Civilian Economy

Chalmers Johnson notes that high military spending diverts innovation and manufacturing capacity from the economy:

By the 1960s it was becoming apparent that turning over the nation’s largest manufacturing enterprises to the Department of Defense and producing goods without any investment or consumption value was starting to crowd out civilian economic activities. The historian Thomas E Woods Jr observes that, during the 1950s and 1960s, between one-third and two-thirds of all US research talent was siphoned off into the military sector. It is, of course, impossible to know what innovations never appeared as a result of this diversion of resources and brainpower into the service of the military, but it was during the 1960s that we first began to notice Japan was outpacing us in the design and quality of a range of consumer goods, including household electronics and automobiles.

***

Woods writes: “According to the US Department of Defense, during the four decades from 1947 through 1987 it used (in 1982 dollars) $7.62 trillion in capital resources. In 1985, the Department of Commerce estimated the value of the nation’s plant and equipment, and infrastructure, at just over $7.29 trillion… The amount spent over that period could have doubled the American capital stock or modernized and replaced its existing stock”.

The fact that we did not modernise or replace our capital assets is one of the main reasons why, by the turn of the 21st century, our manufacturing base had all but evaporated. Machine tools, an industry on which Melman was an authority, are a particularly important symptom. In November 1968, a five-year inventory disclosed “that 64% of the metalworking machine tools used in US industry were 10 years old or older. The age of this industrial equipment (drills, lathes, etc.) marks the United States’ machine tool stock as the oldest among all major industrial nations, and it marks the continuation of a deterioration process that began with the end of the second world war. This deterioration at the base of the industrial system certifies to the continuous debilitating and depleting effect that the military use of capital and research and development talent has had on American industry.”

Economist Robert Higgs makes the same point about World War II:

Yes, officially measured GDP soared during the war. Examination of that increased output shows, however, that it consisted entirely of military goods and services. Real civilian consumption and private investment both fell after 1941, and they did not recover fully until 1946. The privately owned capital stock actually shrank during the war. Some prosperity. (My article in the peer-reviewed Journal of Economic History, March 1992, presents many of the relevant details.)

It is high time that we come to appreciate the distinction between the government spending, especially the war spending, that bulks up official GDP figures and the kinds of production that create genuine economic prosperity. As Ludwig von Mises wrote in the aftermath of World War I, “war prosperity is like the prosperity that an earthquake or a plague brings.”

War Causes Austerity

Economic historian Julian Adorney argues:

Hitler’s rearmament program was military Keynesianism on a vast scale. Hermann Goering, Hitler’s economic administrator, poured every available resource into making planes, tanks, and guns. In 1933 German military spending was 750 million Reichsmarks. By 1938 it had risen to 17 billion with 21 percent of GDP was taken up by military spending. Government spending all told was 35 percent of Germany’s GDP.

***

No-one could say that Hitler’s rearmament program was too small. Economists expected it to create a multiplier effect and jump-start a flagging economy. Instead, it produced military wealth while private citizens starved.

***

The people routinely suffered shortages. Civilian wood and iron were rationed. Small businesses, from artisans to carpenters to cobblers, went under. Citizens could barely buy pork, and buying fat to make a luxury like a cake was impossible. Rationing and long lines at the central supply depots the Nazis installed became the norm.

Nazi Germany proves that curing unemployment should not be an end in itself.

War Causes Inflation … Which Keynes and Bernanke Admit Taxes Consumers

As we noted in 2010, war causes inflation … which hurts consumers:

Liberal economist James Galbraith wrote in 2004:

Inflation applies the law of the jungle to war finance. Prices and profits rise, wages and their purchasing power fall. Thugs, profiteers and the well connected get rich. Working people and the poor make out as they can. Savings erode, through the unseen mechanism of the “inflation tax” — meaning that the government runs a big deficit in nominal terms, but a smaller one when inflation is factored in.

***

There is profiteering. Firms with monopoly power usually keep some in reserve. In wartime, if the climate is permissive, they bring it out and use it. Gas prices can go up when refining capacity becomes short — due partly to too many mergers. More generally, when sales to consumers are slow, businesses ought to cut prices — but many of them don’t. Instead, they raise prices to meet their income targets and hope that the market won’t collapse.

Ron Paul agreed in 2007:

Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.

The result of this arrangement is inflation. And inflation finances war.

Blanchard Economic Research pointed out in 2001:

War has a profound effect on the economy, our government and its fiscal and monetary policies. These effects have consistently led to high inflation.

***

David Hackett Fischer is a Professor of History and Economic History at Brandeis. [H]is book, The Great Wave, Price Revolutions and the Rhythm of History … finds that … periods of high inflation are caused by, and cause, a breakdown in order and a loss of faith in political institutions. He also finds that war is a triggering influence on inflation, political disorder, social conflict and economic disruption.

***

Other economists agree with Professor Fischer’s link between inflation and war.

James Grant, the respected editor of Grant’s Interest Rate Observer, supplies us with the most timely perspective on the effect of war on inflation in the September 14 issue of his newsletter:

“War is inflationary. It is always wasteful no matter how just the cause. It is cost without income, destruction financed (more often than not) by credit creation. It is the essence of inflation.”

Libertarian economics writer Lew Rockwell noted in 2008:

You can line up 100 professional war historians and political scientists to talk about the 20th century, and not one is likely to mention the role of the Fed in funding US militarism. And yet it is true: the Fed is the institution that has created the money to fund the wars. In this role, it has solved a major problem that the state has confronted for all of human history. A state without money or a state that must tax its citizens to raise money for its wars is necessarily limited in its imperial ambitions. Keep in mind that this is only a problem for the state. It is not a problem for the people. The inability of the state to fund its unlimited ambitions is worth more for the people than every kind of legal check and balance. It is more valuable than all the constitutions every devised.

***

Reflecting on the calamity of this war, Ludwig von Mises wrote in 1919

One can say without exaggeration that inflation is an indispensable means of militarism. Without it, the repercussions of war on welfare become obvious much more quickly and penetratingly; war weariness would set in much earlier.***

In the entire run-up to war, George Bush just assumed as a matter of policy that it was his decision alone whether to invade Iraq. The objections by Ron Paul and some other members of Congress and vast numbers of the American population were reduced to little more than white noise in the background. Imagine if he had to raise the money for the war through taxes. It never would have happened. But he didn’t have to. He knew the money would be there. So despite a $200 billion deficit, a $9 trillion debt, $5 trillion in outstanding debt instruments held by the public, a federal budget of $3 trillion, and falling tax receipts in 2001, Bush contemplated a war that has cost $525 billion dollars — or $4,681 per household. Imagine if he had gone to the American people to request that. What would have happened? I think we know the answer to that question. And those are government figures; the actual cost of this war will be far higher — perhaps $20,000 per household.

***

If the state has the power and is asked to choose between doing good and waging war, what will it choose? Certainly in the American context, the choice has always been for war.

And progressive economics writer Chris Martenson explains as part of his “Crash Course” on economics:

If we look at the entire sweep of history, we can make an utterly obvious claim: All wars are inflationary. Period. No exceptions.

***

So if anybody tries to tell you that you haven’t sacrificed for the war, let them know you sacrificed a large portion of your savings and your paycheck to the effort, thank you very much.

The bottom line is that war always causes inflation, at least when it is funded through money-printing instead of a pay-as-you-go system of taxes and/or bonds. It might be great for a handful of defense contractors, but war is bad for Main Street, stealing wealth from people by making their dollars worth less.

Given that John Maynard Keynes and former Federal Reserve chair Ben Bernanke both say that inflation is a tax on the American people, war-induced inflation is a theft of our wealth.

IEP gives a graphic example – the Vietnam war helping to push inflation through the roof:

War Causes Runaway Debt

We noted in 2010:

All of the spending on unnecessary wars adds up.

The U.S. is adding trillions to its debt burden to finance its multiple wars in Iraq, Afghanistan, Yemen, etc.

Indeed, IEP – commenting on the war in Afghanistan and Iraq – notes:

This was also the first time in U.S. history where taxes were cut during a war which then resulted in both wars completely financed by deficit spending. A loose monetary policy was also implemented while interest rates were kept low and banking regulations were relaxed to stimulate the economy. All of these factors have contributed to the U.S. having severe unsustainable structural imbalances in its government finances.

We also pointed out in 2010:

It is ironic that America’s huge military spending is what made us an empire … but our huge military is what is bankrupting us … thus destroying our status as an empire.

Economist Michel Chossudovsky told Washington’s Blog:

War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy.

(and remember Greenspan’s comment.)

It’s not just civilians saying this …

The former head of the Joint Chiefs of Staff – Admiral Mullen – agrees:

The Pentagon needs to cut back on spending.

“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”

Indeed, Mullen said:

For industry and adequate defense funding to survive … the two must work together. Otherwise, he added, “this wave of debt” will carry over from year to year, and eventually, the defense budget will be cut just to facilitate the debt.

Former Secretary of Defense Robert Gates agrees as well. As David Ignatius wrote in the Washington Post in 2010:

After a decade of war and financial crisis, America has run up debts that pose a national security problem, not just an economic one.

***

One of the strongest voices arguing for fiscal responsibility as a national security issue has been Defense Secretary Bob Gates. He gave a landmark speech in Kansas on May 8, invoking President Dwight Eisenhower’s warnings about the dangers of an imbalanced military-industrial state.

“Eisenhower was wary of seeing his beloved republic turn into a muscle-bound, garrison state — militarily strong, but economically stagnant and strategically insolvent,” Gates said. He warned that America was in a “parlous fiscal condition” and that the “gusher” of military spending that followed Sept. 11, 2001, must be capped. “We can’t have a strong military if we have a weak economy,” Gates told reporters who covered the Kansas speech.

On Thursday the defense secretary reiterated his pitch that Congress must stop shoveling money at the military, telling Pentagon reporters: “The defense budget process should no longer be characterized by ‘business as usual’ within this building — or outside of it.”

While war might make a handful in the military-industrial complex and big banks rich, America’s top military leaders and economists say that would be a very bad idea for the American people.

Indeed, military strategists have known for 2,500 years that prolonged wars are disastrous for the nation.

War Increases Inequality … And Inequality Hurts the Economy

Mainstream economists now admit that runaway inequality destroys the economy.

War is great for the super-rich, but horrible for everyone else. Defense contractors, Congress membersand bankers love war, because they make huge profits from financing war.

Pulitzer prize winning New York Times reporter James Risen notes that the so-called war on terror has caused “one of the largest transfers of wealth from public to private hands in American history,” and created a new class of war profiteers which Risen calls “the oligarchs of 9/11.”

War Increases Terrorism … And Terrorism Hurts the Economy

Security experts – conservative hawks and liberal doves alike – agree that waging war in the Middle Eastweakens national security and increases terrorism. See this, this, this, this, this, this and this.

Terrorism – in turn – terrorism is bad for the economy. Specifically, a study by Harvard and the National Bureau of Economic Research (NBER) points out:

From an economic standpoint, terrorism has been described to have four main effects (see, e.g., US Congress, Joint Economic Committee, 2002). First, the capital stock (human and physical) of a country is reduced as a result of terrorist attacks. Second, the terrorist threat induces higher levels of uncertainty. Third, terrorism promotes increases in counter-terrorism expenditures, drawing resources from productive sectors for use in security. Fourth, terrorism is known to affect negatively specific industries such as tourism.

The Harvard/NBER concludes:

In accordance with the predictions of the model, higher levels of terrorist risks are associated with lower levels of net foreign direct investment positions, even after controlling for other types of country risks. On average, a standard deviation increase in the terrorist risk is associated with a fall in the net foreign direct investment position of about 5 percent of GDP.

So the more unnecessary wars American launches and the more innocent civilians we kill, the less foreign investment in America, the more destruction to our capital stock, the higher the level of uncertainty, the more counter-terrorism expenditures and the less expenditures in more productive sectors, and the greater the hit to tourism and some other industries. Moreover:

Terrorism has contributed to a decline in the global economy (for example, European Commission, 2001).

So military adventurism increases terrorism which hurts the world economy. And see this.

Attacking a country which controls the flow of oil also has special impacts on the economy. For example, well-known economist Nouriel Roubini says that attacking Iran would lead to global recession. The IMF says that Iran cutting off oil supplies could raise crude prices 30%.

War Destroys Freedom … Which, In Turn, Destroys the Economy

A permanent war economy destroys our freedoms.

In turn, loss of liberty is horrible for the economy.

War Causes Us to Lose Friends … And Influence

While World War II – the last “good war” – may have gained us friends, launching military aggression is now losing America friends, influence and prosperity.

For example, the U.S. has launched Cold War 2.0 – casting Russia and China as evil empires – and threatening them in numerous way. For example, the U.S. broke its promise not to encircle Russia, and isusing Ukraine to threaten Russia; and the U.S. is backing Japan in a hot dispute over remote islands, and backing Vietnam in its confrontations with China.

And U.S. statements that any country that challenge U.S. military – or even economic – hegemony will be attacked are extremely provocative.

This is causing Russia to launch a policy of “de-dollarization”, which China is joining in. This could lead to the collapse of the petrodollar.
Economic Collapse Will Serve One Purpose: "Global Governance And The Enslavement Of Mankind"

Submitted by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces (Airborne)) via SHTFPlan.com,

The ever-tightening noose around the neck of man shows no sign of slippage: all actions by all of the governments are anent control and dominion. The path to global governance is plainly marked, visible through all of the turmoil. It is that turmoil, those “incidents” that are created and fostered by the governments that enable them to further constrict the noose. The economy plummets in Cyprus and Greece? Time to limit the cash withdrawals. The European banks are having a “hard time” in places such as France or Spain? Time to pillage people’s savings and their IRA’s.

Manufactured crises are the norm, not the exception, and all of them are designed to facilitate one purpose: global governance and the enslavement of mankind.

The Bilderbergers are meeting in Germany this week. Paul Joseph Watson of Alex Jones’ Prison Planet reported on some of the key issues they will be discussing, as such:

“…the creation of a virtual passport that web users will need to obtain before they can use many Internet services is high on the agenda. The Internet ID will be justified under the guise of “cybersecurity” and creating a convenient method for citizens to access government services, but free speech advocates will view the proposal with deep suspicion as it would threaten online anonymity and possibly chill dissent. Services such as Facebook, YouTube and Twitter could also use the online passport to revoke posting permission if a user violates terms of agreement, another obvious threat to the free flow of information that has made the web what it is today. Bilderberg globalists are also set to re-invigorate momentum behind another long term goal – a global tax system presided over by the UN.”

Bilderberg Leak: Secretive Group to Discuss Internet ID, Global Tax, By Paul Joseph Watson

These things are not new, in that they have been proposed before. Just as with anything that is repeated long enough, however, the reiteration has dulled the senses of most. The bad thing is that it is being acted upon. A report by Tarun Wadwha last week described the inculcation of facial recognition software and the use of over 250 million cameras worldwide with the capability of utilizing this software.

250 million cameras. That would equal a camera for every 30 people.

The article went on to detail how in Russia an application called FindFace has come out, the invention of two young entrepreneurs. This application enables you to track down and identify virtually anyone; the app is building a database as we speak, and it is a matter of time before it expands outside of Russia to Europe and eventually the United States. The article went on to detail some of the following measures used in the U.S. and Europe in the manner of the movie “Minority Report” with Tom Cruise as such:

“Microsoft Corp. has patented technology that can allow a billboard to determine who you are and show you personalized advertisements. British authorities are using facial recognition at music festivals to spot troublemakers, while brick-and-mortar stores worldwide are racing to adopt the technology to track loyal customers. Even some high schools and churches have started to use facial recognition to take attendance.”

source: Opinion: Facial recognition will soon end your anonymity

We see it being inserted into our society and the societies in the world: the surveillance state. We see the deliberate and intentional collapses of the economies worldwide, the shifting of assets into the hands of those who control the strings either via legislation and “authority” (governments) or monetarily and economically (corporations and banks/bankers). The daily decline in freedom of speech and the freedom to challenge the establishment…on anything, no matter how minute or obscure…is the rule, not the exception.

In order for the global governance to occur, each “sphere of influence” such as parallel’s Orwell’s “1984” and the super-states must control its respective sphere absolutely. Because of the homogeneity of ethnicity that accompanies each area, overlap is not possible from a perspective of control. But if the spheres of influence are “aligned” at least in purpose and levels of totalitarian control, then an effective balance can be maintained. Then (to paraphrase Alinsky) it can be a matter of “organizing the organized” with “controllers” who oversee the governments/regimes of all of the spheres without any of the people (the enslaved) ever knowing.

We are heading into a very dark time…a time where technology will be used to enslave, not enlighten or uplift mankind. The new dark ages are almost upon us. It will require nothing less than a world war or a complete global economic collapse (orchestrated, in both cases) to destroy the last vestiges of self-governance and law that exist for us. The time to put a stop to it is now, before the power base of the elite becomes so strong that individuals cannot withstand it. The time to rebel against it is now, while we still have the chance before that boot tramples the face of humanity…forever.
UNSEALED: Tran vs Wells Fargo – DOJ Declines to Intervene, Banks Continue to Foreclose with Impunity

“Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer”
~ Regards, Wells Fargo, Your Friendly Neighborhood Banker

~

UNSEALED: Tran vs Wells Fargo Qui Tam – DOJ Declines to Intervene, Banks Continue to Foreclose with Impunity

First, last month, from The Oregonian:

A Damascus man claims he was terminated by Wells Fargo & Co. in 2014 after he discovered the bank was repeatedly collecting on mortgage loans for which it did not have the proper documentation. When Duke Tran, 54, complained about the practice, he claims he was told to lie to customers. When he resisted, the bank fired him in November 2014, Tran said. In a whistleblower lawsuit unsealed a week ago, Tran claims Wells also defrauded the U.S. government. He argues the bank illegally collected hundreds of millions of dollars in federal foreclosure-prevention funding for loans the bank knew lacked proper documentation.

And of course, Wells Fargo denies any wrongdoing…

Tran’s wrenching transition from happy 10-year veteran at Wells Fargo to self-proclaimed whistleblower began in December 2013 when he fielded a call from a couple terrified they were going to get foreclosed out of their home. They were overdue on their second mortgage and Wells Fargo was demanding a balloon payment. Tran, who worked at the bank’s Beaverton call center, checked and checked again. He claims he could find no trace of the couple’s loan in the bank’s computer system and he told the couple so.

So what happened when he alerted his superiors?

Tran says his bosses were not happy. Three months later, on April 21, 2014, Tran and the rest of his team received an email from a supervisor telling them that full disclosure was a bad idea. “Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer,” reads the email, which Tran submitted into the court file.

Tran was troubled. The first-generation Vietnamese-American and volunteer in the US Army Reserve considered it illegal and unethical for the bank to threaten foreclosure when it didn’t have the mortgage contract in question. “The company told me to lie about that,” he said in an interview. “I don’t think that’s right, for the customers, for the company or the entire country.”

Now, let’s take a look at the unsealed complaint for more details …

SUMMARY OF CASE

Duke Tran was a humble, hardworking family man, who had overcome many obstacles to establish himself in the banking industry. Tran was honest and forthright. He had worked at Wells Fargo for over 10 years as a model employee in its home equity department.

In 2014, Tran began to ask questions after stumbling upon a secret Wells Fargo policy that he felt compromised his personal ethics and violated the laws governing mortgage servicing.

Wells Fargo’s internal policy required its employees to unfairly deceive its customers, and the United States, as to the quality of Wells Fargo’s loan documents, in violation of American common law, the Dodd-Frank Act, and Oregon’s Unfair Trade Practices Act.

When Tran continued to express concerns about its secret policy, Wells Fargo began a campaign designed to discredit Tran and ultimately force him out of the company. Wells Fargo illegally retaliated against Tran throughout 2014 and wrongfully terminated his employment on November 12, 2014.

Now, having no other choice to make things right, Tran files this complaint to recover fair compensation for Wells Fargo’s retaliation and wrongful termination. Tran also seeks to take back over $1.4 billion on behalf of the American taxpayers; paid by the United States on account of Wells Fargo’s unfair deceptive mortgages practices.

FACTUAL ALLEGATIONS: Wrongful Termination

On or around March 10, 2013, Tran transferred to the position of Home Equity Customer Service Specialist 4 in the home equity department.

…

Most calls that Tran received involved customers who had received letters from Wells Fargo indicating their mortgage balloon payments were due within 90 days, and that if they did not pay, their accounts would be referred to collections for foreclosure. When Wells Fargo received calls from customers with balloon payments due, its policy was to offer its customers financial products to avoid foreclosure, including HAMP loan modifications.

In or around December of 2013, Tran received the first of what would be many similar phone calls. A husband and wife with an alleged balloon mortgage payment due called Wells Fargo and spoke with Tran. When Tran looked in the Clipper system for their loan contract he realized it was missing or nonexistent, and reported this to them.

Tran promptly reported the issue with the customers to his supervisor and others within Wells Fargo. The next day, Tran received multiple emails from Wells Fargo headquarters that the loan documents were missing and that the company did not have the customers’ contract. Despite this, Wells Fargo directed Tran to deceive the customers and treat the loan like a balloon payment was due.

…

The next day, LeDonne met with Tran and berated Tran for telling the customers the truth about their loan documents. LeDonne told Tran that Tran’s job was in jeopardy and that Tran had placed Wells Fargo at risk by providing this information to the customers. LeDonne went on to say that Janice Norris (“Norris”) and Vice President Lending Manager, Debbie Clausen (“Clausen”) had directed that Tran have no more contact with these customers.

From then on, Tran received many more calls from customers whose loan documents were missing or nonexistent. Tran began to notice many of the loans with missing documents had been acquired by Wells Fargo from First Union or Sun Trust Bank. As he was directed, whenever customers called in and Wells Fargo’s loan documents were missing, Tran sent the matter to a supervisor.

On or around March 4, 2014, Tran received a call from a co-worker from Iowa. The coworker asked Tran about the customers Tran told that Wells Fargo had no loan documents for their loan. The customers had called for an update on their loan. Tran reported that he had referred the customers to his supervisors. Tran then asked his team lead, Heather Stone (“Stone”), about the issue. Stone told Tran that she planned to follow-up with the customers but it appeared they had hired an attorney.

Later that same day, Tran was called in to meet with his supervisor, LeDonne. When Iran walked into his office, LeDonne immediately blew up at him. LeDonne told Iran, “See, I told you before that we’ll get sued and now they’ve hired an attorney!” LeDonne threatened Iran that he would be fired if he ever told another customer the truth about missing or nonexistent loan documents.

On or around April 21, 2014, Tran received an email about a Wells Fargo internal policy stating that when Wells Fargo has lost loan documents, especially those securing a home, employees are to not share this information with customers under any circumstance.

“Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer.”

Tran was immediately uncomfortable with this secret internal policy and went to LeDonne to discuss it. Tran stressed that it was not right or legal to lie to customers. LeDonne cut Iran off and told him that the policy directive came from his boss, Kimberly Thrush (“Thrush”), and senior management.

A lot more goes on from here, see complaint for much more detail, before Mr Tran is fired for failing to say “hello.”

On or around November 12, 2014, Tran had a second interview with another unit within Wells Fargo. The interview was for the same day and LeDonne again refused Tran’s request for time off for the interview. Before Tran was able to resolve the issue again LeDonne called Tran in to discuss a customer call. LeDonne told Tran he was being investigated for “misbehavior” in that he did not say “hello” to a customer at the onset of the call. Tran asked to hear the phone call but LeDonne refused. LeDonne told Tran they would meet with the rest of the management team at the end of the day.

Later that day, Tran was called into a meeting with LeDonne, Thrush, and Norris. LeDonne told Tran that based on the misbehavior they discussed earlier, Wells Fargo was terminating his employment. LeDonne then stood up and told Tran he needed to escort him out of the building.

FACTUAL ALLEGATIONS: Defrauding the Government

Wells Fargo’s policy of unfair deception negatively affected not only its employees and customers but also the American taxpayers. From 2009 until March 31, 2015, the United States paid out over $1.4 billion in HAMP incentives based on Wells Fargo loan modification applications. As of the date of this complaint, Wells Fargo has completed more than a million mortgage modifications through HAMP. Of the $1.4 billion paid based on Wells Fargo applications, only a relatively small fraction ($246,871,173.00) went to Wells Fargo’s customers. The largest portions went directly to corporate investors ($825,776,921.00) and Wells Fargo ($359,151,497.00).

Many of Wells Fargo’s HAMP modifications, including some of the loans Tran was involved with, were based on materially false representations made by Wells Fargo about the quality of its mortgage loan documents.

Wells Fargo fraudulently used the HAMP modification process to turn incomplete loan files into enforceable mortgages. Wells Fargo intentionally misled its customers and the United States by failing to disclose known material defects in its loan documents. Specifically, Wells Fargo’s secret internal policy involved deceiving customers and the United States when Wells Fargo knew or suspected its loan files were missing documents.

Just another day in the Good Ol’ USA.

Full complaint and the DOJ’s order declining to intervene below…

www.4closureFraud.org
This Won't End Well – US Asset Managers Target Australia's $1.5 Trillion Pension Funds

Hedge funds attracted a net $44 billion in assets globally last year, the smallest amount since 2012. As these increasingly desperate funds try to change that in 2016, one enormous target has been identified in Australia.

Australia has approximately USD$1.5 trillion in retirement savings, one of the largest and fastest growing pools of pension money in the world according to the WSJ. Several US asset managers are already actively working to get a foot in the door, even though management fees charged in Australia are among the world's lowest according to local lobby group Financial Services Council.

"Everyone wants to get their hands on that pie. People think there's a lot of money to be made in Australia" said Jesse Huang, director for strategic relations Boston based hedge fund PanAgora Asset Management

Other than the potential to grow AUM, the fact that Australian funds doubled their holdings of alternative assets between 2009 and 2015 has funds salivating to set up shop.

Australian funds doubled their holdings of alternative assets—ranging from venture capital and private equity to hedge-fund investments—to an average of 8% of their portfolios between 2009 and 2015, according to Morningstar. Inflows have been especially strong over the past two years. Including infrastructure and property, Australian funds now hold about 20% of their assets outside of traditional investments such as stocks, bonds and cash.

Additionally, a recent survey by State Street showed two-thirds of Australian pension funds plan to boost their exposure to hedge funds over the next three years.

Overseas funds are putting talent on the ground because Australia is "not an easy market to enter. It's complex and highly concentrated, buyers are sophisticated and competition is fierce. Players who only come here to push product are bound to fail" said Anthony James, a partner at PwC in Sydney.

Potential clients can be tough to convince said Damian Crowley, head of distribution with Pengana Capital, a boutique Sydney fund management firm, adding that some investors "think hedge funds caused the global financial crisis." Alas, if investors have that mindset now, wait until hedge funds tie up pension funds in a bunch of high risk, highly illiquid positions just as the market sells off.

MLC, one of the largest pension funds in Australia has increased its alternative exposure by nearly 40% over the past three years, most notably to PE and energy futures, but CIO Jonathan Armitage says the A$62 billion fund is "picky."

"Our starting point is deep, deep skepticism. We make sure we only buy what we understand." Armitage said

That fact that it's a tough market to enter is not deterring some firms from moving forward however. Oaktree Capital Management, who invests in commercial mortgages and distressed debt opened up a branch in Australia in March, TIAA Global Asset Management opened a Sydney office last year, and Chicago based Northern Trust also set up a Sydney office, along with a sales team in Melbourne to offer full asset-management services to pension funds.

The shift in asset allocation undoubtedly comes from the fact that safer investment strategies are no longer an option for managers trying to generate returns, thanks to central banks going absolutely insane and driving over $10 trillion of sovereign debt into negative yields (soon to be done with corporate debt as well as Mario accelerates the global collapse to light speed with the ECBs new program).

Recall that now fixed income is yielding so little, that to earn a return of 7.5% investors would have to construct a portfolio that has nearly 3x the risk than it did in 1995. This is causing pension funds to risk even more to find yield, and thus the increased allocation to alternative assets.

Hedge funds aren't just targeting the big fish of course, retail investors are also on the radar for those looking to get into Australia.

While foreign hedge funds are eager to target big institutional investors, they are also pitching hard to retail investors—in particular the growing number of Australians, nicknamed “selfies,” who manage their own pension savings. Such investors control about a third of Australia’s retirement assets.

PanAgora, which makes money through complex trading strategies from high-speed algorithmic trading to leveraged short selling, offers one of its funds to mom-and-pop investors here in conjunction with Pengana Capital, a boutique Sydney fund-management firm. Among the more unusual data PanAgora mines to form its trading strategy: thousands of lost-baggage claims for potential signs of poor airline management.

* * *

Ah yes, hedge funds who introduce complex trading strategies to mom and pop investors and massive pension funds – what could possibly go wrong there?
Bitcoin Spikes Above $600 – 2 Year Highs – On Sudden Massive Chinese Buying

Once again, on a Saturday night (US time), Sunday morning (China) a sudden burst of buying pressure in Bitcoin, driven by Chinese buyers, has spiked the virtual currency higher on dramatic volume. With Bitcoin now trading at its highest level since May 2014 (in Yuan), and up 250% since we first suggested this an outlet for desperate-to-leave capital outflows in September, we note that the 'arbitrage' of over 150 Yuan points to massively more demand from Chinese buyers for now.

Another weekend buying-splosion in Bitcoin by The Chinese…

It appears, just as we initailly warned here, that more than a few of the few hundred million Chinese have decided that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decided to invest even a tiny fraction of the $22 trillion in Chinese deposits…

… in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.

And once again tonight, that panic selling of Yuan for Bitcoin has sent it surging in the last few hours, now above $600…

This pushes Bitcoin to 2 year highs priced in USDollars…

And once again it appears the dominant buyer is in China (OKCoin exchange – which reportedly has 90% of global Bitcoin traffic). This is the highest 'China' Bitcoin price since May 2014

Notably with Bitcoin trading 4187CNY and 615USD (with USDCNY at 6.5624), China Bitcoin is trading around 150 Yuan rich to Dollar Bitcoin (once again suggesting strong demand from Chinese buyers).

Both Gold and Bitcoin have been rising since we first warned of the surge in Chinese capital outflows but the virtual currency has dramatically outperformed…

Charts: BitcoinWisdom
Rapper Who Threatened To Kill Trump If "Momma's Food Stamps Are Taken Away" Arrested For Stealing Guns

There was much amusement three weeks ago, when Louisiana rapper Maine Musik said in a YouTube video recording that he would kill republican presidential candidate Donald Trump if his “Mamma’s food stamps are taken away.”

I could go to war with whoever the fuck I want to, but I really want to go to war with Donald Trump because Donald Trump trying to take food stamps from my mamma and that’s all the fuck she’s got. As long as the motherfucking government let us keep food stamps… we gonna be good, but the first time this nigga pass a law talking about he taking Louisiana purchase, shit going to get ugly. I swear to god on every motherfucking chain I got, bitchez gonna go down. You gotta understand them (inaudible) love Fruit Loops. They love that shit so if you take that shit nigga it’s coming with the madness and a nigga ain’t gonna play about that. Y’all take Donald Trump and let him know it’s up over here. We gonna declare war.

As we reported at the time, shortly after the “rapper” recorded this threat, he was visited by police for posting another video to his Instagram account on May 15, where he and his gang showed off a stockpile of weapons.

That’s when Maine Musik’s, whose real name is Demarcus Davis, problems really started, ironically not under president Trump, but Obama. The true culprit, however, was neither the current president nor a potential future one, but Demarcus’ own unprecedented stupidity.

As it turns out in the second video, “Musik” and at least eight other people can be seen brandishing a number of weapons, including rifles, pistols and a sawed-off shotgun, reports Baton Rouge ABC affiliate WBRZ. According to police, all of the guns visible in the video appear to match makes/models of firearms that were reported stolen by a local fun shop. The Baton Rouge Police Department reported the burglary at Meaux Guns & Ammo, located in the 9600 block of Mammouth Drive, on July 6 of last year. At the time of the report, dozens of firearms were reported stolen. Among those guns was a Ruger 10/22 Krinker Plinker.

When authorities examined Musik’s video, they noticed similarities between the weapons being waved around and weapons that had been stolen. A Baton Rouge police spokesman told the outlet that a stolen Ruger being brandished in the video was particularly easy to identify because it had been customized before it was stolen.

Detectives said they were also able to locate the suspect by using a house number and street name visible in the video. A search of Davis’ public Facebook account turned up a photo of the rapper holding the Ruger pistol that was reported stolen. The gun featured numerous customizations and modifications that made it distinctive and easy to spot, according to BRPD.

Davis was initially brought in for questioning concerning his social media posts and videos after he was arrested and booked for failing to stop at a stop sign while in possession of Drank, a purple liquid identified as codeine syrup. He would also be booked on a charge of possession of a Schedule V CDS in addition to the above gun charges.

Former Sons of Guns reality TV star Joe Meaux, who owns Meaux Guns and Ammo, told Fox News that he realized the firearms being waved around by Davis were his after watching a video titled “Rapper Threatens Trump” online. “As I’m watching it, I’m thinking these guns are very recognizable,” Meaux told Fox News. “As I watched more, I realized that they were very familiar. They were stolen from me last year. We do a lot of custom work,” he added. “There was one AK-47 copy built from a .22 I identified. Everything from the optic to the way the sling was placed was all very identifiable.”

As for Davis, he is once again free, having posted $23,000 bail and released the same day he was arrested, although perhaps not for much longer: either the Darwin Awards will snatch him or the secret service will. According to Breitbart, the Secret Service had already been investigating Davis before he was arrested over the rapper’s threats against Trump. Investigators also found photos on Davis’s personal Instagram page, which boasts 56,000 followers, showing him posing with guns. One video features a young girl shooting a replica handgun.

“Many of the items have been recovered, but the matter is still under investigation so when that is completed we will hopefully get them back,” Meaux told Fox. “But the most important thing is that they are off the streets now.”

Not really: after posting bail, the rapper is free and awaiting his next court date, although we no longer has any guns.

Meanwhile, it is clear that nothing has changed: “Maine Musik” posted another video Wednesday with a profanity-laced message for Donald Trump. “Fuck Donald Trump,” Davis says, although this time he has no gun and instead is seen waving a blade. “No more guns… It’s our summer 16, bitch.”

It is unclear who the knife was stolen from.

SHERWOOD USA BITCH ???? #????Nation

A video posted by Maine Luciano (@maine_musik) on Jun 8, 2016 at 2:50pm PDT
An Everyman's Guide To Understanding Cryptocurrencies
Submitted by Charles Hugh-Smith via PeakProsperity.com,
When an asset rises by almost 30% in a few weeks, it tends to attract attention. Recently, that asset was bitcoin (BTC). The price of BTC in dollars rose from $454 on May 23 to $590 on June 6^th.

When an asset doubles in a matter of a few months, it tends to attract attention. The cryptocurrency Ether (part of the Ethereum platform) doubled from around $7 in April to roughly $14 in early June.

Are these cryptocurrencies mere fads? Or are they potentially game-changing alternatives to the conventional currencies such as the U.S. dollar, Chinese RMB, Japanese yen or European Union euro?

There’s no lack of skeptics and critics of bitcoin and other cryptocurrencies. For example, “National currencies aren’t as Centralized, and Bitcoin isn’t as Decentralized, as you think.” (Source)

There are plenty of defenders of cryptocurrencies as well, for example this response to the article above.

The controversy is understandable; bitcoin has had a difficult adolescence. After soaring from $15 in early 2013 to over $1,000 in December 2013, the cryptocurrency crashed to $215 in early 2015 in the wake of the bankruptcy of a major exchange (Mt. Gox) that cost bitcoin investors $470 million in losses.

Yet despite concerns about security, criminal use and volatility, cryptocurrencies have proliferated at a dizzying pace, and new models such as the “smart contracts” of Ethereum have been developed.

So what are those of us who can’t follow the technical arguments supposed to make of all this? For that audience, here's my stab at making sense of the potential global role of cryptocurrencies.

Cryptocurrencies Are Digital Currencies That Are Not Issued by Governments

What’s a cryptocurrency? Wikipedia’s definition is “a medium of exchange using cryptography to secure the transactions and to control the creation of new units.” Cryptocurrencies exist only in the digital realm; there are no physical coins or paper notes.

Cryptocurrencies have no intrinsic value. They share this characteristic with fiat currencies issued by governments/central banks:

“Fiat money is currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for “it shall be.” (Source)

Though major central banks own gold, the currency they issue is not “backed by gold,” i.e. it cannot be converted into gold upon demand.

The value of fiat currency is a function of supply and demand. There are many sources of demand for currency: governments demand taxes be paid in their fiat currency, for example, and this creates demand for the currency.

There is however only two sources of supply: the central banks of nation-states (or regional unions like the Eurozone) and private banks in fractional reserve money systems that enable banks to create new money via issuing new loans.

In a fractional reserve banking system, if a bank has $10 in cash deposits (i.e. in reserve), it can issue a new loan of $100. This loan is new money that was created out of thin air. When the loan is paid in full, this new money disappears from the system.

When central banks or states issue new currency in excess of what the economy is actually producing, the supply overwhelms demand and the currency’s value (i.e. purchasing power) falls accordingly. Venezuela offers a present-day example: the official exchange rate of the Venezuelan bolivar is 10 to the U.S. dollar (USD), but the “street”/black market value is closer to 1,000 to 1 USD. (My correspondents in Venezuela report that it is illegal to post the black-market exchange rate on a website.)

Governments typically restrict alternative currencies to protect their monopoly on money issuance: residents must use the government-sanctified currency or face prosecution and prison.

The U.S. government has declared bitcoin is a commodity (i.e. property) rather than a currency. Other nations have banned bitcoin (presumably out of recognition that it is an alternative currency outside their control.)

Why does bitcoin have any value at all? There are two basic reasons:
1. The supply is limited. The design of bitcoin limits the total number of bitcoins to 21 million. (If you really want to know why this is so, you’ll need to understand the blockchain and bitcoin mining, topics that are beyond the scope of this article.) At present, there are over 15.5 million bitcoins in circulation, roughly three-quarters of the eventual issuance of 21 million.
2. There is demand for bitcoin precisely because it is outside the control of governments/central banks and cannot be devalued at will by governments/central banks.
Why Fiat Currencies Are Being Devalued

Why are most governments/central banks trying to devalue/depreciate their fiat currencies? After all, devaluing the currency reduces the purchasing power of everyone who holds the currency, meaning that the currency buys fewer goods and services. This loss of purchasing power makes everyone who must use the currency poorer.

Why do governments/central banks pursue a policy that makes their citizens poorer?

There are two primary reasons why governments seek to devalue their currency:
1. To make the nation’s exports cheaper, i.e. more competitive, in the belief that expanding exports will make the overall economy grow, despite the fact that devaluing the currency makes imports more expensive, hurting everyone who buys imports.
2. To make it easier for debtors to service their loans. As our currency loses its value, we experience that loss of purchasing power as inflation: the prices of goods and services rises as the purchasing power of the currency declines. Governments/central banks presume that wages will rise along with the prices of goods and services. This rise in wages will make it easier for debtors to service their debts, i.e. make their monthly payments. In a system that depends on the expansion of debt to fuel consumption, making it easier to service existing debt is of critical importance: if debt becomes more difficult to service, debt expansion slows and so does consumption. As consumption slows, the economy slides into recession.
As their currency is devalued (by intention or by unintended consequences), the great problem for many people will be transferring their remaining financial wealth out of depreciating currencies into a more stable currency or into assets in a more stable nation.

The Role of Cryptocurrencies in Capital Preservation

This is where cryptocurrencies have a role that could increase as global currencies are devalued: if you can shift financial wealth out of a currency that is losing purchasing power into a cryptocurrency that is holding its own or even gaining in purchasing power, it would be irrational not to do so.

What advantage do cryptocurrencies have over other stores of value such as gold, silver or cash? All of these traditional stores of value have advantages—portability and universal recognition that they are money—but they cannot be transported across the globe quite as easily as digital currencies.

Though it is a topic of hot debate, many observers believe it is technically difficult to the point of impossibility to stop people from buying, selling and sending cryptocurrencies because currencies such as bitcoin live in a network that is scattered around the globe—a network that can be accessed by anyone with a web browser.

While local exchanges could be shut down by governments, and businesses could be prohibited from accepting cryptocurrencies, stopping people from logging onto servers sited elsewhere is a bigger challenge. (Many governments have outlawed cryptocurrencies, though their success rate in stopping their citizenry from owning/using cryptocurrencies is unknown.)

The rise in daily transactions in bitcoin suggests an expanding base of users globally.

In Part 2: Will Cryptocurrencies Soar As The Global Economy Falters? we explore the potential demand for cryptocurrencies as a means of transferring and preserving capital, and the potential impact of these capital flows on valuations of cryptocurrencies.

As governments actively devalue their currencies (thereby making everyone using the currency poorer), their citizenry with financial capital are forced to seek ways to move their at-risk wealth into other currencies or assets. And as the stability and valuations of cryptocurrencies increase, the potential for a self-reinforcing feedback loop increases: as the value of cryptocurrency rises, it attracts more capital, which pushes prices higher, and so on.

Are we in the infancy of a global stampede into cryptocurrencies?

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
How Fascism Comes To America
Submitted by Doug Casey via InternationalMan.com,

I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can't think of something better to do with your time.

But I'll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you'd like – and when, how, and with whom you prefer to do it. Money allows you to have things and do things and can even assist you to be something you want to be. Unfortunately, money is a chimera in today's world and will wind up savaging billions in the years to come.

As you know, I believe we're well into what I call The Greater Depression. A lot of people believe we're in a recovery now; I think, from a long-term point of view, that is total nonsense. We're just in the eye of the hurricane and will soon be moving into the other side of the storm. But it will be far more severe than what we saw in 2008 and 2009 and will last quite a while – perhaps for many years, depending on how stupidly the government acts.

Real Reasons for Optimism

There are reasons for optimism, of course, and at least two of them make sense.

The first is that every individual wants to improve his economic status. Many (but by no means all) of them will intuit that the surest way to do so is to produce more than they consume and save the difference. That creates capital, which can be invested in or loaned to productive enterprises. But what if outside forces make that impossible, or at least much harder than it should be?

The second reason for optimism is the development of technology – which is the ability to manipulate the material world to suit our desires. Scientists and engineers develop technology, and that also adds to the supply of capital. The more complex technology becomes, the more outside capital is required. But what if sufficient capital isn't generated by individuals and businesses to fund further technological advances?

There are no guarantees in life. Throughout the first several hundred thousand years of human existence, very little capital was accumulated – perhaps a few skins or arrowheads passed on to the next generation. And there was very little improvement in technology – it was many millennia between the taming of fire and, say, the invention of the bow. Things very gradually accelerated and improved, in a start-stop-start kind of way – the classical world, followed by the Dark Ages, followed by the medieval world. Finally, as we entered the industrial world 200 years ago, it looked like we were on an accelerating path to the stars. All of a sudden, life was no longer necessarily so solitary, poor, nasty, brutish, or short. I'm reasonably confident things will continue improving, possibly at an accelerating rate. But only if individuals create more capital than they consume and if enough of that capital is directed towards productive technology.

Real Reasons for Pessimism

Those are the two mainsprings of human progress: capital accumulation and technology. Unfortunately, however, that reality has become obscured by a morass of false and destructive theories, abetted by a world that's become so complex that it's too difficult for most people to sort out cause and effect. Furthermore, most people in the OECD world have become so accustomed to good times, since the end of WW2, that they think prosperity is automatic and a permanent feature of the cosmic firmament. So although I'm very optimistic, progress – certainly over the near term – isn't guaranteed.

These are the main reasons why the standard of living has been artificially high in the advanced world, but don't confuse them with the two reasons for long-term prosperity.

The first is debt. There's nothing wrong with debt in itself; lending is one way for the owner of capital to deploy it. But if a society is going to advance, debt should be largely for productive purposes, so that it's self-liquidating; and most of it would necessarily be short term.

But most of the scores of trillions of debt in the world today are for consumption, not production. And the debt is not only not self-liquidating, it's compounding. And most of it is long term, with no relation to any specific asset. A lender can reasonably predict the value of a short-term loan, but debt payable in 30 years is impossible to value realistically. All government debt, mortgage debt, consumer debt, and almost all student loan debt does nothing but allow borrowers to live off the capital others have accumulated. It turns the debtors into indentured servants for the indefinite future. The entire world has basically overlooked this, along with most other tenets of sound economics.

The second is inflation. Like debt, inflation induces people to live above their means, but its consequences are even worse, because they're indirect and delayed. If the central bank deposited $10,000 in everyone's bank account next Monday, everyone would think they were wealthier and start consuming more. This would start a business cycle. The business cycle is always the result of currency inflation, no matter how subtle or mild. And it always results in a depression. The longer an inflation goes on, the more ingrained the distortions and misallocations of capital become, and the worse the resulting depression. We've had a number of inflationary cycles since the end of the last depression in 1948. I believe we're now at the end of what might be called a super-cycle, resulting in a super-depression.

The third is the export of dollars. This is unique to the U.S. and is the reason the depression in the U.S. will in some ways be worse than most other places. Since the early '70s, the dollar has been used the way gold once was – it's the world's currency. The problem is that the U.S. has exported perhaps $10 trillion – but nobody knows – in exchange for good things from around the world. It was a great trade for a while. The foreigners get paper created at essentially zero cost, while Americans live high on the hog with the goodies those dollars buy.

But at some point quite soon, dollars won't be readily accepted, and smart foreigners will start dumping their dollars, passing the Old Maid card. Ultimately, most of the dollars will come back to the U.S., to be traded for titles to land and businesses. Americans will find that they traded their birthright for a storage unit full of TVs and assorted tchotchkes. But many foreigners will also be stuck with dollars and suffer a huge loss. It's actually a game with no winner.

What's Next

These last three factors have enabled essentially the whole world to live above its means for decades. The process has been actively facilitated by governments everywhere. People like living above their means, and governments prefer to see the masses sated.

The debt and inflation have also financed the growth of the welfare state, making a large percentage of the masses dependent, even while they've also resulted in an immense expansion in the size and power of the state over the last 60-odd years. The masses have come to think government is a magical entity that can do almost anything, including kiss the economy and make it better when the going gets tough. The type of people who are drawn to the government are eager to make the state a panacea. So they'll redouble their efforts in the fiscal and monetary areas I've described above, albeit with increasingly disastrous results.

They'll also become quite aggressive with regulations (on what you can do and say, and where your money can go) and taxes (much higher existing taxes and lots of new ones, like a national VAT and a wealth tax). And since nobody wants to take the blame for problems, they'll blame things on foreigners. Fortunately (the U.S. will think) they have a huge military and will employ it promiscuously. So the already bankrupt nations of NATO will dig the hole deeper with some serious – but distracting – new wars.

It's most unfortunate, but the U.S. and its allies will turn into authoritarian police states. Even more than they are today. Much more, actually. They'll all be perfectly fascist – private ownership of both consumer goods and the means of production topped by state control of both. Fascism operates free of underlying principles or philosophy; it's totally the whim of the people in control, and they'll prove ever more ruthless.

So where does that leave us, as far as accumulating more wealth than the average guy is concerned? I'd say it puts us in a rather troubling position. The general standard of living is going to collapse, as will your personal freedom. And if you're an upper-middle-class person (I suspect that includes most who are now reading this), you will be considered among the rich who are somehow (this is actually a complex subject worthy of discussion) responsible for the bad times and therefore liable to be eaten. The bottom line is that if you value your money and your freedom, you'll take action.

There's much, much more to be said on all this. I've said a lot on the topic over the past few years, at some length. But I thought it best to be brief here, for the purpose of emphasis. Essentially, act now, because the world's combined economic, financial, political, social, and military situation is as good as it will be for many years… and a lot better than it has any right to be.

What to Do?

No new advice here, at least as far as veteran readers are concerned. But my suspicion is that very few of you have acted, even if you understand why you should act. Peer pressure (I'm confident that you have few, if any, friends, relatives, or associates who think along these lines) and inertia are powerful forces.

That said, you should do the following:
1. Maintain significant bank and brokerage accounts outside your home country. Consider setting up an offshore asset protection trust. These things aren't as easy to do as they used to be. But they'll likely be much less easy in the future.
2. Make sure you have a significant portion of your wealth in precious metals and a significant part of that offshore.
3. Buy some nice foreign real estate, ideally in a place where you wouldn't mind spending some time.
4. Work on getting official residency in another country, as well as a second citizenship/passport. There's every advantage to doing so, and no disadvantages. That's true of all these things.
One more thing: Don't worry too much. All countries seem to go through nasty phases. Within the lifetime of most people today, we've seen it in big countries such as Russia, Germany, and China. And in scores of smaller ones – the list is too long to recount here. The good news is that things almost always get better, eventually.
Mike Rowe Gives Advice To Students: "Never Follow Your Passion"

Mike Rowe has some truthiness for those students who are "following their passion" without possessing the skills necessary to accomplish what they're trying to do.

"You've all been given some terrible advice, and that advice is this: follow your passion."

The former host of Dirty Jobs tells it like it is by explaining to students that passion and ability have nothing to do with each other, and that "Just because you're passionate about something, doesn't mean you won't suck at it.". Rowe also reminds students that just because they may have a degree in a chosen field, it doesn't mean that a dream job awaits.

"Dream jobs are usually just that – dreams. But their imaginary existence just might keep you from exploring careers that offer a legitimate chance to perform meaningful work."

"Never follow your passion, but always bring it with you."

* * *

Rowe's message fits nicely with our 7 Harsh Realities Of Life Millennials Need To Understand, which should be widely read, lest we end up with more of this…

Digest powered by RSS Digest

Jun 11

Today’s News 11th June 2016

By admin in Economy

Paul Craig Roberts: "Fellow Americans, Wake Up & Escape The Matrix"

Authored by Paul Craig Roberts,

Where Do Matters Stand?

On the eve of World War II the United States was still mired in the Great Depression and found itself facing war on two fronts with Japan and Germany. However bleak the outlook, it was nothing compared to the outlook today.

Has anyone in Washington, the presstitute Western media, the EU, or NATO ever considered the consequences of constant military and propaganda provocations against Russia? Is there anyone in any responsible position anywhere in the Western world who has enough sense to ask: “What if the Russians believe us? What if we convince Russia that we are going to attack her?”

The same can be asked about China.

The recklessness of the White House Fool and the media whores has gone far beyond mere danger. What do the Russians think when they see that the Democratic Party intends to elect Hillary Clinton president of the US? Hillary is a person so crazed that she declared the president of Russia to be “the new Hitler” and organized through her underling, neocon monster Victoria Nuland, the overthrow of the democratically elected government of Ukraine. Nuland installed Washington’s puppet government in a former Russian province that until about 20 years ago was part of Russia for centuries.

I would bet that this tells even the naive pro-western part of the Russian government and population that the United States intends war with Russia.

Ever since Russia stood up to Obama over Syria, the Russians have been experiencing hostile propaganda and military operations on their borders. These provocations are justified by Washington and its NATO vassals as a response to “Russian aggression.” Russian aggression consists of nothing but obviously false assertions that Russia is about to invade the Baltics, Poland, and Romania and recreate the Soviet Empire, the Eastern European part of which, together with the former Russian provinces of Georgia and Ukraine, now belong to the American Empire.

The Russians know that the propaganda about “Russian aggression” is a lie. What is the purpose of the lie other than to prepare the Western peoples for war with Russia?

There is no other explanation.

Even morons such as Obama, Merkel, Hollande, and Cameron should be capable of understanding that it is extremely dangerous to convince a major military power that you are going to attack. To simultaneously also convince China doubles the danger.

Clearly, the West is incapable of producing leadership capable of preserving life on earth.

What can be done when the entire West demonstrates a death wish for Planet Earth?

Until the criminal regimes of Clinton, George W. Bush, and Obama, American presidents from John F. Kennedy forward worked to reduce tensions with the Soviets. Kennedy worked with Khrushchev to reduce tensions caused by US missiles in Turkey and Soviet missiles in Cuba. President Nixon negotiated SALT I (the Strategic Arms Limitation Treaty) and the Anti-Ballistic Missile Treaty. President Carter negotiated SALT II, which was never ratified by the US Senate but was observed by the executive branch. President Reagan negotiated with Soviet leader Gorbachev the end of the Cold War. President George H.W. Bush in exchange for Gorbachev’s agreement to the reunification of Germany promised that NATO would not move one inch to the East.

All of these achievements were thrown away by the neoconized Clinton, George W. Bush, and Obama regimes, each a criminal regime on par with Nazi Germany.

Today life on Planet Earth is far less secure than during the darkest days of the Cold War. Whatever threat global warming poses, it is miniscule compared to the threat of nuclear winter. If the evil that is concentrated in Washington and its vassals perpetrates nuclear war, cockroaches will inherit the earth.

I have been warning about the growing danger of a nuclear war resulting from the arrogance, hubris, ignorance, and evil personified by Washington. Recently, four knowledgable Russian-Americans spelled out the likely consequences of trying to drive Russia to submission with war threats: http://www.paulcraigroberts.org/2016/06/03/41522/

See also: http://www.paulcraigroberts.org/2016/05/28/as-our-past-wars-are-glorified-this-memorial-day-weekend-give-some-thought-to-our-prospects-against-the-russians-and-chinese-in-world-war-iii/

Don’t expect the brainwashed American population to have the moral conscience and fortitude to prevent nuclear war or even the intelligence to prevent their own vaporization. In a recent article in the Wall Street Journal Scott Sagan and Benjamin Valentino report that 59% of the US population support attacking Iran with nuclear weapons in the event that Iran sank one US Navy ship: http://www.wsj.com/articles/would-the-u-s-drop-the-bomb-again-1463682867

Republicans were much more likely than Democrats to approve attacking Iran with nuclear weapons with 81% of Republicans approving nuclear war compared to 47% of Democrats. Yet, the Democrats are behind Hillary who would be the first to use nuclear weapons. After all, a feminized woman has to prove how tough she is, just as Margaret Thatcher was “the Iron Lady.”

Before it it too late for Americans and all of humanity, arrogant Americans need to recall that “those who live by the sword, die by the sword.”

The economic picture is equally dismal and unpromising. The latest payroll jobs report was even more awful than reported. Hardly any new jobs were created, but what largely escaped reporting is the fact that the economy actually lost 59,000 full-time jobs.

Increasingly the US economy consists of part-time jobs that cannot support an independent existence. Thus, more Americans age 19-34 live at home with parents than independently with spouses or partners. Fully half of 25-year old Americans live in their childhood rooms in their parents’ homes.

This is the “New Economy” that the filthy lying neoliberal economists promised would be reward for the American work force giving up their manufacturing and professional skill jobs to foreigners. What a monstrous lie the neoliberal economists told so that corporate executives and shareholders could put into their own pockets the living wage of the American work force. These neoliberal economists, and, alas, libertarian “free market” ones, have not been held accountable for their impoverishment of the American work force deeply buried in debt with no future prospects.

Those few Americans who have any awareness are beginning to realize that the One Percent and the western governments that serve them are re-establishing feudalism. The brilliant and learned economist, Michael Hudson, has labeled our era the era of neo-feudalism.

He is correct. The majority of young Americans come out of university heavily indebted, primed for debtor prison. When half of 25-year olds cannot marry and form households, how can anyone believe that housing sales and prices are rising except as a result of speculative investors banking on rental income from a population that cannot even pay its student loans.

The United States is the sickest place on earth. There is no public or political discussion of any important issue or of the multiple crises that confront America or the crises that America brings to the world.

The American people are so stupid and unaware that they are capable of electing a criminal and a warmonger like Hillary president of the United States and be proud of it.

These “tough” Americans are so frightened of hoax dangers, such as “Muslim terrorists” and “Russian aggression” that they willingly sacrificed their depleted pocketbooks, the Constitution of the United States—an act of treason on the part of the American people who utterly failed their responsibility to protect the Constitution—and their own liberty to a universal police state that has all power over them.

It is extraordinary that once-proud, once-great European peoples look for leadership from a country of moronic non-entities who have pissed away the liberty, security, and prosperity that their Founding Fathers gave to them.

Fellow Americans, if you care to avoid vaporization and, assuming we do avoid it, live a life other than serfdom, you must wake up and realize that your most deadly enemy is Washington, not the hoax of “Russian aggression,” not the hoax of “Muslim terrorism,” not the hoax of “domestic extremism,” not the hoax of welfare bankrupting America, not the hoax of democracy voting away your wealth, which Wall Street and the corporations have already stolen and stuck in their pockets.

If you cannot wake up and escape The Matrix, your doom will bring the doom of the planet.
The "Crime" Of Offending Islam & Death Of Free Speech In Europe

Across Europe, cartoonists, artists and writers are forced to live under police protection, and also often face criminal prosecution – all for the "crime" of offending Islam.

"'Respect' means, for them, submission." It starts with censoring cartoons…

Gatestone Institute's Giulio Meotti explains what is going on across Europe…

As we concluded previously,

Speech is either free or it isn’t. One cannot have it both ways, as the EU apparatchiks apparently think. As soon as restrictions on free speech are introduced, abuse is sure to follow.
This Employment Trend Is Not Your Friend

Submitted by Michael Lebowtiz of 720 Global

Loan Delinquencies may be Signaling Recession

On June 2, 2016 the Bureau of Labor Statistics (BLS) stunned economic prognosticators and the financial media when it reported that 38,000 new jobs were created in May. The consensus forecast of Wall Street economists was 160,000 new jobs, with estimates ranging from 110,000 to 219,000. Even the most pessimistic forecast turned out grossly optimistic!

At 720 Global we do not forecast economic data, choosing, instead to focus on the bigger macroeconomic picture. That said, we were not surprised by the recent weakness of jobs data. In fact, unlike most forecasters, we do not view the recent employment data as a one-off event but as further proof of a worsening trend in economic activity. In this article, we share a few thoughts that explain why.

Corporate Profitability and Loan Delinquencies

As of the first quarter of 2016, S&P 500 annual earnings have declined for six consecutive quarters and reside at levels last seen in 2013 (data: Standard & Poor’s). Historically, as profitability falters an increasing number of corporate borrowers become delinquent on loans, or worse they default entirely. During such periods corporate executives focus on reducing expenses, which typically translates into reducing headcount. Accordingly, corporate and business loan delinquencies can serve as a barometer of future employment trends.

Commercial and Industrial (C&I) loan delinquency rates, have a strong historical correlation with employment. C&I delinquency rates have risen over the last year and a half, in-line with the decline in corporate profits, to levels last seen four years ago. While the overall delinquency rate is still relatively benign, it is increasing sharply. Another important observation about the delinquency growth rate is that delinquencies tend to trend in one direction for long periods. Note: C&I loans are loans to corporations and businesses and not individuals. Data on these loans are reported on by the Federal Reserve.

The graph below, courtesy of Cyril Castelli of R-Cube, highlights the relationship between the rate of change in C&I delinquencies and employment. The delinquency rates are inverted to better highlight the correlation.

Based on the historical correlation and the sharp growth in C&I loan delinquencies recently, it is conceivable employment drops abruptly over the next 6 months.

BLS Non-Farm Payrolls Data

The graph below charts the three-month moving average of the change in Non-Farm Payrolls against a backdrop of recession periods shaded in light blue.

Over the last 50 years, the U.S. was either in recession or just recovering from one every time three-month job growth went negative (below zero on the graph). In fact, on average a recession began when the three-month average of job growth was still well above zero at 104,000. Currently, the three-month average sits at 116,000. If next month’s report shows fewer than 151,000 jobs created, the three-month average will fall below 104,000.

ISM Non-Manufacturing

The Institute for Supply Management (ISM) produces two indices based on a monthly survey of manufacturing and non-manufacturing business leaders. Within the two ISM indices are component indices such as new orders, employment and prices. Most relevant to this discussion is the ISM Non-Manufacturing – Employment index. The graph below plots this index against a backdrop of recession periods.

A monthly reading above 50 signifies that a majority of those surveyed believe employment conditions are improving. A reading below 50 denotes the majority think employment conditions are worsening. The most recent reading was 49.7 but the three-month average of the ISM Non-Manufacturing Employment index has yet to break below 50. Historically, each time it has dropped below 50, the U.S. was already in a recession. That said, the three-month average of 51.0 is currently below the three-month average the last two times the U.S. economy entered a recession.

Summary

If C&I loan delinquencies prove, once again, to be a leading signal of employment trends, ensuing job losses will send the BLS employment data and the ISM non-manufacturing employment survey well below levels that, in the past, were recessionary.

Personal consumption represents 70% of GDP, therefore a financially healthy and employed consumer plays an outsized role in swaying economic trends. While the employment picture has generally been improving since the financial crisis/recession of 2008-2009, that improvement is showing signs of faltering. A worsening employment picture has serious implications for GDP growth, increasing concerns we have consistently raised about asset price valuations, which are heavily dependent upon the outlook for economic growth.
Stunning Emails Reveal How Clinton Foundation Donor Bought Seat As Hillary's Nuclear Weapons Advisor

Forget Hillary’s personal email server: this is what true cronyism and criminal corruption looks like, and this is the biggest threat from a Hillary presidency.

It has been widely speculated, if not proven, that donors to the Clinton Foundation who over the years have transferred hundreds of millions of dollars to the “charitable organization”, bought political favors with the Clintons in exchange for their generosity. That has now been confirmed thanks to a stunning ABC report which reveals how a major foundation donor – one who previously had practically no experience on intellgience matters – mysteriously ended up as a nuclear weapons advisor to Hillary during her tenure as Secretary of State.

Worse, the person in question Rajiv K. Fernando, had been the head of a high frequency trading company, Chopper Trading (recently acquired by HFT powerhouse DRW), which may explain the unprecedented pull of the HFT lobby throughout all ranks of the US political apparatus. In other words, Fernando bought a seat to not only have advance knowledge of all US foreign policy, but to directly shape it, something he could then parlay in the forms of massive policy frontrunning profits thanks to his trading company.

In other words, the appointment qualified Fernando, a trader in the public markets, for one of the highest levels of top secret access.

Just as shocking was the aggressive retaliation with which the State Department tried to cover up the cronyism that literally “bought” Fernando’s seat as one of Hillary’s closest political advisors, and how – as a result of ongoing media pressure – Fernando just as mysteriously resigned only days after his appointment was announced when the State Department was unable to come up with a legitimate reason for him to stay on.

The full shocking story follows, courtesy of ABC.

Newly released State Department emails help reveal how a major Clinton Foundation donor was placed on a sensitive government intelligence advisory board even though he had no obvious experience in the field, a decision that appeared to baffle the department’s professional staff.

The emails further reveal how, after inquiries from ABC News, the Clinton staff sought to “protect the name” of the Secretary, “stall” the ABC News reporter and ultimately accept the resignation of the donor just two days later.

Copies of dozens of internal emails were provided to ABC News by the conservative political group Citizens United, which obtained them under the Freedom of Information Act after more the two years of litigation with the government.

A prolific fundraiser for Democratic candidates and contributor to the Clinton Foundation, who later traveled with Bill Clinton on a trip to Africa, Rajiv K. Fernando’s only known qualification for a seat on the International Security Advisory Board (ISAB) was his technological know-how. The Chicago securities trader, who specialized in electronic investing, sat alongside an august collection of nuclear scientists, former cabinet secretaries and members of Congress to advise Hillary Clinton on the use of tactical nuclear weapons and on other crucial arms control issues.

“We had no idea who he was,” one board member told ABC News.

A State Department photograph shows the 2011 International Security Advisory
Board. Rajiv Fernando is seated on the far left of the image

Fernando’s lack of any known background in nuclear security caught the attention of several board members, and when ABC News first contacted the State Department in August 2011 seeking a copy of his resume, the emails show that confusion ensued among the career government officials who work with the advisory panel.

“I have spoken to [State Department official and ISAB Executive Director Richard Hartman] privately, and it appears there is much more to this story that we’re unaware of,” wrote Jamie Mannina, the press aide who fielded the ABC News request. “We must protect the Secretary’s and Under Secretary’s name, as well as the integrity of the Board. I think it’s important to get down to the bottom of this before there’s any response.

“As you can see from the attached, it’s natural to ask how he got onto the board when compared to the rest of the esteemed list of members,” Mannina wrote, referring to an attachment that was not included in the recent document release.

Fernando himself would not answer questions from ABC News in 2011 about what qualified him for a seat on the board or led to his appointment. When ABC News finally caught up with Fernando at the 2012 Democratic convention, he became upset and said he was “not at liberty” to speak about it. Security threatened to have the ABC News reporter arrested.

At the 2012 Democratic Convention, ABC News’ Brian Ross asks Rajiv Fernando
about his 2011 appointment to the State Department’s International Security Advisory Board.

Fernando’s expertise appeared to be in the arena of high-frequency trading –– a form of computer-generated stock trading. At the time of his appointment, he headed a firm, Chopper Trading, that was a leader in that field.

Fernando’s history of campaign giving dated back at least to 2003 and was prolific — and almost exclusively to Democrats. He was an early supporter of Hillary Clinton’s 2008 bid for president, giving maximum contributions to her campaign, and to HillPAC, in 2007 and 2008. He also served as a fundraising bundler for Clinton, gathering more than $100,000 from others for her White House bid. After Barack Obama bested Clinton for the 2008 nomination, Fernando became a major fundraiser for the Obama campaign. Prior to his State Department appointment, Fernando had given between $100,000 and $250,000 to the William J. Clinton Foundation, and another $30,000 to a political advocacy group, WomenCount, that indirectly helped Hillary Clinton retire her lingering 2008 campaign debts by renting her campaign email list.

The appointment qualified Fernando for one of the highest levels of top secret access, the emails show. Among those with whom Fernando served on the International Security Advisory Board was David A. Kay, the former head of the Iraq Survey Group and United Nations Chief Weapons Inspector; Lt. Gen. Brent Scowcroft, a former National Security Advisor to two presidents; two former congressmen; and former Sen. Chuck Robb. William Perry, the former Secretary of Defense, chaired the panel.

“It is certainly a serious, knowledgeable and experienced group of experts,” said Bruce Blair, a Princeton professor whose principal research covers the technical and policy steps on the path toward the verifiable elimination of nuclear weapons. “Much of the focus has been on questions of nuclear stability and the risks of nuclear weapons use by Russia and Pakistan.”

The newly released emails reveal that after ABC News started asking questions in August 2011, a State Department official who worked with the advisory board couldn’t immediately come up with a justification for Fernando serving on the panel. His and other emails make repeated references to “S”; ABC News has been told this is a common way to refer to the Secretary of State.

“The true answer is simply that S staff (Cheryl Mills) added him,” wrote Wade Boese, who was Chief of Staff for the Office of the Under Secretary of State for Arms Control and International Security, in an email to Mannina, the press aide. “Raj was not on the list sent to S; he was added at their insistence.”

Mills, a former deputy White House counsel, was serving as Clinton’s chief of staff at the time, and has been a longtime legal and political advisor.

Four minutes later, Boese wrote to his boss, Richard Hartman, to alert him that Ellen Tauscher, who was then the Undersecretary for State for Arms Control and International Security Affairs, would be meeting with Mills to devise a response to the ABC News request.

“Sorry this has become a headache,” he wrote.

Hartman wrote the next morning to say he would “come up and brief you… about where Raj Fernando stands and the ABC News investigative journalist inquiries. You do need to hear about it.” Separately, in an email to another official, Hartman noted that it was “Cheryl Mills, who added Mr. Fernando’s name to the list of ISAB nominees.”

When ABC News sent a follow-up inquiry about the qualifications of another board appointee, Massachusetts state Rep. Harold P. Naughton, Jr., Boese wrote to Hartman to say the department would have a far easier time explaining Naughton’s credentials. “The case for Rep. Naughton is an easy one. We are on solid ground,” he said.

By this point, Fernando himself had been looped into the discussion. He and Hartman exchanged emails, but the entire text of Fernando’s letter was redacted by the State Department prior to its release.

Twice, Mannina was instructed to stall with ABC News, before Mills sent a public statement. It announced Fernando’s abrupt decision to step down.

“Mr. Fernando chose to resign from the Board earlier this month citing additional time needed to devote to his business,” it reads, noting that membership on the board was required to be “fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee.”

“As President and CEO of Chopper Trading, Mr. Fernando brought a unique perspective to ISAB. He has years of experience in the private sector in implementing sophisticated risk management tools, information technology and international finance,” the statement says.

The statement was emailed to ABC News two days after Fernando’s resignation and four days after the initial ABC News inquiry.

Fernando’s letter of resignation to Clinton says he “intended to devote a substantial amount of time to the work of ISAB in furtherance of its objectives. However, the unique, unexpected, and excessive volatility in the international markets these last few weeks and months require[d him] to focus [his] energy on the operations of [his] company.”

Additional emails collected from Hillary Clinton’s personal server only hint at her possible involvement in Fernando’s selection to the board. The records request for documents about Fernando’s appointment produced a chain of correspondence from 2010 with the subject line “ISAB” — or International Security Advisory Board. In those, Mills writes, “The secretary had two other names she wanted looked at.” The names are redacted. Mills then forwarded the response to “H,” which is the designation for Clinton’s personal account. Three minutes later Clinton forwards the email chain to another State official and says simply, “Pls print.”

The Clinton campaign declined requests from ABC News to make Mills available for an interview. Campaign spokesman Nick Merrill deferred to the U.S. State Department, which issued a statement saying the board’s charter specifically calls for a membership that reflects “a balance of backgrounds and points of view. Furthermore, it is not unusual for the State Department Chief of Staff to be involved in personnel matters.”

Cheryl Mills, former State Department chief of staff under former Secretary of State
Hillary Clinton, attends a House Select Committee on Benghazi hearing in Washington, Oct. 22, 2015

Fernando did not respond to messages left by ABC News at home and mobile numbers listed for Fernando, nor to a letter left at the office of his current business.

As is customary with a new administration, the make-up of the board changed substantially when Clinton took over the State Department, according to Amb. James Woolsey, who served on the panel from 2006 to 2009. But the seriousness of its mission remained the same.

He said the board’s primary purpose was to gather an array of experts on nuclear weapons and arms control to constantly assess and update the nation’s nuclear strategy.

“Most things that involve nuclear weapons and nuclear strategy are dealt with at a pretty sensitive basis — top secret,” he said, noting that participants meet in a secure facility and are restricted in what materials they can discuss.

That is not typically the realm of political donors, Woolsey said. Though, he added, it would not be impossible for someone lacking a security background to make a contribution to the panel. “It would depend on how smart and dedicated this person was… I would think you would have to devote some real time to getting up to speed,” he said.

Fernando is now a board member of a private group called the American Security Project, which describes itself as “a nonpartisan organization created to educate the American public and the world about the changing nature of national security in the 21st Century.” He also identifies himself online as a member of the Chicago Council on Global Affairs and says he’s involved with a Washington think tank.

And he continued to donate to Democrats, and to Clinton. He emerged as one of the first “bundlers” to raise money for Clinton’s 2016 bid. And in July 2015, he hosted a fundraiser for Clinton at his Chicago home. Fernando has also continued to donate to the Clinton Foundation. He now is listed on the charity’s website as having given between $1 million and $5 million.

About six months after Fernando resigned from the State Department advisory board, he was invited to attend a White House State Dinner, honoring the British Prime Minister. And this summer Fernando will serve as a super delegate at the Democratic National Convention. According to Chicago media reports, he has committed to supporting Clinton.

* * *

And that, for a mere $1-$5 million sunk cost, one can buy influence, and inside information, which – in this specific case – can then be traded and generate hundreds of millions in profits, an IRR that is too big for Excel to calculate.

The punchline: with thousands of generous Clinton Foundation donating “Fernandos” waiting in the wings, it is only a matter of time before President Clinton’s entire staff is comprised of people who did their math and realized that the US government is merely a means to an end: the end, of course, being to get very, very rich at the expense of the American people whom they – and Hillary – should be serving.

* * *

The following emails were obtained by the conservative political group Citizens United, which obtained them under the Freedom of Information Act, and were provided to ABC News. ABC News has arranged the emails in chronological order. Scroll through the emails below or CLICK HERE to open them in a new window.
Former Fed President: "All My Very Rich Friends Are Hoarding Cash"
There were numerous interesting, informative and mostly bearish speakers during the latest Strategic Investment Conference held at the end of May. Among them were Lacy Hunt, David Rosenberg, Neil Howe, Jim Grant, Mark Yusko, Gary Shilling, and JohnMauldin (readers can watch video interviews with these speakers on Mauldin Economics’ Youtube channel and their full presentations can be found at the following page) all of whom painted a very pessimistic picture for the stock market but, as Tony Sagami points out, the most alarming comment came from Richard Fisher.

Fisher was president of the Federal Reserve Bank of Dallas and a voting member of the Federal Open Market Committee (FOMC) from 2005 to 2015. He was one of, perhaps the only, skeptic on the Fed board going into the great financial crisis, warning on numerous occasions about the upcoming crash only to be ignored by his wiser peers and certainly Alan Greenspan and Ben Bernanke. He was also ignored in the post-Lehman era by both Bernanke and Janet Yellen.

Among his biggest concerns:
- Government Debt: he is worried about the $19 trillion US government debt (up $11 trillion since 2008) because the Fed has fired all its monetary bullets and can’t expand the balance sheet any further.
- China and social instability: he thinks communist leaders care about production but not efficiency. “They might produce more, but our products work,” jokes Fisher. There are entire cities in China with nobody living in them, according to him. Fisher says the biggest problem in China is social stability. “I’m deeply worried about their ability to maintain social stability,” but… “It doesn’t affect us directly.” Another risk in China is that millions of people are pulling their money out of the country.
- Low interest rates don’t work: “We had a long period of moderation and low interet rares, which did nothing to adjust.” The online countries that adjusted were Poland and Mexico, according to Fisher.
- The failed Brazilian experiment: Fisher said Brazil is a symbol of what’s wrong with emerging markets. They lived through the crisis but learned nothing from it.“Brazil has always been a country with potential, and it’s never been realized.”
- Raising rates is long overdue: he made the point that raising interest rates won’t ruin the economy. “The debt rollover is what we should be worried about. Yet nobody is talking about it.”
- It’s all one big Ponzi scheme: “Our government has to borrow money just to pay interest.” Or as Minsky would say, this is the Ponzi finance stage, just before everything goes to hell. “We have a lot of unsound policy in place. It is agreeable, but in my view, it is unsound.”
- The death of the middle class: Fisher says the lowest income quartile has seen an increase in income. The highest quartile has also seen a massive increase in income. The two middle quartiles were flat over a period of many years. “This is why we have such support for people like Donald Trump and Bernie Sanders.”
- A ritalin monetary policy: “We have what I call a Ritalin based monetary policy.” Now Janet Yellen’s job is to wean it. “It has to do with taking the distortions out of the financial markets and letting the markets down easier.” “These are the lowest interest rates in 239 years of history.”
But as Sagami points out, Fisher’s most telling comment came during the Q&A session when he was asked how his personal portfolio was positioned. Fisher’s response: “In the fetal position.” Moreover, he also said that “all my very rich friends are hoarding cash.”

Not some, not many. All.

Which, incidentally may explain why as algos levitate markets on ever lower volume (volume which returns with a vengeance on even a moderate selloff such as today’s), “smart money“, insiders, retail investors and foreigners continue to quietly liquidate stocks for weeks on end. While it is unclear who is buying, what is clear is that increasingly more are getting out of risk assets and getting into cash.

For the sake of Fisher’s friends we hope the cash they are hoarding is physical, and not of the electronic variety. After all, as Greece has shown vividly, it would only take the flick of a switch for the government to lock up, or Corzine, some or all of the $10+ trillion in bank deposits. And ultimately, since helicopter money is coming, even that physical cash will soon be worthless courtesy of near-infinite dilute, and the only monetary asset which would survive the hyperinflationary conflagration of the grand reset, is the same precious metals that have preserved their value through over 5,000 years of human stupidity. Which, ironically, reminds us that just because one is rich that does not make them smart..
Government Failure: Audit Finds FDA's Inadequate Policies Are Leaving The Nation At Risk
If it is ever discovered that tainted food has been released to the public for consumption, it is the Food and Drug Administration's (FDA) responsibility to ensure a recall of the product takes place.

In a very disturbing audit finding Wednesday, the Department of Health and Human Services' Office of Inspector General has determined that due to inadequate policies and procedures, the FDA is too slow in ordering companies to recall tainted foods.

Here are some comments from the memo sent to the FDA from the Inspector General regarding the audit findings.

The audit memo opens by stating that the FDA doesn't have an efficient and effective food recall process to ensure the safety of the Nation's food supply.

The purpose of this memorandum is to alert you to a preliminary finding from our ongoing audit of the Food and Drug Administration (FDA) food recall program. One of the objectives of our audit is to determine whether FDA has an efficient and effective food recall initiation process that helps ensure the safety of the Nation’s food supply.

We found that FDA did not have an efficient and effective food recall initiation process that helps ensure the safety of the Nation’s food supply. Specifically, FDA did not have policies and procedures to ensure that firms1 or responsible parties2 (collectively referred to in this document as “firms”) initiated voluntary food recalls promptly. This issue is a significant matter and requires FDA’s immediate attention.

Two examples from the findings were specifically called out, with one case being a strain of Salmonella found in nut butter in which 165 days passed before a recall was issued. Another example involved various cheese products in which people became ill from Listeria – 81 days passed before a recall was issued. In that instance, one infant even died.
For all 30 voluntary recalls in our sample, after FDA first became aware that an adulterated or misbranded product could be in the food supply chain, it did not prescribe a timeline for each firm to initiate a recall. For two recalls, the firms did not initiate the recall of all potentially harmful products until 165 days and 81 days after FDA became aware of the potential contaminations. The delays in the firms’ recalls may have occurred because FDA did not have policies and procedures that instruct its recall staff to establish set timeframes for (1) FDA to request that firms voluntarily recall their products and (2) firms to initiate voluntary food recalls. As a result, consumers remained at risk of illness or death for several weeks after FDA knew of potentially hazardous food.

For example:
- In a recall involving nut butter at least 14 people became ill with a strain of Salmonella indistinguishable from or linked to the strain found at the firm’s manufacturing facility. 165 days passed from the date FDA identified the potentially adulterated product and the date the firm initiated a voluntary food recall. See Attachment A for a timeline of events for this recall.
- In a series of recalls involving various cheese products, at least nine people became ill from Listeria monocytogenes, including one infant who died. According to FDA records, the Centers for Disease Control and Prevention (CDC) also linked two fetal losses to these illnesses. 81 days passed from the date FDA became aware of the adulterated product and the date the firm had voluntarily recalled all affected products. See Attachment B for a timeline of events for this recall.
And in conclusion, the memo reiterates its finding that there are inadequate policies in place to take prompt actions in order to initiate a recall, and that consumers remained at risk because of that.

FDA does not have adequate policies and procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. As a result, consumers remained at risk of illness or death for several weeks after FDA was aware of a potentially hazardous food in the supply chain.

We suggest that FDA revise its policies and procedures to instruct recall staff to establish set timeframes for (1) FDA to request that firms voluntarily recall their products and (2) firms to initiate voluntary food recalls.

* * *

In summary, everyone should feel good about the precision in which the government runs its programs, especially as it relates to the health and safety of an entire nation.

Here is Attachment A, which walks through the timeline for the Salmonella finding.

And attachment B, which walks through the timeline of the Listeria finding.
A Donald Trump Voter Went To See Him Speak. Protesters Broke His Nose.

Authored by Juan Hernandez, originally posted at The Washington Post

This isn't how politics is supposed to work in the United States.

SANTA CLARA, Calif. — Last Thursday, I left work about 5 p.m. and drove to the San Jose Convention Center to hear Donald Trump speak.

I’ve been voting for conservative candidates for 15 years and a registered Republican since 2015. Now that the general election is underway, I believe Trump is the best candidate to fix our country’s many problems, and I believe he’s going to be the next commander in chief. So I was excited to hear him, and to show my support. Walking into the rally with a friend, I was a little wary: Trump’s speech to the California Republican convention in Burlingame had been disrupted by protesters, and I wasn’t sure whether to expect a similar scene in San Jose. But we got to the event early, and we must have been inside already by the time a crowd of protesters gathered in the streets near the convention center.

The speech really got me energized. I got a new sense of appreciation and respect for Trump after a Bernie Sanders supporter interrupted him with a sign. Trump didn’t blink: “Darling, there’s no way he can win, but keep your sign high,” he said. That is the president that I want. It was great being around so many Republicans — in the Bay Area, we don’t have a lot of that, so it was great to feel the camaraderie of being part of the GOP.

My trouble began once the rally was over.

My friend and I joined a crowd of Trump supporters who had all left the convention center around the same time. The garage where we had parked our car was right next to the building, but police were directing everyone around the block to another garage entrance instead. The farther we walked, the fewer Trump fans were with us — people began peeling off to go to restaurants or bars in the area, or to other garages nearby.

And suddenly, there were protesters everywhere. Some were holding Mexican flags, or burning American ones. They were yelling “F— Trump!” at us and cornering us. Some of them started grabbing Trump supporters — they were going up and slugging people, sucker-punching people, just picking random people out. As much as we wanted to help, because our fellow Republicans were getting hit, I knew any moment that could be me. So my friend and I just kept walking — sometimes, we’d be running. We saw police standing nearby, but they didn’t do anything. That scared me, because I thought, “Okay, if I’m next, there’s going to be no cops.”

About a block from the garage entrance, we turned down the street and found a line of protesters standing in our way. To get back to our car, we’d have to go through them. My friend and I were wearing “Make America Great Again” Trump hats. We were targets, and I was terrified. I could feel it coming — they would look at me and start walking up to me.

Before we could make it into the garage, four or five men surrounded me, and another four surrounded my friend. They just started swinging. We swung back as best as we could. My main thing was I didn’t want to fall; I didn’t want to be knocked down. I’m not a big guy, but I can defend myself as best I can if it’s one on one — but not when they have so much anger against us.

One of the blows caught my nose, and blood just started pouring out. That kind of stunned them, and they backed off a quick second. My adrenaline kicked in; I felt punches on my head, and I felt the punch that hit my nose, but I was in survival mode by then, and I didn’t realize until later how much it hurt. I called my friend, “Okay, let’s go!”

We ran into the parking garage, and we thought we were safe, but there were another few dozen protesters there, too. We got in our car and headed toward the exit. Some protesters jumped on the cars in front of us, but we eventually made it out. My friend drove me to the emergency room because my nose was pouring blood. I had a broken nose, and because I was covered with scratches, I had to get a tetanus shot, too. It took a lot out of me, much more than I realized at first; my headaches and soreness didn’t start to go away until a week later.

I still can’t believe how poorly the police handled the protests. I live by Levi’s Stadium, where the Super Bowl was. They had every single cop out there. Yet knowing the violence that’s been breaking out near Trump rallies, San Jose wasn’t prepared for it last week? So the Los Angeles chapter of Log Cabin Republicans held a news conference back in San Jose on Wednesday, to get some answers from the city’s mayor, Sam Liccardo, and its police department about why they let me and other people get attacked and only made a few arrests.

The whole thing made me angry. Here in Northern California, I feel like I’m a unicorn: I’m a gay Hispanic who’s a Republican. It was much harder to come out as a Trump supporter than it was to come out as gay — the minute you say you’re for Trump, everyone comes at you — but this has pushed me out of the closet about it completely.

I should be able to vote for whom I want, and I shouldn’t have to deal with violence to go hear my candidate speak. If people really want to protest at rallies, they should do it peacefully. I have a young niece and nephew, and I don’t want them to think this is how politics work in the United States. We can’t let our freedom of speech and our freedom of assembly be tarnished by politicians like those in San Jose who do not have our safety at heart.
Sterling Volatility Explodes To Record High As Brexit Looms
With two polls being unleashed on the markets today indicating the largest lead for Brexit over Bremain yet with regard the UK referendum, it seems FX traders at least have begun to wake up to the short-term uncertainties a "leave" vote may entail. A short-term measure of expected price swings for the pound climbed for a third week as traders sought protection as two-week implied volatility, a period that covers the June 23 voting date, closed at its highest on record today.

With just 13 days left, things are not looking good for Cameron and his cronies…
- U.K. Poll on EU Shows 45% Remain, 55% Leave: ORB/Independent
- "LEAVE" ON 53 PCT, "REMAIN" ON 47 PCT BEFORE BRITAIN'S EU REFERENDUM – SKY NEWS
And it is having an effect…

It seems this "wait til the last minute too panic hedge" behavior is not unusual in the new normal as Credit Suisse describes the same occurred last year in the lead up to Grexit...In the case of Brexit, equity markets waiting until last minute to price in equity risk premium similar to Grexit last year?

If this is anything like the “Grexit” catalyst last year, equity markets may wait until the last minute to price in the appropriate risk premium.

As you can see from the EFA vol chart below, even though “Grexit” was a well-known and well-anticipated catalyst last year, EFA 1M implied vol was still trading as low as 11.7% the week before Greece’s June 30th IMF repayment deadline.

EFA 1M implied vol ended up surging 8 vol pts in the final week before the deadline and another 3 vol pts after a surprise referendum was called over the July 4th weekend last year.

And it wasn’t just EFA. VIX also didn’t start reacting to “Grexit” risk until the final week when it jumped from 12 to 19.

Will the same thing happen this time? If so, I think it makes sense to hedge now when you can (and when it’s cheap!), not when you have to in the final days before the deadline when implied vols will have already climbed higher.

Is this merely another symptom of the now deeply embedded belief that markets are invincible thanks to The Central Bank Put? Why hedge? Why reduce exposure? When you know… because The Fed promised… that if stocks fall, they will magically levitated to confirm that all is well and the central planners are in control. But, as Charles Hugh-Smith recently noted, by making the stock market the only game in town, the Powers That Be can no longer afford to let it decline for any reason…

This new rule simplifies trading, confidence and sentiment: Bulls can now relax, knowing that the market will never be allowed to decline. Sentiment can stay pegged at "extreme greed" forever, and there is no longer any need to hedge long positions because markets will only move higher.

Volatility will drift lower because any decline will be mere signal noise, only of interest to high-frequency trading (HFT) machines skimming pennies.

Too much is riding on stocks to let them drift lower. The stock market is not only the critical signaling device that tells the world all is well and everything is getting better every day, in every way, it's also the collateral for all sorts of highly profitable schemes, and the financial foundation of the institutions that are supposed to fund pensions and fulfill insurance redemptions.

And even more important, the stock market is the money machine that enables CEOs and top management to push their stocks higher with buy-backs and then cash out their personal stock options for glorious millions.

By making the stock market the only game in town, the Powers That Be can no longer afford to let it decline for any reason: technical, fundamental, quantitative, it no longer matters–stocks must drift higher forever without disruption.

This is what happens when you strip out volatility and game the system: the system loses all natural resiliency and becomes increasingly brittle and fragile. The only way to make sure it doesn't tremble and shatter into pieces is to guarantee that no decline will be allowed.

Of course then you don't have a market–you have a simulacrum market, a phony fragile shell propped up for PR purposes.

That is until the powers that be allow a nation to exercise their own sovereignty, to vote not for a centralized totalitarian state but for democracy and the right to freely crash their economy (if Osborne and Cameron are to be believed). Will a Brexit vote be allowed to spoil the party? Perhaps an increasing number of Brits have had enough of 'Project Fear' and are uninterested in what the US president's view on their freedom is…
Gawker Files For Bankruptcy

Moments ago the financially challenged tabloid nemesis of Peter Thiel, Nick Denton’s Gawker Media, filed for bankrutpcy – an outcome predicted by many as inevitable – listing assets between $50 and $100 million, and liabilities between $100 and $500 million.

No matter on which side of the Thiel-Denton debate one sides, we doubt many tears will be shed as yet another chapter in “new media” comes to a close.

The WSJ adds that the company will be put for sale in bankruptcy auction, which will begin with an opening bid of $100 million from the digital media company and publisher Ziff Davis LLC, according to a person familiar with the matter. The sale was triggered after the judge overseeing the invasion-of-privacy case brought by Hulk Hogan—whose real name is Terry Bollea—declined to issue a stay pending Gawker’s appeal. That required the company to put up a $50 million bond.

Why is the company filing now? Simple: to make Hulk Hogan’s aka Terry Bollea’s $130 million claim part of the prepetition, unsecured liabiltiies.

“Whatcha gonna do when Chapter 11 runs wild on you”

Proceeds from a sale will go into a fund to finance further litigation costs and cover whatever damages may ultimately be leveled following the appeals process, which could take years to resolve. Gawker has said that it expects to ultimately prevail.

Whatever money is left at the end of the legal process will go to Nick Denton, Gawker’s founder who owns most of the company, and other shareholders. Earlier this year, Columbus Nova Technology Partners took an undisclosed minority stake in the media company as it shored up its books for the trial.

Full filing below:

Digest powered by RSS Digest

Jun 10

Today’s News 10th June 2016

By admin in Economy

"Deliberately Overblown" Brexit Fears Backfire

Submitted by John Browne via Euro Pacific Capital,

As the June 23rd BREXIT (the UK-wide referendum to leave the EU) vote draws near, the polls indicate a close result. Those urging a vote for the UK to remain inside the EU are suggesting increasingly dire economic consequences that would follow a yes vote by the British people to leave. Voices from London, Brussels, and Washington have all put immense pressure on British voters to bend to the will of the elites.

To listen to their commentary one would think that apocalypse was just around the corner. But is there any substance to their warnings?

The Pro-EU membership camp is led by Prime Minister David Cameron, supported by most of his cabinet, the Bank of England, the BBC and the massive support from the UK and EU governments that have funded enormous advertising campaigns against separation. Given this weight of their power, it is amazing how strong the support for a British exit (BREXIT) has remained.

When Britain first joined the European Economic Community (the precursor to the EU) in 1973, the primary motivation was the hopes of increasing British trade through participation in the world’s largest free-trade zone. However, the hope that the union would simply be a free-trading zone of sovereign countries has morphed into a drive for an EU superstate that has relentlessly pushed for greater regulations on businesses and people and greater control of local laws that have nothing to do with trade.

It has been kept remarkably quiet, for instance, that the EU intends to divide the UK into eleven administrative regions, all reporting directly to Brussels. Although Scotland, Wales and Northern Ireland will remain intact as individual national regions, England will be split into eight regions. Worse still, the coastal counties of England will be teamed with regions in Portugal, France, the Netherlands and Germany, where they will remain in a minority role. Even the English Channel is to be renamed. Very little mention is of the EU proposal for EU-wide ID and tax numbers, likely heralding a heavy EU taxation regime.

Likewise, the proposals to create EU-wide armed forces have been put quietly on the back burner. England has a long and proud history of struggling for its sovereignty. In just the past two centuries she has stood alone against Napoleon and Hitler, before inspiring other nations to join the fray. The presence of French or German armed forces used to support a European police force in the UK will not sit well with the English.

All this and many more threats to the British people have been kept largely quiet. Instead, the main activities of the Pro-EU group have been concentrated on the economic and monetary catastrophe that would face the UK if it were to cut itself off from trading with the EU. Some call this, ‘Project Fear’. The actual underlying facts paint a somewhat different picture, one that makes the Pro-EU case appear misleading, even deliberately so.

The basic argument is that with about 50 percent of its current trade with the EU, the UK would face a catastrophic economic and monetary collapse if it left the EU. As a threat, this sounds potentially devastating. Doubtless it has persuaded some. But in the light of reality, a different and far less worrying image emerges.

The UK has the fifth largest national economy in the world, according to 2015 figures compiled by the International Monetary Fund. In its present state of economic stagnation, the EU can ill-afford to lose the UK. According to the March 2016 Statistical Bulletin from the Office for National Statistics, the UK has had a negative trade balance in goods with the EU that has averaged about $8 billion a month this first quarter. If the UK were to leave without being able to negotiate an independent trade deal, the EU economy might shrink by some $96 billion a year. The UK was the second largest net contributor to the EU budget last year. It follows that the 8 English regions (with Scotland, Wales and N. Ireland considered as 'relatively poor') may in aggregate be the second largest suppliers of future intra-EU money transfers from the so-called 'rich' to the poorer southern and eastern regions of Europe. In that sense, the EU needs the UK more than the other way round.

The Pro-EU camp ignore the trade balance issue completely and threaten, as did President Obama, that the UK would be left out in the cold, like Switzerland, and unable to negotiate its way out of a disaster. Switzerland is not an EU member and has an economy of less than a quarter the size of the UK’s. And yet from 2009-2013 she exported, on average, 4.6 times the value per person to the EU than does the UK (The Truth About Trade Outside the EU, William Dartmouth MEP, June 2015). With a negative EU trade balance, why would the UK be unable to negotiate, from outside, a trade agreement at least as good as that achieved by Switzerland?

[As an aside, over dinner many years ago, my occasional Lords and Commons golfing partner Dennis Thatcher asked me how the UK would survive alone in an era when world power blocks and corporations were getting bigger? I replied, “In the same way as Switzerland.” He retorted while hitting the table hard with his hand, “That’s just what Margaret thinks!”]

Further, the EU negotiates international trade agreements under the auspices of the World Trade Organization (WTO), in the primary interests of the EU, not of the UK. England has flourished by trading globally, especially with the U.S. and the British Commonwealth. The EU has no trade agreements yet with China or Japan. Outside the EU, the UK would be enabled to negotiate freely to trade with the entire world and be unfettered by the EU where it has a muted voice of 1 among 28 members. Furthermore, free of burdensome and costly EU regulations, the British economy likely would be re-energized, particularly among the vital job-creating small business sector.

In addition to economic collapse, the Pro-EU camp postulates that the British pound sterling, still one of the top five global trading currencies, would plummet following a BREXIT. However, many informed observers believe the international monetary system is on the cusp of a major collapse. In these circumstances, the vital interests of the Federal Reserve, European Central Bank, Bank of Japan and even the Bank of China would be to steady the ship to avert a collapse of fiat currency. Unimaginable amounts of central bank money could be deployed to save the pound, rendering it a false scare.

On the other hand, although the UK is not a member of the euro, a BREXIT indirectly could threaten the euro, now the world’s second currency.

Already a number of EU members are experiencing anti-EU sentiments among their people. The United Kingdom Independence Party (UKIP), which forced the BREXIT vote, is not alone. It is part of a sizable block, styled the Europe for Freedom and Direct Democracy (EFDD) group, in the EU parliament. It is comprised of representatives from the UK, France, Sweden, Italy, Poland, Lithuania and the Czech Republic. In addition, countries like Greece, Spain and Portugal are becoming very unhappy about the implications of Eurozone membership. A for BREXIT vote could ignite an implosion within the Eurozone rather than being a threat to Sterling. This may be what worries the international central banking and political elite most. It has led directly to massive global elite support for Cameron’s Project Fear.

If the British public wises up to David Cameron’s game of fear and vote for BREXIT, there will be some short-term shock and disruption in currencies, equities, bonds, precious metals and possibly employment. However, the global central bank and political elites could be expected to move very fast to avoid the development of deeper problems. Negotiations likely would be concluded very quickly to calm things down with minimal damage to the UK economy or its currency.
The Pentagon's Great Wall Of Impotence

Authored by Pepe Escobar, originally posted at RT.com,

No one ever lost money betting on the Pentagon refraining from exceptionalist rhetoric.

Once again the current Pentagon supremo, certified neocon Ash Carter, did not disappoint at the Shangri-La Dialogue – the annual, must-go regional security forum in Singapore attended by top defense ministers, scholars and business executives from across Asia.

Context is key. The Shangri-La Dialogue is organized by the London-based International Institute for Strategic Studies (IISS), which is essentially a pro-Anglo-American think tank. And it takes place in the privileged aircraft carrier of imperial geostrategic interests in South East Asia: Singapore.

As expressed by neocon Carter, Pentagon rhetoric – faithful to its own estimation of China as the second biggest “existential threat” to the US (Russia is first) – revolves around the same themes; US military might and superiority is bound to last forever; we are the “main underwriter of Asian security” for, well, forever; and China better behave in the South China Sea – or else.

This is all embedded in the much ballyhooed but so far anemic “pivoting to Asia” advanced by the lame duck Obama administration – but bound to go on overdrive in the event Hillary Clinton becomes the next tenant of 1600 Pennsylvania Avenue.

Real threats are predictably embedded in the rhetoric. According to Carter, if Beijing reclaims land in the Scarborough Shoal in the South China Sea, “it will result in actions being taken by the both United States and … by others in the region.”

What’s left for China, in Pentagonese, is just to be a member of a hazy “principled security network” for Asia – which will also help protect the East against “Russia’s worrying actions”. Carter mentioned“principled” no less than 37 times in his speech. “Principled” cheerleaders so far include Japan, India, the Philippines, Vietnam and Australia.

So here’s an instant translation: we do a NATO in Asia; we control it; you will answer to us; and then we encircle you – and Russia – for good. If China says no, that’s simple. Carter proclaimed Beijing will erect a “Great Wall of self-isolation” in the South China Sea.

If this is the best Pentagon planners have to counteract the Russia-China strategic partnership, they’d better go back to the classroom. In elementary school.

Navigate in freedom, dear vassals

Predictably, the South China Sea was quite big at Shangri-La. The South China Sea, the throughway of trillions of US dollars in annual trade, doubles as home to a wealth of unexplored oil and gas. Stagnated and increasingly irrelevant Japan, via its Defense Minister Gen. Nakatani, even advanced the Japanese would help Southeast Asian nations build their “security capabilities” to deal with what he called “unilateral” and “coercive” Chinese actions in the South China Sea. Cynics could not help to draw similarities with Imperial Japan’s Greater East Asia Co-Prosperity Sphere.

The Beijing delegation kept its cool – to a point. Rear Admiral Guan Youfei stressed, “The US action to take sides is not agreed by many countries.” Youfei – the head of the Chinese office of international military cooperation – did not refrain though from condemning a “Cold War mentality” by the usual suspects.

As for Japan, China’s Foreign Ministry detailed that “countries outside the region should stick to their promises and not make thoughtless remarks about issues of territorial sovereignty.” Japan has absolutely nothing to do with the South China Sea.

Beijing’s reclamation work on reefs in the South China Sea naturally put it in direct conflict with Vietnam, the Philippines, Malaysia and Brunei. So US meddling – under the convenient cover of“freedom of navigation” – had to be inevitable. “Freedom of navigation” operations are a silly intimidation game in which a US Navy ship or plane passes by a Chinese-claimed island in the South China Sea.

It was up to Admiral Sun Jianguo, Deputy Chief of the Joint Staff Department of China’s Central Military Commission, to cut to the chase, stressing “the provocation of certain countries” and adding that “selfish interests” have led to the South China Sea issue becoming “overheated”. He slammed the Pentagon for double standards and “irresponsible behavior”. And he slammed the Philippines for taking the conflict to a dubious UN arbitration court after breaching a bilateral agreement with China;“We do not make trouble but we have no fear of trouble.”

The Chinese position prefers dialogue and cooperation – and Jianguo re-stressed it, calling for ASEAN to make a move. In fact China has already reached what is called a four-point consensus with Brunei, Cambodia and Laos on the South China Sea two months ago. The Philippines are a much harder nut to crack – as the Pentagon is taking no prisoners to lead Manila “from behind”.

Even Vietnam, via Deputy Defense Minister Nguyen Chi Vinh, made it clear – in the same plenary session as Admiral Jianguo – that Vietnam prefers solutions via the UN Convention on the Law of the Sea as well as negotiation between China and ASEAN.

Bend over to our rules – or else

After Shangri-La’s rhetorical excesses, the action moved to Beijing, the site of the 8th China-US Strategic and Development Dialogue. That’s the annual talkfest launched in 2009 by Obama and then Chinese President Hu Jintao.

Chinese Vice Foreign Minister Zheng Zeguang painted a rosy picture, stressing the exchange of“candid, in-depth views on important and sensitive issues of shared concern.” Chinese Ambassador to the US Cui Tiankai once again needed to point out that the relationship is just “too important” to be “hijacked” by the South China Sea. And yet this is exactly the Pentagon’s agenda.

Beijing though won’t be derailed. As State Councilor Yang Jiechi put it, ASEAN-China dialogue is progressing via what Beijing calls the “dual-track” approach, according to which disputes are negotiated between the parties directly involved. That implies no Washington interference.

Beyond what is discussed either at Shangri-La or at the China-US dialogue, the Big Picture is clear. ‘Exceptionalistan’ planners have molded a narrative where China is being forced to make a choice; either you bend over to “our” rules – as in the current unipolar geostrategic game – or else.

Well, Beijing has already made its own choice; and that entails a multipolar world of sovereign nations with no primus inter pares. The Beijing leadership under Xi Jinping clearly sees how the so-called international“order”, actually disorder, is a rigged system set up at the end of WWII.

Wily Chinese diplomacy – and trade – knows how to use the system to advance Chinese national interests. That’s how modern China became the “savior” of global turbo-capitalism. But that does not mean a resurgent China will forever comply with these extraneous “rules” – not to mention the morality lessons. Beijing knows ‘Exceptionalistan’ would not agree even to divide the spoils in a geopolitical spheres-of-influence arrangement. Plan A in Washington is containment – with possibly dangerous ramifications. There is no Plan B.

The bottom line – thinly disguised by the somewhat polite responses to Pentagon threats – is that Beijing simply won’t accept anymore a geopolitical disorder that it did not create. The Chinese could not give a damn to the New World Order (NWO) dreamed up by selected ‘Masters of the Universe’. Beijing is engaged in building a new, multipolar order. No wonder – alongside with strategic partner Russia – they are and will continue to be the Pentagon’s top twin threat.
A Day In The Life Of Several Hundred Laid Off Nomura Traders

Back in April, Japan's largest brokerage, Nomura, announced that it was quitting the European equity business. The decision was a cost cutting measure, and was made easier by the fact that the European operation hadn't made a profit since 2010.

Nomura isn't alone, Investment banks across the globe are cutting equity traders as a result of the current trading environment.

The following is what it was like for a group of London traders the day Nomura made the announcement that their services were no longer required, as chronicled by Bloomberg.

* * *

The fact that the division had only made one annual pretax profit since being bought from bankrupt Lehman Brothers Holdings in 2008 created an environment where traders would have to filter out the rumors of impending cuts quite frequently. However on April 11, it wasn't business as usual.

At One Angel Lane, Nomura’s stylish, eco-friendly European headquarters, employees have learned to filter out rumors of impending cuts. The division has only made an annual pretax profit once since it was bought from bankrupt Lehman Brothers Holdings Inc. in October 2008 — a fact so often mentioned one half-expects it to be printed on employees’ business cards.

On April 11, though, the noise was louder than usual. A senior executive had let slip to a colleague at a barbecue that he was dreading the following week because the bank was shutting down equities. By the time media reports of unspecified job cuts in the U.S. and Europe appeared at lunchtime, all semblance of work had ground to a halt. Desk heads asked their managers what was going on. According to one of those doing the asking, they were told there was nothing to worry about.

That changed early the next morning when e-mails went round ordering staff to attend a compulsory meeting. Research analysts and salespeople caught the elevators up to the 11th floor; traders congregated on the third. By 9 a.m., it was official. Everyone was given an “at risk” letter, in which the firm offered to help them find alternative roles over the next 45 days, but they knew it was typically just a formality.

After listening to speeches by senior managers and human resources personnel, everyone was told to gather their belongings, leave key cards at reception, and exit the building. Most made their way to All Bar One and The Folly, the only pubs open in the city of London at that hour, to have a pint, and perhaps even to express a sigh of relief that there was no longer a daily worry about whether or not a job would be there the next morning.

The Folly, a pub operated by Drake and Morgan Bars and Restaurants

They made their way in dribs and drabs. Hundreds of displaced bankers, shuffling up Suffolk Lane to All Bar One and along Upper Thames Street toward the Folly, the only pubs in the City of London open that early on an overcast Tuesday morning.

The shell-shocked men and women sipping pints and consoling each other had become part of a growing population. Faced with a toxic blend of zero-interest rates, stiffer capital requirements and a collapse in trading revenue, banks including Barclays Plc, Deutsche Bank AG and Credit Suisse Group AG have announced large cuts to their European operations in recent months. Even U.S. firms, with higher profitability, are trimming staff.

Among the bankers who stayed in the pubs until late in the evening, seemingly attempting to stave off the inevitable by remaining in the financial district, there were at least some expressions of relief. Nomura had already conducted one round of restructuring, in 2012, following the appointment of Koji Nagai as chief executive officer. Unlike his predecessor, Nagai was openly skeptical about Nomura’s place in a saturated and tightly regulated European market. The whiff of insecurity pervaded the trading floor.

The bank went on a cost-cutting drive and, under the direction of a new compliance team hired from UBS Group AG, started to clamp down on even minor breaches to company rules. Staff members were chastised for sending presentations to their personal e-mail accounts to work on over the weekend. One group of traders was threatened with dismissal after being caught on closed-circuit TV stealing candy from a vending machine.

Knowing their fate was one thing, however one important question remained unanswered: would those that were let go still receive a bonus. Figuring that the financial year finished prior to being let go, many assumed that a bonus would still be provided – sadly, they were wrong.

For the newly unemployed, one question loomed large: Would they still get a bonus? Nomura’s financial year finished at the end of March — well before any decision was announced regarding job cuts. Some traders and bankers assumed that, since they’d worked a full year, they would still receive an award.

They were wrong. On May 9, Nomura wrote to staff notifying them they would get nothing. Discretionary bonuses, the letters pointed out, were based on factors including future value to the company. Some bankers are now considering challenging the decision, citing a 2000 case in which a departing Nomura prop trader successfully sued the firm for 1.35 million pounds ($2 million). Nomura declined to comment on the bonus decision.

To top everything off, in addition to being fired and told no bonus would be paid out, some traders were summoned back to the office to face a disciplinary hearing. In trying to prepare for a future job search, they forwarded themselves documents they felt may be needed in the future, such as research reports, excel models, and even in one case, even a list of clients. Not only did the bank clamp down on those cases, which as a result will inevitably make it more difficult to find work in the future for those involved, the bank has yet to respond to those that simply asked for some work documents that may help in a future job search, even though Nomura had pulled out of Europe.

A second letter landed on the doorsteps of a handful of employees later that month, summoning them back to the office for a disciplinary hearing. In the hours before the cuts were announced, about five analysts had forwarded themselves documents they might need if they lost their jobs: research reports, Excel models and, in at least one case, a list of clients.

Nomura, like most banks, prohibits employees from forwarding any work documents to personal e-mail accounts. In tense meetings, the individuals explained themselves and asked for leniency. The bank is now considering what action, if any, to take. Possibilities include firing them for gross misconduct, thereby depriving them of severance pay and making it hard to find a job elsewhere; or handing out written warnings that will show up in a reference to a prospective employer. The analysts, who range from a junior associate to an industry veteran, fear that any measures will hamper their efforts to find alternative positions at a time when the industry is retrenching. Nomura declined to comment on the situation.

Separately, several former employees have asked the company to provide them with work documents they say will help them find roles elsewhere, such as their proprietary models and databases. They argue there is no reason for Nomura to refuse since it will no longer be competing in Europe. So far, no decision has been reached.

In the rush to leave One Angel Lane, many employees didn't have time to grab all of their belongings. Old family photographs, items of clothing and professional mementos lie in storage awaiting collection, a reminder of the human cost when a business fails.
On Death And Taxes: "The Greed Of The Government Can Never Be Overstated"

Submitted by Jeremiah Johnson (nom de plume of retired Green Beret of the United States Army Special Forces) via SHTFPlan.com,

Readers, you’re awake to the horrors of the Federal Government, our rapidly-declining GDP and ever-increasing debts. Trillions of dollars have been stolen, in the form of appropriations and programs that funnel directly from the tax-base: the fat “cash-cow” that the government suckles from. The taxes are life-sustaining to the government juggernaut, managed by the ever self-serving “representatives” of Congress who approve pay raises for themselves, immunity from prosecution from (what was formerly) insider trading, and exonerate themselves from any and all ethics violations.

Taxes keep the government going, keep the system emplaced and you the citizen in your place, from birth to death. The website ivn.us reports the breakdown for the federal government’s feedings:

Personal income taxes 47.4%

Corporate income taxes 34.1%

Social insurance taxes 9.9%

Tariffs/gas taxes/fees 8.5%

Ben Franklin summarized the position of the average citizen two centuries ago:

“In this world nothing can be said to be certain, except death and taxes.”

Franklin was correct; however, he should have reversed the order, because taxes can both bring on death and still haunt the deceased after their passing. The best example of this is the death tax, where a person’s estate is assessed after their death. Their heirs better pay the tax man! Yes, how exactly does all of that work? The deceased individual worked all of their lives, paying income taxes both federal and state, paying off their house and mortgage, paying their property tax.

If they paid for their house in full, and all related property taxes, then why is it assessed for a death tax?

The death tax is labeled conveniently as an “inheritance tax,” much in the manner that conquest and possession of more property is done by a municipality. Labeled aseptically as “annexation,” it is where the nabobs of the “grand council” of the municipality vote to take for themselves (sorry, the municipality) more land/territory. It’s all within their laws, and everyone smiles and pays the additional taxes happily ever after.

This year more than $3.4 trillion in federal taxes are estimated to be taken in by the federal government. Add to this the $1.5 trillion in local and state taxes, and this figure amounts to more than 31% of the nation’s income. Meanwhile look at the tax dodges that the Clinton’s perform, such as the multiple-listed addresses for corporations in the state of Delaware, and the undeclared revenues for their books and speaking engagements.

On December 16, 1773, American colonists disguised as Indians destroyed 342 cases of tea stored on board 3 cargo ships of the British navy. The price of tea included a tax of 30 pence per pound in England. In the American colonies, that tax was only 3 pence per pound, and yet the colonists wouldn’t take it: they acted. A far cry from today, where the citizens just accept all of it complacently and without more than an anguished bleat.

“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

-Will Rogers

For the most part that is true, with the exception of the inheritance taxes, in which the dead person’s estate is divided up: the heirs either pay or lose the property that has already been paid for and property taxes paid year after year! If you have a million dollars in the bank saved over 20 years, and you suddenly die, if the taxes have already been paid year after year on your income, then why do they double-dip and tax you after your death?

It is all about control and dominion. Government produces nothing, takes everything it can, and consumes all of it with wanton, avaricious gluttony. The greed of government can never be overstated. There are only politicians, no leaders, and those who misrepresent themselves and the Constitution in order to manipulate us and claim to represent us. They only represent themselves. The fiat currency and the Petrodollar are already leveraged to the hilt with a negative balance after the phony, inflated, CBO-doctored GDP.

We have no leaders, only rulers. The communist truism is correct: all authority comes from the barrel of a gun. Taxes are a means with which to destroy wealth and property passed from one generation to the next, and control the masses, subjugating them and dominating them via the color of law that make them always answerable to a superficially-benevolent but in reality malevolent government. All governments are vampires, and the blood they drain from the people is the blood of their taxes. We have taxation with misrepresentation, while these miscreants continue to wine, dine, and fete themselves on their trips to Martha’s Vineyard and Cozumel. On death and taxes, only the former allows you to escape the latter, and not even then.
China Orders 1,000 Heavy Transport Aircraft "Based On The Experience Of The United States And Russia"

As tensions escalate to dangerous levels in the South China Sea and in eastern Europe, an interesting decision has been made be the Chinese government.

According to Sputnik, back in January the People's Liberation Army Air Force was preparing to develop a new fleet of stealth fighters and heavy transport aircraft. The heavy transport aircraft, the Xian Y-20 transport, was going to be built in order to give Beijing a "fast and reliable platform" to deliver arms and soldiers over long distances.

Model Y-20 Transport

During a technology exhibition in Beijing, Aviation Industry Corporation of China (AVIC) elaborated on the governments plans for the Y-20. Although originally thought that Beijing would want only 400, "More than 1,000 Y-20s will be needed" said Zhu Qian, head of AVIC's large aircraft development office – the reason? "Based on the experience of the United States and Russia" Zhu says.

Now that's an interesting nugget of information. So due to the fact that the US and Russia are at odds, China needs 1,000 heavy transport aircraft – why would that be, is China planning on getting involved if ever the US and Russia got into a military dispute?

The Y-20 weighs roughly 220 tons, has four turbofan engines, and can carry up to 66 tons of cargo at a range of about 3,230 miles. This means the heavy transport aircraft can reach everywhere in Europe and Asia, the US state of Alaska, Australia, and North Africa.

So to summarize, due to what's happening between Russia and the United States, China has ordered nearly triple the amount of heavy transport aircraft it originally intended so that it could take tanks and other military equipment anywhere in Europe.

Which reminds us of what we reported earlier today. As China sailed a warship by disputed islands that are claimed to be controlled by Japan, Japanese officials also stated that a two Russian vessels were also spotted in the contested zone. Something tells us that there may be a military alliance in the works between Russia and China, and that could present significant problems for the US as it tries to bully both simultaneously.
State Department Delays More Clinton-Related Records Requests… Up To 75 Years

Submitted by Mike Krieger via Liberty Blutzkrieg blog,

Obstruction anyone?

Recall that a couple of days ago in the post, Obama Administration Delays Release of Hillary Clinton TPP Emails Until After the Election, we learned:

Trade is a hot issue in the 2016 U.S. presidential campaign. But correspondence from Hillary Clinton and her top State Department aides about a controversial 12-nation trade deal will not be available for public review — at least not until after the election. The Obama administration abruptly blocked the release of Clinton’s State Department correspondence about the so-called Trans-Pacific Partnership (TPP), after first saying it expected to produce the emails this spring.

Well there’s more to this story. International Business Times reports:

As the election season accelerates, requests for public information from the State Department surrounding communications from former Secretary of State Hillary Clinton have hit speed bumps.

A review of publicly available records requests from users of the transparency site MuckRock shows that inquiries related to the Democratic presidential nominee are more likely to be delayed until after the election than other requests to the State Department — a trend government watchdogs say highlights the challenges the government has faced under President Obama to live up to its transparency aims.

Though the files reviewed by IBT constitute just a fraction of the tens of thousands of inquiries the State Department processes annually — too few, experts said, to establish any sign of deliberate obstruction — they underscore the difficulty of probing Clinton’s tenure as the top U.S. diplomat, even as interest in her record mounts.

Four of the five Clinton-related records requests maintained at MuckRock have been given approximate due dates after the election in early November. These include a request filed by International Business Times Senior Investigations Editor David Sirota regarding Clinton’s contested record on trade issues, reported Monday. The fifth request has passed its estimated May completion date and has yet to be updated.

By contrast, of 20 Freedom of Information Act (FOIA) requests updated in the past three weeks by the State Department, only half had been postponed until after the 2016 presidential election, receiving estimated completion dates in October or earlier.

Though the agency has fulfilled numerous Clinton-related requests in the past year, spokespeople declined to specify how many outstanding inquiries into Clinton records remain or how many responses are due before the election.

Despite adding dozens of staffers to its FOIA offices, the State Department argued in court that it would take 75 years to complete a review of documents related to the Republican National Committee’s sweeping request of records for former Clinton aides.

But it isn’t all external pressures hobbling the State Department. A scathing agency audit earlier this year into the agency’s processes found “procedural weaknesses” leading to “inaccurate and incomplete” responses. The State Department, on average, takes the longest among government agencies to complete simple requests: 111 days.

Complicating matters is the fact that Clinton emails must face review not only from the State Department, but also from any other government agency that feels it has a stake in disclosure of the contents. The intelligence community has played a particularly active role in scrutinizing the cache, retroactively marking dozens of Clinton emails classified. More than 2,000 documents have been kept from public view over secrecy concerns.

I’m sure there’s nothing there in the pubic interest.

The White House is one of the government offices that gets to view documents, and watchdogs have accused the executive branch of delaying the release of politically sensitive material. Though Obama launched his presidency with a promise to be the “most transparent” in history, his administration has had a fitful record on openness — earlier this year, Vice News reported that executive officials worked to undermine congressional FOIA reforms.

Of course, this appears to be part of a much larger effort to conceal who Hillary Clinton really is from the voting public. It’s the same reason she refuses to release her Wall Street speech transcripts — she needs to be able to pretend to be something she’s not during the election.

Here’s another related example, also from International Business Times:

Facing an increasingly tough primary fight against Bernie Sanders last October, former Secretary of State Hillary Clinton, now the presumptive Democratic nominee, tried to distance herself from her push to negotiate the controversial Trans Pacific Partnership trade deal during her time atop the State Department (2009-2013). After months of taking positions on the deal that were criticized — even by members of her own party — as vague, Clinton said the deal wasn’t what she’d hoped it might be.

Since then she’s held fast on that position, weathering a primary fight that was anything but expected from the populist, self-described Democratic socialist Sanders, who has repeatedly railed against the TPP. At the same time, a review of the hardback edition of her memoir as secretary of state, “Hard Choices,” compared to the paperback — first noted by the Center for Economic and Policy Research (CEPR) — finds that segments of the book where Clinton describes an effort to convince American countries to join the TPP negotiations have been left out.

We encouraged “all open-market democracies driving toward a more prosperous future to join negotiations with Asian nations on TPP, the trans-Pacific trade agreement,” the original version of the book reads in a two-page segment discussing a 2009 conference in El Salvador. Those two pages have been cut from the paperback version of the book, according to CEPR.

Requests for comment sent to the Clinton campaign and Simon & Schuster, publisher of “Hard Choices,” were not immediately returned.

hmm…
Peak Youth

The world will experience “peak youth” in 2020 for the first time in human history, as the number of people aged over 65 is expected to outnumber those under 5 years old.

As BofAML notes, a key implication of an aging population is that an economy’s savings rate tends to rise while increases in investments tend to decline.

It is this aging global population that has thwarted the “war on deflation” in recent years (among other things like excess debt, deleveraging, and technical disruption)…

Aging populations increase the need to save for a longer retirement and lead to higher healthcare costs (note that in the next 10 days, 112,000 people will reach retirement age in the US, Europe, and Japan).

Source: BofAML
Peter Schiff Warns "This Is The Point Where The Fed's Real Problems Begin"

Submitted by Peter Schiff via Euro Pacific Capital,

Stop me if you’ve heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back…only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different. But it never is. Last week was just the latest re-telling.

For nearly a month the Fed’s bullish statements stoked optimism on the economy and raised expectations, based particularly on the most recent FOMC minutes, for a summer rate hike. But these hopes were dashed by the May non-farm payroll report, which reported the creation of only 38,000 jobs in May, the worst monthly performance in six years, based on data from the Bureau of Labor Statistics (BLS). The number missed Wall Street’s estimate by a staggering 120,000 jobs. If not for the 37,000 downward revision reported for April (160,000 jobs down to 123,000), May could have shown a contraction. This would have constituted a major black eye to the Obama Administration’s favorite talking point that its policies have led to 75 months of continuous job gains. (6/3/16, Democratic Policy & Communications Center).

To make the report even stranger, the plunge in hiring was accompanied by a drop in the unemployment rate to just 4.7%. Of course the fall in the unemployment rate was a function of another major drop in the labor force participation rate to just 62.6%, matching the June 2015 rate, which was the lowest level since the late 1970s (BLS). So the unemployment rate did not fall because the unemployed found jobs, but because they stopped looking. The market reaction was swift and sharp, as it always has been when a fresh shot of cold water has been thrown in the face of market boosters. The dollar fell hard and gold rose sharply.

But we can rest assured that despite any embarrassment that the Fed may be experiencing for having so gloriously misdiagnosed the current economic health, it will be right back at it in a few days, telling us about all the positive economic signs that are emerging and how it is ready and willing to start raising interest rates at the earliest opportune moment. Boston Fed president Eric Rosengren waited exactly 48 hours to start that campaign as he sounded bullish notes in a Monday speech in Finland. (6/6/16, Greg Robb, MarketWatch)

Given how many times this scenario has unfolded, leading to the point where even reliable Fed apologists like CNBC’s Steve Liesman have begun questioning the Fed’s credibility, one wonders what the Fed hopes to achieve by continuously walking into the bar with a new smile. But this performance is the only policy tool it has left. The Fed appears to believe that perception makes reality, so it will never stop trying to create the rosiest perception possible. It may view its own credibility as expendable.

There is also the possibility, however unlikely, that the Fed officials are not just trying to create growth through open-mouth operations, but that they actually believe that their policies are working, or are about to work. This would be as dogged a commitment to policy as medieval doctors had for bloodletting, which they thought was a useful therapy for a variety of ailments. Doctors at that time had all kinds of seemingly plausible reasons why the technique was effective. If the patient did improve after draining blood, it was taken as a sign of validation. But they would continue to apply the leeches even if the patient did not improve. Failure was simply a sign that more blood needed to be drained. Similarly, central bankers consider ultra-low, and even negative, interest rates as an ambiguous stimulant that will create growth when applied in large enough doses.

But what if modern central bankers, much like medieval doctors, are operating on a wrong set of assumptions? We know now that draining blood creates conditions that actually decrease a patient’s ability to fight infection and recover. Perhaps, one day, bankers will come to a similarly delayed conclusion about how zero and negative interest rates have prevented a real recovery that would otherwise have naturally taken place.

That’s because artificially low interest rates send false signals to the economy, prevent savings and investment, and encourage reckless borrowing and needless spending. They prevent the type of business and capital investment that is needed to create real and lasting economic growth. But don’t expect bankers, or their cheerleaders on Wall Street, the financial media, government, or academia, to ever make this admission. They do not believe in the power of free markets. They believe in government. Such a leap is simply beyond their powers of comprehension.

But there is another cycle here that is much more influential on the current market dynamic and should be much easier to spot. When the Fed talks up the economy and promises rate increases, the dollar usually rallies. When the dollar rallies, U.S. multi-national corporate profits take a hit, and the market falls. When the market falls, economic confidence falls and puts pressure on the Fed to maintain easy policy. This is a loop that the Fed does not have the stomach to break.

Because the Fed waited more than seven years to lift rates from zero, the cyclical "recovery" is already nearing its historical limit, if it's not already over. This could put the Fed into a position of raising rates into a weakening economy. Normally it does so when the economy is accelerating. Some identify this delay as the Fed's only policy error. But had it moved earlier, the recession would have simply arrived that much sooner. The Fed's actual policy error was thinking it could build a "recovery" on the twin supports of zero percent interest rates and QE, and then remove those props without toppling the “recovery.”

But despite all this, there are those who still believe that the Fed will deliver two more rate hikes this year. Given the anemic growth over the past two quarters, the recent plunges in both the manufacturing and service sectors, average monthly non-farm payroll gains of only 116,000 over the past three months (most low-wage, and part-time) and the stakes contained in the election that is just six months away, such a conclusion is hard to reach. Instead, I expect we will get the same bar gag we have been getting for the past year. Many of those who now concede that a June hike is off the table still believe July to be a possibility. I believe the Fed will go along with that hype until it can no longer get away with it…then it will start bluffing about September, or perhaps December.

The Fed has to keep talking about rate hikes so it can pretend that its policies actually worked. But the truth is that the Fed policies have not only failed, they have made the problems they were trying to solve worse, and raising interest rates will prove it. So the Fed resorts to talking about rate hikes, to maintain the pretense that its policies worked, without actually raising them and proving the reverse. This can only continue as long as the markets let the Fed get away with it or until the numbers get so bad that the Fed has to admit that we have returned to recession. That is the point where the Fed’s real problems begin.
Venezuela Opposition Leader Hit On The Face With Metal Pipe As Police Watch

Following the recent tragic stories of mass looting by the country’s starving population, which has resulted in at least one death, and even people resorting to killing animals for food, little can shock us anymore as we follow Venezuela’s total social disintegration. Which is why we took today’s news that the leader of Venezuela’s congressional opposition bloc was hit in the face with a pipe, and bloodied as he attempted to make his way into a government building, with hardly any surprise at all.

As photographs circulating online show, government supporters attacked Congressman Julio Borges with a pipe.

He spoke at a press conference after the attack with blood streaming down from his nose and mouth, and bloody stains on his button-down shirt.

#Venezuela oposition leader @JulioBorges attacked by pro-government groups during a peaceful protest. pic.twitter.com/85i0YrAfer

— Mariana_Atencio (@marianaatencio) June 9, 2016

Borges had been attempting to enter the headquarters of the country’s electoral body in downtown Caracas with other opposition figures. The area was heavily militarized, with lines of police looking on.

#Venezuela Opposition leader @JulioBorges beat by PAID gov’t thugs at electoral headquarters. #9Jun @CanadaFP @hrf pic.twitter.com/Q9uujpED2S

— Michael Welling (@WellingMichael) June 9, 2016

Borges accused police of pushing him toward gangs loyal to President Nicolas Maduro.

ÚLTIMa HORA| @JulioBorges: “Fuimos agredidos por colectivos con piedras, tubos, cascos y aparatos explosivos”. pic.twitter.com/OyqZN53I7T

— El Nuevo País y Zeta (@enpaiszeta) June 9, 2016

Watch on #Periscope: Julio Borges tras agresiin https://t.co/hSQmPqndzO

— MARY MENA (@MENAMARY) June 9, 2016

“Government supporters beat us with total impunity with pipes, stones, and explosives that went off in the middle of a group of lawmakers,” Borges said. “Maduro, what we want is to vote.”

The opposition is pushing for a recall referendum against Maduro this year. They accuse elections officials of dragging their feet to delay the process. Borges said the officials refused to meet Thursday. A Maduro official previously has said that there will be no referendum.

Digest powered by RSS Digest

Jun 09

Today’s News 9th June 2016

By admin in Economy

Mervyn King's Alarmist Warning: "All China's Assets In The US Might Be Annulled"

What is it about former central bankers who first destroy the fiat system with their monetarist policies, only to go into retirement, and preach the virtues of the one compound they spend their entire professional careers trying to destroy: gold. To be sure, when it comes to polar reversals of opinion, nobody comes even remotely close to Alan Greenspan: the former Fed chairman who is not only instrumental in launching the “Great Moderation”, which unleashed the current unprecedented global debt wave which will lead to unprecedented disaster sooner or later, has in recent years become one of gold’s biggest advocates as demonstrated most recently in “Greenspan’s Stunning Admission: “Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It.”

Now it’s the turn of his former colleague at the Bank of England, Mervyn King, who in an interview with the WGC’s Gold Investor monthly, pours cold water over Bernanke’s “explanation” that gold is merely a tradition, and says the following:

“I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold,” he adds.”

The then innocently pointed out that when it comes to defense against hyperinflation, gold remains the, well, gold standard:

“It’s still early days to conclude that around the world, governments have found the solution to maintaining price stability with a managed paper currency. We made real progress in the 1990s and early 2000s and a lot of countries went down that road and followed us. But hyper-inflation has clearly not disappeared – the second biggest hyper-inflation in history was in Zimbabwe in this century – so I can understand why holding gold would seem to be a sensible part of a national portfolio. Because there is clearly a need to take some precautions against an unknowable future.”

But the most interesting observation from Mervyn King’s interview comes courtesy of an observation by The Money Trap’s Robert Pringle, who writes the following about “Mervyn King’s alarmist warning“:

According to the World Gold Council, Mervyn King, former governor of the Bank of England, believes that in certain circumstances China’s assets in the US could be “annulled”. Mervyn King’s alarmist warning is made in an interview, entitled “Present perilous, future imperfect” that appears in the June issue of Gold Investor, a WGC publication. After pointing out that “China and other countries do not want to be in a situation where all their iternational assets are in effect dependent on the US”, he is quoted as suggesting that all China’s US assets could be at risk:

“Over the last decade or so, the claims by some emerging market countries on the US have grown. Who knows what the future holds, but China and other countries do not want to be in a situation where all their international assets are in effect dependent on the US. Of course the US would not want to renege on its debts, but if some awful conflagration occurred, then all China’s assets in the US might be annulled. So there are plenty of big concerns that make it extremely reasonable to have assets in your portfolio that are not dependent on the goodwill of other countries.”

The choice of the word “annulled” suggests some kind of deliberate action. Under what scenario could this be even contemplated?

Does he have in mind some sort of armed conflict? That is suggested by his reference to an “awful conflagration”. He appears to be suggesting that if China and the US went to war, the US could cancel the Treasuries China owns (only those China owns?) and not repay (nor service the interest) unilaterally.

He does not say so, but of course this would cause all US Treasuries to collapse, and the US would not be able to issue new bonds.

Temporary suspension?

If he means that the US would suspend paying interest or capital on the bonds that it owes to China (and its allies) only while the war went on, then he cannot mean ‘annulled.’

It is fair to point, as he does, to concerns that make it reasonable to have assets in a central bank’s portfolio that are not dependent on the goodwill of other countries.

It is also quite legitimate to consider extreme scenarios other than those mentioned by Mervyn King; e.g. that US fiscal deficits might grow out of control, ending in rapid inflation or even hyperinflation.

But for Mervyn King to say that there are circumstances in which the US could annul its debts is astonishing. Mervyn King’s alarmist warning goes far beyond scenarios outlined in his recent book “The End of Alchemy”

All we can add to this is that with Icahn, Druckenmiller, and Soros, and now Mervyn King too, all warning that major trouble is coming, we are confident that the algos and the 17-year-old hedge fund managers will be right in betting it all on central banks to keep pushing the S&P to new record highs and beyond even as the global economy grinds to a halt.

Source
How Companies 'Collaborate' to Rip Off and Get Rid of Workers

By EconMatters

We occasionally cover some of the odd and weird phenomenons in the current corporate America. We are going to categorize them as Workplace NWO (NWO = New World Order). Here is the latest we’ve observed.

The current prevalent corporate slogan is ‘team work’ and problem solving, decision-making through ‘collaborative effort’. On the surface, this represents a healthy evolution of workplace process, like the old saying goes ‘Two brains are better than one”.

However, in our previous post we noted how PIP (Performance Improvement Plan) has become a popular tool used by the new generation of less experienced managers to get rid of high performance, more experienced, ‘black horse’ employees who do not fit into an otherwise mediocre ‘team’. In addition to PIP, there’s another way to still rip the benefit, so to speak, of such employee (after all, you can’t put every such employee on PIP) under the cloak of ‘collaboration’.

Read: How Companies Are Using PIP to Humiliate and Get Rid of Workers

Cool, You Got A Project That Nobody Else Can Deliver

In this situation, the high performance ‘black horse’ employee is typically given a challenging project or task that nobody else in the ‘team’ is capable of delivering. The project usually requires recurring deliverable, that is, it is not something you do it one time and leave.

At first glace, this seems to demonstrate manager’s confidence as well as confirmation in this employee’s skills and capabilities. So this more experienced and high performance ‘black horse’ employee gets a moral boost and works hard on the project. The project eventually gets completed with resulting compliments even from higher-ups. A job well done and this employee gets some deserving recognition, everything seems fair and square, right? Not so fast.

Collaborate to Rip Off

As mention before, this is a recurring project. Usually, the most difficult part is to establish a sustainable and repeatable process for product creation and delivery on schedule every and each time. In a more traditional workplace, the recurring portion of the project should also fall under the initial project leader and creator (in this case, the ‘black horse’ employee) to continue managing the ongoing process and deliverable. However, in the ‘modern’ corporate workplace dominated by Gen X and millennial, nothing is done with rules based on standard moral compass any more.

Read: How Some Companies Are Scamming Job Applicants

What typically happens is that as soon as the project gets some ‘credibility’ and ‘buzz’ (mostly on the back of that ‘black horse’ employee), the manager goes ‘let’s use the collaborative approach’ and distributes project ownership part and parcel to other junior and mediocre ‘team members’. After all, following (an established process) is much easier than creating.

Lead a Project without Ownership

This means this ‘black horse’ employee is still the ‘project leader’ responsible and accountable for the project outcome, but does not have true project ownership any more. You might ask what is the purpose of the manager doing so? Well, for one thing, the ‘black horse’ employee is still the ‘project leader’, so he or she has to do a lot of work mopping up after other ‘team members’. If anything goes wrong, which most likely will, the blame is on the project leader. Secondly, since the initial project leader has established credibility, other team members who now become part project owner are able to ride on that coat tail and may get away with inferior product delivery. A third reason is that every team member gets a bite out of the sweet successful project pie instead of the out-of-favor ‘black horse’ employee getting all the glory.

Read: Getting Hired Now Takes Longer

Ripoff Cycle Repeats

The story usually does not end there. There will always be another difficult project, and again it will be assigned to the ‘black horse’ employee and then be taken away just like so. This high-performance and hard-to-terminate employee most likely will not get much benefit on the performance review since most of his or her achievement has now morphed into the ‘collaborative effort” of the team.

Everybody Loves Collaboration!

Of course, all other team members support and love how manager is looking out for their ‘personal development’. What’s not to like when somebody else does the heavy lifting and you get to share the credit and glory regardless how little contribution you have made? And since we are in a distorted democratic society where majority rules, this could go on forever with support and approval from seemingly everywhere. The only ‘victim’ is the ‘black horse’ employee who is constantly trying to rein in project quality control behind the scene.

But At Whose Expense?

What is very likely going to take place is that those other relatively mediocre ‘team members’ get noticed or even moved up in positions due to the ‘contribution’ and ‘collaborative’ work of a few high-visibility project, while the brain behind these projects will never move up or go anywhere. Eventually, this high performance, hard-to-terminate employee gets so frustrated and moves on to a new job at a different company.

‘More Bang for the Buck’

Similar to PIP, this ripoff disguising as ‘collaboration’ is something that emerged in corporate America within the past 5-10 years, and also has become part of the standard operating procedure for the new generation of middle managers.

Both achieve the same goal – getting rid of a worker disharmonious to the ‘team’ but otherwise hard to terminate based on performance alone. The difference is that PIP leaves a paper trail in HR records with some legal risk, whereas ‘collaborate to rip off’ is much more subtle and stealthy while getting more bang for the buck, figuratively speaking, plus zero risk of a law suit.

Like a Pack of Wolves

In my view, there’s is really nothing significantly unreasonable with PIP or the ‘Collaborative Approach”; however, the problem lies squarely with how they are implemented by the new breed of middle managers after the Boomer generation.

The post-boomer new generation middle managers tend to have a heightened sense of self-entitlement and like to rely on standardization as a managerial skill. That is, their main goal in managing people is to have a ‘group-think-and-act’ team with similar degree of inexperience. So these managers will not tolerate anyone who does not fit the preferred team mode. They also tend to register low on the moral compass, and like to band together like a pack of wolves taking out ‘obstacles’ in the process of climbing the corporate ladder.

Short Term Win (maybe), Long Term Total Loss

I know some will argue that this is what Corporate America needs to complete in the global world against the emerging economies like China or S. Korea. I believe this is purely short-sighted and may see some short-term benefits, but in the longer term, Corporate America will lose out with these Workplace NWO.

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle
No Fly No Buy: Obama's Last Ditch Effort To Cripple The Second Amendment

Submitted by Joshua Krause via TheDailySheeple.com,

There’s one thing that all gun grabbing politicians have in common. They are all quite adamant that they don’t want to take your guns. They’ll tell you over and over again that all they want is a few reasonable regulations. Every once in a blue moon they’ll let their guard down in front of an reporter, and reveal their true long-term intentions, but by and large they’re always trying to put a reassuring face on their gun grabbing agenda.

Obama for instance, has consistently claimed throughout his presidency that all he wants is a few “reasonable” restrictions, and that all he intends to do is keep guns out of the hands of “bad guys.” Whenever he talks about it however, you can read between the lines and find his ulterior motives.

At a recent Town Hall meeting, Obama was put on the spot by gun store owner, who asked him why he wants to restrict gun use for law-abiding citizens. The video has since gone viral among liberals who think that the president gave a stellar response. In reality, he merely showed us his true colors.

“First of all, the notion that I or Hillary or Democrats or whoever you want to choose are hell-bent on taking away folks’ guns is just not true,” he claims “And I don’t care how many times the NRA says it.” Obama then goes on to make the case for restricting gun ownership for people who find themselves on the no fly list, and cites an example of someone who has been visiting ISIS websites but is still allowed to buy firearms.

“So sir I just have to say respectfully, that there is a way for us to have common sense gun laws. There is a way for us to make sure that lawful responsible gun owners like yourself, are able to use them for sporting, hunting, protecting yourself. But the only way we’re going to do that is if we don’t have a situation in which anything that is proposed is viewed as some tyrannical destruction of the Second Amendment.”

Unfortunately, his idea to restrict gun ownership for people on the no-fly list is exactly the kind of thing that could lead to the tyrannical destruction of the Second Amendment. In a perfect world it would be nice if we could keep guns away from terrorists, but restricting the gun rights of people who are on the no-fly list is anything but reasonable or “common sense.”

That’s because literally anyone can find themselves on the no-fly list. You don’t have to commit a crime and you don’t need to visit any suspicious websites. They can take away your right to travel freely without any due process whatsoever. At best, all the government needs to do is hear that you might have some sympathies for a terrorist organization, and you’ll be barred from being on a plane for life.

As Techdirt.com pointed out last year, more than a third of the people on the no-fly list have no known terrorist affiliations. If Obama’s plan were ever put in place, you could lose your right to bear arms over nothing more than a hunch or a rumor.

Leaks to the Intercept revealed that the “process” by which people are put on either the no fly list or the terrorist watch list basically involves hunches, and revelations from just a few months ago show that DHS still uses flim flam pseudo science to put people on the list based on hunches that the government laughably calls “predictive judgment,” but which experts have said has no scientific basis whatsoever.

If you want to understand how incredibly wrong this proposal is, you just need to replace “buy guns” with something else, like “the right to assemble” or “the right to use the internet.” It’s easy to say: “What could possibly be the argument for allowing a terrorist suspect to use the internet?” But then you remember that these aren’t actual suspects — they’re just people put on a list by law enforcement with no thorough process, let alone due process to defend themselves or to get off the list. And, of course, being a “suspect” doesn’t mean you’re guilty. Innocent until proven guilty used to actually mean something.

And let’s not forget, that our government has a very broad definition of “terrorist,” and has in the past claimed that conservatives, libertarians, veterans, and Christians should be watched closely for their supposed terrorist potential (i.e., the groups that are most likely to own firearms).

Sorry Obama, but you’re a gun grabber plain and simple. At best perhaps, you’re ignorant of what your proposal could do to our rights, and at worse you’re lying to the American people. You know exactly what a “no-buy list” would lead to. Furthermore, the fact that more guns were sold during your administration than any other in history does not prove that you’re not trying to take our guns, it’s only proof that you’ve failed to take them. You can sugarcoat your anti-Second Amendment vision, and claim that you just want to make us all a little safer, but we know what your ideas would do to our rights.
Americans Have Never Been Fatter – And It's Getting Worse

Two recent reports from the Centers for Disease Control (CDC) show that efforts to encourage Americans to lose weight aren't working.

In one study of more than 5,400 adults, the results show that 33% of US adults are overweight, and 38% of US adults are obese. Breaking the data down a bit further, the report writes that "the age-adjusted prevalence of obesity in 2013-2014 was 35% among men, and 40.4% among women." Additionally, more than 5% of men and nearly 10% of women came in morbidly obese.

For adults, people are considered overweight when their body mass index reaches 25, obese when it hits 30, and morbidly obese when it reaches 40.

As an example, someone who is 5-foot-5 and weighs 149 pounds has a body mass index of 24, which is considered a healthy weight according to NBC News. If a pound is added, and that same person has a BMI of 25, the person is considered overweight. At 180 pounds that individual would have a BMI of 30 and would be considered obese.

In a second study done on children and teens, the results showed that 17% are obese and 5.8% were extremely obese. Obesity in kids is measured a little bit differently, it's how heavy they are compared to other kids the same age and height – those weighing more than 95% of kids the same age are considered obese.

People who are obese have higher rates of heart disease, diabetes, some cancers, arthritis, and Alzheimer's disease, however despite a lot of effort and millions of dollars spent, there is not much evidence the epidemic is diminishing.

From NBC News

It's not clear why obesity continues to worsen, despite many studies trying to put a finger on it.

"Numerous foundations, industries, professional societies, and governmental agencies have provided hundreds of millions of dollars in funding to support basic science research in obesity, clinical trials and observational studies, development of new drugs and devices, and hospital and community programs to help stem the tide of the obesity epidemic," the journal's editors, Dr. Jody Zylke and Dr. Howard Bauchner, wrote in a commentary.

"The obesity epidemic in the United States is now 3 decades old, and huge investments have been made in research, clinical care, and development of various programs to counteract obesity. However, few data suggest the epidemic is diminishing," they added.

"Perhaps it is time for an entirely different approach, one that emphasizes collaboration with the food and restaurant industries that are in part responsible for putting food on dinner tables."

Not only is it not diminishing, the Trust for America's Health projects that 44% of Americans will be obese by 2030, while the Centers for Disease Control and Prevention projects 42% of adults will be.

From a financial perspective, a Gallup and Healthways study shows that 34% of obese adults were more likely to suffer financially than non-obese adults.

* * *

It appears as though Americans could use some time away from smart phones and video games, and redirect their efforts to a gym. Obesity is also a prime example of the fact that throwing money at a problem does not necessarily make the problem go away.

Here are some other interesting facts from our #FatLivesMatter post.

Adult obesity by state

Here are the states with statistically significant increases in obesity between 2008 and 2015

And finally, the healthcare costs attributable to obesity…
The Federal Reserve's Strange Behavior Makes Perfect Sense

Submitted by Brandon Smith via Alt-Market.com,

I have made this comment many times in the past, but I think it needs to be stated again here: If you think the Federal Reserve’s goal is to maintain or repair the U.S. economy, then you will never understand why they do the things they do or why the economy evolves the way that it does. The Fed’s job is not to protect the U.S. economy. The Fed’s job is to DESTROY the U.S. economy to make way for a truly global system.

There seems to be a collective delusion within certain parts of the liberty movement that the “globalists” (the banking and political elites that promote total global centralization of finance and power) are a purely American or Western problem, and that they have some kind of loyalty to the success, or perceived success, of the U.S. “empire.” This is nonsensical when you look at the progression of the American fiscal system after the Fed was established over a century ago.

In the past 100 years, the U.S. has suffered a gradual but immense devaluation in the dollar’s real buying power. We witnessed the first long-term fiscal depression in the nation’s history. We saw the removal of the gold standard. We saw the dismantling of the greatest industrial base in the history of the world. We have struggled through the implosion of the derivatives and credit bubble, which Fed officials have openly admitted responsibility for. And now, we are on the verge of the final implosion of a massive equities bubble and the collapse of the dollar itself.

All of these developments require careful planning and staging, not recklessness or random chance. Free-market economies tend to heal and adapt over time. Only constant negative manipulation could cause the kind of steady decline plaguing the U.S. ever since the Federal Reserve was forced into being.

The Fed has had multiple opportunities to strengthen the economic lifespan of America, but has ALWAYS chosen to take the exact opposite actions needed, guaranteeing an inevitable outcome of crisis. The goal of internationalists and international bankers is to acquire ever more centralized authority, and thus, ever more centralized power. The U.S. is an appendage to the great vampire squid, an expendable tool that can be sacrificed today to gain greater treasures tomorrow. Nothing more.

But this reality just does not seem to sink into the skulls of certain people. They simply cannot fathom the idea that the Fed is a saboteur. Not a bumbling greed fueled monster, or even a mad bomber, but a careful and deliberate enemy agent with precise destruction in mind.

Case in point; the recent institution of the Fed rate hike program. No one really gets it and no one is asking the right questions. Why, for example, did the Fed begin raising rates in December? No one asked them to take such measures. Certainly not day traders in the market casino; they were too busy enjoying the fiat inflation of biggest equity bubble in the encyclopedia of humanity. The politicians weren’t demanding any drawback of Fed stimulus, they were too busy enjoying the fraudulent recovery afforded by the recapitalization of too-big-to-fail banks. So, again, why bother promoting rate hikes that are essentially guaranteed to cause a market crisis?

Some might argue that the Fed must raise rates slightly so that they have room to cut them again when their stimulus schemes eventually fail. This is certainly possible, however, such an action only reinforces the position that the Fed is deliberately undermining the U.S. system. To hike rates now only to then cut them immediately after would result in the end of faith in the central bank’s ability to administer our financial structure. A crash would occur regardless.

I do not believe the Fed intends to cut rates again, at least not until it is already too late to stall a full spectrum breakdown in stock markets. Even though the majority of analysts, mainstream and independent, hold the position that the Fed is unlikely to raise rates for a second time (or ever again), I am not convinced that this is the plan. The question remains — why begin raising rates at all if the goal is not to bulldoze forward and squeeze the U.S. economy?

As I wrote in my article “The Global Economic Reset Has Begun,” the Fed has a habit of doing exactly what it says it is going to do. They may fool the public as far as the exact timing of policy changes, but they never back away from the policy changes themselves. I cannot find a single instance in the history of the central bank in which they announced future measures and then didn’t eventually follow through within the year. This is how I predicted the first rate hike in December of last year, and it is why I believe another rate hike is coming this summer. Fed officials today have been adamant that at least two more rate hikes will be initiated in 2016. If they do not enact these hikes, it will be the first example that I will have witnessed or seen in research in which they “backed off” completely from a policy initiative.

Some analysts argue that this makes no sense. The Fed has spent the better part of the past eight years trying to keep equities markets alive. Why would they now risk crashing the same markets with rate hikes that will cut off corporations and banks from cheap or free overnight loans? Why would they strangle the steady stream of stock buybacks that have been supporting the markets for the past few years? Why risk the fragile rice paper psychology of the markets? Why would they kill the “golden goose”?

As the recent jobs report from the Bureau of Labor Statistics shows, our fiscal foundations are crumbling and eventually, the fundamentals of our economy will overwhelm central bank orchestrated optimism anyway. Keep in mind, the report of only 38,000 jobs added in May does not paint the full picture of the unemployment problem in America.

The BLS and the mainstream media consistently gloss over the REAL job loss statistics including U-6 measurements which indicate that more than 664,000 working age Americans were removed from unemployment rolls and are no longer “counted” as jobless. This brings the grand total number of workers without jobs or that are underemployed to nearly 95 MILLION! The BLS ignores these people in their primary calculations for the national unemployment rate, which magically dropped again last month to 4.7 percent.

While the “official” jobs numbers are bad enough to cause concerns among mainstream traders and economists, the real numbers are far worse.

Nearly every base economic indicator globally, from raw materials demand, to manufacturing and exports, to corporate earnings, to retail sales and employment are printing negative this year. Despite all of this, markets remains levitated (for now) because the insane assumption within the mostly inane world of stocks is that bad economic news ensures the fed will bow to market forces and support the equities bubble for another quarter. When the entirety of investment markets embraces a singular assumption, when the markets has "no doubts", this is when bad things happen.

I have to laugh when I hear the claim that the Fed “cannot raise rates” in light of the new data. The fed is not "trapped"; rather, it is the U.S. economy that is trapped with the Fed as the instigator. Obviously, the Fed was well aware of the real unemployment problem as well as numerous other negative data when they hiked rates the first time in December. So, let’s just say it plainly — The Fed is NOT dependent on data when making its decisions. The Fed does whatever it wants to do whenever it feels like doing it, and it is very likely that Fed policy decisions are made months in advance, while publicly scheduled policy meetings are designed just for show.

They may claim that they care about the latest dismal jobs report, or other detrimental fiscal developments, but they don’t. They have their own agenda and their own data points, many of which we will never be privy to.

I would also mention the fact that the Fed has raised rates during recessionary economic conditions on several occasions, including during the onset of the Great Depression; a move which Ben Bernanke later publicly admitted was the ultimate cause of the prolonged depression event. You can read my analysis of this in my article “What Fresh Horror Awaits The Economy After Fed Rate Hike?”

With May’s job report so negative even with all the BLS manipulation, it is presumed that the Fed will not hike rates again at their June meeting. I believe that the Fed is certainly capable of raising in June. The timing of the meeting, right before the vote in the UK on the Brexit referendum, is perhaps not a coincidence.

While I understand the argument that the Fed would be “better off” taking its time and raising in July or September, I want readers to entertain another possible scenario for a moment. Imagine if the Fed raised rates in June to everyone’s shock and surprise. Market turmoil is almost a guarantee. A hike in June BEFORE a Brexit event would also be easier to rationalize to the public than a hike after a Brexit event.

Imagine then that, again, to everyone’s shock and surprise, the Brexit vote is successful and the UK leaves the European Union (a supposed black swan that the IMF has warned will cause a global equities crisis).

At this point, who gets blamed for the resulting equities crash? The Fed? The citizens of the UK? Who? If the globalists wanted to trigger the next leg down in the global economy, I can’t think of better circumstances or a better smokescreen.

I also acknowledge the possibility that only one of these events might be necessary to increase market turmoil. But from the perspective of an evil-minded internationalist, wouldn’t it be spectacular to have both? I could be wrong, but it is something to think about…

If you want answers to questions on why the Fed takes the risks it does, or why internationalists engineer crisis events, I suggest you read my article “The Economic End Game Explained.” Suffice to say, the Fed serves the interests of globalists and Fabian socialists, not the interests of America as a nation, and the globalists know that chaos is the best method for influencing populations to accept a “new order.” I would also say that they are pulling the plug simply because this year is most opportune.

I don’t pretend to fully understand every detail of the timelines of globalists and the motivations behind them, but I do know that the evidence shows they have such timelines, and according to recent actions the clock appears to be running out.
Goldman Crushes Democrat's Dreams: Shows Obamacare Has Cost "A Few Hundred Thousand Jobs"
We suspect Lloyd Blankfein will be receiving a call from The White House (or Treasury) very soon as Goldman Sachs' economists did the unthinkable in the age of political correctness – while investigating the state of under-employment in America, the smartest people in the room found that ObamaCare has led to a rise in involuntary part-time employment, estimating that "a few hundred thousand workers" have been forced to cut hours and has "created disincentives for full-time employment."

Goldman's Jan Hatzius explains that they find mixed evidence to support the theory that the employer mandate under the Affordable Care Act (ACA) has contributed to the elevated level of involuntary part-time work.

Our estimates of the effect by industry do show signs of an effect, particularly among the sectors that had the greatest gaps in required health insurance coverage prior to implementation of the mandate, but the relationship is weak.

It is possible that the level of involuntary part-time workers could be a few hundred thousand higher than it would be otherwise as a result of the mandate, which is a small share of the 6.4 million workers employed part-time involuntarily, but potentially a much larger share of the “underemployment gap”.

Their research into the relative slack in the labor force notes that…
The share of workers who would like to work full-time but are only able to find part-time work for economic reasons has declined much more slowly than the unemployment rate, raising the possibility that structural factors could be keeping the involuntary part-time rate elevated (Exhibit 1). If true, this would suggest that there is currently even less slack remaining in the labor market than we have assumed.

One potential explanation of the structural rise in the ratio of share of part-time to full-time employment is the employer mandate in the Affordable Care Act (ACA).

In principle, the ACA should increase part-time employment as a share of total employment, from both the demand and supply side.
- On the demand side, some employers that do not offer health insurance coverage for full-time employees may seek to avoid penalties by relying on part-time labor instead.
- On the supply side, the ACA potentially creates disincentives for full-time employment, as it increases the implicit tax on marginal low- and middle- income earnings by reducing subsidies as incomes rise. It also loosens the link between employment and health insurance coverage – coverage can now be purchased more easily away from one’s employer – which may allow some who previously worked full-time for the offered health benefits to now work part-time instead. However, these supply-side effects should not be contributing to the elevated level of involuntary part-time work.
As Goldman concludes…

Overall we believe that the evidence suggests that the ACA has at least modestly elevated involuntary part-time employment.

While the effect is hard to quantify given the apparently loose relationship just noted, we would estimate that a few hundred thousand workers might be working part-time involuntarily as a result of the ACA. We reach this estimate by multiplying the difference between the actual and estimated involuntary part-time workers in the five sectors most affected by the ACA mandate by total employment in those sectors. We can reach a similar estimate by dividing the sectors into two groups weighted equally by total employment, and subtracting the difference between actual and estimated involuntary part-time employment in the less-affected group by the difference in the more affected group. These admittedly rough measures fall in the middle of the few academic studies on the topic, and suggest that while the effect of the ACA employer mandate is small compared to the total number of the 6.4 million workers employed part-time for economic reasons, it could constitute a more significant share of the estimated remaining “underemployment gap.”

There goes Blankfein's invite to Hillary's inauguration.
Currency Wars Re-Escalate As Bank Of Korea Eases To Record Low Rate With Surprises Rate Cut

With the 655th rate-cut globally since Lehman, the Bank of Korea stunned the market tonight and cut rates 25bps to 1.25% (a record low). Only 1 of 18 economists expected a rate cut as it appears record highs in US equities signal nothing about the underlying turmoil in the world’s economy. After 6 straight days stronger (against the USD), the Won is sliding back above 1160 as it seems the currency wars are reigniting in AsiaPac…

The 25bps cut, the first reduction since June 2015, shocked the market as only one BOK board member said at the May decision (according to the minutes) that there was a need to cut rates in near term.. which makes us wonder just what changed so quickly.

As Bloomberg reports, South Korea’s central bank unexpectedly cut the benchmark interest rate to a new record low as concerns rose that the government’s push to restructure indebted companies is putting pressure on the economy.

The decision to cut the seven-day repurchase rate to 1.25 percent was projected by only one of 18 economists in a Bloomberg survey. While Goldman Sachs Group Inc. was the sole forecaster predicting a cut at this meeting, Citigroup Inc., HSBC Holdings Plc, and Nomura Holdings Inc. were among those seeing a reduction in the next couple of months.

South Korea’s sovereign yield dropped to a record low this month after minutes of the May meeting showed a board member called for lower rates while the government and central bank announced plans to create a fund to facilitate corporate restructuring, boosting rate-cut bets as part of policy coordination. The board’s May minutes showed several members were worried about downside risks from the corporate overhaul such as unemployment and declining investment.

The market’s focus is on how many times the BOK will cut rates this year, Park Jong Youn, a fixed-income analyst for NH Investment & Securities Co., wrote in a report before the decision. Risks to the economy include unemployment from corporate restructuring, less fiscal spending due to front-loading in the first half of the year, and the anti-corruption law taking effect, according to Park, who expects two cuts in 2016.

The government and central bank said on Wednesday that they’ll create an 11 trillion won ($9.5 billion) fund to recapitalize policy banks and prepare for the potential financial market impact from corporate restructuring. Korean shipbuilders announced plans to sell assets and cut jobs to pare debt.

South Korea’s exports fell for a 17th consecutive month in May, although the pace of decline eased. Indicators of corporate activities such as investment ratios fell to post-financial crisis lows amid shipbuilders’ downsizing, while consumption held up.

The economy grew more than initially estimated in the first quarter, expanding by 0.5 percent from the previous three months. Household debt rose to a record high of 1,223.7 trillion won in the first quarter, central bank data show.

The three-year sovereign yield closed at an unprecedented 1.39 percent on Wednesday. The won gained 3 percent this month through Wednesday, erasing losses earlier this quarter, as expectations waned for a June rate increase by the Federal Reserve.

With inflation set to trail BOK’s 2 percent target for six straight months, Governor Lee will hold a press briefing in July to explain monetary policy measures to achieve the target. This accountability measure was one reason Goldman Sachs had predicted a cut at this meeting.

Now, who is next? Vietnam? Or does China come over the top with a big one?
What The IRS Just Revealed Should Start A Wave Of Outrage

Submitted by Allen West via AllenBWest.com,

Just imagine if this had been a Republican presidential administration these past seven years. The media would have been all over it like white on rice. However, for some very apparent reason, the liberal progressive media has dismissed or ignored scandals, faults, issues of deception, lies, abandonment of Americans to die, and tyrannical unconstitutional actions. Now the IRS has finally revealed its nefarious actions to us all – and it’s far worse than we thought.

As reported by the Washington Times,

“More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.

The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS. But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.

The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. That total is much higher than the 298 groups the IRS‘ inspector general identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long — potentially illegal — delays, and forcing them to answer intrusive questions about their activities.

Tea party and conservative groups said they was the target of unusually heavy investigations and longer delays, Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.

Sixty of the groups on the list released last month have the word “tea” in their name, 33 have “patriot,” eight refer to the Constitution, and 13 have “912” in their name — which is the moniker of a movement started by conservatives.

Another 26 group names refer to “liberty,” though that list does include some groups that are not discernibly conservative in orientation. Among the groups that appear to trend liberal are three with the word “occupy” in their name. And then there are some surprising names, including three state or local chapters of the League of Women Voters — a group with a long history of nonprofit work.”

There should be a wave of incredible outrage all across the nation knowing this has occurred. Lois Lerner should not be sitting back enjoying a nice six-figure tax payer-funded pension. Now, imagine if this were a Republican administration and the preponderance of these groups were liberal progressive? There’s no doubt t the manner of stories would be incessant and rampant — much like Abu Ghraib. It must be accepted that the liberal progressive left will leverage the power of the federal government against the common American citizen.

After the 2010 midterm election cycle President Obama and the left knew there was no way they could allow for a constitutional conservative grassroots movement to go forward. So they came up with the treacherous scheme of using the tax collection agency to undermine the effort.

In other words, the president of the United States turned the government on his own people — well, I suppose we’re not his own people. We still have to hear about the breaking and entering of Watergate, but mum’s the word on something as horrific as this. This was a widespread and calculated strategy, and if anyone wants to believe the president of the United States of America wasn’t cognizant of this activity, well, they’re delusional.

And if President Obama wasn’t aware of this, then someone needs to explain to us who is in charge of the federal government — namely, this episode. Yes, I would concur that much lies at the feet of the modern-day Rasputin, Valerie Jarrett. But, Obama can’t come up with some “plausible deniability” excuse. I suppose he also had no idea Ben Rhodes was lying about the Iranian nuclear deal or creating a false narrative about the Benghazi incident. And yes, I will continue to address Benghazi since four Americans no longer walk this earth — while those who abandoned them still do.

We may not know the full extent of the tyranny of the Obama administration until years afterwards. However, we should be careful about turning this country over to another tyrant.

I have to admit, I just don’t hear much discussion, reference, and quotes by the remaining three presidential candidates regarding the Constitution and individual rights. I’m not talking about populist messaging. I want to know how we shall restore this Constitutional Republic to its standing and regard for individuals and their right to petition the government for redress of grievances.

This is a very serious issue and it needs to be addressed — this should be a critical item to bring to the awareness of the American people. We truly do not need to be talking about someone’s individual court case. The fact that the Internal Revenue Service has released a list of groups that they targeted should not go unnoticed. This is a critical message point. And the liberal progressive left must be forced to admit if they do or do not consent to this type of abhorrent behavior.

It can no longer be dismissed as having never happened. What America do we live in that an agency can produce a target list? And it would be interesting to see the exact dates for each group when they were first targeted — I bet that would be rather revealing.

Here we thought we lived in a free country. Sadly it seems the last seven years have been anything but.
How The IRS Used Civil Asset Forfeiture To Ruin The Lives Of Two Connecticut Bakers

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

At the beginning of this year, Attorney General Eric Holder attempted to close an exploitable loophole in asset forfeiture laws. State and local law enforcement agencies often sought federal “adoption” of seizures in order to route around statutes that dumped assets into general funds or otherwise limited them from directly profiting from these seizures. By partnering with federal agencies, local law enforcement often saw bigger payouts than with strictly local forfeitures.

The loophole closure still had its own loopholes (seizures for “public safety,” various criminal acts), but it did make a small attempt to straighten out some really perverted incentives. But deep down inside, it appears the DOJ isn’t really behind true forfeiture reform. In fact, it seems to be urging local law enforcement to fight these efforts by pointing out just how much money these agencies will “lose” if they can’t buddy up with Uncle Sam.

– From the post: How the Department of Justice is Actively Trying to Prevent Civil Asset Forfeiture Reform

It’s been a while since I’ve reported on the lawless and barbaric practice of civil asset forfeiture. However, just because it hasn’t been a focus doesn’t mean it isn’t happening. Indeed, it appears the same federal agencies that couldn’t find a bank executive they didn’t want to coddle, take particular pleasure in harassing and abusing average Americans generally, and small businesspeople in particular.

The following case highlighted by the Huffington Post is an extremely sad and sobering expose. Below are some excerpts, but you can read the whole thing here: IRS Returns Bakery’s Money After 3 Years. Now It Wants To Put The Owners In Prison.

In May 2013, David Vocatura watched $68,000 disappear.

He was at his family’s bakery in Norwich, Connecticut, when a squad of armed IRS agents filed into the store. The agents wanted to know if Vocatura and his brother Larry were trafficking drugs or running a prostitution ring. The brothers had no idea what they were talking about.

The IRS refused to believe Vocatura’s Bakery was operating on the up and up. Agents said the business raised red flags because of a series of cash deposits in sums under $10,000, the amount at which banks are required to report transactions to the federal government. They said this behavior was consistent with a crime known as structuring, which the IRS defines as making calculated financial transactions in order to skirt reporting requirements. The agents had no evidence of other wrongdoing, but thanks to a controversial law enforcement tool known as civil asset forfeiture, they didn’t need any to seize every penny in the Vocaturas’ bank account: $68,382.22.

Under the practice of civil forfeiture, authorities can move to permanently take property they suspect of being linked to criminal activity, without obtaining a conviction — and, in cases like the Vocaturas’, without even charging the owner with a crime.

USA! USA!

For the past three years, the brothers have been fighting to get their money back, maintaining they’d done nothing wrong. The IRS has responded by subjecting David, 53, and his brother Larry, 69, to a series of increasingly aggressive legal maneuvers — including threats of significant prison time and additional fines — in an attempt to strong-arm them into permanently forfeiting their assets.

On Tuesday, the Institute for Justice, a libertarian public interest law firm, filed a lawsuit in U.S. District Court for the District of Connecticut on behalf of Vocatura’s Bakery, demanding that the IRS promptly return their money. The suit argued that the Vocaturas were just the latest example of the government hastily seizing property, and then going to extreme and even unconstitutional lengths to justify it after the fact.

Hours after the suit was filed, the IRS said it would finally give the Vocaturas their money back. But the prosecutor didn’t drop the case. Instead, he now plans to mount an expansive investigation into the bakery’s finances, looking for a reason to bring criminal charges against the brothers.

At issue in the Vocaturas’ case are hundreds of deposits between March 2007 and April 2013 that ranged from $7,000 to $9,900 — a total of around $2.8 million. The Vocaturas say the deposited money was from the bakery’s sales, as they were doing mainly cash business at the time, and they have a less suspicious explanation for why the deposits were so close to the reporting limit. David Vocatura says a representative from their local bank told him that an employee had to fill out forms each time they brought in more than $10,000, so he decided to make life easier for the bank attendants by making smaller, more frequent deposits.

If the IRS has proof that the Vocaturas were deliberately structuring payments or hiding illicit proceeds, it hasn’t provided it.

Earlier this month, Peter S. Jongbloed, assistant U.S. attorney for the District of Connecticut, served the Vocaturas a grand jury subpoena calling for them to turn over every financial record from the six years between March 2007 and April 2013, so the agency could finally begin investigating the business’s tax and regulatory compliance. At the time, it was the latest reminder that the government was intent on taking the brothers’ assets, even if it had to change its approach three years after the fact.

The Institute for Justice argues that the subpoena is an attempt to retroactively justify an improper seizure and punish the Vocaturas for not rolling over.

“At this point, the government is in so deep, they’ve put these guys through three years of hell — and held onto their money for three years — and so they feel like they need to justify it,” said Robert Everett Johnson, an attorney for the Institute for Justice who is representing the Vocaturas. “So now they’re going to conduct this investigation into the bakery in some effort to try to find something that will make it look like they were doing the right thing all along.”

Yes, my fellow Americans, this is your government.

The government’s seizure of the Vocaturas’ account is part of a broader pattern of concerns about the use of civil asset forfeiture, a practice that brings in billions of dollars each year to federal, state and local law enforcement agencies.

Critics say each step of the process is ripe for abuse. Authorities frequently base seizures on weak circumstantial evidence. In some of the most publicized civil asset forfeiture cases, the mere presence of cash has constituted enough probable cause to justify a seizure. In cases like the Vocaturas’, the act of depositing cash isn’t necessarily illegal on its own, but authorities are quick to treat anyone who does it like a criminal.

Once the government seizes property, it’s difficult to get back. Unlike in criminal trials, where suspects are considered innocent until proven guilty, property owners must often prove their innocence in civil forfeiture cases.

Once someone’s assets are forfeited, those proceeds go to the agency that made the seizure — and there is very little oversight of how that money can be used. Critics of civil asset forfeiture say this dynamic incentivizes law enforcement officials to bring in as much money as possible, creating a motive to “police for profit” rather than for public interest or safety.

The IRS has used structuring allegations to seize hundreds of millions of dollars through civil asset forfeiture in recent years, some of which has been funneled directly into the agency’s coffers. A report from the Institute for Justice put the total value of forfeitures — money the government kept in IRS structuring cases — at nearly $125 million between 2006 and 2013.

Of the more than 2,500 seizures in the report, at least one-third involved no claims of criminal activity beyond the cash transactions themselves. Only 1 in 5 were ultimately prosecuted as a criminal structuring case. The numbers also show that the IRS failed to keep seized money in many cases, which could be a troubling sign of over-prosecution.

The Vocaturas’ home state of Connecticut is a hotbed for structuring-based seizures, according to IRS data provided to the Institute for Justice through a public records request. Among states with a single U.S. attorney, Connecticut ranks third worst for these sorts of seizures. Between 2005 and 2013, federal prosecutors in the state approved 9.2 seizures for suspected structuring for every 10,000 businesses in the state — a rate that the Institute for Justice says is dramatically higher than other states.

In February, 33 months after the bakery’s bank account was seized, Jongbloed broke his silence. He offered the Vocaturas an opportunity to end their ordeal, while also preventing the public backlash that had impeded recent structuring cases.

Though the federal government had still not filed criminal charges against the brothers, Jongbloed wanted them to plead guilty to structuring, a felony, and admit that they’d “acted with the intent to evade the reporting requirement.” By doing so, the Vocaturas would be subject to a potential four-year prison sentence and would have to agree to forfeit both the initial $68,000 and an additional $160,000 in personal assets between them.

But by getting the Vocaturas to admit guilt, the IRS would also have been able to keep the brothers from speaking out about their case. The plea deal would have served as an admission that the government had some cause to take their money. Nobody could accuse the government of once again abusing civil forfeiture if the victims ultimately handed over the money as punishment for a crime they had copped to.

Jongbloed noted that sanctions could be harsher if the case went to trial, and encouraged the Vocaturas to take the deal. The brothers, who still insist that they’ve done nothing wrong, rejected that offer.

On May 10, Jongbloed responded by demanding more than six years of business records documenting all of the bakery’s dealings. He finally wants to figure out if the Vocaturas had actually broken the law when IRS agents raided their account.

While the government is finally giving the Vocaturas their money back, the fact that they were able to hold it for so long without taking concrete action shows how much leeway they have in these cases.

As long as the current system of civil asset forfeiture remains intact, new federal guidelines or policy are unlikely to be effective, said Steven L. Kessler, a New York attorney who has defended a number of clients in high-profile forfeiture cases. He believes clear legislative action is needed to keep the government from compromising people’s property rights in the hunt for money.

“When the government says they’re going to do that on their own, they’re going to make the change, everyone is very happy and we move on to the next story,” said Kessler. “Rarely does anything change, because we’re dealing with a guideline — we’re dealing with something that is within the full discretion of the government.”

There are some rumblings in Congress for a legal overhaul.

Last week, Rep. Jim Sensenbrenner (R-Wis.) and a bipartisan group of co-sponsors introduced a bill to rein in civil asset forfeiture. Among the most significant measures, the Deterring Undue Enforcement by Protecting Rights of Citizens from Excessive Searches and Seizures Act of 2016, or the DUE PROCESS Act, would shift the burden of proof from the property owner to the government, and raise the standard needed to validate a forfeiture. If passed, the new law would require the government to provide “clear and convincing” evidence that property was substantially connected to criminal activity — still below the “beyond a reasonable doubt” standard for criminal convictions.

This needs to pass.

These legislative fixes would do little for Vocatura’s Bakery, however.

While their legal saga began as a civil forfeiture case, the IRS has now decided to pursue criminal forfeiture against them. That isn’t addressed in the DUE PROCESS Act, which only deals with civil cases.

Nor is it assumed that these bills will pass. Civil asset forfeiture reform has hit snags in Congress before, in part due to aggressive lobbying from law enforcement groups intent on preserving the practice.

Yep. Recall: Land of the Unfree – Police and Prosecutors Fight Aggressively to Retain Barbaric Right of “Civil Asset Forfeiture”

“The way you would expect the criminal justice system to work if you were reading your high school civics textbook is that you’d expect the government first to investigate people, then to obtain an indictment if they think something wrong has happened, and then to obtain a conviction and then finally to punish them,” he said.

“But in this case that all has happened exactly backwards,” Johnson continued. “The government first punished the Vocaturas by taking their property, then they tried to get them to plead guilty to charges, and only when they refused to plead guilty did the government investigate.”

This is not what freedom looks like.

Digest powered by RSS Digest

Jun 08

Today’s News 8th June 2016

By admin in Economy

Germany May Be A Bigger Threat To The European Union Than Brexit

Submitted by John Mauldin via MauldinEconomics.com,

Two polls were recently released that call the European Union in question.

A poll in Italy reported that the Five Star Movement (a populist political party that wants to hold a referendum on whether Italy should remain in the European Union) was the most popular political party in the country ahead of local elections scheduled for next month.

On the same day, British researchers who surveyed nine EU countries reported that 45 percent of respondents believed that their country should hold a referendum on whether to remain in the EU.

48% of Italians want to leave the EU

Reuters tried to explain that political scandals, which have undermined public confidence in current Prime Minister Matteo Renzi’s Democratic Party, affected the poll numbers. But this is Italy we’re talking about, the same country that brought us Silvio Berlusconi.

The country is no stranger to political scandals. A few instances of corruption would not be enough to make an anti-establishment party like the Five Star Movement as popular as it has apparently become.

The problem in Italy is economic. Unemployment in at least four of Italy’s southern provinces is over 18.8 percent, and in the other southern provinces, it is between 12 percent and 18.7 percent. And Italy hasn’t yet solved its non-performing loan problem.

Two simultaneous phenomena are occurring here. The first is disillusionment with the Italian government. What was an economic problem has become a political problem, and since Italy is a democracy, its leaders can be voted out of office. The next general election is not until 2018, but if developments continue to unfold in Italy, the situation is only going to get worse for mainstream political parties.

The second, deeper question is whether Italy wants to stay in the European Union. A Euroskeptic party is becoming the most popular political party in the eurozone’s third-largest economy. The rise of euroskepticism manifests itself in the polls, too—58 percent of Italians wanted a referendum on EU membership, and 48 percent would have voted to leave the EU.

In France, one of the twin pillars of the EU, 55 percent of survey respondents agreed a referendum should be called, and 41 percent said they would vote to leave.

Brexit debate adds fuel to the fire

Most debates over Brexit have revolved around potential consequences for Britain—whether Scotland might push for another independence referendum and join the EU on its own terms, or whether and how much (in terms of money and jobs) the UK would lose as a result of a decision to exit.

What was less addressed, however, is how Britain’s stand against the EU and the public debate is dividing the rest of Europe. Prime Minister David Cameron negotiated a series of exceptions early this year. Even if the UK remains, it will have a new set of understandings with Brussels, and other countries may follow its lead.

If Britain leaves and doesn’t undergo an apocalyptic depression, poll numbers might begin to trend upward—and they don’t have a long way to go to become the majority in some of the EU’s most influential states.

Germany is a ticking bomb

At the center of the European Union is Germany whose export-dependent economy is gradually falling apart. (Geopolitical Futures, in partnership with Mauldin Economics, has published a detailed study of the German economy. Click here to claim your free copy).

The German economy has thus far been able to avoid the crisis of the exporters that has affected every other major exporting country in the world – from the producers of manufactured goods like China and South Korea to commodity exporters like Russia and Saudi Arabia.

The US Treasury Department recently announced that the US would monitor China, Japan, Korea, Taiwan, and Germany for potential currency manipulation. The report noted that Germany has built up a significant bilateral trade surplus with the US, in addition to holding the second-largest current account surplus in the world, at approximately 8.3 percent of GDP.

It isn’t currency manipulation that has put Germany on this monitoring list. It is the fact that European and Chinese demand for German products has fallen. As a result, the US has become the destination for Germany’s exports in order to make up the difference. Export to the US, however, is a Band-Aid on a deeper wound.

There are a number of factors besides exports that go into Germany’s current account surplus. Germany has become a significant creditor. Its net foreign assets rose from almost zero in the 1990s to around 40 percent of GDP by the end of 2010, according to economic scholar Jörg Bibow.

Interest rates are low, and German banks are viewed as a safe haven in the European Union for stashing money. But since Germany is a creditor, many of the assets on German books are the unpaid debts of other eurozone countries. That means Germany is deeply exposed to a eurozone that still has not meaningfully recovered from the 2008 crisis.

Account surplus is usually seen as a positive. But if Germany has a surplus of 8.3 percent of GDP, why not use that surplus to stimulate domestic demand? Germany must be either unwilling or unable to use the surplus to stimulate domestic demand. This is in part because Germany is a creditor and invests abroad and in its own banks and companies.

And this gets at the root of the entire problem. Germany exports almost half of its GDP. Germany imposed austerity on the EU after 2008, which has resulted in stratospherically high unemployment rates in southern Europe.

Demand has not returned to pre-financial crisis levels. Germany has been able to skirt the crisis while most of Europe is either still suffering or is in the doldrums. There are limits to US demand and its tolerance of German exports.

All of this offers different unique prisms through which to see how the European Union’s connective tissue is fraying as the bloc’s economic logic becomes increasingly illogical.

Germany is the powerhouse of the EU and the fourth-largest economy in the world. But the truth is, the Germans are facing a profound crisis – and there's no way they can prevent it.
"It's A Seismic Shift" – Japan's Biggest Bank To Quit As JGB Primary Dealer

Ever since the launch of Japan’s QE, and worsening in the aftermath of January’s shocking NIRP announcement, Japan’s bond market, which moments ago slid to new record lows yields across the curve, has had its share of near-death experiences: between repeated VaR shocks, to days in which not a single bond was traded, to trillions in bonds with negative yields, it has seemed that the Japanese Government Bond is on life support. That support may be ending.

According to Nikkei, and confirmed by Bloomberg, Japan’s biggest bank, Bank of Tokyo-Mitsubishi UFJ, is preparing to quit its role as a primary dealer of Japanese government bonds as negative interest rates turn the instruments into larger risks, a fallout from massive monetary easing measures by the Bank of Japan. While the role of a Primary Dealer comes with solid perks such as meetings with the Finance Ministry over bond issuance and generally being privy to inside information and effectively free money under POMO, dealers also are required to bid on at least 4% of a planned JGB issuance, which as the Nikkei reports has become an increasingly heavy burden for BTMU.

In other words, one of the key links that provides liquidity and lubricates the Japanese government bond market has just decided to exit the market due to, among other thinks, lack of liquidity entirely due to the policy failure of Abenomics in general, and Kuroda’s disastrous monetary policies in particular. One could, of course, ask just how does BTMU plan on also exiting the Japanese economy itself, if and when the country’s $8 trillion bond market implodes, but we doubt the bank will ever be able to answer that.

The ministry is expected to let the bank resign.

Japan has 22 primary dealers including megabanks and major brokerages. Several foreign brokerages had pulled out before as part of restructuring efforts at home or for other reasons, but BTMU will be the first Japanese institution to quit.

In a revolutionary shift, one created by the Bank of Japan itself, banks, once the biggest buyers of JGBs, see little appeal in sovereign debt today. The bonds have very low yields, and a rise in interest rates could leave banks with vast unrealized losses. Private-sector banks held just over 229 trillion yen ($2.13 trillion) in JGBs at the end of 2015, nearly 30% less than at the end of March 2013, before the BOJ launched massive quantitative and qualitative easing measures.

Negative rates introduced this year by the BOJ reinforced the trend. The highest bid yield on benchmark 10-year JGBs sank to a record low of negative 0.092% on Thursday. BTMU was the fifth-largest buyer of Japanese government bonds among the 22 primary dealers until spring 2015, but ranked 10th or lower between October 2015 and March 2016 as shareholders turned up their nose on government debt.

Ironically, the same NIRP that was supposed to save Japan’s economy is now set to kill Japan’s bond market: Japan’s three megabanks halved their JGB holdings to a total of 54 trillion yen in the three years through March. They get little benefit from building up their positions on negative-yield bonds, which result in a loss when held to maturity.

Meanwhile, Peter Pan Kuroda and his merry monetary lunatics, continue continue to crowd out the entire market, purchasing 100% of gross issuance, or a whopping 80 trillion yen in JGBs annually, and last year its holdings surpassed that of commercial banks in 2015 for the first time in about 40 years.

For now, Japan’s increasingly fragile bond market appears stable thanks to the central bank’s massive intervention, however the irony is that the more the BOJ intervenes the more it will have to intervene to sustain the illusion that there even is a bond market. That will not last long, and now that the Primary Dealer exodus has begun, what little liquidity there was in JGBs will evaporate completely.

For now, few expect immediate turmoil from BTMU ceasing to be a primary dealer. But a drop in private-sector interest could undercut the market in the medium to long term. Actually replace “could” with “will.”

Analysts, while slow to pick up on the news, are waking up to a changed world for the world’s second largest government bond market. According to Chotaro Morita, chief rates strategist at SMBC Nikko Securities, news that Japan’s largest banks may return its primary-dealer license signals a “seismic change” in Japan’s govt bond market, initially triggered by BOJ’s QQE.

Trying to downplay the impact of this shocking move, Morita said that the short-term impact on JGB market may be limited given BOJ’s purchases, however he adds that “if other large banks follow this move, it’s hard to say there will be no impact.”

According to the Nikkei that’s precisely what is about to happen: Sumitomo Mitsui Financial Group and Mizuho Financial Group also may consider quitting like BTMU.

As a reminder, according to the BIS, Japan had a little over $8 trillion in government debt as of 2015.
Ali Is Dead, Fear Is Alive & Free Speech Is Being Dealt A Knock-Out Punch

Submitted by John Whitehead via Rutherford.org,

“What are the defenders of free speech to do? The sad fact is that this fundamental freedom is on its heels across America. Politicians of both parties want to use the power of government to silence their foes. Some in the university community seek to drive it from their campuses. And an entire generation of Americans is being taught that free speech should be curtailed as soon as it makes someone else feel uncomfortable. On the current trajectory, our nation’s dynamic marketplace of ideas will soon be replaced by either disengaged intellectual silos or even a stagnant ideological conformity. Few things would be so disastrous for our nation and the well-being of our citizenry.”—William Ruger, “Free Speech Is Central to Our Dignity as Humans“

As a nation, we have a tendency to sentimentalize cultural icons in death in a way that renders them non-threatening, antiseptic and easily digested by a society with an acute intolerance for anything controversial, politically incorrect or marred by imperfection.

This revisionist history—a silent censorship of sorts—has proven to be a far more effective means of neutralizing radicals such as Martin Luther King Jr. than anything the NSA, CIA or FBI could dream up.

In life, King called for Americans to rise up against a government that was not only treating blacks unfairly but was also killing innocent civilians, impoverishing millions, and prioritizing the profits of war over human rights and dignity. This was a man who went to jail over racial segregation laws, encouraged young children to face down police dogs and water hoses, and who urged people to turn their anger loose on the government through civil disobedience. King actually insisted that people have a moral responsibility to disobey unjust laws.

In death, however, King has been reduced to a face on a national monument and a national holiday, neither of which even hint at the true nature of the man: fiery, passionate, single-minded in his pursuit of justice, unwilling to remain silent in the face of wrongdoing, and unafraid of offending those who might disagree with him.

A contemporary of King’s, heavy-weight championship boxer Muhammad Ali followed a different path as a social activist and “breaker of boundaries.” Like King, Ali didn’t pull any punches when it came to saying what he believed and acting on it. Yet already, in the wake of Ali’s passing, we’re being treated to a sentimentalized version of the heavy-weight boxer.

In life, Ali was fast-talking, fast-moving and as politically incorrect as they come. He became an early convert to the Nation of Islam, a black separatist religious movement whose membership at one time included Malcolm X and Louis Farrakhan. He denounced his “slave name” (Cassius Marcellus Clay) and refused to be the “white man’s Negro.”

He was stripped of his boxing title, arrested and threatened with five years in prison and a fine of $10,000 after refusing to be drafted into the Army as a conscientious objector to the Vietnam War. “My conscience won’t let me go shoot my brother, or some darker people, or some poor hungry people in the mud for big powerful America,” declared Ali. “And shoot them for what? They never called me nigger, they never lynched me, they didn’t put no dogs on me, they didn’t rob me of my nationality, rape and kill my mother and father. … Shoot them for what? How can I shoot them poor people? Just take me to jail.”

As First Amendment scholar David L. Hudson Jr. notes, “Ali’s remarkable career and life placed him at the vortex of these First Amendment freedoms… Ali freely exercised his religious faith. He regularly spoke provocatively on a variety of topics. The press was abuzz with coverage and criticism. Thousands assembled in support of him, and the champion himself took part in rallies, parades and marches. Some petitioned the government to redress the injustice of his conviction for refusing military service, which resulted in his being exiled from the boxing ring for his beliefs.”

It took a legal battle all the way to the U.S. Supreme Court for Ali’s religious objections to serving in the Army to be given credence and his First Amendment arguments to prevail. The case was Clay v. United States.

That was in 1971.

Forty-five years later, Ali is dead, fear is alive, and free speech is being dealt one knock-out punch after another.

Indeed, talk-show celebrity Piers Morgan has been soundly trounced and roundly censured for daring to suggest that Ali—a champion of the First Amendment who liberally peppered his speech with words (nigger and Uncle Tom) and opinions (“the white man is the Devil“ and “I’m sure no intelligent white person watching this show … want black boys and black girls marrying their white sons and daughters“) that would horrify most of his politically correct fans—made more “inflammatory/racist” comments than Donald Trump.

Speaking of Trump, in Fresno, California, a third-grader was ordered to remove his pro-Trump “Make America Great Again” hat because school officials feared for his safety. The 9-year-old boy refused, citing the First Amendment.

That was the same argument—a concern for safety—officials used in 2010 when they ordered several high school students to remove their t-shirts emblazoned with the American flag. The concern: wearing the flag on Cinco de Mayo, a Mexican day of celebration, might offend Hispanic students attending the school. The U.S. Supreme Court agreed with the school’s logic. Coincidentally, that same week, the high court also ruled against Confederate flag license plates on the grounds that they constituted government speech and might be offensive to African-Americans.

For those of us who came of age in the 1960s, college campuses were once the bastion of free speech, awash with student protests, sit-ins, marches, pamphleteering, and other expressive acts showing our displeasure with war, the Establishment and the status quo.

Today, on college campuses across the nation, merely chalking the word “Trump” on the sidewalk is enough to have student groups crying foul and labeling it as hate speech in need of censorship. Under the misleading guise of tolerance, civility, love and political correctness, college campuses have become hotbeds of student-led censorship, trigger warnings, microaggressions, and “red light” speech policies targeting anything that might cause someone to feel uncomfortable, unsafe or offended.

As I point out in my book Battlefield America: The War on the American People, this doesn’t even begin to touch on the criminalization and surveillance of various forms of speech that the government deems to be hateful, anti-government, extremist, bullying, dangerous or inflammatory.

One could say that we have allowed our fears—fear for our safety, fear of each other, fear of being labeled racist or hateful or prejudiced, etc.—to trump our freedom of speech and muzzle us far more effectively than any government edict could.

Ultimately the war on free speech—and that’s exactly what it is: a war being waged by Americans against other Americans—is a war that is driven by fear.

America is in the midst of an epidemic of historic proportions. The contagion being spread like wildfire is turning communities into battlegrounds and setting Americans one against the other. Normally mild-mannered individuals caught up in the throes of this disease have been transformed into belligerent zealots, while others inclined to pacifism have taken to stockpiling weapons and practicing defensive drills.

This plague on our nation—one that has been carefully cultivated and spread by the powers-that-be—is a potent mix of fear coupled with unhealthy doses of paranoia and intolerance, tragic hallmarks of the post-9/11 America in which we live.

Everywhere you turn, those on both the left- and right-wing are fomenting distrust and division. You can’t escape it. We’re being fed a constant diet of fear: fear of terrorists, fear of illegal immigrants, fear of people who are too religious, fear of people who are not religious enough, fear of the government, fear of those who fear the government. The list goes on and on.

The strategy is simple yet brilliant: the best way to control a populace is through fear and discord. Confound them, distract them with mindless news chatter and entertainment, pit them against one another by turning minor disagreements into major skirmishes, and tie them up in knots over matters lacking in national significance. Most importantly, keep the people divided so that they see each other as the enemy and screaming at each other so that they drown out all other sounds. In this way, they will never reach consensus about anything or hear the corporate state as it closes in on them.

This is how a freedom-loving people enslave themselves and allow tyrants to prevail.

This Machiavellian scheme has so ensnared the nation that few Americans even realize they are being manipulated into adopting an “us” against “them” mindset. Instead, fueled with fear and loathing for phantom opponents, they pour millions of dollars and resources into political elections, hoping for change that never comes. All the while, those in power—bought and paid for by lobbyists and corporations—move their costly agendas forward, and “we the suckers” get saddled with the tax bills.

We have been down this road before.

A classic example is the fear and paranoia that gripped the country during the 1950s. Many huddled inside their homes and fallout shelters, awaiting a nuclear war. It was also the time of the Red Scare. The enemy this time was Communist infiltration of American society.

Joseph McCarthy, a young Republican senator, grasped the opportunity to capitalize on the popular paranoia for personal national attention. In a speech in February 1950, McCarthy alleged having a list of over 200 members of the Communist Party “working and shaping the policy of the U.S. State Department.” The speech was picked up by the Associated Press, without substantiating the facts, and within a few days the hysteria began.

McCarthy specialized in sensational and unsubstantiated accusations about Communist infiltration of the American government, particularly the State Department. He also targeted well-known Hollywood actors and directors, trade unionists and teachers. Many others were brought before the inquisitional House Committee on Un-American Activities for questioning. Regarded as bad risks, the accused struggled to secure employment. The witch hunt ruined careers, resulting in suicides, and tightened immigration to exclude alleged subversives.

“McCarthyism” eventually smeared all the accused with the same broad brush, whether the evidence was good, bad or nonexistent. McCarthy, like many do today, appealed to the low instincts of envy, paranoia and dislike for the intellectual establishment.

“The real scoundrel in all this,” writes historian David Halberstam, “was the behavior of the members of the Washington press corps, who, more often than not, knew better. They were delighted to be a part of his traveling road show, chronicling each charge and then moving on to the next town, instead of bothering to stay behind and follow up. They had little interest in reporting how careless McCarthy was or how little it all meant to him.”

However, on March 9, 1954, Edward R. Murrow, the most-respected newsman on television at the time, broke the ice. He attacked McCarthy on his weekly show, See It Now. Murrow interspersed his own comments and clarifications into a damaging series of film clips from McCarthy’s speeches. Murrow ended the broadcast with one of the greatest news commentaries of all time, also a warning.

We will not walk in fear, one of another. We will not be driven by fear into an age of unreason, if we dig deep in our history and our doctrine; and remember that we are not descended from fearful men. Not from men who feared to write, to speak, to associate, and to defend causes that were for the moment unpopular.

This is no time for men who oppose Senator McCarthy’s methods to keep silent, or for those who approve. We can deny our heritage and our history, but we cannot escape responsibility for the result. There is no way for a citizen of a republic to abdicate his responsibilities. As a nation we have come into our full inheritance at a tender age. We proclaim ourselves, as indeed we are, the defenders of freedom, wherever it continues to exist in the world, but we cannot defend freedom abroad by deserting it at home. The actions of the junior Senator from Wisconsin have caused alarm and dismay amongst our allies abroad, and given considerable comfort to our enemies. And whose fault is that? Not really his. He didn’t create this situation of fear; he merely exploited it—and rather successfully. Cassius was right. ”The fault, dear Brutus, is not in our stars, but in ourselves.”

Whether you’re talking about free speech, surveillance, police misconduct or some other symptom of a government that has grown drunk on its own power, the answer is always the same: “we the people.”

We need to reject fear as our guiding principle, and restore freedom to its rightful place at the center of our republic.

As William Ruger writes in a powerful editorial for Time:

We must vigorously re-make the case for free speech. We must recur to its great defenders from ages past and reintroduce their ideas to our fellow Americans. The wisdom of John Milton, John Locke and John Stuart Mill—not to mention that of Americans like George Mason and Justice Louis Brandeis—is as true today as it was in their times. We just have to remember it… we must transmit an understanding of the value of free speech to today’s Americans in order to ensure that it is protected for future generations. And perhaps even more importantly, we need to demonstrate a vigorous commitment to free speech. America’s success depends on whether we continue to embrace this fundamental freedom.
ISIS Taxes Sockless Women & Beardless Men In Desperate Attempt To Raise Cash

As we have detailed in the past, the dramatic reduction in cash flow from oil sales has taken a tremendous toll on ISIS. A shortage of oil revenues has led to ISIS becoming so desperate for cash that it has even killed its own fighters in order to sell their organs. Now, it appears that another method is being tried to raise funds, this time by taking a page out of the standard government playbook: when you run out of cash, simply find ways to raise taxes on everyone.

RT is reporting that ISIS has now enacted new taxes on those that live in territories under the group's control (which has dropped from 9 million to 6 million people over the past year), and each tax is more bizarre than the next.

For leaving a door open, $100. If one were to fail a random Sharia test, $20 per wrong answer. For women, $30 for not wearing socks, and $25 if a cloak is too tight – for men, a quick trimming of the beard will get you hit with a $50 tax. And if someone is a non-sunni muslim or used to work for the government, then there is a special "repentance" certificate that needs to be paid for, and that will cost anywhere from $200 to $2,500.

"There are fewer people and business activities to tax, the same applies to properties and land to confiscate." Said Columb Strack, senior analyst at IHS. "This is a big indicator of the group's financial difficulties. Taxation makes up about 50 percent of the Islamic State's monthly revenue sources and encompasses almost every aspect of the population's life" added Ludovico Carlino, also of the IHS.

Speaking of every aspect of the population's life, there are even taxes related to livestock. For example, if a bell is found around a sheep's neck, that's a $10 fine for the owner, and the animal will be confiscated.

As ISIS is under pressure in both Iraq and Syria, it may lose even more territory. If and when that happens, who knows what kind of outlandish scheme the group will come up with at that point.

* * *

Bonus: Here is drone footage showing the Syrian army advancing on Raqqa, the de facto capital of the Islamic State.
Mapping The Cost Of "Sin" Across America

As spring heads into summer across the United States, many Americans may be enjoying a frosty adult beverage. And associated with the purchase of that alcohol, Americans will pay a hefty tax. The taxes collected from so-called sin taxes serve as a major source of revenue for some states. Sin taxes can cover activities from tobacco and alcohol to casino and racing gambling.

HowMuch.net decided to visually break down the amount of revenue that states generate from sin taxes on a total tax revenue basis, as well as examining the amount of revenue generated by the category of "sin taxes". States collected over $32 billion in sin taxes in 2014. As political pressure mounts to keep income and property taxes low, state legislatures have often turned to sin taxes to generate more revenue. Experts note that states have raised taxes on tobacco products 111 times between 2000 to 2015.

Eleven states collected over $1 billion from sin taxes. These states are identified by the darkest color on the visualization above. Pennsylvania led the way with $2.7 billion in sin tax revenues. The Keystone state generated over $1 billion from tobacco revenue alone, one of only three states to do so. This was followed by revenue from racino in excess of $770 million and casino revenue of $575 million.

Pennsylvania is closely followed by New York with around $2.65 billion in sin tax revenue. Close behind in third was Texas with $2.51 billion in sin taxes. The other eight states in excess of $1 billion were Nevada, Indiana, Illinois, Ohio, Michigan, New Jersey, Florida and California.

At the bottom end of the scale, Wyoming had the lowest amount of "sin tax" revenue with only $26 million. North Dakota was in second place with only $41 million.

Taxes on tobacco products is a major source of sin tax revenue. As stated previously, only three states generated in excess of $1 billion in revenue from tobacco. New York took in the largest amount of tobacco taxes with $1.446 billion, in a virtual dead heat with Texas who also took in $1.446 billion. Pennsylvania generated the third largest amount of tobacco revenue at $1.028 billion. On the lower side of the scale, Wyoming only collected $24.4 million in tobacco. South Carolina was the second lowest with only $25 million generated from taxes on tobacco.

Another major category of sin taxes is alcohol. As shown by the visualization, Texas was the only state to generate over $1 billion in revenue from alcohol. The next closest state in a distant second was Florida with $452 million. New York was third far behind Florida with only $250 million in alcohol tax revenue. Wyoming saw the lowest amount of revenue with only $1.8 million from alcohol.

Only certain states allow casinos, thus geographically limiting the amount of revenue generated in this category. Not surprisingly, Nevada led the country in casino taxes with $912 million. The home of Las Vegas, casino revenue is a major source of income for the state. Pennsylvania was in second with $575 million in casino tax revenue. West Virginia was lowest in the category and only saw limited casino revenue of $3.8 million.

Another category with limited participants is revenue from Racinos. The combination of race tracks and casinos generated $937 million for New York, first in the category. This was followed by Pennsylvania with $770 million. Rhode Island followed in third with $318 million. Oklahoma was in last place with only $20 million in racino tax revenue.

The final category of sin taxes is revenue from video-gaming/pari-mutuel activities, generating fairly low revenue overall. West Virginia led the country in this category with $204 million collected. This was followed by Louisiana with $182 million. Illinois was in third with $152 million.

As states continue to grapple with ever-tightening budgets, it is nearly certain that state legislatures will continue to raise sin taxes. Sin taxes are an easy way for states to increase revenue without running into significant political opposition. However, the benefit of ever increasing sin taxes is questionable. Some academic studies have pointed to sin taxes as having limited revenue growth and high costs to enforce. The debate over sin taxes is certain to continue during the election year.

Source: HowMuch.net
The US Is Dumping Hazardous Electronic Waste Into Asia

US exports of goods and services may be decreasing, but one export that appears to be hanging in there is hazardous electronic waste.

According to a recent investigation conducted by the Seattle-based e-waste watchdog group Basel Action Network (BAN), much of the hazardous electronic waste discarded in America is not being recycled properly – and by not recycled properly he means dumped in a junkyard in southeast Asia.

Jim Puckett who leads BAN said that "most of the public still thinks that they're going to recycle e-waste right there in America. They have the right to know where their stuff goes."

Last year the investigation inserted GPS tracking devices inside 200 discarded computers, printers and TV's. The devices were dropped off at donation centers, recyclers, and electronic take-back programs across the country. What the investigation found was that about a third of the items were illegally exported from the US, generally ending up in independent shops and junkyards in southeast Asia.

Using a mapping app on an iPad, Puckett tracked several of the items, including one left with Dell Reconnect, to the outskirts of Hong Kong.

From Sputnik

Puckett's investigation led him to a site on the outskirts of the city of Hong Kong, where workers without protective gear, wearing aprons dusted with extremely poisonous toner ink, were dismantling, and in some cases simply smashing, large piles of old printers.
The salvage locations were littered with the broken white fluorescent tubes used to illuminate LCD flat-screen monitors on the printers. When broken, these items release highly-toxic mercury vapor. Through his translator, Puckett learned that the workers were not made aware that they were dealing with toxic materials, or that their health was at risk.

Another device mounted with a Puckett GPS locater was found in a nearby abandoned field, amid scattered pieces of LCD and CRT monitors, camcorders and keyboards. Hong Kong bans the import of hazardous e-waste from the US, and Puckett believes many of these operations are illegal.

The Hong Kong Environmental Protection Department said "On the whole, Hong Kong has been effective in combating hazardous waste shipments", also adding that at least 21 cargo loads of e-waste have been sent back to the US in the past three years.

Ultimately, BAN's tracking investigation revealed that 65 US recyclers illegally shipped e-waste to China, Thailand, Pakistan, Taiwan, Mexico, and Kenya. Of the 28 electronic GPS-monitored devices dropped off by Puckett with Dell Reconnect, six went abroad, to Hong Kong, Taiwan, China, and Thailand.

In response, Beth Johnson, the head of Dell's producer responsibility program said the company is interested in finding out how the tracked electronics ended up overseas. "If there is something that did not follow the system, we would certainly want to know about it and certainly take corrective action."

Well, now Dell knows that it's been dumping hazardous electronic waste into Asia – let's see if it updates the website to say: "plus you'll be helping to protect the environment and benefit your community at the same time – all while dumping all of the hazardous shit into Asia!"
The New "Hope"

Submitted by Ben Hunt via Salient Partners' Epsilon Theory blog,

A policy-controlled market, whether it’s today’s investment environment or the 1930s or the 1870s, places enormous pressure on investors … for yield and consistent return, to be sure, but even more so for a resurrection of the investment beliefs that held sway in “normal times”, for an escape from the prison of extraordinary monetary policy and its grip on market behavior. Pressure and time. That’s all it took for the Shawshank Redemption and that’s all it takes for our modern market redemption. Or it least that’s all it takes for the hope and the escape attempt. Let’s see if we’re as successful as Andy Dufresne.

When suitably crystallized, an investment hope takes on a different form. It becomes an investment theme. Today the investment hope that has crystalized into an investment theme is the notion that soon, just around the corner now, perhaps as a result of the next mystery-shrouded meeting of the world’s central bankers, perhaps as a result of the U.S. election this November, we will enjoy a coordinated global infrastructure spending boom. Of course, this isn’t deficit spending or another trillion dollar layer of debt, but is “investment in our crumbling infrastructure.” This isn’t a mirror image of China’s massive over-build in empty cities or of Obama’s shovel-ready infrastructure projects from 2009-2010, but is “really a free lunch“, to quote Larry Summers, where there’s never a Bridge-to-Nowhere or an Airport-of-One. Or so the Narrative goes.

A Narrative theme is a theme of hope, pure and simple. And because hope can and will emerge without any evidence or support from the real world, a Narrative theme can work from an investment perspective even if it’s a non-event in the real world or, stranger yet, an abject failure in the real world. In exactly the same way that you can invest alongside central bank efforts to prop up markets and drive asset prices higher without believing in your heart-of-hearts that anything these bankers say is even remotely true, so can you invest alongside a Narrative theme without believing a single word of the Narrative itself.

And to be clear, my personal belief is that Larry Summers and the rest of the “public infrastructure projects are great investments!” crowd are sniffing glue. You’re pulling forward future economic activity, that’s all. Read the latest from Howard Marks if you don’t believe me. I’m not saying that government spending is bad — on the contrary, government spending is absolutely necessary to preserve life, liberty, and the pursuit of happiness, and there’s certainly a societal “return on investment” from government spending — but don’t tell me that there’s this huge productivity-enhancing, non-quotation-marked economic return on investment generated by the government building stuff that the private sector doesn’t want to build. Don’t tell me that what China is doing with their infrastructure is “mal-investment”, but that if we do it … well, that’s different, because, you know, our infrastructure is “crumbling” instead of “gleaming” the way it is in … umm … China. Yes, LaGuardia is a miserable airport. So stipulated. But there are infinitely greater productivity gains to be had from changing our insane TSA regulations and reducing security lines than by building a new Terminal B. If you want a massive Keynesian deficit spending program on top of our massive current debt … fine, make the argument. There’s an argument to be made. But don’t put a specious “investment” wrapper around it.

But it’s exactly that specious wrapper — the Narrative — that makes all of this work as an investment theme. If a massive public works program were couched in its traditional Keynesian or neo-socialist form (you don’t see Bernie Sanders talking about the economic ROI of his infrastructure proposals), it wouldn’t have a chance with the Wall Street Journal crowd. But, hey, if a public works program is “a smart investment” … never mind that this is about as smart an investment as Moonbase Alpha (yes, I had the Space: 1999 lunchbox) or perhaps a gigantic hole in the ground … well, then, let’s muster up the usual suspects at CNBC and the Wall Street Journal op-ed staff to get behind this, and let’s convince ourselves that Donald Trump wouldn’t be a nut job president, even though every shred of evidence and plain common sense screams the contrary, because he’s, you know, a “builder.”

It’s all based on hope for real economic growth and an escape from policy-controlled markets, a hope that springs in every investor’s heart given enough pressure and enough time. It’s a hope that, as Sir Francis Bacon said, makes for a good breakfast but a bad supper. We’re in the breakfast phase of this Narrative theme still, as Missionaries (to use the game theory term) like Larry Kudlow beat the drum louder and louder for a big infrastructure spend, and it’s a drumbeat that will continue to grow until there’s a reality check or a powerful Missionary creating Common Knowledge to knock it back. That will be the dinner portion of this Narrative theme, and it will be an unpleasant meal. But I don’t see dinner being served until well after the U.S. election, no matter who takes the White House or how the balance of power shifts in Congress, and it might be a year or two later before the thin gruel of dashed hopes is served up to markets.

So even though I think this U.S. public infrastructure build has barely a whiff of merit from an economic policy perspective, even though I think its net effect once implemented will be to make the ultimate debt reset that much more horrific, I also think it’s a highly investable idea. Because that’s the way you play the Common Knowledge Game.

Common Knowledge is information that everyone believes everyone has heard. It’s why executions were once held in public, not so a big crowd can see the guy getting hanged, but so the crowd can see the crowd watching the guy getting hanged. It’s why political debates are filmed in front of a live audience. It’s why sitcoms have laugh tracks. It’s how a relatively small but highly televised protest in Cairo’s Tahrir Square toppled Mubarak. It’s why the Chinese government still cracks down on media pictures of the Tiananmen Square protests, now more than 25 years old. Common Knowledge is the game theoretic concept behind the irresistible power of the crowd watching the crowd, and as a result Common Knowledge construction by governments, corporations, and yes, central bankers is one of the most potent instruments of social control on Earth.

The Common Knowledge Game is the game of markets, and it’s been internalized by good traders for as long as markets have existed. What you think about the market doesn’t matter. What everyone thinks about the market (the consensus) doesn’t matter. What matters is what everyone thinks that everyone thinks about the market, and the way you get ahead of this game is to track the “Missionary statements” of politicians, pundits, and bankers made through the four media microphones where the Common Knowledge of markets is created: The Wall Street Journal, The Financial Times, Bloomberg, and CNBC. It’s what Keynes called The Newspaper Beauty Contest, and it drove the policy-controlled markets of the 1930s exactly as it drives markets today. Is it an easy game to play? Nope. But you don’t have to be a professional poker player to avoid being the sucker at your local game. You don’t have to be a wizard trader to be aware that the Common Knowledge Game is being played, and that it’s driving market outcomes.

Red and Andy survived more than 20 years in Shawshank prison because they never lost hope. But they were smart about the concept of hope. They didn’t let hope consume them to take stupid chances. In Red’s words, they never let hope drive them insane. That’s the same balancing act we all need to adopt here in Central Bank prison. Hope is a good thing. Hope is a human thing. But hope is also a social construct that is used intentionally by others to shape our behaviors, in markets as in life. That’s the awareness we need to be hopeful survivors here in the Silver Age of the Central Banker, and that’s the awareness I’m trying to create with Epsilon Theory.
7 Charts One Hedge Fund Is Watching
Fasanara Capital’s Francesco Filia sends over the following list of things he is watching, as well as the following seven charts he believes will show the upcoming key inflection points.

THINGS TO WATCH
- Yields are reaching new lows: the average German government bond yield is now below zero for the first time in history. 10yr Bunds are testing April ’15 lows (at +7bps). Curve may flatten from here.
- Negative yields putting pressure on the banking sector: historically, the European banking index tends to underperform when interest rates drop and the curve flattens. So far in the last month, banks are over-performing yields. Over-performance may fade from here.
- Within Europe, Italian banks are getting particularly hit: they started to underperform at the beginning of May and the Italian Banks index has now hit new YTD lows.
- We keep a close eye on the other risk factors:
  - USD/CNH is surprisingly grinding higher, despite weak NFP, dovish Yellen, weak broad US Dollar, EUR & JPY strengthening.
  - Oil and Base Metals decoupled in May: this relation is to be closely monitored, we look at Oil gyrations as short-term heavy volatility, within a long-term downward trend.
CHARTBOOK:

The GERMAN AVERAGE GOVERNMENT BOND YIELD now below zero for the first time in history
‘Umlaufrendite’ dived below zero for the first time last Friday after weak US NFP numbers. Now 10trn$ worth of govies globally trade negatively

GERMAN 10yr and 30yr YIELDS keep falling, curve may flatten further from here
10yr BUND yield already at all-time lows, 30yr BUXL is still ~30bps above historical lows

Banks over-performed yields recently, gap may narrow from here
RATIO of EU BANKS / EUROSTOXX vs. 10yr BUND YIELD. Historically, the relative performance of European banks over the Eurostoxx correlates well with European yield curves. Banks have over-performed recently. The gap is likely to narrow from here: relatively, yields may rise more than bank equities or fall less than bank equities.

Italian banks underperformed the EU banking sector in May by most in 2016
Italian Banks hit new YTD lows this week. Their underperformance vs the EU banking sector is now evident, whereas they had moved broadly in tandem during January/February sell-off. Negative news flows (Veneto Banca, recent local elections) might be the driver of the move. Trend to monitor.

BTP vs. BUND & FTSEMIB vs. EUROSTOXX: Italian underperformance is visible also in the fixed income and broader equity market
The yield spread between 10yr BTPs and 10yr Bunds kept widening since mid-March, while the FTSEMIB underperformed the Eurostoxx even more visibly (10% since January)

USD/CNH grinding higher, despite broad US Dollar weakness
CNH is nearing the psychological level of 6.60, and fixed at its weakest since2011, despite post-NFP broad US Dollar weakness and good China FX reserve depletion numbers just released.

OIL and BASE METALS decoupled in May
While the Oil price kept rising and moved to 50$, base metals fell off a cliff and descended below March lows. A trend to monitor closely for clues on who is right of the two.
World's "Safest" Market Suffers Worst Volatility Since 2009

As Fed credibility collapses in a pile of failed communications, Bloomberg notes that the $1.5 trillion market for U.S. Treasury bills, known as an oasis of stability for investors worldwide, is experiencing the most volatility since the financial crisis.

Since September's farcical Fed fold, T-Bill yields have seen a visibly notable increase in volatility – extra- and intra-day…

As Bloomberg reports, the gyrations underscore how it’s a precarious time for investors in bills and other instruments in the money market, which the Fed uses to implement policy changes. Asset managers looking to park cash in the short-term securities have to navigate officials’ efforts to normalize interest rates while also adapting to post-crisis rules.

Skepticism toward the Fed’s plans to boost its overnight target, following liftoff from near zero in December, is fueling the volatility. Futures assign a 2 percent chance of an increase at officials’ June 14-15 gathering, and the probability doesn’t exceed a coin toss until December.

“The Fed has hiked once already, so we are in a tightening cycle, but there is enough uncertainty about what that will look like,” said William Marshall, an interest-rate strategist in New York at Credit Suisse Group AG, one of the Fed’s 23 primary dealers.

“The other big uncertainty, where there is still a lot of debate, is what is going to be the end state for front-end demand once the money-fund reforms go into effect.”

While this huge market is the so-called "safest" place to park cash in the world, based on the average daily range swings, T-Bills have not been this 'risky' since 2009…

Regulatory changes are also driving the volatility…

On Oct. 14, Securities and Exchange Commission rules take effect that may lead investors to shift into money-market funds focused on government debt, from prime funds, which typically buy commercial paper. The new regulations mandate that institutional prime funds report prices that fluctuate, rather than sticking to $1 per share. The measures also allow fund companies to use steps such as redemption fees to prevent runs in times of panic.

Amid all the changes, which have already led many money-market companies to alter their offerings, institutional investors may pull about $400 billion from prime funds, JPMorgan Chase & Co. predicted in the first quarter.

The combination of fluctuating Fed bets and purchases of bills related to regulatory changes will spur volatility, said Jerome Schneider, head of short-term portfolio management at Newport Beach, California-based Pacific Investment Management Co., which oversees $1.5 trillion.

“Until these stimuli become reconciled and resolved, we may continue to see relative repricing a normal event in this sector,” he said.

So, as with everything else The Fed touches – stocks are at their lowest volatility in years (amid the highest valuations ever) and T-Bills are the riskiest in 7 years