Dec 10

Today’s News 10th December 2018

  • Free Gas Over Yemen's Skies: Saudi Jets Refueled By American Taxpayers Due To "Accounting Errors"

    The White House wants to stay the course in Yemen even as the Senate is set to push back against US military support to the Saudi-led bombing campaign. But now a bombshell report reveals the Pentagon has been fueling Saudi and UAE jets free of charge due to “errors in accounting where DoD failed to charge” according to US defense officials. 

    Free handouts over the skies of Yemen. US-Saudi refueling, file photo

    The huge significance is summarized in the opening lines of The Atlantic report which broke the story over the weekend: 

    President Donald Trump, who repeatedly complains that the United States is paying too much for the defense of its allies, has praised Saudi Arabia for ostensibly taking on Iran in the Yemen war. It turns out, however, that U.S. taxpayers have been footing the bill for a major part of the Saudi-led campaign, possibly to the tune of tens of millions of dollars.

    For the entire three-and-a-half years of the program, the Pentagon never had an official servicing agreement in place with the Saudis and further never informed Congress.

    The vital refueling role that the US military has played in the war goes back to March 2015 and is reported to be “enormously expensive”. The recipient country, in this case the Saudis, is required by law to pay the costs but the Pentagon now admits “they in fact had not been charged adequately” in an official DoD letter obtained by The Atlantic.

    The Pentagon is now “currently calculating the correct charges” but it’s unclear if the missing funds going back years — footed by the American taxpayer — will ever be obtained especially as the DoD doesn’t even know what it’s owed. 

    Information on the “accounting errors” began to emerge after Senators asked defense officials last March to account for Saudi coalition refueling costs. After eight months, just a day ahead of the Nov. 28 Senate vote to debate ending the war in Yemen, the Pentagon admitted it could answer this question. 

    Senator Jack Reed, the top Democrat on the Senate Armed Services Committee, told The Atlantic that likely “tens of millions of dollars” worth of fuel was supplied to the Saudi coalition for free. However, this figure (again which the Pentagon says it can’t account for) is possibly in the hundreds of millions, considering the following:

    Records provided by the Defense Logistics Agency this March indicated that since the start of fiscal year 2015 (October 2014), more than 7.5 million gallons of aerial refueling had been provided to the UAE, and more than 1 million gallons to the Saudis. Those figures were for all aerial refueling, not necessarily only related to operations in Yemen.

    “It is clear that the Department has not lived up to its obligation to keep Congress appropriately informed or its responsibility to secure timely reimbursement,” Sen. Reed told The Atlantic. “U.S.-provided aerial refueling assistance was provided to the Saudi-led coalition for more than 3.5 years, activities that likely cost tens of millions of dollars. We must ensure that U.S. taxpayers are fully reimbursed for that support.”

    So it’s clear that not only has the United States given the Saudis a “free pass” politically while tens of thousands of Yemeni civilians have been massacred over the years, but has literally been funding the Saudi military machine for free, despite Riyadh’s immense oil wealth. And further the obvious question that remains is… whatever happened to “America first?”

  • How Big Brother Grips Americans' Minds To Support Invasions

    Authored by Eric Zuesse via The Strategic Culture Foundation,

    On November 29th, Gallup headlined “Democrats Lead Surge in Belief U.S. Should Be World Leader” and reported that “Three-fourths (75%) of Americans today think the United States has ‘a special responsibility to be the leading nation in world affairs,’ up from 66% in 2010. The surge is driven by Democrats, whose belief in this idea has increased from 61% eight years ago to 81% now.”

    This finding comes even after the lie-based and catastrophic U.S. invasions of Iraq in 2003, and of Libya in 2011 (and of so many others, such as Afghanistan, where the U.S. and Sauds created the Taliban in 1979). Americans — now even increasingly — want ‘their’ (which is actually America’s billionaires’) Government to be virtually the world’s government, policing the world. They want this nation’s Government to be determining what international laws will be enforced around the world, and to be enforcing them. Most Americans don’t want the United Nations to have power over the U.S. (its billionaires’) Government, but instead want the U.S. Government (its billionaires) to have power over the United Nations (which didn’t authorize any of those evil, lie-based, U.S. invasions). 

    Not only would doing this bankrupt all constructive domestic functions (health, education, infrastructure, etc.) of the U.S. federal Government, but it would also increase the global carnage, as if the U.S. Government hasn’t already been doing enough of that, for decades now.

    The leadership for this supremacist craving comes straight from America’s top, not from the masses that are being sampled by the Gallup organization, who only reflect it — they are duped by their leaders. Here is how U.S. President Barack Obama (a Nobel Peace Prize winner in 2009, for nothing at all but his ‘kindly’ but insincere verbiage when he had been a candidate) stated this widespread delusional American belief in American global moral supremacy, when addressing the graduating class at West Point Military Academy, on 28 May 2014: 

    The United States is and remains the one indispensable nation. [Every other nation is therefore ‘dispensable’; we therefore now have “Amerika, Amerika über alles, über alles in der Welt”.] That has been true for the century passed and it will be true for the century to come. … America must always lead on the world stage.

    This had certainly not been the objective of U.S. President Franklin Delano Roosevelt when he set up the U.N. just before his death in 1945; he instead wanted the U.N. to evolve into a democratic government of the world, with elected representatives of each and every one of the world’s governments — to evolve into becoming the global international republic — regardless of whether or not the U.S. Government approves or disapproves of another nation’s government. The idea on which the U.N. was founded was not to involve the U.S. Government in the internal affairs of other nations, not to be the judge jury and executioner of other governments that it doesn’t like, nor to dictate what other nations should or should not do within the given nation’s boundaries. FDR intended that there instead be democratically represented, at the U.N., each and every nation, and each and every people within that global government, where each of these national governments is (hopefully but not necessarily) a democracy. FDR was just as opposed to dictatorship internationally, as he was opposed to dictatorship nationally, and he recognized that inevitably some governments will disapprove of other governments, but he was deeply committed to the view that a need exists for laws and law-enforcementbetween nations, on an international level, and not only within the individual nations, and that each nation is sacrosanct on its own internal laws. He respected national sovereignty, and opposed international empire. (This was his basic disagreement with Winston Churchill, then, and with American leaders such as Obama and Trump now.) Unlike President Obama (and evidently unlike the vast majority of today’s Americans) FDR didn’t want this international government to be an American function, but instead an entirely separate international governmental function, in which there is no international dictatorship whatsoever — not American, and not by any other country. He knew that this is the only stable basis for international peace, and for avoiding a world-annihilating World War III. 

    Barack Obama rejected FDR’s vision, and advocated for the United States as being (and even as if it already had been for a century) virtually the government over the entire world, which “must always lead on the world stage.” Adolf Hitler had had that very same international vision for his own country, Germany, “the Thousand-Year Reich,” but he lost World War II; and, then, when FDR died, Hitler’s vision increasingly took over in America, so that ideologically, FDR actually lost WW II, when Harry S. Truman took over the White House and increasingly thereafter, until today, when the U.S. commits more invasions of foreign countries than do all other nations in the world combined. Americans (apparently, as shown in this and other polls) like this, and want more of it.Nobody else does. For example, nobody (except the U.S. and Saudi and Israeli aristocracies and their supporters worldwide, which are very few people) supports the U.S. regime’s reinstitution of sanctions against Iran, which the U.S. regime is imposing as the global dictator. America’s economic sanctions are like spitting into the face of FDR, who had opposed such imperialistic fascism in the more overtly military form when Hitler’s regime was imposing it. It’s also spitting at the U.N.

    This latest Gallup finding displays an increase, but nothing that’s at all anomalous as compared to the decades-long reality of imperialistic U.S. culture. For decades now, Gallup’s polling has shown that the most respected of all institutions by the American people is the nation’s military — more than the church, more than the Presidency, more than the U.S. Supreme Court, more than the press, more than the schools, more than anything. America is invasion-nation. This is true even after the 2003 invasion of Iraq on the basis of blatant lies, which destroyed Iraq — a nation that had never invaded nor even threatened to invade the United States. The American people are, resolutely, bloodthirsty for conquest, even after having been fooled into that evil invasion, and subsequent decades-long military occupation in Iraq, and after subsequent conquests or attempted conquests, in Libya, Syria, Yemen, and elsewhere — all destroying nations that had never invaded nor even threatened America. Why? How did this mass-insanity, of evil, come to be?

    How is this aggressive nationalism even possible, in America’s ‘democracy’? It’s actually no democracy at all, and the public are being constantly fooled to think that it is a democracy, and this deception is essential in order for the public to tolerate this Government, and to tolerate the media that lie for it. This widespread deceit requires constant cooperation of the ‘news’-media — and these are the same ‘news’-media that hid from the public, in 2002, that the U.S. Government was outright lying about “WMD in Iraq.”

    The public simply do not learn. That’s a tragic fact. Largely, this fact results from reality being hidden by the ‘news’-media; but, even now, long after the fake ‘news’ in 2002, about the U.S. regime’s having possessed secret and conclusive evidence of “Saddam’s WMD,” the published ‘history’ about that invasion still does not acknowledge the public’s having been lied-to at that time, by its Government, and by the ‘news’-media. So, the public live, and culturally swim, in an ongoing river of lies, both as its being ‘news’, and subsequently as its having been ‘history’. This is why the public do not learn: they are being constantly deceived. And they (as Gallup’s polls prove) tolerate being constantly deceived. The public do not rebel against it. They don’t reject either the politicians, or the ‘news’-media. They don’t demand that the American public control the American Government and that America’s billionaires lose that control — especially over the ‘news’-media.

    Honesty is no longer an operative American value, if it ever was. That’s how, and why, Big Brother (the operation by the international-corporate billionaires) grips Americans’ minds to support foreign Invasions. Americans support liars, and it all comes from the top; it’s directed from the top. It is bipartisan, from both Democratic Party billionaires and Republican Party billionaires. National politicians will lose their seats if they disobey.

    A good example, of this Big-Brother operation, is America’s Politifact, the online site which is at America’s crossover where ‘news’ and ‘history’ meet one-another. It’s controlled by billionaires such as the one who founded Craigslist. Millions of Americans go to Politifact in order to determine what is true and what is false that is being widely published about current events. The present writer sometimes links to their articles, where I have independently verified that there are no misrepresentations in an article. But, like the ‘news’-media that it judges, Politifact is also a propaganda-agency for the (U.S.-Saud-Israeli) Deep State, and so it deceives on the most critically important international matters. An example of this occurred right after the U.S. regime had overthrown in February 2014 in a bloody coup the democratically elected Government of Ukraine, and replaced it by a rabidly anti-Russian racist fascist or nazi Government on Russia’s doorstep, a regime that was selected by the rabidly anti-Russian (but lying that it wasn’t) Obama regime. This Politifact article was dated 31 March 2014, right after over 90% of Crimeans had just voted in a referendum, to rejoin Russia, and to depart from Ukraine, which the Soviet dictator had transferred them to, separating them from Russia, in 1954. (None of that history of the matter was even mentioned by Politifact.) The Politifact article was titled “Viral meme says United States has ‘invaded’ 22 countries in the past 20 years”, and it was designed to deceive readers into believing that “Russia’s recent annexation of Crimea” reflected the real instance of “invasion” that Americans should be outraged against — to deflect away from America’s recent history as being the world’s actual invasion-nation. This propaganda-article said nothing at all about either Crimea or Ukraine except in its opening line: “A Facebook meme argues that Americans are pretty two-faced when it comes to Russia’s recent annexation of Crimea.” It then proceeded to document that the exact number of American invasions during the prior 20 years wasn’t 22, and so Politifact declared the allegation “false” (as if the exact number were really the entire issue or even the main one, and as if America’s scandalous recent history of invasions were not).

    So, it’s on account of such drowning-in-propaganda, that the U.S. public not only respect what U.S. President Dwight Eisenhower derogatorily called the “military-industrial complex,” but respect it above even the U.S. Presidency itself, and above all other U.S. institutions (as Gallup’s constant polling demonstrates to be the case).

    Here’s the reality: The same group of no more than a thousand super-wealthy Americans control both the United States Government and the weapons-manufacturing firms (such as Lockheed Martin), which are the only corporations whose only customers are the U.S. Government and its chosen allied governments. So, these few people actually control the U.S. Government’s foreign relations, and foreign policies. They create and control their own markets. This is the most politically active group of America’s super-rich, because they own America’s international corporations and because their business as owners of the military ones is military policy and also diplomatic policy, including the conjoining of both of those at the CIA and NSA, including the many coups that they (via their Government) engineer. They also control all of the nation’s major news-media, which report international affairs in such a manner as to determine which foreign governments will be perceived by the mass of Americans to constitute the nation’s ‘enemies’ and therefore to be suitable targets for the U.S. military and CIA to invade and conquer or otherwise “regime-change” — such as have been the lands of North Vietnam, Afghanistan, Iraq, Libya, Syria, Iran, North Korea, Yemen, Venezuela, etc., at various times. The weapons-manufacturers won’t have any markets, at all, if there are no ‘enemy’ nations that are deemed by the public to be suitable targets for their weapons. ‘Enemy’ nations, and not only ‘allies’ (or ‘allied’ nations), are necessary, in order for the military business to produce the most profits. Overwhelmingly, if not totally, the chosen ‘enemies’ are nations that have never invaded nor even threatened to invade the United States; and, so, in order to keep this Government-funded business (the war-profiteering and associated international natural-resources extractions businesses) growing and thriving, what’s essential is continuing control over the nation’s ‘news’-media. As Walter Lippmann wrote in 1921, “the manufacture of consent” is an essential part of this entire operation. It happens via the media. Even Germany’s Nazis needed to do that. Any modern capitalist dictatorship (otherwise called “fascism”) does. The U.S. regime, being a capitalist dictatorship, certainly does. Physically, Hitler lost, but his ideology won, he won even as nazism (racist fascism) instead of merely as fascism, and this racism is shown because the U.S. regime is rabidly racist anti-Russian (not merely anti-communist), and has been so for at least a century. (Maybe it’s what Obama actually had secretly in mind when he said “That has been true for the century passed and it will be true for the century to come.” And Trump is no less a liar than Obama, and he continues this aim of ultimately conquering Russia.) They say they’re only against Russia’s leader Vladimir Putin, but Putin shows in all polls of Russians, even in non-Russian polls, to be far more favorably viewed by Russians than either Barack Obama or Donald Trump are viewed by Americans. This is why regime-change-in-Russia is increasingly becoming dominated by U.S. economic sanctions and military, and less dominated by CIA and other coup-organizers. The actual dictatorship is in America, and it requires participation by its ‘news’-media. Demonizing ‘the enemy’ is therefore crucial. It is crucial preparation for any invasion.

    The United States Government spends at least as much money on its military as do all of the other governments in the world combined. Its ‘news’-media (that is to say, the media that are owned by, and that are advertised in by, the corporations that are controlled by, the same small group of billionaires — America’s billionaires — who fund the political campaigns of both the Democratic Party’s and the Republican Party’s nominees for the U.S. Congress and the Presidency) may be partisan for one or the other of the nation’s two political Parties, but they all are unitedly partisan for the international corporations, such as Lockheed Martin, that America’s billionaires control, and that sell only to the U.S. Government and to the foreign governments that are allied with the U.S. Government. They also are partisan for the U.S.-based oil and gas and mining international corporations, which need to extract at the lowest costs possible, no matter how much the given extractee-nation’s public might suffer from the deal. “Three-fourths (75%) of Americans today think the United States has ‘a special responsibility to be the leading nation in world affairs,’” and the actual beneficiaries of this mass-insanity are the owners of those U.S.-based international corporations, the military and extraction giants.

    Anthony Cordesman, at the Center for Strategic and International Studies, headlined on 15 August 2016, “U.S. Wars in Iraq, Syria, Libya and Yemen: What Are The Endstates?” and he said, “Once again, the United States does not seem to be learning from its past. The real test of victory is never tactical success or even ending a war on favorable military terms, it is what comes next.” But he ignored the main reason why these invasions had occurred. America’s weapons-manufacturers won’t have any markets, at all, if there are no ‘enemy’ nations that are deemed by the American public to be suitable targets for their weapons. Cordesman is there calculating success and failure on the basis of the myths (such as that the U.S. Government cares about those “Endstates”), not of the realities (that it craves targets). The realities focus upon the desires of the owners and executives of the weapons-manufacturers and the extraction-firms, for ongoing and increased profits and executive bonuses, and not on the needs of America’s soldiers nor on the national security of the American people. Least of all, do they focus upon the needs — such as the welfare, freedom, or democracy — of the Iraqi people, or of the Syrian people, or of the Libyan people, or of the Yemenite people. It’s all just lies, PR. Those invasions served their actual main functions when they were occurring. “The Endstates” there are almost irrelevant to those real purposes, the purposes for which the invasions were, and are, actually being done.

    Here’s an ideal example of this mass mind-control: On 19 November 2017, Josh Rogin at the Washington Post headlined “The U.S. must prepare for Iran’s next move in Syria” and reported that:

    A task force of senior former U.S. diplomatic and military officials has come up with suggestions for how Trump could prevent Iran from taking over what’s left of liberated Syria and fulfill his own promise to contain Iranian influence in the region.

    “Most urgently… the United States must impose real obstacles to Tehran’s pursuit of total victory by the Assad regime in Syria,” the report by the Jewish Institute for National Security of America states. “Time is of the essence.”

    The underlying presumption there was that the U.S. regime has legitimate authorization to be occupying the parts of Syria it has invaded and now occupies, and that Iran does not. But the reality is that the U.S. regime is occupying Syria instead of assisting Syria’s Government to defeat the U.S.-Saud-Israeli invasion to overthrow and replace Syria’s Government, by stooges who will be selected by the Saud family who own Saudi Arabia, and the reality is that Iran’s forces there are invitees who are instead assisting Syria’s Government against the Saudi-Israeli-American invasion. In other words: this WP article is basically all lies. Furthermore, the Jewish Institute for National Security of America is a front-organization for the fascist regime that rules Israel, and the WP hid that fact, too, so its cited ‘expert’ was a mere PR agency for Israel’s aristocracy. So, this is Deep-State propaganda, parading as ‘news’. 

    Americans actually pay their private good money to subscribe to (subsidize) such bad public ‘news’papers as that. The billionaire who happens to own that particular ‘news’paper (the WP), Jeff Bezos, had founded and leads Amazon, which receives almost all of its profits from Amazon Web Services (AWS), the cloud-computing division, which supplies the U.S. ‘Defense’ Department, CIA, and NSA. For example, “without AWS and Prime, Amazon lost $2 billion in the 1st quarter of FY18. … These losses come from Amazon’s retail business. About 60% of Amazon’s revenue comes from retail and that’s where Amazon is losing money.” Amazon is profitable because of what it sells mainly to the Government, but also to other large U.S. international corporations, and they all want to conquer Syria. None opposes that evil goal. Although Bezos doesn’t like the Sauds, he has actually been (at least until the Khashoggi matter) one of their main U.S. media champions for the Sauds to take over Syria. It’s all just a fool-the-public game. It works, it succeeds, and that’s what Gallup’s polls are demonstrating. The public never learns. It’s a fact, which has been proven in many different ways.

    This reality extends also to other nations, allies of the U.S. aristocracy, and not only to the U.S. regime itself. For example, on 27 November 2018, a whistleblowing former UK Ambassador, Craig Murray, who is a personal friend of Julian Assange, headlined“Assange Never Met Manafort. Luke Harding and the Guardian Publish Still More Blatant MI6 Lies”, and he proved that Britain’s Guardian had lied with total, and totally undocumented (and probably even totally non-credible), fabrications, alleging that Julian Assange of WikiLeaks had secretly met (in 2013, 2015, and 2016) with Paul Manafort of the Trump campaign. The UK, of course, is a vassal-nation of the U.S. aristocracy, and the Guardian is run by Democratic Party propagandists (paid indirectly by Democratic Party and conservative Tony-Blair-wing Labour Party billionaires) and therefore fabricates in order to assist those Parties’ efforts to impeach Trump and to dislodge Jeremy Corbyn from the Labour Party’s leadership. However, each of America’s two political parties (like the UK’s aristocracy itself) represents America’s aristocracy, which, like Britain’s aristocracy, is united in its determination to eliminate Assange — they are as determined to do that to him, just as Saudi Crown Prince Mohammed bin Salman al-Saud was determined to eliminate Jamal Khashoggi. ‘Democracy’? This? It is Big Brother.

    Only if the population boycott lying individuals and organizations, is democracy even possible to exist in a nation. Democracy can’t possibly exist more than truth does. In political matters, deceit is always treachery; and its practitioners, whenever the evidence for it is overwhelming and irrefutable, should experience whatever the standard penalty is for treachery. Only in a land such as that, can democracy possibly exist. Elsewhere, it simply can’t. The only basis for democracy, is truth. Deceit is for dictators, not for democrats. And deceit reigns, in the U.S. and in its allied countries. Is this really tolerable? Americans, at least, tolerate it.

    When Obama was awarded the Nobel Peace Prize, the far-right Rupert Murdoch’s Wall Street Journal editorialized against Obama on 10 October 2009, by saying that “What this suggests to us — and to the Norwegians — is the end of what has been called ‘American exceptionalism’.” Little did anyone then know that after winning re-election upon the basis of such war-mongering lies from Obama, as that “America remains the one indispensable nation”, Obama in February 2014 would go so far as to perpetrate a bloody coup overthrowing the democratically elected Government of one “dispensable” nation, Ukraine; and, then, on 28 May of 2014, Obama would be telling America’s future generals, that “The United States is and remains the one indispensable nation” and that Obama would, in that speech, explicitly malign Ukraine’s neighbor Russia. He did it, in this speech, which implicitly called all nations except the U.S. “dispensable.” He had carefully planned and orchestrated Americans’ hostility toward Russia. His successor, Trump, lied saying that he wanted to reverse Obama’s policies on this, and Trump promptly, once becoming elected, increased and expanded those policies. Whatever a deceitfully war-mongering country like this might be, it’s certainly no democracy. Because democracy cannot be built upon a ceaseless string of lies.

  • DEA Spy Cameras In Vacuum Cleaners: Surveillance State

    According to the website USAspending.gov, the US Drug Enforcement Administration (DEA) awarded a contract to an American defense company to build a vacuum cleaner for surveillance purposes.

    A California-based company called Special Services Group, LLC. received a $42,595 contract on November 28 to manufacture a “custom Shop Vac concealment with Canon M50B.” The program completion time is one month, the DEA expects delivery of the spy vacuum on January 01.

    Canon describes the high-sensitivity VB-M50B Network Camera as a “PTZ [Pan-Tilt-Zoom] network camera” that “captures video with remarkable color and clarity, even in very low-light environments.”

    Depending on the retailer, the camera sells for $3,000 to $3,500; the contract summary specifies the spy vacuum is being funded by the DEA’s Office of Investigative Technology, as Quartz first reported this story on December 06.

    The company behind the spy vacuum: Special Services Group “is a leading supplier of technical solutions for law enforcement, military and government agencies in the United States of America,” its website says. “Due to the critical missions of our customers, we have chosen not to place our product information on our website. Please use the contact section of our site to request more information.”

    So, what did social media have to say about spy vacuums?

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    Last month, new government procurement data also showed how the DEA purchased an undisclosed number of secret surveillance cameras that are being disguised as streetlights. 

    Again, Quartz first reported this dystopian development of federal authorities stocking up on “covert systems” in November. The report showed how the DEA paid a Houston, Texas company called Cowboy Streetlight Concealments LLC. approximately $22,000 since June for “video recording and reproducing equipment.”

    It is not just streetlights and vacuum cleaners the federal government wants to mount covert surveillance cameras on, it seems cameras inside traffic barrels could be heading onto America’s highways in the not too distant future.

    And as Quartz reported in October, the DEA operates a complex network of digital speed-display road signs that covertly scan license plates.

    Chad Marlow, a senior advocacy and policy counsel for the ACLU, told Quartz that cameras in street lights have been proposed before by local governments, typically under a program called “smart” LED street light system.

    “It basically has the ability to turn every streetlight into a surveillance device, which is very Orwellian to say the least,” Marlow told Quartz. “In most jurisdictions, the local police or department of public works are authorized to make these decisions unilaterally and in secret. There’s no public debate or oversight.”

    And so, as the US continues to be distracted, torn amid record political, social and economic polarization, big brother has no intention of letting the current crisis go to waste, and quietly continues on its path of transforming the US into a full-blown police and surveillance state.

  • Jatras: The "America Last" Express Hurtles On – Saudi Arabia, INF, Ukraine

    Authored by James George Jatras via The Strategic Culture Foundation,

    As the façade of 2016 Candidate Donald Trump’s promised “America First” continues to crumble away, the baked-into-the-cake pathologies of the foreign and security policy “experts” who monopolize President Trump’s administration plunge forward along their predetermined paths.

    Any realistic notion of American national interests comes last after the priorities of – well, pretty much everyone else with leverage in Washington.

    Case in point, let’s start with Saudi Arabia and all the breast-beating over whether Saudi Arabia’s Mohammed bin Salman (MbS) really is guilty of ordering the killing of Jamal Khashoggi. (Spoiler Alert: You betcha!)

    American and western media were all a-twitter last week with Russian President Vladimir Putin’s high five to Crown Pariah MbS at the G20. Amid the faux outrage – come on, does anyone really think MbS was the only killer in that room? – the gesture received America’s highest media tribute: a parody on “Saturday Night Live.”

    What a circus. Apart from Putin’s greeting, the assembled hypocrites went out of their way to shun the leprous MbS, even shunting him to the margins of the group picture – as though the killing of one dodgy journalist outweighed their abetting MbS’s business-as-usual slaughter in Yemen. Really! I barely know the guy. We were never actually friends…

    Khashoggi’s gruesome death is the gift that keeps on giving, exacerbating as it does both international and domestic American fault lines. Let’s keep in mind that his affiliation was with the Muslim Brotherhood (and Turkish President Recep Tayyip Erdoğan), the CIA, and (almost the same thing) the Washington Post. Internationally these line up with Turkey, Qatar, and Saudi elements currently on the outs with MbS and who would like to send him to join Khashoggi. Domestically in the US these add up to the Deep State and “the Resistance” to President Donald Trump, who are thrilled to be able to hang Khashoggi around his neck like an albatross, which he’s foolishly allowing to happen.

    On the other hand, MbS is supported by Israel, which has a lot of clout on Capitol Hill (duh) and virtually owns the Trump administration (also duh). Prime Minister Bibi Netanyahu has Trump dancing to his tune via Jared Kushner (Trump and Kushner may now in fact be the same person), Ivanka Trump, and Sheldon Adelson, plus his entire foreign policy team, starting with National Security Adviser John Bolton and Secretary of State Mike Pompeo. Rather than wisely using the Khashoggi imbroglio as an opportunity to take the exit ramp away from US support for the crazed Wahhabist head-choppers in Riyadh of any faction, Team Trump is doggedly defending their the line in the sand in support of MbS personally as the spearhead of their anti-Iran, “Arab NATO” program.

    The Resistance side is no less anti-Iran, but beating the Khashoggi drum and even tying it to support for Yemen slaughter (not that they really give a damn about Yemen, except for a few bleeding hearts like Senator Rand Paul and Representative Tulsi Gabbard, who even have the temerity to oppose the CIA’s arming of al-Qaeda in Syria!) is a twofer: to weaken and humiliate Trump, plus hoping at some point to install a replacement to MbS who would be a more reliable tool for their anti-Iran vendetta. The big break, if it comes, will be if Bibi’s foot soldiers around Trump decide they need to dump MbS as counterproductive to their agenda on Iran. Then they’ll stop resisting the Resistance, MbS will be removed (with extreme prejudice), and Trump will have egg on his face for having supported him for so long. For the Resistance, it’s win-win …

    … if it happens that way. On the other hand, even exposed as the bloody minded killer he is, it’s not impossible MbS, with Israel backstopping him, can just tough it out. After all, those waiting in the wings in Riyadh are no angels either. At least in the short term MbS may still have the upper hand via squatter’s rights; he’s in power and the guy everybody still has to deal with. He can also still spread a lot of cash around as Khashoggi recedes into the rear view mirror.

    If things really look as though they are going south on him, MbS might think to take leaf from the playbook of Georgia’s Mikheil Saakashvili in 2008 and Ukraine’s Petro Poroshenko a couple of weeks ago (more below) and provoke an incident with Iran on his own to force Washington back him up. That would be risky, to say the least. It’s unlikely that even Bolton and Pompeo are ready for war – yet. They seem to believe their own propaganda about regime change via sanctions and economic collapse and the supposedly yuge popularity of the “People’s Mojahedin” (MEK), our designated replacement waiting to be parachuted into Tehran. They’ll at least want to run the sanctions game a while longer to weaken Iran (and humiliate the Europeans some more) before they go for Plan B if necessary. Also, they’d need a phony pretext along the lines of Iraqi WMDs, Benghazi, Racak, and it’s uncertain MbS is competent give them one all by himself.

    If MbS does hazard to strike out on his own before they (Donald Kushner and Boltpeo) are ready, he may end up chewing on his tie like Saakashvili (or whatever the equivalent of that is with a thobe and gutra). At that point he would be universally seen as a liability and removed. Nothing can be ruled out of course, and if MbS thinks are getting really shaky he just might do it, figuring he’s got nothing to lose … but his head. 

    Shifting gears to the big league between the US and Russia, it’s virtually certain the Trump administration will follow through on its threat to pull out of the Intermediate-Range Nuclear Forces (INF) Treaty, originally concluded between the US and the USSR in 1987. Pompeo’s ultimatum to Russia to confess they were cheating and dispose of the offending 9M729 missiles was couched in a laundry list of “admit when you stopped beating your wife” charges: “These violations of the INF treaty cannot be viewed in isolation from the larger pattern of Russian lawlessness on the world stage. The list of Russia’s infamous acts is long: Georgia, Ukraine, Syria, election meddling, Skripal and now the Kerch Strait, to name just a few.”

    Pompeo’s ultimatum came literally one day after Trump signaled in a Tweet that he does not want a new arms race:

    ‘I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The U.S. spent 716 Billion Dollars this year. Crazy!’

    Ha! Who does this Trump fellow think he is – the President? He doesn’t want a “crazy” arms race? Too bad. He’d better check with the guys he’s picked to run his administration for him. They’re completely copasetic with crazy – and then some!

    Perhaps we can hold out a desperate hope that Trump’s intention is to replicate his tentative win on Korea, that threatening to pull out of the INF Treaty and accusing Moscow of every sin under the sun is just part of the “art of the deal,” “little rocket man” versus “mentally deranged dotard,” etc., with the real goal a new and better deal with Russia, maybe including China as well. But if that were so (there’s no evidence for it) there’s no need to trash the current agreement or even to threaten to do so. There is a lot that has changed technologically since 1987, and updates and revisions, perhaps in a protocol to the existing treaty might make sense.

    That’s unlikely to happen though. Instead, not only will there be a new arms race in the intermediate range – which Moscow declares its willingness to undertake, however reluctantly – the flaccidity of America’s European so-called allies is again relevant. US threats to deploy intermediate-range missiles in Europe would be meaningless if European countries refused to host them because doing so would make them a target for Russian weapons. But while the European Union whines it would be better to keep the Treaty (just like it whined impotently about the JCPOA), NATO – mainly the same countries as belong to the EU – dutifully backed up the US position. There’s no evidence Europeans are prepared to confront Washington with a firm “Ohne uns!” if the INF agreement is terminated. Servility to their Transatlantic hegemon outweighs even their instinct for self-preservation. Whereas in the 1980s the first intermediate-range deployment of US Pershing missiles sparked a huge, mainly Leftist, European peace movement – which in turn helped lead to the INF Treaty in the first place – nothing of the sort exists now. This perhaps reflects the fact that today’s Left, which has little affinity with ordinary working people and is obsessed with Cultural Marxist identity politics, has become quite anti-Russian with the demise of communism.

    Finally, moving to Ukraine, one would think the Trump Administration would not be particularly friendly towards a government that was complicit in the attempt to use the Christopher Steele dossier to put Hillary Clinton in the White House and then, when that failed, to cripple the Trump administration through the witch hunt known as Russiagate. While the major players were intelligence and law enforcement agencies of the United States and the United Kingdom(not necessarily in that order), other countries were involved too. One of the prominent ones was Ukraine, whose President Petro Poroshenko feared could be left out in the cold if Trump improved ties with Russia per his oft-stated intent– since after all, nobody in Washington could care less about Ukraine except as a club to beat Russia with. Steps were taken to avert that:

    ‘Andrii Telizhenko, a former high-ranking Ukrainian diplomat known well in Washington circles, had vital information about collusion between elements of Ukraine’s Petro Poroshenko administration and the US’ Democratic National Committee (DNC) to dig up – or create – dirt on Donald Trump, but he has been chronically ignored by US investigators.

    ‘Telizhenko appeared as a key source in a January 2017 Politico article by Ken Vogel titled, “Ukrainian efforts to sabotage Trump backfire: Kiev officials are scrambling to make amends with the president-elect after quietly working to boost Clinton.”’

    Whatever concerns Poroshenko might have had that his complicity in the anti-Trump US-UK Deep State plot would hurt his standing with the administration of his target have long since been put to rest. Trump’s turning his administration into a haven for Bush-era recidivists and others of the sort who have turned American policy into a shambles for the past three decades has seen to that. Hostility to Russia is and will remain a lodestar of US policy, whichipso facto makes Poroshenko our “friend.”

    That means that Poroshenko need only poke the bear to get a growl and kneejerk pledges of support will click into place. While Ukraine may not be a full member of the golden circle of countries like Israel, Saudi Arabia, and the United Kingdom that have the US on a leash, it’s not too far from it either.

    With his reelection prospects in March 2019 appearing dismal, Poroshenko decided to “wag the dog” with a stunt in the Kerch Strait connecting Crimea to the Russian mainland that he knew would provoke a Russian response. As Moon of Alabama reports:

    ‘The Ukrainian president Petro Poroshenko sent the boats with the order not to coordinate their passage with Russian authorities. The captured sailors confirm that. He obviously wanted to provoke a violent Russian reaction.

    ‘The government of Ukraine practically admitted that the mission had nefarious intent:

    “Ukraine’s state security service [SBU] says that its intelligence officers were among the crew on Ukrainian naval ships seized by Russia in a standoff near Crimea.

    “The SBU agency said in a statement Tuesday that the officers were fulfilling counterintelligence operations for the Ukrainian navy, in response to ‘psychological and physical pressure’ by Russian spy services. It didn’t elaborate, but demanded that Russia stop such activity.”

    “Russia’s FSB intelligence agency said late Monday that that there were SBU officers on board the Ukrainian ships, calling that proof of a “provocation” staged by Ukraine.”

    Moscow is acutely aware of the danger of an attack to disable the Kerch Strait Bridge, built quickly and at great expense (a fact that undermines the oft-repeated anti-Russian claim that Moscow is plotting to seize Mariupol, Zaporozhye Oblast, and part of Kherson Oblast to establish a mainland route from Donbas to Crimea from the north). There have been rumors (perhaps no more than that) that Ukraine seeks to deploy a Special Atomic Demolition Munition (SADM), a small, man-portable, low-yield (circa one kiloton) device developed by NATO in the 1950s for destroying European infrastructure in advance of a Soviet invasion. Such a device would be deployable by divers if they had access to the bridge. Whether or not there’s any factual basis for such concerns, Moscow takes threats to the bridge seriously. In May 2018 the Russian Investigative Committee opened a criminal case against establishment commentator Tom Rogan and his Washington Examiner editor for advocating blowing up of the bridge, which Russian officials called incitement to terrorism.

    Right on cue, Washington is preparing new sanctions, planning to send US warships into the Black Sea in a show of support for a country to which we are not allied (amid a lunatic call from the Atlantic Council to force an entry into the Sea of Azov as well!), and conducting “extraordinary” observation flight over Ukraine. What could possibly go wrong?

    The bottom line is that Poroshenko now can jerk our chain and we will respond. While this time he failed to get a nationwide, 60-day martial law declaration approved by a Rada concerned he’d use it to cancel next year’s election, he did get 30 days in oblasts bordering Russia and Pridnestrovie. This will be useful not only for hampering electoral activities of his opponents in areas where he is even more unpopular than in the rest of Ukraine, it will facilitate seizures of churches and monasteries from the canonical Ukrainian Orthodox Church – a process that has already begun. He is secure in the knowledge that another provocation is always an option, in Kerch again, or the Donbas, or a grab against a major Church site like Pochaev or Pechersk.

    Perhaps the saddest thing is that it has now become all so predictable. We were told that Donald Trump’s administration would put America and American interests first. But instead, those acting in his name tell us through their actions: “Get in line, peasants.”

  • Russian Stealth Jets To Be Armed With New Hypersonic Missiles 

    The advanced Sukhoi Su-57 multipurpose jet, Russia’s first domestically produced fifth-generation stealth fighter, will be armed with new hypersonic missiles, according to a Russian military source.

    “In accordance with Russia’s State Armament Program for 2018-2027, Su-57 jet fighters will be equipped with hypersonic missiles,” a Russian defense industry source toldTASS news agency on December 06.

    “The jet fighters will receive missiles with characteristics similar to that of the Kinzhal missiles, but with inter-body placement and smaller size,” the source added.

    Moscow said the new Kinzhal (“Dagger”), a nuclear-capable air-launched ballistic missile, can hit speeds of up to Mach 10 and can perform evasive maneuvers that can render NATO’s US-led missile defense system completely “useless.”

    The missile can carry both conventional and nuclear warheads with a range of about 1,200 miles.

    The new hypersonic missile will be much smaller than the current Kinzhal; this is due to size constraints of fitting the weapon inside the stealth aircraft’s weapons bay. The alternative would be mounting the missile on the outside of the plane, but that would increase the jet’s radar signature. 

    No details within the report explain about a timetable for the development or the planned specifications for the new missiles. The Defense Ministry would neither confirm nor deny the information.

    The Kinzhal missile is currently being tested in field training exercises.

    President Vladimir Putin’s State of the Nation Address on March 01, made it clear that Russia had acquired advanced weaponry, including laser weapon systems, an underwater nuclear-powered drone, hypersonic weapons, and nuclear-powered cruise missiles. 

    The Russian military will receive about a dozen Su-57s in 2019, but there are some concerns that the plane is not yet a true fifth-generation jet, due to the need for an engine upgrade. 

    While many western analysts remain skeptical of the Su-57 and Kinzhal’s capabilities, it seems that Moscow is quickly moving ahead and preparing for the next military conflict. 

    The global economy is nearing the tipping of a massive slowdown in 2019, which could be followed by a recession. During economic downturns, the risk of military conflict tends to increase. Russia is preparing for a fight, as so is China. 

  • Seven Days Of Failures For The American Empire

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    On November 25, two artillery boats of the Gyurza-M class, the Berdiansk and Nikopol, one tugboat, the Yany Kapu, as well as 24 crew members of the Ukrainian Navy, including two SBU counterintelligence officers, were detained by Russian border forces. In the incident, the Russian Federation employed Sobol-class patrol boats Izumrud and Don, as  well as two Ka-52, two Su-25 and one Su-30 aircraft.

    Ukraine’s provocation follows the advice of several American think-tanks like the Atlantic Council, which have been calling for NATO involvement in the Sea of Azov for months. The area is strategically important for Moscow, which views its southern borders, above all the Sea of Azov, as a potential flash point for conflict due to the Kiev’s NATO-backed provocations.

    To deter such adventurism, Moscow has deployed to the Kerch Strait and the surrounding coastal area S-400 batteries, modernized S-300s, anti-ship Bal missile systems, as well as numerous electronic-warfare systems, not to mention the Russian assets and personnel arrayed in the military districts abutting Ukraine. Such provocations, egged on by NATO and American policy makers, are meant to provide a pretext for further sanctions against Moscow and further sabotage Russia’s relations with European countries like Germany, France and Italy, as well as, quite naturally, to frustrate any personal interaction between Trump and Putin.

    This last objective seems to have been achieved, with the planned meeting between Trump and Putin at the G20 in Buenos Aires being cancelled. As to the the other objectives, they seem to have failed miserably, with Berlin, Paris and Rome showing no intention of imposing additional sanctions against Russia, recognizing the Ukrainian provocation fow what it is. The intention to further isolate Moscow by the neocons, neoliberals and most of the Anglo-Saxon establishment seems to have failed, demonstrated in Buenos Aires with the meeting between the BRICS countries on the sidelines and the bilateral meetings between Putin and Merkel.

    On November 30, following almost two-and-a-half months of silence, the Israeli air force bombed Syria with three waves of cruise missiles. The first and second waves were repulsed over southern Syria, and the third, composed of surface-to-surface missiles, were also downed. At the same time, a loud explosion was heard in al-Kiswah, resulting in the blackout of Israeli positions in the area.

    The Israeli attack was fully repulsed, with possibly two IDF drones being downed as well. This effectiveness of Syria’s air defenses corresponds with Russia’s integration of Syria’s air defenses with its own systems, manifestly improving the Syrians’ kill ratios even without employing the new S-300 systems delivered to Damascus, let alone Russia’s own S-400s. The Pantsirs and S-200s are enough for the moment, confirming my hypothesis more than two months ago that the modernized S-300 in the hands of the Syrian army is a potentially lethal weapon even for the F-35, forbidding the Israelis from employing their F-35s.

    With the failed Israeli attack testifying to effectiveness of Russian air-defense measures recently deployed to the country, even the United States is finding it difficult to operate in the country. As the Washington-based Institute for the Study of War confirms:

    “Russia has finished an advanced anti-access/area denial (A2AD) network in Syria that combines its own air defense and electronic warfare systems with modernized equipment. Russia can use these capabilities to mount the long-term strategic challenge of the US and NATO in the Eastern Mediterranean Sea and the Middle East, significantly widen the geographic reach of Russia’s air defense network. Russia stands to gain a long-term strategic advantage over NATO through its new capabilities in Syria. The US and NATO must now account for the risk of a dangerous escalation in the Middle East amidst any confrontation with Russia in Eastern Europe.”

    The final blow in a decidedly negative week for Washington’s ambitions came in Buenos Aires during the G20, where Xi Jinping was clearly the most awaited guest, bringing in his wake investments and opportunities for cooperation and mutual benefit, as opposed to Washington’s sanctions and tariffs for its own benefit to the detriment of others. The key event of the summit was the dinner between Xi Jinping and Donald Trump that signalled Washington’s defeat in the trade war with Beijing. Donald Trump fired the first shot of the economic war, only to succumb just 12 months later with GM closing five plants and leaving 14,000 unemployed at home as Trump tweeted about his economic achievements.

    Trump was forced to suspend any new tariffs for a period of ninety days, with his Chinese counterpart intent on demonstrating how an economic war between the two greatest commercial powers had always been a pointless propagandistic exercise.

    Trump’s backtracking highlights Washington’s vulnerability to de-dollarization, the Achilles’ heel of US hegemony.

    The American-led world system is experiencing setbacks at every turn. The struggle between the Western elites seems to be reaching a boil, with Frau Merkel ever more isolated and seeing her 14-year political dominance as chancellor petering out. Macron seems to be vying for the honor of being the most unpopular French leader in history, provoking violent protests that have lasted now for weeks, involving every sector of the population. Macron will probably be able to survive this political storm, but his political future looks dire.

    The neocons/neoliberals have played one of the last cards available to them using the Ukrainian provocation, with Kiev only useful as the West’s cannon fodder against Russia. In Syria, with the conflict coming to a close and Turkey only able to look on even as it maintains a strong foothold in Idlib, Saudi Arabia, Israel and the United States are similarly unable to affect the course of the conflict. The latest Israeli aggression proved to be a humiliation for Tel Aviv and may have signalled a clear, possibly definitive warning from Moscow, Tehran and Damascus to all the forces in the region. The message seems to be that there is no longer any possibility of changing the course of the conflict in Syria, and every provocation from here on will be decisively slapped down. Idlib is going to be liberated and America’s illegal presence in the north of Syria will have to be dealt with at the right time.

    Ukraine’s provocation has only strengthened Russia’s military footprint in Crimea and reinforced Russia’s sovereign control over the region. Israel’s recent failure in Syria only highlights how the various interventions of the US, the UK, France and Turkey over the years have only obliged the imposition of an almost unparalleled A2AD space that severely limits the range of options available to Damascus’s opponents.

    The G20 also served to confirm Washington’s economic diminution commensurate with its military one in the face of an encroaching multipolar environment. The constant attempts to delegitimize the Trump administration by America’s elites, also declared an enemy by the European establishment, creates a picture of confusion in the West that benefits capitals like New Delhi, Moscow, Beijing and Tehran who offer instead stability, cooperation and dialogue.

    As stated in previous articles, the confusion reigning amongst the Western elites only accelerates the transition to a multipolar world, progressively eroding the military and economic power of the US.

  • EU Army? France Riot Control Vehicles Bearing EU Flag Stoke Fear, Confusion

    A strange sighting in France has the internet abuzz over whether the Macron administration deployed armored vehicles bearing the EU flag to perform riot control during Saturday’s Yellow Vest protests, stoking concerns over whether it’s the first sign of a much talked about EU Army.

    “rather than bearing the French Tricolore flag, the vehicles bore the distinct starred EU flag, which critics have said is a sign an EU Army is drawing closer to existence” –Daily Star

    The notion of an EU Army is not new – as both French President Emmanuel Macron and German Chancellor Angela Merkel have both floated the idea.

    In November, Merkel said “The days where we can unconditionally rely on others are gone,” adding “We should work on a vision to create a real European army one day.” 

    Stressing that such an army would not be “against NATO” but complement it, the chancellor also proposed a European Security Council with rotating seats for member states that would make speedy foreign policy decisions without the need for unanimity. –New York Times

    In early November, Macron told France’s Europe 1 Radio that Europeans cannot be protected without a “true, European army.” 

    “I believe in the project of a sovereign Europe,” said Macron, adding “We won’t protect Europe if we don’t decide to have a true European army. In front of Russia, which is at our borders and which can be threatening, I would like to start a security dialogue with Russia, which is a country I respect and which is European.”

    President Macron has already warned that Europeans can no longer rely on the US to defend them, and he revived the theme on Tuesday, in response to President Donald Trump’s decision to pull out of a 1987 nuclear treaty with Russia, banning medium-range ground-launched missiles.

    “Who is the main victim? Europe and its security,” he told French radio station Europe 1.

    “I want to build a real security dialogue with Russia, which is a country I respect, a European country – but we must have a Europe that can defend itself on its own without relying only on the United States.”

    Speaking about cyber security, he also said: “We have to protect ourselves with respect to China, Russia and even the United States of America.” –BBC

    So – was the riot control vehicle pictured with an EU flag the first sign of an EU army operating in France, or is there another explanation for the sighting?

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  • Dollar Slides After Goldman Capitulates, Pulls March Rate Hike Forecast

    For months, Goldman’s optimistic take on the economy drew raised eyebrows across both the sell and buyside, and nowhere more so than the bank’s forecast for 4 Fed rate hikes in 2019, a number that is even higher than the Fed’s own dot plot forecast which anticipates 3 rate hikes next year, not to mention the market’s own implied prediction of less than 1 rate hike in the coming year.

    Well, on Sunday night Goldman capitulated and in a note titled “The Ides of March” published late on Sunday by Jan Hatzius, the banks capitulated on its optimistic, and hawkish, projections, and now calls for less than a 50% probability of a rate hike in the March.

    How does Hatzius justify this long-overdue capitulation? It’s hardly the recent economic data, which while conceding that it has slowed down, Goldman notes that it has transitioned from “exceptionally strong to merely strong.”

    Relative to the turmoil in the financial markets, the economic numbers have been remarkably stable recently. Admittedly, jobless claims have risen and November payrolls fell somewhat short of expectations. But a report showing 155k new jobs and a decline in the (unrounded) unemployment rate to a new 48-year low of 3.67% is hardly weak in an absolute sense. Combined with the rebound in the November ISMs and firm consumer confidence readings, Friday’s report kept our current activity indicator (CAI) at 2.8% in November. This is down from a pace of 3.6% over the summer but still roughly 1 percentage point above the economy’s potential growth rate. In other words, our CAI implies that growth has transitioned from exceptionally strong to merely strong

    Hatzius also observes a similar softening in inflation data, even if not one in wage growth; even so, “the wage and price inflation misses have been relatively minor, and we expect an increase in nominal wage growth to the 3¼-3½% range as well as a pickup in core PCE inflation to 2.2% by the end of 2019.”

    However, while Hatizus refuses to admit a slowdown in either jobs or inflation, he notes that a “much more significant change is the sharp tightening in financial conditions.” As Hatzius adds, “for a variety of reasons—including an initial bout of concern about Chairman Powell’s “long way from neutral” remark, the inevitable slowing of GDP and profit growth from their exceptionally strong pace, and the broadening tension between the US and China—rising investor anxiety has pushed up our FCI by about 80bp since early October. If the FCI remains constant at its current level, we estimate that tighter financial conditions would take ¾-1pp off real GDP growth over the next year.”

    It is this tightening in financial conditions that Goldman finally admits “may lead to fewer rate hikes than seemed likely earlier” for one simple reason: “if the financial markets have already delivered greater restraint, the committee just doesn’t have as much work to do in pushing up the funds rate.”

    Fed officials tend to downplay this link in their public communication because they dislike the “Fed put” narrative, i.e. the simplistic idea that they let the stock market dictate monetary policy. Nevertheless, we think they do—and should—respond to the economic implications of material and sustained changes in financial conditions by adjusting the funds rate path.

    In other words, while the Fed downplays the “Fed put” narrative – according to Goldman – that’s all that really matters in the end. Thanks for clarifying… even though we are confident that JPM’s Marko Kolanovic will promptly brand this latest admission from Goldman as, drumroll, even more “fake and bad news.”

    So what are the practical implications for Goldman’s funds rate call?

    As Hatzius explains, despite the FCI tightening, recent Fed communications suggest that a hike in December is still very likely (in our view 90%). However, according to the Goldman chief economist, “the probability of a move in March has now fallen to slightly below 50%.”

    A decision to pause in March would also be consistent with the likelihood that tariff-related uncertainty will look particularly high around the end of the 90-day grace period on March 1.

    Yet even while admitting it was wrong, Goldman refuses to go all the way, and Hatzius hedges by saying that “this is a close call because there are still good arguments for a March hike, including a continued positive fiscal impulse that should keep growth above trend in Q1 even with tighter financial conditions, as well as a funds rate that remains at the very bottom end of the committee’s range of neutral rate estimates even after a December hike.”

    Additionally, Hatzius admits that there will be one easy way to test if Goldman is right in just two weeks: the bank’s forecast of no hike assumes that the median number of 2019 hikes in the December dot plot moves down from 3 to 2; So if the median instead stays at 3 hikes, “the probability of March would increase again” according to Goldman.

    Finally, despite Goldman’s capitulation on a March rate hike call, the bank still sneers at the market’s current pricing for the funds rate, which discounts less than one full hike in all of 2019. Why? Because in Goldman’s forecast, the economy continues to grow above trend for most of the year, the unemployment rate falls further below the Fed’s estimate of its longer-term level, wage and price inflation gradually move higher, and we see a return to quarterly hikes in June that last through the end of 2019.

    And here, out of nowhere, Goldman mentions rate cuts: just in case it is proven absolutely dead wrong and the Fed decides to start easing next year:

    By contrast, the likelihood of sizable rate cuts—which would probably coincide with a recession or at least a serious recession scare—remains quite low over the next year or two, in our view. Current growth momentum is good, the FCI tightening is material but far from devastating, and the two key historical recession drivers—financial imbalances and a serious overheating problem—are still not visible. We therefore think that the storm will pass and this will keep Fed officials on a normalization path, albeit a more tortuous one than up to now

    So what if any impact did Goldman’s rate call change have on the market? A quite profound one, because while equity futures were sliding and 10Y yields lower on the session, pushing the dollar index to session highs early in the overnight session, moments after Goldman’s note hit, the Bloomberg dollar index tumbled to session lows…

    … while the Euro spiked, largely as a result of the sharp repricing of Fed vs ECB rate hike odds in 2019, because one look at Euribor vs Eurodllar 2019 calendar spreads, shows that suddenly the odds of a rate hike by the ECB are higher than those in the US! In other words, after a violent repricing in the past month – largely thanks to Powell’s recent comments and continued disappointing economic data out of the US – the market now sees the ECB as more hawkish than the Fed in 2019.

  • Why Socialism Fails: Uganda Edition

    Authored by Andrew Moran via LibertyNation.com,

    Uganda was described as a “fairy tale” by Churchill, but it descended into chaos…

    Africa is the cradle of mankind, the mother to all human beings that have ever existed on this blue pearl of the cosmos. It’s a land rich in resources, sights enriched with beauty, and cultures that have influenced generations. But Mother Nature would have never envisioned that the continent would be the hotbed of brutality, bloodshed, and barbarism. These have been the primary themes for centuries, and they persist today, with large swaths of the continental population barely surviving.

    Most modern-day historians like to blame British colonialism and U.S. capitalism for the problems that plague the region. However, even dating back to the tribes of yesterday, researchers come across tales of sadism and savagery, like burying people alive and roasting flesh and bone as punishment.

    Africa has produced some of history’s worst tyrants, ranging from Zimbabwe’s Robert Mugabe to Sudan’s Omar al-Bashir to Somalia’s Siad Barre. But there was nobody as evil as Uganda’s Idi Amin.

    Because this despot and his regime’s destruction pale in comparison to that of other socialist atrocities, like Pol Pot’s Cambodia, Uganda’s flirtation with socialism and dictatorships is rarely discussed. But it doesn’t make it any less brutal for the victims of the madness of Idi Amin.

    Like other accounts of failed socialist experiments, Uganda was entrenched in a one-man conquest to seize absolute power, kill dissidents, and nationalize private industry. Unlike other socialist utopias, Ugandans did not resort to cannibalism – it was Amin himself who enjoyed the taste of human skin.

    Nationalization

    Shortly after his death in 2003, Amin’s physicians revealed that he was clinically insane, relying on anti-psychotic drugs just to get by. Considering the economic policies he instituted and the viciousness he employed, the dosage was ostensibly insufficient.

    While a traditional red tape central system to manage the economy was absent, the Amin government and his henchmen still adopted the mainstay of socialism: nationalizing the means of production.

    The dictator’s first act was to expel more than 80,000 South Asians and seize their assets, accusing these people of deceiving the country and stealing from natives. The policy was popular among the population, promising to return the nation to ethnic Ugandans, many of whom envied and resented successful foreigners.

    Idi Amin

    The second act was to expropriate private property, nationalize industry, and take over agriculture. The economy was already on the decline, but these socialist pursuits exacerbated the nation’s financial plight. As expected, sugar exports plunged, factories collapsed, and businesses and stores shuttered their doors because of mismanagement, abuse of power, a lack of maintenance, and full-blown neglect.

    When Amin and his henchmen were successful in exporting crops, the earnings were then used to buy weapons and luxury items for the military, including gold Rolex watches and Scotch whiskey. He believed this purchased permanent loyalty from his mercenaries, quoting the old African proverb: “A dog with a bone in its mouth can’t bite.”

    As the economy worsened, Amin believed he could solve the nation’s woes by printing more money. Expectedly, inflation topped 700% – toilet paper would cost two weeks’ wages.

    Ugandans never really got to experience the prosperity that was promised to them. Suffering from food shortages and a paucity of basic necessities, smuggling became rampant. Amin was so perturbed by this trend that he ordered his officers to shoot smugglers on sight, hoping to deter future heroes from trying to provide basic goods to the public.

    Frozen Heads

    To understand the mad leader’s time in office, you need to examine a dinner party he hosted. A year prior to the formal event, he ordered the killing of Brigadier Hussein Suleiman, the former army chief of staff who was appointed by his predecessor, Milton Obote. As the evening progressed, he brought out Suleiman’s frozen head and placed it proudly on the dinner table for the guests to admire.

    Many of Amin’s enemies were beaten to death with wrenches, sledgehammers, and other tools and had their heads chopped off and frozen. He eventually constructed a room designated for refrigerators that housed his vast collection of frozen heads. It was known as the “botanical room.”

    Amin had a thirst for blood and violence. This was life in Uganda from 1971 to 1979:

    • Prisoners in Mackindye, Naguru, and Maksero were forced to kill each other to save their own lives, only to later be killed by other inmates.

    • Human remains of dissidents, prisoners, and enemies of the state were dumped in rivers.

    • People whose last name started with “O” were slaughtered – “O” was common in the Acholi and Langi tribes.

    • Murders by security forces were secret and systematic.

    • He often ate the flesh of his human victims.

    His family also suffered the same fate as Amin’s victims. For instance, one of his wives – he had a harem of women with up to 35 kids – died in a botched abortion. To serve as a warning to his other spouses, he demanded that her limbs be removed and reattached with the legs at the shoulders and the arms at the pelvis.

    Amin’s anti-Semitism was also fierce, celebrating Adolf Hitler for killing six million Jews and accusing Israelis of not acting in the interest of the world.

    He died in 2003 when his family disconnected him from life support as he suffered from kidney failure. His death would have come a lot earlier. Former British Foreign Secretary David Owen revealed that he had considered ordering the assassination of the African despot because “his regime goes down in the scale of Pol Pot as one of the worst of all African regimes.”

    Idi Amin making white diplomats kneel before him

    Uganda Will Never Forget

    Venezuela will never forget Hugo Chavez and Nicolas Maduro. Cambodia will never forget Pol Pot. Romania will never forget Nicolae Ceausescu. Uganda, which remains rife with corruption and crime in 2018, will never forget Idi Amin.

    These men all share the same legacies of failed economics, disturbing behaviors, or grotesque pleasures. Those who romanticize socialism typically omit them from their praise of how wonderful this iniquitous ideology is. But peering through the past will yield a record of mass misery, torture, and anguish – the hallmarks of every socialist test in history.

    This brand of socialism is only responsible for the deaths of 300,000, a drop in the bucket compared to the millions in Mao’s China or Hitler’s Germany. It is still a tragedy that must be embedded in our minds when we begin to toy with socialism and all its subsidiaries. Kampala, Caracas, and Moscow, it’s all the same. Let’s not bring it to Washington, Ottawa, or London.

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