- Brexit Ironies Mount: Belgian Premier Warns EU Won't Help UK Out Of "Black Hole"
Submitted by Michael Shedlock via MishTalk.com,
The move to punish the UK picks up steam even though such actions will damage the EU far more than the UK. Belgium is the latest country bound and determined to punish the UK.
Please consider EU will not help UK out of ‘black hole’, Belgian premier warns.
Britain’s vote to leave the EU has opened a political “black hole” in Westminster and Europe’s leaders will not bend to help it out, Belgium’s prime minister has warned.
Charles Michel’s caustic views on the unreal “dreams” of Brexiters, outlined in an hour-long interview with the Financial Times, speak to the difficulties Britain faces in reaching an exit trade deal that satisfies all 27 EU leaders and their parliaments.
Before the referendum, the liberal leader doggedly resisted giving Britain a special deal on its EU membership terms. He is now showing similar resolve over any Brexit deal, pushing the UK to start the divorce promptly and telling it to expect no big concessions on migration or market access.
“The truth is it’s a very negative situation for the UK, there is no doubt,” he said.
The Truth
The truth is Brexit is very bad for the EU, and punishing the UK will make matters worse, possibly even starting a global trade war.
Facts of the Matter
- “Italian Gov’t Collapse More Than Just a Possibility”
- The EU Cannot Survive as a Prison
- Spain’s Social Security Program Will Go Bust in 2018
- Austria’s Constitutional Court Orders Rerun of Presidential Election.
- Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster
Risk of Global Trade Collapse
Please consider “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish
Bluff or Stupidity?
Germany exports €50,963,643 to the UK than it takes back in imports.
Instance the UK must abide by migration rules when that's the reason the UK left the EU is blatant stupidity given balance of trade numbers
— Mike Shedlock (@MishGEA) July 10, 2016
Le Pen stated “This Is the Beginning of the End of the European Union“.
For details please see Hollande Lectures US About Trump.
The final irony in this mess is that it’s the EU on the verge of falling into an economic black hole, and punishing the UK is one sure way to make that happen.
- The Prospects For Money
Submitted by Alasdair Macleod via GoldMoney.com,
In my view, this new bout of turmoil in financial markets is the prelude to the final demise of government currency.
If I’m right, a long-expected collapse in the purchasing power, and of the very concept of fiat currency, will evolve from current events. The purpose of this article is to explain why monetary theory predicts a currency collapse.
The question at the heart of today’s market instability is the validity of fiat currency; that is to say, forms of money issued and sanctioned by individual governments, with no backing other than faith in those governments’ creditworthiness, and the enforcement of its use by law. The risks they impose on all of us will be evidenced one day by both the speed of the fall in each individual fiat money’s purchasing power, and inevitably by their comparison with gold’s more stable purchasing power. Essentially, an awareness of the dangers of unsound money will gradually become evident to every economic actor.
So far, or at least since the days when fiat money was freely exchangeable for gold, central banks have managed to enforce upon us their currencies as money, originally on the basis they were gold substitutes. That pretence was finally dropped in 1971. The purchasing power of fiat currencies has never been seriously challenged since, except in relatively few extreme cases, such as Zimbabwe and Venezuela. Not even the financial crisis eight years ago threatened a collapse in fiat currencies, when banks had to be rescued with unlimited extra quantities of money and credit.
The current crisis has commenced while there are determined efforts to stop the purchasing power of the major currencies from rising, even leading to the deployment of negative interest rates in this quest. None of the central banks’ policies appear to have worked. The increasing purchasing power of the yen, despite all attempts to lessen it, is the clearest example of the abject failure of a central bank to achieve its monetary objectives. The same can be said of the ECB and the euro, a currency even more synthetic than those it replaced. It is clear that the central banks are setting monetary policy more in hope than in a true appreciation of their own hopelessness.
They place an undue emphasis on empirical evidence. That’s why charts and statistics are so important to them and all their epigones. When you don’t understand and cannot explain something, you turn to the so-called evidence. And when very few people actually have a reasonable grasp of what money is about, you can rely on empirical evidence being unchallenged. For monetary policy, this tells us two things: central banks are clueless about monetary theory, and in the event of a second systemic crisis, they will be misguided by their experiences of the last one.
Today’s empirical evidence reflects the bail-out of the global banking system in 2008/09. Neo-classical monetarists were initially worried by the potential for price deflation in the wake of the banking system’s rescue, and so central bankers expanded narrow money by unprecedented quantities to counter credit deflation, real and anticipated. These were intended to be short-term measures, to be replaced with more normal monetary policies as soon as the immediate crisis was over. These short term measures are still in place today eight years later.
The impact on the gold price
After the Lehman shock, which led to a temporary flight into both money and short-term government debt, the purchasing power of currencies relative to that of gold rose, with the gold price falling from $930 to $690. Subsequently, when it became apparent that monetary expansion had succeeded in curbing deflationary forces, this trend reversed, taking the gold price to over $1900. That then changed in September 2011, following concerted central bank intervention to supress the gold price.
The dollar-gold relationship has now turned once again, signalling that the tide of confidence is moving against currencies. The purchasing power of currencies measured against that of gold is now falling. We now have a banking crisis in the making, if the share prices of major banks are any indication. The UK’s decision by referendum to leave the EU points to Europe’s political disintegration. Increasing market volatility tells us that another systemic crisis may well be imminent, and government bonds reflect a continuing flight to safety.
Already, the Bank of England has announced that a further £250bn in monetary support will be made available to the banks, and that additional swap lines have been agreed between the major central banks. We can take this as evidence that the central banks, relying on empirical evidence, are preparing a new round of monetary expansion as the solution to any future crisis, confirmed in their belief that the risk to the credibility of their currencies is unlikely to be a problem.
This is not what gold, when priced in these currencies, is telling us. To understand why and where the central bankers are mistaken, we must consider some fundamental points about how money actually works.
The theory of money and its purchasing power
To prepare our minds for a comprehensive understanding of monetary theory, we must at the outset dispense with any idea that statistical analysis is relevant. It is not, because there are no constants involved. Valid statistics require at least one constant, usually the purchasing power of money. In the whole field of economics, let alone money, there are none. The purchasing power of money is to a large degree independent of its quantity, and depends on a fluctuating acceptance that it is exchangeable for goods. Quack monetarists that believe in the equation of exchange, despite all evidence it does not work, overlook the subjective factors that qualify something as money.
When we set out to understand money, we must acknowledge there are three major influences at work, besides a general acceptance that a particular form of money is exchangeable for goods. There is the subjective value of the goods for which an exchange is considered, there are the fluctuations in the relative quantities of goods and money in the exchange process, and there is the balance of relative desires in the population as a whole to increase or decrease the quantity of money held, relative to goods. All these factors are the unknowable decision of every single economic actor, and fluctuate accordingly.
This self-evident truth continually risks undermining the very function of any particular form of money, which in order to be acceptable to the parties in any transaction must have a commonly accepted value, even though one party will want money more than the other at a given price. This commonly accepted value has been described by the economist, von Mises, as money’s objective exchange value. It is the one thing that parties to a transaction can agree upon. A dollar is a dollar, a euro is a euro, and so on, even though different individuals will want these forms of money more or less than other individuals.
So far, we have addressed only one out of four dimensions of the money problem. A second dimension is that demand for some goods is always greater than demand for other goods, so money’s purchasing power will differ for every good and class of good exchanged for it. It is never sufficient to just assume that, for instance, the price of housing is rising solely due to demand for housing. It also rises because people place a lower value on money than they do on bricks and mortar. On reflection, this truth should be self-evident. But it also holds true for every other good for which any particular form of money is exchanged, and it is too simplistic to assume that changes in price come from the goods side alone.
A third dimension to consider is that the products and quantities of goods and services purchased yesterday will not be the same as the products bought tomorrow. Besides making the point again, that statistics are wholly irrelevant to understanding money, we can also add that what money will be used to buy tomorrow and in what proportions cannot be predicted, beyond perhaps some broad generalisations, such as people will buy food, they will use energy, and they will enjoy some leisure time. Such platitudes are of no practical value to understanding monetary theory, and disqualify the use of price indices and aggregates such as gross domestic product.
The fourth dimension is one of time. The injection of money into an economy will start at a point, typically the banks creating loans, or governments through unfunded spending. Money therefore enters an economy unevenly, benefitting some at the expense of others. This is known as the Cantillon effect, and is universally ignored by the neo-classical economic community.
The problem today
The reader should now have a grasp as to why attempts to discern future purchasing powers for money are futile, and why monetary policies of central banks never succeed, except perhaps by pure chance.
As if the four dimensions cited above were not enough, there is a further problem. Most fiat money is produced not by central banks, as is commonly supposed, but by commercial banks, which lend money into existence. Bank credit is essentially temporary money, and is regularly extinguished in credit cycles. It is the obvious potential for this bank credit to contract which concerns central bankers most. When bank credit contracts, businesses that are over-reliant on debt for their capital requirements, and companies that have borrowed to finance unprofitable production go bankrupt. This is the bust of the credit cycle. In recent decades, the bust has been deferred and deferred and deferred, but hasn’t gone away.
The failure of central bank monetary policies appears to have reached an inflection point. This is what the share prices of systemically-important banks are telling us. This is what the political disintegration of Europe, upon which the new synthetic euro is based, is telling us. This is what the cul-de-sac of permanently zero and negative interest rates are telling us. This is what wildly over-priced government bonds are telling us. This is what the greatest indicator of all, the price of gold is now telling us.
The inflection point, I believe, is the marker for a potentially catastrophic decline in the purchasing power of paper currencies that are unbacked by exchangeable gold. The faith and credit-standing of issuers of paper money, and not the known and suspected inadequacies of commercial finance, is the last rotten pit-prop supporting the system. We can easily see how a new round of monetary expansion designed to save the global banking system from its nemesis will lead, not to a Lehman-style outcome, but to a collapse of paper currencies.
This, apart from the implied forecast for gold in the paragraph before last, is the only truly subjective statement in this article on a truly subjective subject.
- "I Do Not Like This Uncle Sam…"
With markets and monetary policy already reduced to Seussian fantasy, and the average insta-American incapable of comprehending anything but snapchat-‘memes’, we thought the following summed up the state of US politics perfectly…
- Warmongers Delight: Abe Hits Super-Majority With Sweeping Victory In Japan Election
Submitted by Michael Shedlock via MishTalk.com,
The warmongers and gun manufacturers are cheering today as Shinzo Abe Wins Sweeping Victory in Japan Elections.
Shinzo Abe has won a sweeping victory in elections to Japan’s upper house, leaving him within reach of a parliamentary supermajority that would allow the government to revise Japan’s pacifist constitution.
With seven proportional representation seats left to declare on Sunday night, Mr Abe’s ruling Liberal Democratic party and its allies had won 72 out of the 78 seats they need for a two-thirds majority.
Toru Takigishi, a 76-year-old chemistry professor in Tokyo and a long-time LDP supporter, said he voted for the Communist party for the first time. “I’m happy with the current constitution and I want peace to be maintained. At least there is a checking mechanism for constitutional change under the Communist party,” Mr Takigishi said.
Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution
The Wall Street Journal reports Japan Election Boosts Shinzo Abe’s Bid to Revise Constitution
With most results in, Mr. Abe’s Liberal Democratic Party and its junior partner, Komeito, were on track to win nearly 70 of 121 seats that were up for grabs in the 242-seat upper house. A handful of seats remained undecided early Monday.
The coalition parties plus smaller opposition parties and unaffiliated lawmakers who favor constitutional revision were likely to control two-thirds of Parliament’s upper house after the election, projections by Japanese media showed. Revision requires two-thirds of both houses of Parliament, after which the changes must be approved by a majority of voters in a national referendum. The coalition already controls two-thirds of the lower house, which wasn’t up for election, meaning Mr. Abe has the votes to start the revision process.
Any move to change the constitution is likely to spark a divisive battle. Last year, Mr. Abe’s government enacted a bill allowing Japanese troops to fight overseas along with the country’s allies, following a controversial reinterpretation of one article of the constitution.
The move prompted months of protests, some attracting tens of thousands of people. Though the security bill was passed by both houses of Parliament, experts testified that it was unconstitutional.
With the election over, Mr. Abe will likely focus on passing the stimulus package, a task that has gained urgency since the U.K.’s decision last month to leave the European Union cast further uncertainty over the global economy.
Mr. Abe hasn’t disclosed any details, but the stimulus program is expected to be a multiyear effort to upgrade the nation’s transport infrastructure, expand child care and nursing-care services and create scholarships for students.
Meanwhile, the Bank of Japan is widely expected to expand its efforts to stoke growth and inflation when its policy board meets July 28-29. Its most likely options are increasing the size of its unprecedented asset-purchase program and pushing a key interest rate on bank reserves further into negative territory.
For further discussion of warmongering possibilities, please see Japan’s Abe Angling for War with China? Could the US be Drawn In?
- The Federal Reserve's Grand Scheme Exposed (In 1 Simple Chart)
For 138 years, consumer prices in America slightly declined. After The Federal Reserve was created, things changed…
The 'scheme' exposed…
Source: VisualizingEconomics.com
But, not satisfied with that shift, in 1971, Nixon unhooked American economics from any rationality, because – as we detailed previously – 'The 1%' hate the Gold Standard… between 1930 and 1970, it was only the "bottom 90%" that saw their incomes rise, as can be seen on the next chart.
In other words, the ascent of the non-1% peaked when the Deep State forced Nixon to depart from the gold standard's constraint on largesse.
Which should also clarify just why to the "1%", including their protectors in the "developed market" central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.
- Theory Of "Conspiracy Theorists"
Submitted by Marcus Godwyn via OrientalReview.org,
It seems to have become one of the most popular ways of ridiculing somebody’s argument or position, calling into question someone’s sanity or even somebody’s right to their very own existence in recent years are “You’re a conspiracy theorist!”, “That sounds like a conspiracy theory to me!” We hear such accusations let fly in TV and radio debates all too often as soon as anyone begins to question a perceived, generally excepted “truth”. The accuser always seems supremely confident that this accusation is enough to immediately put the accused beyond the pale of all human reason and that all participants and viewers of the debate should be expecting men in white coats to arrive at any moment and the accused to be led away in the interests of all for “corrective treatment”.
The definition of conspiracy of the on-line dictionaries insists on the “evil, harmful, bad” side of things. In other words; in the English language, it is impossible to conspire to do good. This is one of the reasons why the accusation of being a conspiracy theorist remains an effective put down as it implies that the accused believes that their government, company bosses and colleagues, military or police commanders, friends and acquaintances or even members of their own family and partaking in secret, evil deeds and plots for harmful ends which have happened or are going to happen and hence at best implies lack of good faith and paranoia and at worst, extreme negativity, treachery; being a fifth columnist. All labels with which most of us would wish not to be tarnished.
Here however are some alternative definitions of “conspiracy theorist”:
- someone who has seen through the bullshit (David Icke);
- someone who questions the statement of known liars (unknown).
It is clearly not possible to see these definitions as morally negative unless we are creators of bullshit or known liars.
Could it be that the time has come for a reappraisal of the definition of the word conspiracy because the following is palpably undeniable. Every development in politics and affairs of state, every war, every campaign within a war, every attack and counter attack, every putsch, every terrorist act, every revolution and even every democratic election manifesto and campaign, every new bill passed, every budget or construction project proposed on a national or local level ad infinitum, throughout human history has been born of human planning, plotting or conspiracy depending upon which side we were or are on or how you view the proposals! Effected to a lesser or greater extent by chance undoubtedly and maybe borne on a current of destiny as well! The latter I will not discuss further here. Not because I dismiss it. Heaven forbid. Simply it is not important for the points I want to make. One of the most important of which is this, in short: our history is littered with and shaped from, not conspiracy theories but conspiracy facts! One of the earliest and most famous that springs to mind is that of The Trojan Horse. A very cunning plot by the Greeks which broke the stalemate of the long siege of Troy and enabled them to conquer and ransack the city but by the current English definition, a conspiracy only from the point of view of the Trojans as for them it was “bad and harmful” but not for the Greeks. But who amongst us now really sees one side or the other as the “evil” one? So was it a conspiracy or not?
A Nazi soldier gets ready to murder two Soviet Slavic women during Operation Barbarossa, summer 1941. This incident probably took place in the Ukraine or Belarus.
There are times in history, usually more recent history, (examine and discuss) when there seems to have clearly been a good and evil side. One such example I would posit is Operation Barbarossa. Hitler’s attack on the Soviet Union! While this was of course a life saving event for Great Britain, even the most diehard anti communist must surely see that the invasion of Nazi forces into the USSR was unequivocally bad and harmful for the peoples of that empire as it promised no liberation at all; only abject slavery or total oblivion whatever their position in Soviet society. It was clearly planned or plotted in advance but according to the English language, it was only a conspiracy from the point of view of the peoples of the USSR and the Soviet government, not from the point of view of Nazi Germany and her allies as they perceived that attack as beneficial to them at the time which, of course, is why they contrived and went ahead with it.
What about Operation Overlord- The Normandy landings or D-Day? This massive military undertaking was literally years in the planning or plotting. Was it a conspiracy? According to the current English definition, only for the rulers of Nazi Germany as it can be argued that it was actually beneficial even for most Germans not actively involved in the Nazi hierarchy as it lead to their liberation as well as to that of the other nations of western Europe. In spite of this, the German army fought like tigers on the western front to the bitter end but I digress. I will however be returning to the D Day landings a little later for reasons that will become clear.
Surely therefore, it is obviously undeniable that the accusation of being a conspiracy theorist is in fact totally subjective and because of that, totally spurious from an objective, truth seeking point of view concerning any, as yet, unsolved or disputed events in human history or actuality and hence it follows that those using this accusation to discredit the ideas or theories of others have an agenda for doing so. This agenda maybe conscious or subconscious but it is always there.
The purpose of this article is neither to prove or disprove any famous conspiracy theories and, although I, like anybody else, have my own ideas and suspicions, I am not putting them forward here. What I am putting forward here is the fact that if you hear someone publicly dismissing somebody else’s ideas as conspiracy theories and especially if the “dismisser” is a western journalist, government spokesperson or a politician they are trying to prevent you thinking about something by ridiculing you into not delving further.. The unconscious agenda of such accusers I mentioned earlier is the cognitive dissonance caused when presented with information that contradicts long held and emotionally charged beliefs. The conscious agenda is of course blatant lying in order to cover up the truth.
Let us look at a concrete example. In Toronto Canada there is a high profile televised political discussion called the Munk Debate. Here is the link to the particular episode I’m going to concentrate on.
The motion proposed on this occasion was “Be it resolved, The West should engage, not isolate Russia”. As you can see this motion assumes that Russia is somehow wrong and the only question is how best to deal with Russia’s wrongness. Given this obvious slant from the beginning the pro team of Vladimir Pozner and Stephen F. Cohen did a reasonable job but were unable to fend off the barrage of 100% truth inversions (all of which conforming to the strictly controlled and censored Canadian mass media slant) from the rabid, foaming at the mouth, jumping up & down, Jihadi anti- Putin and Russia team of Anne Applebaum and Garry Kasparov. At around the 16th minute Applebaum starts to speak about the Kremlin’s “massive” investment in their multi-language media “disinformation machine” including RT television. At around 17.12 minutes in this recording she then states that “When Malaysian airliner MH17 was shot down by a “Russian missile” over Ukraine this media machine immediately came up with all sorts of crazy conspiracy theories such as planes taking off already full of dead people” and explains that this is done deliberately by Russia and only by Russia in order to cloud people’s minds until “they” don’t know what to think any more. Well! Sure! Planes taking off full of dead people does sound pretty crazy doesn’t it. I couldn’t believe my ears when I first heard that one actually but let’s look more closely at what she said before coming back to that. How many conspiracy theories does she mention? One? Well, I count three and a half. The above mentioned plus two and a half more. The statement that Russian media is disinformation is also a conspiracy theory as is the position that they alone came up with all these conspiracy theories. Many of them are proposed and published by westerners. The accusation that MH17 was shot down by a Russian missile is also a conspiracy theory as well as propaganda because all weapons at that time on both sides were either Russian made or Soviet made. Who is using them, how and why is the pertinent question which the western media always seeks to obfuscate. And yes, well, okay, true. I admit that the last sentence I’ve just written is another conspiracy theory at least for some of you. Are you beginning to see how deep the rabbit hole goes and how ridiculous the allegation of conspiracy theorist is under any circumstances?
Fact. The “official” version of 9/11 is every bit as much a conspiracy theory as all the others!
Especially as it has proved impossible to prove over the years and seems indeed, ever easier to disprove. When governments and the mainstream media tell us a version of events after a terrorist act or invasion or murder etc they then accuse anybody who voices doubts or proposes another version of events of being conspiracy theorists but the governments and main stream media are themselves conspiracy theorists until, I repeat, there emerges incontrovertible proof and evidence to confirm one of the conspiracy theories as the conspiracy fact.
Back to Applebaum’s “planes taking off full of dead people”. When I first heard that one I was literally seething at the sheer stupidity of such an insane theory being voiced almost immediately after the disaster. At the time I was still only just emerging from an umbilically wet, comforting “womb warmth” world where our western governments were working for our best interests but were just rather incompetent at doing it. In the immediate aftermath of that tragedy I reluctantly assumed that the self defense forces had mistaken it for a US backed Kiev bomber or that a guided missile had locked on to the airliner by error or evil destiny. After all at the time, they were being attacked by the air-force of the US installed Kiev government everyday and, in spite of having no aircraft themselves had been increasingly successful in downing their attackers. Then came the immediate barrage of western press headlines. From Britain for example: The Sun: PUTIN’S MISSILE and PUTIN’S LOOTERS ROB BRIT VICTIM The Daily Mail: PUTIN’S KILLED MY SON The Daily Mirror: PUTIN’S VICTIMS to name but a few. US Secretary of State John Kerry claimed that the US had proof of exactly what kind of missile was used and where it was fired from. He stated, as reported by The Guardian, that “all the evidence surrounding the downed Malaysian airlines flight MH17 points towards pro-Russia separatists in eastern Ukraine being to blame.” Well. All those newspaper headlines are simply conspiracy theories and as it turns out, more insane than the dead-bodies-taking-off idea. While Kerry’s accusations could have seemed feasible at the time, the fact that not one jot of “all that evidence” has been made public twenty two months later reduces his words to a conspiracy theory too. The headlines are totally insane because of the lack of motive. The fact is, after taking into account the ill fated crew and passengers of MH17 and their families, loved ones and friends there is simply not one human being on earth out of all seven billion of us who had less motive to get involved in shooting down a passenger plane anywhere in the world, let alone over Eastern Ukraine than Russian president Vladimir Putin and his government followed by The Donetsk Republic’s armed forces who were and are fighting at home, on their own land for their very existence. In the shock of the immediate aftermath, European governments some of whom had been resisting US pressure to impose sanctions on Russia as punishment for having saved Crimea, at the behest of Crimeans, from invasion by ultra racist Ukrainian US backed rebels bent on their eradication one way or another, caved in and sanctions were imposed. Anyone placing themselves in the position of detective would see straight away, that the new Ukrainian government had massive motive for and massive profit to gain from MH17’s downing if it could be pinned on Russia, followed by those governments who had plotted and helped the coup in Kiev -the US, UK, Dutch, Polish, Swedish and EU baron’s to name the main players. That in itself is of course not proof that they were complicit but it would be one of the areas where any real investigation would concentrate a lot of effort and inquiry.
In the Munk Debate, broadcast on the 11th April 2015, more than eight months after the tragedy, Applebaum is careful to avoid pointing the blame specifically at Putin personally while using language that generally insinuates instead. Could it just be that legal advice has something to do with that. Another video, which judging by its title indicates that she “apparently” knew all the details of what happened, seems to have disappeared completely from the net: “Anne Applebaum: MH17 attack | what happened. How it happened and who was responsible.” If anybody saw it or has a transcript it would be great to know what she actually said here.
Meanwhile as more and more theories as to how this tragedy occurred were coming forth , spurred on by the lack of any evidence being made public, including the content of the black boxes, some aspects of the plane full of already dead people theory were beginning to seem, well, just slightly less insane. On March 8th 2014 Malaysian airlines flight MH370 disappeared on route from Kuala Lumpur to Beijing. It’s fate remains a mystery to this day. Such a story is the very oxygen of conspiracy theorists, some well intentioned and some undoubtedly less so and the internet and You Tube is not lacking in explanations. Many posit the idea that the plane was hi-jacked to the closed US military island base of Diago Garcia and many, made and published before the downing of MH17 and all those I saw, none of which were made by Russians or the Russian media, predict that this missing plane would turn up being used in a future false flag event. After the downing of MH17, it didn’t take long for the idea to gain circulation that it was in fact the missing MH370 and that it had been transported to Donbass and blown up on the ground maybe with the preserved bodies of the ill fated passengers of MH370 inside or that it had even taken off from Amsterdam with the bodies inside etc! Well dear reader, maybe you, like me find all these theories pretty far fetched if not ridiculous or maybe in very bad taste. The fact however is that neither you nor I can absolutely rule them out no matter how far fetched they seem because there is a small window of possibility. The US and her allies have the means to pull off such an operation and the motive. We would do well to remember the film of an explosion on the horizon that was broadcast by all the world’s mainstream media, including Russian, as the explosion of MH17 hitting the ground. As many quickly pointed out, a plane, still over half full of fuel, blown up at high altitude by a ground to air or air to air missile would have left smoke trails in the sky as it fell. That seems beyond all scientific doubt but absolutely no traces in the sky appear in that video so that would seem to suggest that either it does not show the impact of MH17 but something else (more likely in my opinion) or, well yes, the plane was in fact blown up on the ground. There has also been a historical precedent for such an idea albeit on a much smaller scale physically but, nonetheless of great historical significance.
Operation Mincemeat which was made famous as a book and a film called The Man Who Never Was. This was a plan executed in April 1943 to fool the Germans into thinking that the allied invasion of Sicily would in fact happen in Greece. A dead body was procured, dressed up in a British officer’s uniform, given a false identity and a briefcase chained to his wrist containing “top secret” documents about the allied invasion of Greece not Sicily. The dead body was made to look like the victim of a plane crash of the coast of nominally neutral but in fact pro German Spain. In reality however his body was delivered to the area by a submarine. The plan worked so well that when the actual allied invasion of Sicily began the German’s thought it was just a diversion and didn’t respond having transferred the majority of their forces to Greece. When, the following year, just after the D Day landings, the Nazis found genuine top secret plans in an abandoned landing craft, they refused to believe them being sure it was another such ruse as operation Mincemeat. Here’s a link (now promise not to laugh) to a Daily Mail article on the whole subject. It does just suggest that the idea of already dead bodies in planes might have a certain feasibility after all which is something Anne Applebaum, among many others, doesn’t want you to think about.
I repeat that I am not supporting or debunking any conspiracy theories here. I cannot prove, or disprove just as you cannot prove or disprove any of the above mentioned theories or, for example, that Aliens exist or that they don’t exist therefore we cannot dismiss or confirm one hundred percent those theories involving aliens either. It really is that simple.
As for the conscious or unconscious agendas I talked about earlier, I would, in spite of his virulence, put Garry Kasparov in the unconscious camp. He so often loses control of his emotions and his discourse which is clearly out of all reality. I wonder if he has ever asked himself why he thinks and feels that which he does, I very much doubt it. Berezovsky was someone with a very similar mind set in my opinion. Anne Applebaum on the other hand seems to be squarely in the conscious camp. In other words, she is deliberately lying in order to, not distort the truth but totally reverse it in true Orwellian style. I don’t claim to know exactly what her motive is. Due to the fact that her husband was the Polish foreign secretary (he was one of the EU politicians who brokered and signed the ill fated deal with the Yanukovych government in Kiev that didn’t even last twenty four hours), her finances had to be made public and, as many pointed out, she benefited from a huge spike in earnings as soon as the Ukrainian crisis began in 2013 followed by an ongoing scandal concerning the disclosure of their earnings in subsequent years but I find it hard to believe somehow that her motive is solely financial. Maybe simply anti-Russian racism and/or a commitment, ideological and self interested, to financial world takeover of the US, western debt based fractional reserve banking system. Whatever the reason is, it has to be admitted that she is a very effective propagandist who’s discourse remains coherent, controlled, pointed but utterly premeditated and false. In fact her tirade in the Munk Debate against Russia since Putin became president is in reality one of the most concise and accurate descriptions of today’s USA and also post putsch Ukraine that I’ve ever heard. Her total insistence that the western media is truthful and objective is also a 100% truth inversion. Russian media has become infinitely more truthful and objective than its western counterpart which has descended into out and out double speak. I have never seen or heard her lose her temper or be overtaken by emotions of any kind. It must be said however that I’ve never seen her in debate against someone who actually takes her apart as it would be eminently possible to do. That, of course, is anything but coincidence.
“Truth is by nature self-evident.
As soon as you remove the cobwebs
of ignorance that surround it,
it shines clear” – Mahatma Gandhi.As many of us have already noticed it is not a comfortable experience when our emotionally charged, often, long held beliefs are challenged by adverse, contradictory information which we are unable to ignore. It takes the kind of courage not given to all to accept and analyse the cognitive dissonance that comes in such situations and to ask why it is happening and many people, including plenty that I know personally, simply refuse to believe anything that contradicts the, invariably “cozy” world which they have allowed to be constructed for themselves. Such people often become defensive and sometimes down right aggressive when pressed. This is because they can’t ignore the information, only smother it or block it from their conscious mind. The reason that some information is impossible to ignore is a very important phenomenon as basically this means that it is fundamental truth or at the very least the grain of truth that can lead us out of the pit of lies. If, for example, somebody tells you or I that the Earth is flat, we are not going to feel any surge of panic or cognitive dissonance of any kind for obvious reasons but try telling an American who comes from a staunch, traditionally Democrat family and has a deeply entrenched – indoctrinated belief that the Democrats are “the good guys”, the ones who care about other people and the poor at home and abroad and are anti-war etc, that, in fact, Obama and Clinton are among the most dangerous warmongers in history, responsible for illegal invasions and that they are just puppets of the military, industrial complex, Wall Street and “some people” called the Illuminati and sparks will certainly fly. There is an excellent video on-line called “Confronting Cognitive Dissonance – The Eyeopener”:
At 5.11 an American lady begins to describe her physical reaction when she understood that she was receiving very uncomfortable information about 9-11 which, much as she wanted to, she just could not ignore. Her reaction is courageous and very moving and anyone who dismisses her as a conspiracy theorist can only be mal-intentioned or seized by cognitive dissonance themselves. It is our intuition or as some like to say “our gut”; in truth, our connection to universal intelligence, that tells us whether such information is real or not. This is the same phenomenon as the moment of inspiration that artists and scientists have when a new scientific understanding or invention, poem, novel, song, symphony is born. First the moment of inspiration and insight; then starts the hard work of creation, building, experiment, investigation, trial and error and bringing forth. Every single human being is connected to universal intelligence, not just an elite few, but intuition, just like any other human faculty, becomes stronger the more we use it. The vital fact here is that we all know the truth when we here or see it whether we like it or not. Again, “Truth is by nature self-evident. As soon as you remove the cobwebs of ignorance that surround it, it shines clear”.
We live in a time of massive change where the world seems to have been turned upside down at such lightning speed that many of us feel that we can’t keep up which is of course disturbing. I use words like “seems” and “feels” because this is an illusion. In fact this situation has been growing for a long time. Centuries in fact and some would say millennia. This particular moment in history started, was started (examine & discuss) at the beginning of the 1990s. I would liken it to a wave that as it comes in slowly to shore, grows and swells inexorably until it finally crashes leaving that which was on the top, on the bottom. That which seemed democratic and free, undemocratic and tyrannical, that which seemed to be built on solid foundations, built on quicksand, that which seemed good, evil and vice versa. Above all, there are no ideologies left although for those with the aforementioned long held emotional attachment to this or that ideology = products of Man’s ego, this is pretty hard to accept. What’s left on the shore as the wave recedes is simply right or wrong, good or evil, truth or falsehood. In fact a world of fundamental polar opposites. Many. Especially in the western world lulled by the media bubble of unreality are seemingly, on the surface, unaware of these massive shifts. My own awakening only came with the Ukrainian crisis as I have already documented in “NATO Through the Looking Glass”. I now live in a totally different world and it is much more frightening than the one I was living in up to three years ago but I’m getting used to it and in no way want to return to unconsciousness. I now question everything and am exercising my intuition and faith, in the true sense of the word, every day. What this reveals is infinitely more terrifying than the cozy “womb warmth” I used to live in but the payback is that things line up and actually make sense and I feel much healthier for it. The many layered onion skins that were enveloping my perception are falling away one after another and I’m very aware that this process is very far from over but the idea of crawling back into my former mind set is impossible for me. It would be akin to committing suicide. I’m also very aware that, thank God, I am very far from being the only one undergoing this process.
Of course, like so many others during these times, I’ve got used to being called a conspiracy theorist which is probably why I was moved to write this article. I am proud to be in the camp inhabited and moved by people such as the lady in the “Confronting Cognitive Dissonance” video who states that she felt physically sick when she understood that her government, which she had more or less trusted up until that moment might have been behind 9-11. Such people are searching for truth and discovering themselves. The other kind of conspiracy theorists are those who invent or propagate conspiracy theories for money and power and, or because they want to convince us that their particular prejudice is the one and only true prejudice whoever it be directed against. “It’s all the fault of the people I’ve learned to hate and you must agree with me.” Perennially popular targets remain: The blacks, the Jews, Monarchs, business people, immigrants and Russians to name but a few and these conspiracy theorists are of course the 100% polar opposite of the former. One looking for the truth and the other, deliberately trying to destroy it. The American Lady reluctantly facing up to her realization that the official government conspiracy theory about 9-11 doesn’t hold water and the fear of looking into what seems to be at first glance, the darkness of the abyss or: Anne Applebaum’s constantly and professionally reiterated conspiracy theories about Putin being a tyrannical dictator and mafiosi obsessed with world domination who has to be stopped by the “free, democratic” West before he, followed by his “brainwashed” millions in Russia will march in “good old” WWII style to enslave us all. I leave you to contemplate these two examples. These two absolute, polar opposites. The seeker for truth and the bald faced liar for gain!
- "The World Is Walking From Crisis To Crisis" – Why BofA Sees $1,500 Gold And $30 Silver
With both stocks and US Treasury prices at all time highs the market is sensing that something has to give, and that something may just be more QE, which likely explains the move higher in gold to coincide with both risk and risk-haven assets. As of moments ago, gold rose above $1,370, and was back to levels not seen since 2014. Curiously, the move higher is taking place after Friday’s “stellar” jobs report, suggesting that someone does not believe the seasonally-adjusted numbers goalseeked by the BLS.
And while we reported last week that one way investors are rushing into the anti-QE safety of gold is by buying paper gold derivatves such as ETFs, which rose above 2,000 tons for the first time since 2013, many others have bypassed paper claims on gold such as GLD entirely, and are rushing into physical.
Case in point, Japanese savers who, fearing domestic confiscation, have been accumulating gold in Switzerland. It’s not just the Japanese: as Nick Laird shows, the past week saw the second largest ever increase in physical gold holdings, as the total published holdings of physical funds rose by 2.5 million ounces to 85.8 million, second only to the 4 million ounce increase in early 2009.
Finally, with even the sellside starting to turn, there may be more upside as the slow money starts to move in. In a whimsical note released on Friday, Bank of America’s metals team writes “Gold: always believe in your soul. Glad you are bound to return. You’re indestructible.”
Yes, we were surprised too, but it’s true.
Strange golden “poetry” aside, this is why BofA thinks gold is going to $1,500 and silver’s next stop is an “overshoot” to $30.
The world has been walking from crisis to crisis and we see risks that this may not change. The importance of that dynamic for the precious metals is mirrored by the high correlation between potential US GDP growth and gold quotations. Many of the underlying issues affecting the global economy are structural, with Brexit merely a symptom of the problems many countries are facing. To that point, we called a bottom in gold in February and Brexit reinforces our view. As such we are upgrading next year’s gold price forecast from $1,325/oz to $1,475/oz. We called a bottom in silver in April on supply and demand dynamics; an overshoot of prices to $30/oz is possible.
Gold heading for $1,500/oz
After a weak US labour market report earlier in June, the risk of Brexit added to the gold price rally ahead of the vote (Chart 11) and after. In our view, Brexit has affected gold through various transmission channels. On the fixed income side, US Treasuries and German bunds have benefited from a flight to quality; the current uncertainty also suggests that an accelerated rate hiking cycle is unlikely, so interest rates globally are set to remain low, which in turn reduces the opportunity costs of holding a non-yielding asset like gold. Given this dynamic, we believe gold prices could rise to $1,500/oz near-term.
The world will keep on walking from crisis to crisis
Switching tack slightly, macroeconomic uncertainty in the UK, Eurozone and US remains elevated; the high correlation between US potential GDP growth and gold (Chart 12) highlights how important this is for the precious metal. While the underlying ills are nuanced between countries, an increasing polarization of politics and a rise in populism have been common by-products; to that point, wealth generation/wealth distribution, immigration and sovereignty have caused contentious debates. Of course, this has not helped confidence and did not make it easier for governments to implement the measures necessary to put economies on a more sustainable footing. As a result, a host of countries has moved through a series of mini-crises in recent years, which we believe is unlikely to change. Hence, we reinforce our view first published in February 2016 that gold prices have bottomed.
Silver can overshoot to $30/oz
Gold has been the market’s focus through most of 2016, although silver has outperformed the yellow metal of late. The rally does not necessarily come as a surprise, a point made in April, when we highlighted that silver is bottoming out (Global Metals Weekly: Silver has a silver lining 25 April 2016).
Chart 13 shows the model behind our rationale. That analysis assumes that investors are the marginal buyers, so we ask how strong non-commercial demand needs to be to balance the silver market at $15/oz, $20/oz and $25/oz. Our analysis suggests the following:
- For silver to trade at or below $15/oz, non-commercial market participants would need to reduce purchases further compared to 2015. This is not our base case.
- Silver can average $20/oz if investors increased their purchases slightly, which we believe is likely.
- A sustained rally towards $25/oz would require an increase of non-speculative demand to the tune of 30% YoY. While possible, this looks a tall order.
Taking a closer look at investment demand, Chart 14 shows that silver coin sales in the US, an important demand segment, have been strong YTD. Having said that, we note that coin premia (an indicator for market tightness; Chart 15), but also prices in China have not rallied as much as international spot quotations (Chart 16). This is an indication that the rally in the past few days, which was largely based on the paper market, may not necessarily have the underpinnings of physical buying.
- China To Use Pension Funds As $300 Billion "Plunge Protection Team"
One of the more troubling stories to hit the tape last week was that despite, or rather due to, roughly $100 billion in losses in the past 5 quarters, Japan’s gargantuan $1.4 trillion state pension fund, the GPIF, which has desperately been selling Japan’s best performing asset – Japanese Government Bonds – in order to buy local stocks and the Nikkei at its decade highs only to see its equity investment plunge, is now forced to buy even more stocks, i.e. double down, as part of a ridiculous rebalancing which will lead to even more losses.
Japan is not alone.
After China did everything to prop up its own stock market, including arresting hedge funders, sellers, “rumormongers”, halting short selling, eliminating futures trading, and ultimately culminating with the “Buttonwood SPV” in which the PBOC finally threw in the towel and admitted it was directly buying stocks, we now learn that Chinese pensioners are about to become unwitting stock funds.
As Bloomberg reports, “China’s pension funds are about to become stock investors.”
The country’s local retirement savings managers, which have about 2 trillion yuan ($300 billion) for investment, are handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities including equities. The organization will start deploying the cash in the second half, according to China International Capital Corp. and CIMB Securities.
For the rhetorical answer to the rhetorical question of “what can possibly go wrong” here is the one-title answer, also from Bloomberg:
Why is China – for whom social stability is absolutely paramount and thus gambling with people’s retirement funds is truly a foolish initiative – doing this? Simple: whereas in the US legions of clueless investors buy any and every stock mentioned by such “legends” of crony capitalism as Warren Buffet, in China it is the pension fund. To wit:
For the nation’s equity markets – which are dominated by retail investors and among the world’s worst performers this year – the state fund’s presence is even more valuable than its cash, said Hao Hong, chief China strategist at Bocom International Holdings Co. The NCSSF has “such a good reputation in being a value investor that if they take the lead, the signaling effect is actually quite strong,” said Hong, who had predicted the start and peak of China’s equity boom last year. “It’s almost like Warren Buffett saying he is buying a stock.”
China’s “Warren Buffett” may be about to have a very rude awakening. According to Bloomberg, China’s NCSSF, which oversees 1.5 trillion yuan in reserves for China’s social security system, has returned an average 8.8% a year since 2000, the Securities Daily reported earlier this year, citing official data. Truly a remarkable number, and one which is alas just too good to be true when one considers that the larger pension system has been locally managed and made just 2.3% annually through 2014, the newspaper said. This also ignores China’s epic stock market wipe out in 2015.
Here is the official spin:
The organization’s entry will come as Shanghai stocks begin a gradual recovery that has pared their losses for the year to 16 percent from as much as 25 percent. While yuan depreciation concerns are pressuring Chinese assets lower, the economy is showing some signs of stabilizing. The nation’s foreign-exchange reserves unexpectedly climbed in June in a sign of slowing outflows, while a measure of services rose.
The entry “will be a positive event in terms of sentiment but the actual impact won’t be drastic,” said Ben Bei, an analyst at CIMB Securities in Hong Kong. “The fund will tend to be prudent and the progress may be very gradual — that is, it will enter the market over the next several years.”
The unofficial one is simpler: to boost confidence that China’s openly rigged and manipulated markets are once again safe:
Venturing into China’s volatile stock markets — where a crash erased $5 trillion of value last year — isn’t without its risks for funds traditionally focused on more stable assets. Japan’s government pension fund, the world’s largest, may have lost about $43 billion in the second quarter, Morgan Stanley MUFG Securities Co. estimated. This adds fuel to criticism over the Government Pension Investment Fund’s decision to boost equity allocations in 2014.
The problem, however, is that like in Japan and the rest of the world, pension funds simply have no choice than to swing for the fences when it comes to returns. Especially in China.
Low returns are a challenge for China’s pension system, which is already facing pressure from a rapidly aging population. The country’s old-age dependency ratio — a measure of those 65 or over per 100 people of working age — is set to triple to 39 by 2050. The NCSSF didn’t respond to an e-mail seeking comment. The pension funds are more likely to buy blue-chip firms, said CIMB’s Bei, while Bocom’s Hong said they’ll probably seek out shares of state-owned enterprises with low valuations. With the market down for the year, the timing is right for entry, said Hong.
The only silver lining on this latest foray into risk assets by a pension fund is that the exposure will be capped. Up to 30% of Chinese pension investments’ net value can be allocated to stocks, while the cap for bonds is 135 percent. While that means the funds can theoretically inject 600 billion yuan into shares – compared with the Shanghai market’s 25.9 trillion yuan size – CICC estimates that purchases this year will be limited to about 100 billion yuan. This means less than $20 billion in buying power: hardly impactful at all to push stocks much higher.
* * *
But the real reason why this latest $300 billion in stock buying “dry powder” is being activated can be summarized in just two words: plunge protection. Bloomberg explains:
Giving the NCSSF more ammunition may serve one more purpose: helping stabilize markets during the next rout. During last year’s tumble, policy makers armed state-run investing company China Securities Finance Corp. with more than $480 billion to try and limit declines. “Their mandate is to make a return and make sure the fund doesn’t have a deficit,” said Hong. “But in times of crisis when they’re called upon by the state, I think it will be difficult to refuse the request.”
Too bad China does not know how to use HFTs like Citadel who, in collaboration with entities like the NY Fed, unleash massive upside momentum on very little capital to prevent market routs as has been the case in the US at every major inflection point during the past 7 years. That China has not yet gotten to the most modern method of market manipulation – with or without the Fed’s blessing – is troubling and suggests that at least one more major round of pain is in store for Chinese stocks.
- The Unlikely Story That A Panty Theft Sparked The Dallas Shooter's Downfall
Exactly how Micah Johnson came to be the man who murdered five police officers in Dallas remains unsolved. Johnson, a mid-twenties man (much like Bin Laden's son), apparently had taken his love for the ladies a little too far when he was serving in the Army Reserves. The killer who "stated that he wanted to kill white people, especially white officers", as we posted, had an apparent fetish for women's panties.
As The Daily Beast reports, Johnson was kicked out of the Army for stealing panties, returned home as a soldier who fell from grace, was exposed to Eric Garner's July murder and Michael Brown's August murder, all while trying to negotiate a deal with his lawyer regarding his panty heist.
Johnson’s military lawyer, Bradford Glendening, says that a female corporal mentioned Victoria’s Secret underthings when she filed a sexual harassment complaint against his client. The lawyer further reports that the corporal was worried enough to seek an order of protection against Johnson and to recommend that he receive mental health treatment.
And…
Down in Texas, Micah Johnson waited for his lawyer to work out some kind of deal with the Army. Family friend Myrtle Booker noted that along with becoming withdrawn, Johnson had developed an increased interest in firearms, as might befit a onetime panty stealer who found himself lacking.
Johnson's bad luck began shortly after the President visited Bagram Air Base in Afghanistan on a surprise visit to Johnson's group and others in 2014.
Imagine knowing that you are about to be discharged for stealing panties and now you have to help set up for a surprise pep-speech from the President. Furthermore, imagine being in the group, with other proud soldiers surrounding you, and hearing the President say:
…I’m also here representing 300 million Americans who want to say thank you as well. (Applause.) I know sometimes when you're over here, away from home, away from family, you may not truly absorb how much the folks back home are thinking about you. So I just want you to know when it comes to supporting you and your families, the American people stand united. We support you. We are proud of you. We stand in awe of your service.
Johnson, likely very worried about what would come of his panty theft, learned in August of 2014 after arriving back in the US, that his Mesquite home, where he went to highschool and graduated in 2009, was broken into and two guns were stolen.
At this point it has become clear that the story-line being spun to the public is one focused on the details. The people of Dallas and the rest of the world are to believe:
- an Army Reserve recruit stole panties,
- saw two high profile murders play out on American media,
- felt bad in the juxtaposition of Presidential praise in the midst of a possible discharge,
- had two guns stolen from him,
- then turned into a Dallas sniper much like Lee Harvey Oswald.
As we highlighted just hours ago, Johnson has links to Leftist Revolutionary Groups and the Nation of Islam. As we've shown, Johnson's ties have been consciously made and clearly part of a deeper slide into a world where unapologetic calls for the murder of fireman and cops are regular propaganda. On the African American Defense League (AADL) Facebook back, founder Dr. Mauricelm-Lei Millere wrote:
The whiteman wants your blood! How many of us has he killed and enslaved? Trillions!…We need the action that makes them pay attention. An eye for an eye philosophy! Arm yourself in Ferguson, Missouri and across America! A life for a life!" He continued, "Also, we must go to their comfortable neighborhoods and raid those stores. It is time to LOOT & BURN those stores…
At this point we're beginning to wonder if "Johnson's Panties" will be the "Benghazi Youtube Video" or the "Syrian Chemical Attacks Video" of American constitutional repression efforts. Remember, for all the talk we've heard about gun control lately, there seems to be a lack of discussion surround Attorney General Eric Holder's gun smuggling operation with the Mexican drug cartels that killed a US border agent. Those are details we need though.
Will the average American believe the narrative of a botched panty heist sparking a downfall that dragged Johnson through sensationalized US media coverage of murder, to a home invasion, all the while feeling ashamed about his own disgrace as the US President heaps praise upon his group?
* * *
Draw your own conclusions.
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