- The Origins Of The Deep State In North America, Part 2
Authored by Matthew Ehret via The Duran,
“As between the three possibilities of the future: 1. Closer Imperial Union, 2. Union with the U.S. and 3. Independence, I believe definitely that No. 2 is the real danger. I do not think the Canadians themselves are aware of it… they are wonderfully immature in political reflection on the big issues, and hardly realize how powerful the influences are… On the other hand, I see little danger to ultimate imperial unity in Canadian ‘nationalism’. On the contrary I think the very same sentiment makes a great many especially of the younger Canadians vigorously, and even bumptuously , assertive of their independence, proud and boastful of the greatness and future of their country, and so forth, would lend themselves, tactfully handled, to an enthusiastic acceptance of Imperial unity on the basis of ‘partner-states’. This tendency is, therefore, in my opinion rather to be encouraged, not only as safeguard against ‘Americanization’, but as actually making, in the long run, for a Union of ‘all the Britains’.”
-Lord Alfred Milner, 1909
CLICK HERE FOR Part one: The Rise of the Round Table Movement and the Sad Case of Canada (1864-1945)
Prologue
Canada’s history has remained clouded in misinformation and outright lies for over 200 years, while basic truths which were once well understood by leading statesmen a century past are now treated as little more than myth or “conspiracy theory”. Yet as the above quote written by the pen of Lord Alfred Milner indicates, the crafting of the Canadian identity has been bought for the price of a national soul. The greatest obstacle to Canadian sovereignty today is found in the fact that Canada’s synthetic identity has been constructed over the past decades with the intention of obstructing the establishment upon this earth of a world of sovereign republics, which was and still is the outgrowth of the success of the American Revolution in 1783. To do so, we must investigate how the Anglo Dutch oligarchy has played through such institutions as the Rhodes Trust, Fabian Society, and Round Table Movement. These structures have played a key role in mis-shaping every key standard of economic, political, cultural and scientific behaviour which has perverted western institutions to this very day and have come to be identified since the election of Donald Trump as “the Deep State”.
Part one of our story focused upon the creation of these institutions and their methods of penetrating their networks throughout influential institutions of Canada from 1865 to 1943, and the evolution of the Round Table into the Royal Institute for International Affairs (RIIA) in 1919. American branches were created in 1920 with the Council on Foreign Relations (CFR) and Institute of Pacific Relations, while a Canadian branch was established in 1928 with the Canadian Institute for International Affairs (CIIA). Key Canadian patriots resistant to the RIIA’s plans were also introduced in the form of “Laurier Liberals” O.D. Skelton and Ernest Lapointe, both of whom aided in influencing the highly malleable Prime Minister William Mackenzie King towards the Canadian nationalist cause, greater cooperation with American Patriots such as Franklin Roosevelt and away from the RIIA’s plans for world government under the League of Nations. With the mysterious deaths of Skelton and Lapointe in 1941, all such resistance melted away and Canadian foreign policy become fully infected by Rhodes Trust/ Fabian agents of the CIIA.
This second segment will address the important 1943-1972 destruction of humanist potential leading up to the reforms implemented by CIIA-assets Lester B. Pearson and Pierre Elliot Trudeau in their role in advancing Milner’s program for a new synthetic nationalism.
The Attack on Post-War Potential Begins 1945-1951
By the end of the war, Canada’s productive capacity had risen to unimaginable heights and the vision of unbounded progress free of imperial monetarism was not far off from realization. The relationship between Canada and the United States was at an all-time high, with exploding trade, and purchasing power that had multiplied threefold from 1939 to 1956. The authority and power won by C.D. Howe was continued into the following 12 years of Canadian progress first, as Minister of Reconstruction (1944-1948) then as Minister of Trade and Commerce (1948-1957). When Howe realized that his resistance to Canada’s participation in the unjust Korean war of 1950 would not work, he changed gears, and took advantage of the situation by renewing his broad war powers, once again allowing himself to lead Canada’s economy top down, resulting in the great projects with America such as the St Lawrence Seaway, the Avro Arrow CF-105 supersonic interceptor, the TransCanada-U.S. natural gas pipeline and especially the civilian use of nuclear power shaped by Canada’s unique CANDU technology.
The secret to Canada’s progress during and after the war continued to be the National Research Council (NRC), re-organized and rehabilitated after years of incompetence under its former President General Andrew McNaughton. The NRC was a flexible top down organization run by one of Howe’s brightest engineering students C.J. Mackenzie who went on to become the first President of Atomic Energy Canada Ltd (AECL).
With similar mission-oriented organizational structures having organically formed in the USA during war, the NRC was celebrated and studied as a model for countries the world over. The leaders of this institution fought not only to advance nuclear power in Canada in order to escape the limits of fossil fuels and accelerate the next breakthrough to thermonuclear fusion, but also led the fight to provide their technology to underdeveloped countries such as India and Pakistan which were yearning to break free of their British colonial masters. The NRC also successfully led breakthroughs in radio astronomy, oceanography and industry. Its basic objective can be summarized in the following model:
(1) Maximize the density of discoveries within a cross country system of self-financed and self-organized intramural NRC laboratories.
(2) Translate those discoveries into new technological applications and machine tools.
(3) Apply these technologies as efficiently as possible into the industrial productive system to increase the productive powers of labour.
(4) Force university curricula and behaviour to adapt by such creative upshifts as quickly as possible ensuring that no fixed/formulaic patterns of thought could encrust themselves upon the minds of students or professors.
Dexter White and Wallace
The Cultural/Economic/Scientific factors of Canada’s post-war dynamic were on a new trajectory of true independence, founded on a commitment to progress which the British Empire now mobilized all of its energy to destroy. The great fear of Lord Milner laid out in 1909 of “union with the United States” guided by unbounded scientific and technological progress was now underway, peaking with a 1948 call for a North American customs union advocated by Howe and leading FDR statesmen in the United States that had not yet been purged by the Cold War witch hunt led by Senator McCarthy. Sadly, now under the vast influence of the British Empire’s mind control, one of Mackenzie King’s last acts in office was the destruction of this proposition. After King’s 1950 death, C.D. Howe continued on as Minister of Trade and Commerce under King’s successor Louis St. Laurent (1948-1957) [4].
Having ensured that FDR’s postwar vision for a world of sovereign nation states would not come to fruition after his untimely death in April 1945, the first of a series of ideological barrages was hammered into Canadian and U.S. policy beginning with the installation of Wall Street tool Harry Truman as President, and with him the advent of the “Truman Doctrine” centering on the Rhodes-Milner agenda of Anglo-American Empire guided by Churchill’s design of “British brains and American brawn”. While FDR was still alive, his allies led by Harry Dexter White and Henry Wallace were capable of fending off John Maynard Keynes’ attempts to structure the Bretton Woods agreements according to his own twisted logic of a one world currency steered by the Nazi affiliated Bank for International Settlements and Bank of England (of which Keynes was a Director). However, after FDR’s death, the last major beachhead of resistance to British recolonization melted.
The Anglo-American “special relationship” was quickly established by Truman bringing American foreign policy quickly under the control of the RIIA networks beginning with Truman’s unnecessary utilization of two of America’s only three nuclear bombs on the already defeated Japan which set the foundations for the Korean War [5]. This policy was ushered in by Sir Winston Churchill’s 1946 “Iron Curtain” speech in Fulton, Missouri which officially opened the age of the Cold War, setting a fear based dynamic of tension that resulted in a purging of FDR allies from positions of influence, and an influx of British operatives into high prominence the world over.
The Chicago Tribune’s Cassandra Sounds the Alarm
In 1951, the enormously influential Massey-Lévesque Royal Commission attempted to first launch an attack upon the “American invasion” of media (print, radio, television and cinema) which was taking over the Canadian psyche. One of the primary demands of the 1951 report called for an emergency ban on U.S. media to keep “dangerous” American cultural influences from contaminating Canada’s British traditions with the following words:
“Few Canadians realize the extent of this dependence… our lazy, even abject imitation of them [American institutions] has caused an uncritical acceptance of ideas and assumptions which are alien to our tradition”.
What were these types of alien ideas which concerned the British Empire so much at this important period of historical change? To get a sense of the fear which Massey and his British masters felt regarding the “low brow” American journalism being read by Canadians, it is useful to take a sample of a 1951 article written by journalist Eugene Griffin “Canada Offers Fine Field to Rhodes’ Wards” published as one of a series of 16 explosive articles between July 15-31 in the Chicago Tribune:
“Scholars and other British educated Canadians are in a unique position to serve Britain through Canada’s influence on Washington as a next door neighbour of the United States. Canada acts as a connecting link between England and the United States, helping to hold the neighbouring republic in line with the dominion’s mother country… When Gen. MacArthur displeased Britain and Canada by his efforts to win the Korean war, Canada’s Oxford educated minister for external affairs, Lester B. Pearson, complained that American-Canadian relations had become “difficult and delicate”. MacArthur was fired the next day… Pearson’s foreign office staff is packed with Rhodes scholars. There are 23 among 183 staff officers, or one out of every eight, who were educated at Oxford university, England, on the scholarships created by Cecil Rhodes, empire builder and diamond mogul who wanted the United States taken back into Britain’s fold [see Box]… Other Canadian foreign office members also were educated in England, although not as Rhodes scholars. Pearson went to Oxford (St. John’s, 1922) on a Massey scholarship, endowed by a Canadian millionaire… Norman A. Robertson, a Rhodes Scholar (Balliol, 1923) sometimes called the most brilliant member of the British trained inner circle in the government’s East Block, headquarters of the prime minister and the foreign office, is another important figure in Canada’s relations with Britain and the United States. He is clerk of the Privy Council and Secretary to the cabinet, and has been undersecretary of state and High Commissioner to Britain.”
Little could the writers of the Chicago Tribune then know that during the very summer of their writing, a young Fabian, having just returned home from his conditioning under Harold Laski’s mentorship at the London School of Economics was working at his first job in the Privy Council Office (PCO) under the watch of Rhodes Scholar and Privy Council Clerk Norman Robertson. That young Fabian went by the name Pierre Elliot Trudeau [7]. Working alongside Trudeau at the time in the PCO included his supervisor Gordon Robertson, a young Oxford man named Marc Lalonde and his friend Gerard Pelletier, all three of whom went on to play prominent roles in Trudeau’s powerful inner cabal 20 years later.
Upon returning to Montreal in 1951, Trudeau came under the control of F.R. Scott, Rhodes Scholar and co-founder of the League of Social Reconstruction (LSR) 20 years earlier. Trudeau’s celebrity as an enemy of Quebec Premier Maurice Duplessis was cultivated by these Rhodes networks through his publication Cité Libre which served to 1) brainwash young intellectuals according to the journal’s existential Catholic “personalist” philosophy of French philosophers Jacques Maritain and Emmanuel Mounier on the one side and 2) rally a populist attack on the Vatican-influenced Union Nationale (UN) government of Duplessis, Daniel Johnson Sr. and Paul Sauvé on the other [8]. This provincial government had made its renown not only for resisting British control over its destiny, but had also been a beachhead of resistance against eugenics laws then being implemented across the continent [9]. Trudeau worked in tandem with the creepy network of social engineers run from Laval University by Father George Henri Lévesque (co-chair of the Massey Commission), which exploded onto the scene in 1960 as the “Quiet Revolution” overthrow of the Union Nationale after two untimely heart attacks of UN leaders beginning with Duplessis in 1959, then followed by Paul Sauvé a mere nine months later.
Another personality whose celebrity was being created in tandem with Trudeau’s during the 1950s included Trudeau`s schoolboy chum, and British Intelligence asset René Lévesque, whose popular CBC radio show Point de Mire served to rally public opinion against the Duplessis regime and prepare the culture for the radically liberalizing reforms of the Quiet Revolution [10].
Huxley’s UNESCO Doctrine and Eugenics
The guidelines for the post-1945 path to a New World Order were laid out clearly by Sir Julian Huxley in his 1946 UNESCO: Its Purpose and Its Philosophy:
“The moral for UNESCO [United Nations Education, Science and Cultural Organization] is clear. The task laid upon it of promoting peace and security can never be wholly realised through the means assigned to it- education, science and culture. It must envisage some form of world political unity, whether through a single world government or otherwise, as the only certain means of avoiding war… in its educational programme it can stress the ultimate need for a world political unity and familiarize all peoples with the implications of the transfer of full sovereignty from separate nations to a world organization.” [11]
To what end would this “world political unity” be aimed? Several pages later, Huxley’s vision is laid out in all of its twisted detail:
“At the moment, it is probable that the indirect effect of civilization is dysgenic instead of eugenic, and in any case it seems likely that the dead weight of genetic stupidity, physical weakness, mental instability and disease proneness, which already exist in the human species will prove too great a burden for real progress to be achieved. Thus even though it is quite true that any radical eugenic policy will be for many years politically and psychologically impossible, it will be important for UNESCO to see that the eugenic problem is examined with the greatest care and that the public mind is informed of the issues at stake so that much that is now unthinkable may at least become thinkable.”
How could “the unthinkable” application of a practice which Hitler had made repulsive to humanity, become adopted by a society which had a faith in progress and unbounded creativity so incompatible with social Darwinism? Huxley’s own life’s decision to become a founding member of the World Wildlife Fund (WWF) in 1961 alongside Bilderberg Group founder Prince Bernhard and Prince Philip provides us a clue. It is no coincidence that Huxley’s role as President of the British Eugenics Society (1959-1962) also overlapped his co-creation of the World Wildlife Fund (WWF).
The only way such a genocidal policy as eugenics, masquerading as “objective” science, could be readopted by humanity was through the dissociation of mind from matter, via the breaking of “subjective values” from “objective facts”. The method chosen was a worshipping of the ugly and irrational in the aesthetics such that judgement could no longer be governed by a sense of truth and beauty, while the “cold and logical” was separated from the artistic and kept in its own cold dark mechanical universe accessible only through statistical methods of thought. This is how the modern school system has been divided into two different synthetic worlds of Arts and Sciences. The operatives chosen to carry out this policy were Massey’s ally Sir Kenneth Clark and Sir John Maynard Keynes who led the scientific management of culture in Britain. The mental cage chosen to schism “values” from “facts” in managing human affairs was named “systems analysis”.
A major goal of the Massey Commission and its UNESCO design, was to create structures that would elevate the Humanities and Social Sciences to the highest pedestal of knowledge (and financing), paving the road for the later acceptance of systems 8-a-Club of Rome King Peccei analysis to be used in the management of society. The person assigned to impose “systems” planning into political practice was the Lord President of the British Empire’s Scientific Secretariat Alexander King working through the Organization for European Economic Cooperation (OEEC), (later to become the Organization of Economic Cooperation and Development (OECD) in 1961). Under the OECD, King became Director General of Scientific Affairs and went on to co-found the Malthusian Club of Rome alongside Italian industrialist Aurelio Peccei in 1968.
The CIIA’s Royal Commissions Deconstruct and Reconstruct the Synthetic Soul of Canada
The RIIA directed its various branches, and Rhodes Trust networks around the world to implement the New Eugenics project outlined by Julian Huxley in 1946. In Canada, the implementation process occurred between an intervals of 24 years and took the form of four CIIA-directed operations whose immense influence cannot be overstated. They were:
1) The Royal Commission into the Arts and Letters (1949-1951),
2) The Royal Commission on Economic Prospects for Canada (1955-1957),
3) The Royal Commission on Government Organization (1960-1963), and
4) The Senate Committee on Science Policy (1968-1972).
Each commission was designed with the effect of establishing new structures of thought upon policy makers in the domain of culture, economic and science policy which induced the blind acceptance of satanic policies of Malthusian eugenics masquerading as “environmentalism”, or the “science” of saving nature from civilization. A society imbued with a moral sense of Judeo-Christian ethic and love of progress, and strengthened by the Roosevelt-led fight against Hitler, would never accept Eugenics. A fact well known to the Anglo-Dutch oligarchy.
A Royal Commission, as the name implies is an invention of the British Empire which has been used for centuries in order to create the perception that top down structural changes in all aspects of government were “scientifically” and objectively achieved. The truth is that conclusions of such Commissions have always been pre-decided by the ruling oligarchy long before the Royal Commission’s experts were even formed. Usually spanning 2-3 years of studies by a clique of pre-selected “experts” in a given field, Royal Commissions produce voluminous data sets, hundreds of thousands of pages of information, and then summarize their findings and prescriptions in the form of several summary reports consisting of a 1-2 thousand pages. The sheer quantity of data associated with such reports is supposed to dissuade anyone from giving any respect to other countervailing opinion which challenge the Commission’s findings, with the assumption that unless everyone commits two years of their lives to a specialized study funded by millions of dollars and thousands of man hours, then their opinion could not be worth anything.
The Massey-Lévesque Commission: The First Wave of Attack 1949-1951
In Canada, Milner-protégé Vincent Massey was assigned the unique responsibility of leading the implementation of this multifaceted program which struck in a series of Royal Commissions organized entirely by agents of the CIIA. Massey’s role was carried out as the chairman of the already mentioned Royal Commission on National Development in the Arts, Letters and Sciences (1949-1951) alongside his co-chairman Father George Henri Lévesque, a social scientist and Dominican priest who is rightly credited as the intellectual godfather of the 1960-1966 “Quiet Revolution” which secularized the province of Quebec and brought in OECD educational reforms. All proposals sought by the end of this two year study were directed by the UNESCO agenda which Sir Julian Huxley laid out publicly in 1946 [15].
As Massey’s former assistant Karen Finlay wrote in The Force of Culture: Vincent Massey and Canadian Sovereignty, Massey’s lifelong governing principle was “principle of disinterest” whereby Massey argued that it is “intellectual detachment” which empowers someone to truly judge the aesthetic value of art [16]. Under the logic of UNESCO and Massey’s satanic formula, it is assumed that since personal “subjective” values pollute one’s judgements on “the beautiful and good’, it is only by disassociating oneself from pre-existing values, that we gain the ability to judge “good” and “bad” art in an “objective” and thus “true” fashion.
The severing of the subjective from the objective thusly also forces the denial of any pre-existing standards by which anything could be judged as intrinsically good or bad, and thus a ripe field of moral relativism can be harvested. Evil may then run wild without any fear of being challenged. In other words, this is a complete denial of the existence of universal physical principles
The structures against universal physical principles which were proscribed in the Massey-Lévesque Commission involved the creation of a more powerful Canadian Broadcasting Corporation, a National Film Board, a National Library, a National Art Gallery, a National Art Bank, a Social Sciences and Humanities Research Council, Federal financing of the education system in the humanities and social sciences, and Canada Council for the Arts modelled on Keynes’ semi-autonomous, government financed British template .
The Federal financing of the education system was vital for the Commission since it was the only way which OECD and UNESCO reforms could be ushered in without provincial resistance. Pre-existing teaching practices emphasizing the Greek Classics, which treated students as if they had a soul, could only be dismantled efficiently under this top down restructuring, applied during the 1960s in which moral relativism, Darwinism, and “new math” increasingly replaced anything of substance. The horrendous explosion of modernist, abstract and banal art generously sponsored under the structures of Massey’s Canada Council (f.1957) gives one a sick sense of the spiritual disease with which the imperialists (and sadly their victims) are infected. Both federal control of education and the arts were necessary to pervert the principles guiding both, and establish the mental/spiritual infrastructure supportive of satanic programs of Malthusian population reduction as the new environmentalist eugenics was designed to be.
To amplify this spiritual disease, the Massey-Levesque Commission even proscribed the creation of a Canadian honours system such that oligarchical habits could more easily be cultivated in Canada [18]. The creation of the Canada Council took much longer than Massey would have liked, and its postponement was due largely to the resistance of the l’Union Nationale government of Quebec and its Vatican-steered Catholic Church. The powerful elements within the Quebec Catholic Church were among the only organized forces on the continent that had competently identified the satanic intentions underlying the OECD-UNESCO reforms being infiltrated into global educational and political systems.
It were for such reasons that Father Lévesque and his ideological offspring of social engineers and technocrats at the University Laval had become the bitter enemies of the Union Nationale government. The implementation of OECD educational reforms as prescribed by the Massey-Lévesque Commission were a primary focus of the Quiet Revolution. The task of applying the reforms was given in large part to two Rhodes Scholars: Jean Beetz and the creator of the Quebec Ministry of Education, Paul Gérin-Lajoie. Soon-to-become Prime Minister Pierre Elliot Trudeau played a key institutional role in this process as well in the Law Faculty at University Laval alongside Lalonde and Beetz.
With the creation of the Canada Council, the “scientific management” of culture, so necessary to elevate the ugly and banal into a position of respectable authority was ensured and the ground was thus laid for the next steps of the fascist takeover of Canada.
The Gordon Commission: The Second Wave of Attack 1955-1957
“Many Canadians are worried about such a large degree of economic decision-making being in the hands of non-residents [because it] might lead to economic domination by the United States and eventually to the loss of our political independence.”
-1957 Gordon Commission Report [19]
The Massey-Lévesque Commission was followed systematically, by the Royal Commission on the Economic Prospects of Canada (1955-1957) chaired by Walter Lockhart Gordon, chairman of the National Executive Committee of the CIIA and head of the largest accounting firm in Canada Clarkson-Gordon Management. The Commission claimed that Canada’s sovereignty was threatened by American ownership of Canadian enterprise, and that drastic action to cut America off from the Canadian economy were absolutely necessary.
As historian Stephen Azzi demonstrated in his 2007 study Foreign Investment and the Paradox of Economic Nationalism [20], the claims made by the report were entirely fraudulent. The massive upshift in quality of life, electricity and social services due to American capital in Canada was not even addressed in the voluminous Gordon Commission reports. Thus the only relevant purpose of the report was to cultivate a culture of anti-Americanism, and establish political structures limiting foreign ownership of Canadian markets, and lower the potential living conditions of Canadians [21]. The biggest farce embedded in the Gordon Commission quote above, of course, which Azzi misses, is that there never was any political independence for Canada to lose to Americans in the first place, since it had never freed itself from the political and economic clutches of its British Mother.
Gordon went onto implement his own proposals after leading the cleansing of the Liberal Party of all C.D. Howe Liberals between 1957-1963 [22], becoming Finance Minister (1963-65) under his long-time puppet-on-loan from Vincent Massey, Lester Pearson, whom he himself selected as early as 1955 to run for leadership of the Liberal Party [23]. After his policies as Finance Minister failed, Gordon took over the post of President of the powerful Privy Council Office (1966-68) from his predecessor Maurice Lamontagne.
These two commissions were designed to “sound the alarm bells” against Canadian vulnerability to an imminent American imperial takeover of Canada’s culture and economic resources. Although no evidence was ever presented that American imperialism had any intention to take over Canada, the prescriptions to save Canada from economic and cultural Americanization involved both a negative and positive component: Negatively, each proposed the rapid implementation of quota systems/ tariff systems to limit foreign input of capital and media, while positively, proposing centralized structures to coordinate culture and economic management by a vast London-steered bureaucracy. The already long controlled mass media outlets of Canada glamorized their findings and created a mass fear in the popular culture.
The effect of these two reports also amplified anti-Americanism to such a feverish pitch that a Canadian identity could be established on a fear-based negation, whereby Massey, Lévesque and Gordon following the prescription laid out by Lord Milner in 1909 crafted a blueprint for a “New Nationalism”. This counterfeit nationalism was wrapped up with a brand new national anthem and Canadian flag upon Lester B. Pearson’s Liberals becoming the government in 1963.
The Delphic perception of Canada’s sovereign status outside of the actual control of the British Empire had to be established for the next wave of Canada’s post-1963 role in trapping nations into the imperial spider’s web of International Monetary Fund conditionalities.
Unlike the flags of most countries, the noble Maple Leaf, as many Canadians have still yet to realize, has neither now nor ever signified anything whatsoever.
The Glassco Commission: The Third Wave of Attack 1960-1963
Once the Canadian cultural inferiority complex was amplified sufficiently by fear of American imperialism, the collective neurotic mindset was now ready for the next wave of the CIIA’s onslaught unleashed with the Royal Commission on Government Organization (1960-1963) chaired by Walter Gordon’s partner at Clarkson-Gordon, John Grant Glassco. Glassco was the son of William Grant, and nephew of Vincent Massey. This commission brought in a monetarist/accounting framework for managing a bureaucratic structure under the logic of “letting managers manage”. As its mission statement laid out: “This report examines the adequacy of existing arrangements for making economic and statistical services available for the formulation of policy, for administrative decisions, and for the service and enlightenment of the public.” [24]
A little later, the report laid out the belief that all problems with inefficiency in achieving policy objectives was due to the fact that there are too few economists and social scientists in controlling administrative positions of government: “..Very little can be done, or ought to be done, to discourage the movement of economists into higher administrative posts. Talented administrators are just as scarce as economists, and it would be a mistake for the public service to deny itself any fruitful source of good administrators.” [25]
In preparation for Finance Minister Walter Gordon’s 1963-65 implementation of his 1957 Royal Commission financial proposals, Glassco laid out the new necessary controlling structures to allow Gordon to cut off Canada from American investments, and choke off as much of America from Canada as possible when he wrote: “The immediate concern is the development of a competent central economic staff within the Department of Finance, not to take over work done elsewhere but rather, under the direction of the Minister of Finance, to attend to the development of general economic policy for the government as a whole .” [26]
Finally, Glassco pushed for the UNESCO policy of amplifying the social sciences while attacking the “hard” sciences like physics and biology with the following: “The relatively slow development of economic research in Canadian universities, due to shortage of funds, bears on both the quantity and quality of the future supply of trained economists. While the government is spending scores of millions annually to support research in physics and biology, little financial assistance is given to research in the social sciences” [27]
The edict of “letting managers manage” was necessary if the appearance of democracy were to be maintained while the absolute control of society by an accounting priesthood was to be preserved. The commission’s reports called for the adoption of “horizontal” (aka: bottom up) planning which was to replace the archaic belief in “vertical” (aka: top down) intentions from elected officials to the process they were elected to preside over, as was the common practice of the NRC and its administrators.
Ironically, while bottom up planning according to accounting standards was pushed, central control through the Treasury Board was also promoted by Glassco. This prescription would ensure that only a small coterie would ever fully have their minds on the whole, while every other department were too busy focusing on hyper-specialized compartmentalized parts to think about the whole.
While the NRC and its leadership such as C.J. Mackenzie, the student of the late C.D. Howe and the late Dr. E.W.R. Steacy were vigorously attacked by the Glassco Commission, the overhaul which Glassco prescribed involved the centralized planning of science policy according to budgetary constraints under the Treasury and a Science Secretariat. These positions were to become completely subservient to the control of bureaucrats specialized in accounting and monetary economics degrees advanced through the “social sciences and humanities” programs outlined by UNESCO. With this new system of management and its anal adherence to Planning-Programming-Budgeting (PPB), the problems associated with the governments such as those of C.D. Howe and later John Diefenbaker (1957-1963) which intended to actually get something done for the improvement of the nation, could not occur [28]. This systemic reform was not an end in and of itself however, and was merely a necessary stepping stone towards actualizing a system of thinking which would accept the linear language of “Systems Analysis” as a guide for conceptualizing the management of humanity under laws of entropy, constrained by the limits of fixed resources.
The Glassco Report’s prescriptions for policy overhaul were to be implemented fully by Trudeau several years later.
As a reward for a job well done, Glassco was promoted from Executive Vice-President of Brazilian Traction, Light and Power Co. to President in 1963.Under this position, the overthrow of the nationalist Brazilian President João Goulart was effected via a military coup d’état [29]. The free market pillaging of Brazil created a model applied even more aggressively a decade later with Henry Kissinger’s orchestration of the Pinochet regime’s coup in Chile.
The Lamontagne Commission’s 1967-1973 Program for Genocide
The last wave of this CIIA-run Milner Project for a new nationalism (at least insofar as major structural reforms were concerned), took the form of the Senate Special Committee on Science Policy (1967-1972), more popularly known as the Lamontagne Commission after its chairman Senator Maurice Lamontagne [30]. This commission had the distinction of being the most transparent in its satanic intention to ban creativity and impose Malthusian constraints un-naturally upon the management of human affairs. The report is especially relevant as it begins with the acknowledgement of the American System of Political Economy, which it then attempts to destroy by lies and ridicule:
“During the early part of the 19th century, Great Britain and to a lesser extent France were fast developing industrial technology and finding ways of fruitfully exploiting science. Later on the United States moved from technical backwardness to such a level that it could begin exporting to the “advanced” European countries manufacturing techniques and machine tools so different that the whole approach became known as the “American System”. An English productivity team that visited the United States in 1853 to study this ‘system’ concluded that “men served God in America, in all seriousness and sincerity, through striving for economic efficiency.” [31]
By identifying the fact of creativity’s relationship to technological advance, and technological advance’s relationship to increased growth and productivity, embedded self-consciously in the American System founded by U.S. Treasury Secretary Alexander Hamilton and his mentor Benjamin Franklin, Lamontagne, a student of George Henri Lévesque and key member of the Gordon Commission twelve years earlier, established his commitment to defend the principle of empire. The most active defender of the American System during the 20th and 21st century, Lyndon LaRouche (1922-2019) has subsequently described contrast between the forces active today the following terms:
“The most readily accessed example of the contrast of good to evil in modern times, has been typified not only by the goodness of the anti-monetarist principle on which the original Constitution of the United States of America was premised; it was also the same principle which had been adopted earlier by the Massachusetts Bay Colony. That principle, which modern society should trace back to such Renaissance geniuses as Nicholas of Cusa, has been demonstrated through the crucial quality of a leading contributing role specific to the included role of U.S. Treasury Secretary Alexander Hamilton.” [32]
Lamontagne’s allegiance to the monetarist forces opposing the American System, can be clearly seen when Lamontagne let his true intention shine forth when he wrote in vol. 2 of his 3 volume report:
“It is becoming apparent, however, that nature is not as passive as we thought, that it has its own laws and can revenge itself, once its own equilibrium has been disrupted… Nature imposes definite constraints on technology itself and if man persists in ignoring them the net effect of his action in the long run can be to reduce rather than to increase nature’ potential as a provider of resources and habitable space… But then, an obvious question arises: How can we stop man’s creativeness?” [33]
Thus, Lamontagne has established that it is man’s creativity itself that must be stopped if the supposed “fixed” equilibrium of nature will remain unchanged by technology! This is the root morality of the current global environmentalist religion which Lamontagne was at the forefront of unleashing. Since Lamontagne admits that his “ideal” solution of destroying man’s creative impulse is itself an impossibility, like the Zeus of Aeschylus’s Prometheus Bound, he never the less finds a resolution to this problem by introducing a perverse alternative when he wrote
“How can we proclaim a moratorium on technology? It is impossible to destroy existing knowledge; impossible to paralyze man’s inborn desire to learn, to invent and to innovate… In the final analysis we find that technology is merely a tool created by man in pursuit of his infinite aspirations and is not the significant element invading the natural environment. It is material growth itself that is the source of conflict between man and nature” [32]
Thus creativity and its fruits of technological progress are acceptable only IF they reduce the assumed conflict between man and nature posited by Lamontagne! “Bad” technology in Lamontagne’s formulation, has the effect of increasing humanity’s powers of productivity and thus increase the entropy in his fixed ecosystem-based economy. If, on the other hand, we promote technologies of a low energy flux density form, such as windmills, solar panels and biodiesel, which lead to the reduction of man’s powers to exist, then technology can be defined as a “good” thing.
This is the genocidal intention of the British Empire expressed in all its nakedness, which has been the primary target of American statesman and founder of the science of Physical Economy, Lyndon LaRouche. By the time of the Lamontagne Commission, LaRouche had already risen to world prominence as the only effective challenger to the British monarchy`s genocidal agenda of lowering the energy flux density underlying society`s material and intellectual existence. LaRouche has subsequently fought for 50 years to defend the truth of mankind`s scientifically verifiable relationship to the universe, as being governed by everything which Lamontagne and his Anglo-Dutch masters hate: mankind`s necessity for unbounded scientific and technological progress expressed as the unending obligation to increase the productive powers of labour.
The concept which LaRouche has used to guide mankind`s mandate for progress, is the increase of energy flux density of cycling of atoms through the biosphere and human economy, shaped by upgrades of new platforms of technologies. Compare LaRouche`s view on energy-flux density with the cynical rubbish promoted expressed by Lamontagne above:
“The rates of increase of energy-flux density in the concentrations of increasing rates of intensity of power per capita, must be now be restarted, and also accelerated; otherwise, the death-rates throughout the world are now already accelerating at rates which must be identified as a global trend in planetary human genocide… The nominal trend in rising rates of genocide is not the only aspect of this threatening trend. The inability to maintain a correlated set of rates of increase of the energy-flux density of the human persons per capita, must be correlated with the falling rate of intellectual development of the typical U.S.A. or European citizen. The so-called “green doctrine” is a doctrine of practice which results in not only human genocide, but a decadence in the mental powers, and also the relative sanity, of the individual human being.” [34]
What LaRouche is describing is the simple fact that without a constant increase of energy-flux density of the system and each individual within that system, then the domination by a green doctrine which sets “value” upon forms of energy and behaviour which reduce mankind’s power to accomplish work is destined to exterminate the population trapped within that system. The effect of destroying the means to increase the energy flux density of the system (ie: Creativity) means that a policy of genocide is the only alternative for a ruling oligarchy!
How would such a logic of genocide be accepted by citizens and administrators who are animated by the inspired faith in scientific and technological progress as was still largely the case during the late 1960s? For this task, Lamontagne had already let the cat out of the bag when he wrote in vol. 1:
“If general science policy is to accomplish its crucial role effectively, it must also develop a system of control, to make sure that the strategy will be respected in the detailed decision-making process and review mechanisms… Perhaps more than any other sector of policy, science policy requires the careful application of systems analysis.” [35]
With the linear language of systems analysis, the minds of those trying to manage any intrinsically non-linear process became sufficiently crippled with statistics and compartmentalization that their ability to see either 1) a whole top down process, or 2) the tragic consequences of their own foolish beliefs, was destroyed. Similar to the logic adopted ten years earlier with the state-run Canada Council which provided top down grants to “certain types” of art, music and social theories compatible to an oligarchy, though abhorrent to natural human sentiment, the Lamontagne Commission called passionately for a centralized financing and planning body in order to fund those “types” of applied technologies and pure research which were compatible with the genocidal aims of an oligarchy, but would never be accepted by a society imbued with even a little common sense and human compassion. In this spirit Lamontagne exclaimed that:
“The creation of a dynamic and balanced science organization is an urgent necessity. A main centre of coordination and financing of science policy is extremely desirable. The time has come to create a federal department of scientific affairs”. [36]
Lamontagne is referring of course to the creation of the Canadian Ministry of State for Science and Technology (MOSST) which was modelled on the British system, and kept under the full control of the Treasury Board and its balanced accounting system. MOSST and the Treasury Board redirected Canadian science into the dark ages and its new emphasis on “ecosystems management” and “conservation” instead of nation building. The “new wisdom” advocated by Lamontagne demanded that science now be shackled to “market demand” instead of future orientation.
Enter Trudeau’s Club of Rome
After the Rhodes Trust-directed ouster of the well intentioned, but incredibly naïve Conservative Prime Minister John Diefenbaker in 1963 [37], all of the measures proposed by these four Commissions were enforced vigorously by Lester B. Pearson and the Rhodes Trust/CIIA networks that had risen to prominence under him, and then fully by Pearson’s replacement… the former Justice Minister Pierre Elliot Trudeau in 1968. Along with Trudeau came fellow CIIA-assets from the Privy Council Office Gerard Pelletier, and another disciple of Father Lévesque named Jean Marchand, both of whom were active with Trudeau’s Cité Libre. The `new reformers` of Quebec became the `new reformers` of Canada.
Under Trudeau, the application of “systems analysis” as a cover for population reduction and fascism were fully carried into the top down management of government on all levels, and the Club of Rome of Alexander King, and his Canadian collaborators such as Maurice Strong, Maurice Lamontagne, Roland Mitchener (former Governor General) [38], Michael Pitfield (Personal Aid to Trudeau and head of Privy Council Office), Alastair Gillespie (Rhodes Scholar, and 1st MOSST), C.R. Nixon (Privy Council Office), Marc Lalonde (Rhodes Scholar, Trudeau advisor and head of Prime Ministers Office), Ronald Ritchie (National Advisor), Rennie Whitehead (Asst. Sec. to MOSST), and Ivan Head (head of Prime Minister`s Office) had set its putrid roots firmly into Canadian soil officially when the Canadian Branch was established informally in 1970 [39].
This nest was directly responsible for the creation of Environment Canada, which had applied systems analysis in order to transform what was once a policy of water and energy development, centred on a national mission, towards “ecosystems management”. A strict dualism between civilized humanity characterized by change and the “unchanging pure equilibrium” of nature was assumed as law, and with this assumption, a new green religion arose masking its fascist intentions behind a “new Canadian nationalism” centred not around a love of freedom or development, but around a fear of both American and Russian aggressors and unfortunate admiration for Britain.
How the Present Comes from the Future: The Free Choice of the Will is a Matter of Mind
The lies of the past are looking pretty ugly. Shall we find the strength within ourselves as Canadians to look upon this disfigured ugliness which we are told is our heritage, in order to recapture the vision of Canada’s sovereign potential as a great pioneering nation which held the imaginations of men such as Wilfrid Laurier, O.D. Skelton, C.D. Howe and John Diefenbaker? Shall we pick up upon the organic creative evolution that was so scarred and disfigured when Franklin Roosevelt died, and build such long overdue projects as the North American Water and Power Alliance, championed by the Kennedy brothers in the 1960s and Lyndon LaRouche today? Shall we rebuild our destroyed infrastructure along upgraded magnetic levitation train technology powered by advanced fourth generation nuclear thorium reactors and begin to taste the breakthrough of fusion? Shall we let go of the false genocidal notion of unchanging ecosystems and allow ourselves to see human beings as a species above and beyond everything else known in the biosphere, in that we are unique in our power to comprehend, and wilfully transform those processes of nature in a way that improves and speeds up their evolutionary progress towards ever higher states of energy-flux density?
That really depends on you.
Tune in next week for the Origins of the Deep State part three: What is the Fabian Society and to What End was it Created?
- Visualizing The Unicorn Landscape In 2019
Following today’s Uber debacle, it seemed only appropriate to scan the current landscape of unicorns waiting in the wings.
It was only six years ago that venture capitalist Aileen Lee coined the term “unicorn” to describe any privately-held startup worth $1 billion or more.
At the time, Visual Capitalist’s Jeff Desjardins explains, such valuations were so rare that they deserved a special name – but since then, it’s fair to say that the landscape has shifted dramatically. The startup boom intensified, and capital flowed into private companies at an unprecedented pace.
In recent times, unicorns have multiplied more like rabbits, and investors have propped up the combined value of the world’s 326 unicorns to the tune of $1.1 trillion.
Breaking down the World’s 326 Unicorns
Today’s chart uses data from the Unicorn Tracker created by CB Insights, and it breaks down the unicorn landscape by sector, valuation, and country.
Let’s start by looking at the biggest unicorns currently in existence:
Note: data is current as of May 3, 2019
ByteDance is the world’s largest unicorn at a $75 billion valuation. The company owns Toutiao, a popular machine-learning enabled content platform in China that customizes feeds based on a user’s reading preferences. It also owns video sharing platform Tik Tok.
Experts are estimating that over 100 unicorns could IPO in 2019, including Uber and Airbnb from the above list.
So far this year, Lyft and Pinterest have already hit the public market – and another recent unicorn to IPO was conferencing platform Zoom Video, which has seen shares increase 120% in price since its impressive mid-April debut.
Unicorns by Sector
The two most common sectors for unicorns are Internet Software Services and E-commerce.
Note: data is current as of March 2019
However, as you can see, the segment most valued by investors is On-Demand, which includes companies like Uber, Didi Chuxing, and DoorDash.
Unicorns by Geography
Nearly half of the world’s unicorns come from the U.S., but China also has an impressive roster of highly valued startups.
Note: data is current as of March 2019
Strangely, outside of the six major countries listed above, the rest of the world only combines for a measly 32 unicorns – less than 10% of the global total.
Unicorns by Valuation
Seven unicorns – including Uber, WeWork, Airbnb, and ByteDance – account for almost 30% of all of the value of the entire landscape.
Note: data is current as of March 2019
The bottom of the pyramid ($1-5 billion in valuation) holds 280 companies. Added together, they are worth $461 billion, which is equal to 42.5% of the unicorn total.
- "Then It Really Hit The Fan" – Vancouver, Casinos, & Grandmas
Authored by Kevin Muir via The Macro Tourist blog,
“Do you mind if I have a pull?” the well dressed gentleman asked.
The grandmother had been sitting at the dollar slot machine for over an hour. The tokens disappearing faster than when you drop a burger on the floor in front of your labrador retriever. Why not? She thought to herself, let him feed the bottomless pit for a bit.
“Sure. Be my guest. But I warn you, it hasn’t been nice.”
“Thanks. Awfully kind of you. I don’t know why, but I feel lucky tonight. All the machines are in use, so I appreciate you letting me play my hunch.”
She watched the man remove a Bellagio one-dollar-token from his expensive suit and slip it in the slot. Then he pressed the button. The machine whirled and spit out the bad news.
With a big smile, he took out another token and tried again. No luck.
“One last time” he laughed as he pushed his final token into the slot machine.
Then it happened. Instead of greeting him with bad news, the machine blazed WINNER! WINNER! WINNER!
The man flashed a mischievous grin and said to the grandmother, “You have been playing this machine for a while. That’s your money. You take it.”
“Oh no” she responded, “you were the lucky one. It wouldn’t have happened for me. I insist you keep your winnings.”
“I tell you what. How about we take this money over to the craps table and try to turn it into some real dough? If we lose, so be it. If we win, we split it.”
What the heck she thought to herself. I don’t get over to that side of the casino often. It might be fun.
“Let’s do it” she said packing up her belongings.
As the night progressed, she realized this man was indeed lucky. Somehow they kept winning at the craps table. And it was so much fun.
He kept asking if she wanted to take her half and cash out. But she didn’t feel right taking his money. Besides, she didn’t want the evening to end. Why not let the fun continue until he inevitably loses it all? It will make a great story to tell the ladies in the bridge club.
Another hour and a half later, she suddenly realized how long they had been playing. Sobering up, she had a good long hard look the big pile of chips in front of the gentleman and said, “What are those orange chips?”
“Oh, you mean the pumpkins? Those are worth a $1,000” he told her.
“And the red ones?”
“Ahh… the cranberries? They’re 5k. And these little gems – they’re $25k”
Holy smokes she thought to herself as she stared at the pile of chips.
“Uhhhhhhh….” she stammered as she tried to estimate the value, “I think I’ll take my half now.”
It turns out they had won well over half a million dollars. After counting it out, the man handed her stack of chips worth a little less than $300k and thanked her.
As she was walking away, she said, “Peter, I never got your last name.”
“Brown. Peter Brown. Nice to meet you.”
Little did that grandmother realize, but she had been playing craps with one of Vancouver’s most legendary financiers. From that chance encounter, that nice old grandmother took her winnings and put all of her grandkids through university. For the rest of her life, she never missed sending Peter a Christmas card.
Vancouver real estate
Some people are lucky enough to be born smart, while others are smart enough to be born lucky. Peter most likely falls into the latter camp but I suspect he got a healthy dose of both traits.
Although I love telling that story about Peter and the grandmother, it’s not his casino exploits I admire most, but his ability to ride bull markets and most importantly, get off without being left holding the bag. Now some of my Vancouver pals will tell me that Peter was notorious for selling their “promote” too early, but I don’t view that as a bad thing.
Which brings me to the topic of today’s discussion.
Peter owned a sprawling house in Vancouver’s tony Point Grey district. Of course he did. Peter didn’t do much at less than full speed. The house was almost 15,000 square feet with a little less than 2 acres of land.
But most importantly, it was in the city, yet boasted an incredible view of the harbour.
I am using the past tense when describing Peter’s house because he sold it. For $31 million. To a…(wait for it, this is the best part)… to a… student.
As usual Peter was a little early, but when you are trading size, you feed the ducks when they are quacking. And no doubt about it, in May of 2016 it was like a Ducks Unlimited convention in the Vancouver real estate market.
It’s starting to sink
Peter probably came as close to top-ticking the Vancouver real estate market as humanly possible. Although many charts will show you how prices continued to go up, these are the same indexes currently indicating only a modest downtick over the past half a year.
Talking to my buddies from Vancouver, it is obvious the market is soft. Really soft. There is way more going on than the charts indicate. Rich people often sit on their hands in real estate downturns, so it’s still unclear where the real bids are, but suffice it to say we have already had a decent correction in Vancouver housing prices. Especially at the top end. Like the kind of top end Peter used to own.
Why is that?
Well, there is tons of blame to go around so I don’t want to take sides, but let’s review the facts without judgment.
Canada, and Vancouver especially, opened its doors to Chinese immigrants. Rich Chinese citizens looking for a way to take some capital out of China found Canada an especially convenient route. And what better place to park it than real estate?
I have heard multiple stories of people selling their stately old homes in Shaughnessy or Point Grey only to rent them back from the Chinese numbered company that bought the house. The crazy part of their stories? The post-dated rent cheques were not being cashed. That’s the sort of stuff you see in bubbles. No doubt about it.
Housing prices kept rising. And rising. And rising. Stupid stuff like $31 million mansions being bought by Chinese students.
From a recent Bloomberg article:
Vancouver penthouses, ski chalets at Whistler, and holiday retreats in the Gulf Islands are among the thousands of properties identified in a dirty money probe that estimates more than C$7 billion ($5 billion) was laundered through the western Canadian province of British Columbia last year.
The startling findings from two reports released by the provincial government Thursday illustrate how a torrent of suspicious cash has fueled casinos, luxury car sales and real estate in the Pacific Coast region.
“The amount of money being laundered in B.C. is more than anyone predicted,” Finance Minister Carole James told reporters Thursday. In real estate alone, an estimated C$5 billion may have been laundered last year in the province – equivalent to 4.6% of all transactions by value in that period, according to one of the reports. In the Vancouver region, where housing prices rose more than 70% in five years, “I certainly believe that money laundering played a part,” James said. Such a share of transactions is “sufficiently large to have an observable impact on real estate prices,” the report said.
Finally the British Columbian government decided they had enough, and slapped down a foreign buyer tax. The shitty part of their stunt? They did not grandfather contracts that had been executed but not settled. So a Chinese buyer who had just plopped down $5 bucks on a Vancouver house suddenly found an extra three quarters of a million due on closing.
This occurred just as the Chinese economy was slowing down.
So when you combine the two developments, that iceberg bid that seemed unfillable disappeared almost overnight.
Then it really hit the fan
Last December, at the behest of American officials, a Chinese national was arrested in Vancouver. From the CBC:
The chief financial officer for Chinese telecom giant Huawei was detained at Vancouver International Airport on Dec. 1, 2018 at the behest of U.S. officials. The U.S. has accused Meng and Huawei of conspiracy, fraud and obstruction in relation to violating U.S. sanctions in Iran.
On Wednesday, Meng’s team argued her arrest and detention were unlawful and that there is no basis for her extradition. Lawyer Scott Fenton said comments by U.S. President Donald Trump suggested the case against Meng was politically motivated.
The U.S. and China have tried to keep Meng’s case separate from their trade dispute, although Trump has said he would consider intervening in the case if it would help forge a trade deal with Beijing.
Canada was simply complying with the extradition agreement we have in place with America, but for doing so, China has chosen to make an example out of us. They have scuttled merger deals (I believe the MEG Energy deal was ordered abandoned by Chinese authorities), refused to buy our commodities (check out the developments in the canola dispute) and in general, used every lever at their disposal to punish Canada.
What’s that line about acrimonious divorces? It’s always the children who suffer.
Well, Canada is definitely suffering in the feud between China and the U.S.
To think that it isn’t also affecting our real estate market is simply naive. Vancouver is the epicenter of Chinese capital-flight and that money is no longer coming to Canada.
And yes, the real estate correction that everyone has feared for so long in Canada is finally upon us.
Chinese students buying mega-mansions from Vancouver’s elite yet shrewd market-types peeling off their real estate holdings they have held for decades. What side of that trade do you want to be on?
The only question has been timing
I am by no means predicting the end of the world for Canada. We are after all a people who get by every year without a Canadian hockey team ever coming close to winning the Stanley Cup. We will soldier on.
Yet it would be naive to deny the long awaited real estate correction has started.
You don’t need to see more graphs about Canadian consumer indebtedness. We all know what they look like. The story is so well told it’s pointless to repeat any part of it.
A correction was coming, the only question left unanswered was timing.
Well, I think it’s now obvious that we are in the midst of that adjustment.
The only help I can offer is to point out that real estate cycles are long. Really long. The mistake will be assuming it will be over quickly. It won’t.
And my favourite trade?
I love buying the short end of the yield curve in Canada against selling the US equivalent tenor.
Probably the easiest way to play it is a long BAX DEC 2019 vs ED DEC 2019 spread:
Yeah, Canadian rates are already lower than in the United States. But the trend between the two countries is drifting nicely in the “right” direction. Again, no need to overthink it.
Sure, we have declined 50 basis points over the past year, but if we look at this spread over time, it’s far from unheard of for Canadian rates to be well below American rates.
Even more importantly, let’s examine what the market is pricing in for future Federal Reserve and Bank of Canada policy.
Up north, there is a minuscule 15 basis points of easing priced into the next two years.
This contrasts the US dollar denominated eurodollar futures market where there is 42 basis points of cutting in the curve.
As for the spread between 3-month US and Canadian short term rates, I am targeting 100 basis points discount in Canada over the next year. The forward futures for December 2019 are trading with a 48 basis point difference. It’s tough for me to devise a scenario where these two rates would trade back to even over the short to medium run, so on a risk-adjusted basis, I think it’s an attractive proposition. The market is overly worried about the American economy and much too sanguine about Canada’s prospects.
Yet as I write this Canada released the employment numbers for April. And they were stunningly strong.
I view this as a terrific opportunity to initiate my long BAX / short ED position. Maybe I am selling my home country short, but I just don’t see the Canadian economy outperforming the US in the coming year. Like our home based hockey teams, I expect it to disappoint.
Just remember, we knew eventually all those Canadian real estate owners would be like the grandmother playing with Peter Brown. At a certain point you look down at the stack of chips in front of you and decide, it’s time to cash out.
- New CIA "Flying Ginsu" Missile Shreds Individual Targets With 6 Long Blades
The CIA’s latest high tech assassination precision strike missile appears something straight out of Mortal Kombat. “To the targeted person, it is as if a speeding anvil fell from the sky,” the WSJ wrote, revealing the weapon publicly for the first time based on interviews with over a dozen current and former defense officials.
The R9X is the newest “secret” missile in the CIA arsenal and is nicknamed the “flying Ginsu” — given its six blades used to kill targets on impact as the missile lands at high speed, without carrying an explosive payload.
A see-through model of the original Hellfire missile. The R9X is a modification of the original Hellfire, outfitted with blades that exit the missile’s surface moments before impact. File photo via Lockheed Martin. It’s a modified version of the Hellfire missile which can shred anything in its path on impact, but designed to prevent or minimize civilian deaths.
It’s also sometimes called “the Ninja Bomb” for its ability to rip through cars and buildings after being fired from a UAV as a kind of 100-pound giant flying switchblade, but since it doesn’t create a blast radius, is optimal for individual targeting.
According to the WSJ, the CIA began development of the missile in 2011 for close proximity “war on terror” targeted assassinations — also as a way to protect non-combatants who might be used as human shields, as terrorists tend to embed themselves within urban civilian populations.
NEW – @WSJ confirms the @CIA & @DeptofDefense have a new “secret” missile – the R9X, or “flying Ginsu” – which kills a selected target with 6 blades, but no explosive payload.
— “To the targeted person, it’s as if a speeding anvil fell from the sky.”https://t.co/DIQfnfJYDq pic.twitter.com/iM87WUFLhg
— Charles Lister (@Charles_Lister) May 9, 2019
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The WSJ described the newly revealed weapon further as follows:
To the targeted person, it is as if a speeding anvil fell from the sky, the officials said. But this variant of the Hellfire missile, designated as the R9X, also comes equipped with a different kind of payload: a halo of six long blades that are stowed inside and then deploy through the skin of the missile seconds before impact, shredding anything in its tracks.
One official noted in the report the R9X is “for the express purpose of reducing civilian casualties” — which has apparently worked the handful of times it’s been used on the battlefield.
Defense and intelligence officials cited by the WSJ revealed successful deployments in counter-terror operations in Libya, Iraq, Syria, Somalia, and Yemen.
Via The Telegraph: “The missile did not even shatter the windshield of the car carrying Ahmad Hasan Abu Khayr al-Masri, al Qaeda’s former number two in Egypt.” One of the confirmed uses of the R9X was in Syria on Feb 26, 2017 in Idlib, during the reported CIA assassination of al-Qaeda deputy leader Abu Al-Khayr al-Masri.
Analysts had been perplexed at the time as to the precision hole in the car’s roof yet without any clear trace of an explosive blast impact, and Masri was confirmed dead inside.
I remember puzzling over these cuts for ages trying to work out what had hit the car of Abu Khayr al-Masri, deputy leader of Al-Qaeda.
Turns out it was a Hellfire missle with fucking swords attached to it. pic.twitter.com/aJW524c1Ph
— Nick Waters (@N_Waters89) May 9, 2019
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Now it’s mystery solved: that’s right, the CIA took out a jihadist via a giant 6-bladed flying knife, apparently.
If US officials are now going public with this high tech yet somewhat medieval sounding slice-and-dice device, in an apparent attempt to assure the public it cares about civilian casualties, we only wonder what kind of “creative” killing machines still remain classified.
- A Week In The Life Of The Empire
Authored by The Saker via The Unz Review,
Introduction
It is sometimes helpful not to look at any one specific issue in detail, but rather make a survey of ongoing processes instead. The resulting picture is neither better nor worse, it is simply different. This is what I want to do today: to take a bird’s eye view of our suffering planet.
Putin trolls the Empire
It is all really simple: if the Ukrainians will give passports to Russian citizens, and we in Russia will be handing out passports to the Ukrainians, then sooner or later will will reach the expected result: everybody will have the same citizenship. This is something which we have to welcome.
Vladimir Putin
It appears that the Kremlin is very slowly changing its approach to the Ukrainian issue and is now relying more on unilateral actions. The first two measures taken by the Russians are maybe not “too little too late”, but certainly “just the bare minimum and at that, rather late”. Still, I can only salute the Kremlin’s newly found determination. Specifically, the Kremlin has banned the export of energy products to the Ukraine (special exemptions can still be granted on a case by case basis) and the Russians have decided to distribute Russian passports to the people of Novorussia. Good.
Zelenskii’s reaction to this decision came as the first clear sign that the poor man has no idea what he is doing and no plan as to how to deal with the Russians. He decided to crack a joke, (which he is reportedly good at), and declare that the Ukrainian passport was much better than the Russian one and that the Ukraine will start delivering Ukrainian passports to Russian citizens. Putin immediately replied with one of his typical comebacks declaring that he supports Zelenskii and that he looks forward to the day when Russians and Ukrainians will have the same citizenship again. Zelenskii had nothing to say to that
Zelenskii finally finds something common to Russia and the Ukraine
I have been thinking long about this “a lot in common” between Ukraine and Russia. The reality is that today, after the annexation of the Crimea and the aggression in the Donbas, of the “common” things we have only one thing left – this is the state border. And control of every inch on the Ukrainian side, must be returned by Russia. Only then will we be able to continue the search for [things in] “common”
Vladimir Zelenskii
Well, almost. He did eventually make a Facebook post in which he declared that all that Russia and the Ukraine had in common was a border. This instantly made him the object of jokes and memes, since all Russians or Ukrainians know that Russia and the Ukraine have many old bonds which even 5 years of a vicious civil war and 5 years of hysterically anti-Russian propaganda could not sever. They range from having close relatives in the other country, to numerous trade and commercial transactions, to a common language. The closest thing to a real Ukrainian language would be the Surzhik which is roughly 50/50 in terms of vocabulary and whose pronunciation is closer to the south Russian one than to the Zapadenskii regional dialect spoken in the western Ukraine and which is used (and currently imposed) by the Ukronazi junta in Kiev.
The malignant manatee threatens the planet with fire and brimstone
We have Pompeo, a malignant manatee looking to start wars in which he will not risk his flabby amorphous ass also parading his Christianity. Bolton, a mean sonofabitch who belongs in a strait jacket, at least doesn’t pose as someone having a soul. And the Golden Tufted Cockatoo, too weak to control those around him, preening and tweeting. God save us.
Fred Reed
The term “malignant manatee” is not from me, the brilliant Fred Reed came up with this one, but I can only fully endorse it because it fits. Perfectly. And our malignant manatee sure is on a roll! Just this week he managed to threaten Venezuela, Iran, and even Russia and China together. I think that it is high time to declare that Pompeo is a bona fide nutcase, a dangerous, arrogant and ignorant psychopath whose crazy statements represent a direct threat to the entire planet. Not to say that his pal Bolton is any less crazy. Now combine these two rabid thugs with the spineless “Golden Tufted Cockatoo” (to use Fred Reed’s equally hilarious but accurate characterization) and you see that the planet is in big, big trouble.
Turns out that Putin is a crypto-Zionist and an Israeli puppet.
Here I won’t even bother with any quotes. The alternative Internet/blogosphere has, again, been hit by a wave of articles declaring that Putin is Netanyahu’s puppet and a crypto-Zionist. I have debunked that nonsense in the past (see here and here) and I won’t repeat it all here. Besides, what this surge in “Putin the Zionist” propaganda is, is not so much the result of a gradual realization about the true agenda or Putin himself as much as it is, yet again, a desperate scramble for clicks. I already discussed that recently too (see here). I will just reiterate my conclusion here: clickbaiters are never experts and experts are never clickbaiters.
Frankly, to all those who email me and ask “Is it really true? Putin is an Israeli puppet? He helps Netanyahu in Syria, does he not?!” I would suggest simply looking at what the Israelis and Zionists write about Putin (for starters, you can click here, here or here). Even better, ask the defenders of Putin the crytpo-Zionist to explain the hysterically anti-Putin campaign the US legacy Ziomedia has been engaged in for the past years! But don’t hold your breath for an answer – since Russia has comprehensively foiled all Israel’s many plans for Syria, it takes a remarkable determination not to see that Putin is hated by Neocons and Zionists alike, and for good cause, I would add.
Oh, and Putin is a crypto-Muslim too!
Yes, besides being a crypto-Zionist, Putin is also a crypto-Muslim. This latest nonsense usually comes from Alt-Right circles who can forgive Putin his friendliness to Israel, but not to Islam. These are the folks who believe that Putin is not a real defender of the “White Race”. They are opposed by those who believe that Putin and the Moscow Patriarchate will somehow jump-start the “Christian West”. We are talking about some hardcore “single-issue” folks here whose main disagreement is whether Jews or Muslims are to be hated (and feared!) most.
[Having had to deal with both groups myself – I have been accused of being a Jew, a Jew lover and a Muslim and a Muslim lover many times! – I know that reasoning with these folks is a total waste of time. Their paranoid hatred is completely incompatible with any fact-based and logical discussion. Besides, by arguing with them you threaten their income and livelihood – which due to their lack of expertise depends entirely on their ability to generate clickbait revenue. If you do engage with them, they will call you a Jew-lover or an Islam-lover and that’s it. Not worth your time IMHO].
The quasi-comical truth is that the Alt-Righters don’t get Russia *at all*. They keep transposing their narrow horizons on a nation with which they have absolutely nothing in common, not even religiously or racially (even if they think otherwise). Hence their love-hate relationship with Putin: on one hand, they would love to have a champion like Putin (Ann Coulter or Milo Yiannopoulos do not qualify), but on the other, they hate Putin for not endorsing their racist and fascist agenda. Truth be told: Russia has no use for these intellectual midgets.
Russia is “selling out” to the Taliban?
Well, since we are making a (tongue-in-cheek) “inventory” of all of Putin’s (and even Russia’s) sins, let’s include cozying up to the Taliban (who even agreed to put on Saint George’s Ribbons!) and… … and what exactly is happening here?
How about trying to bring peace back to Afghanistan? You know – the same thing Russia is doing in Venezuela, in Syria and elsewhere. This implies talking to the other side, and even striking smiling poses when asked by the press.
Needless to say, the thugs running the AngloZionst Empire have accused Russia or aiding and even arming the Taliban. And why not? This is no more ridiculous than saying that Saddam and Iran are helping al-Qaeda, or than saying that Russia “hacked” DNC computers, or told Maduro not to run for his life. Hey! We are living in “Skripal times” and the rules of evidence have changed to “highly likely” – so why not claim that Russia is also selling out to the Taliban (maybe even on Netanyahu’s orders?).
In the meantime, Russian soldiers are busy ducking missiles…
Yep, apparently unaware that their Commander-in-Chief is a puppet of both Israel and the worldwide Islamic Ummah, Russian servicemen are ducking missiles in Syria. The latest attack saw them shoot 36 missiles (and one targeting drone) out of the sky. This is good news, of course, but this just goes to show that these (US and Israel backed) Islamists shooting these missiles have not been informed that the Russian military in Syria is here to help Netanyahu and Trump. Somebody should probably tell them
Conclusion: just one more crazy and terrifying week, with many more to come
I tried to be a little tongue-in-cheek here, but the reality is that what is taking place before our eyes is both absolutely insane and most terrifying. Why? Because the world is now ruled by a most dangerous gang of ignorant thugs who are very rapidly losing their grip on our planet and who is simply neither intellectually equipped to understand, nor deal with this very complex and rapidly changing situation.
What we are seeing is a full-spectrum collapse of the unipolar world and its gradual, but also inexorable, replacement with a multi-polar world in which things like “speaking with your adversaries or even enemies” becomes the norm rather than the exception. Even more importantly, this is a world in which US threats always fall on deaf ears simply because nobody takes the US seriously anymore. While the US military probably has the capability to re-invade Grenada or “bring democracy” to the inhabitants of the North Sentinel Island – no adults in the room will be impressed (least of all the Iranians!).
It is this quiet indifference which enrages the likes of Pompeo, Bolton or Trump – for all their narcissistic chest-thumping – they are, and will forever remain, the ultimate losers – folks who simply couldn’t get *anything* done. Even more terrifying is their sense of total impunity. If Obama was “democracy with a human face” then Trump is “democracy with a simian face” – not much better.
When I think that a “Golden Tufted Cockatoo” (to use Fred Reeds wonderful image) has the authority to press the nuclear button I feel terrified. I also realize that the survival of the human species will depend on Putin and Xi and their ability to gradually disarm or neutralize the US threat without triggering a nuclear war.
These are truly terrifying times. If you are not terrified, then you are delusional.
But if being terrified is a natural and absolutely normal reaction, we need to overcome it and fearlessly resist. Like Maduro does, surrounded by his men.
This refusal to be afraid, even while being terrified, is how we will eventually defeat the Empire!
Venezuela is, by far, the weakest link in the chain of resistance to the Empire. But look at these faces!
All I can say is this: may the courage of the kids protecting not only Maduro, but also the sovereignty of their country, be an inspiration to us all, no matter how terrified we are.
- China Car Sales Tank 16.6% In April, Falling For A Record 11 Months In A Row
No country has better exemplified the global automobile recession than China. Sales for the world’s largest auto market continue to deteriorate, with the latest report confirming that passenger vehicle sales in China tanked yet again – this time dropping 16.6% year-over-year to 1.54 million units, following a 12% decline in March and an 18.5% slide in February. In addition, April SUV sales fell 14.7% to 642,220 units.
The last time retail auto sales were up in China was all the way back in May 2018, meaning sales have declined for a record 11 months in a row.
The country’s slowing economy and continued trade tensions with the United States are weighing on consumer sentiment among its 1.4 billion people. Additionally, changes in tax policies and import tariffs have also acted as a headwind for car demand. Cars were the only consumer product category in China that shrank the first two months of 2019.
“There’s little hope for us to see positive signs for the auto market in the first half,” Cui Dongshu, secretary general of the industry group, said. As regular readers may recall, this is the same, once optimistic Cui who suggested in March that car sales “may recover in April”. He predicted poorly.
Despite the market contracting, names like Volkswagen, Honda and Toyota all gained ground. Ford Motor Co. and General Motors Co.’s Wuling and Baojun brands both fell in April, according to LMC Automotive. Ford reported a 54% sales plunge in China last year and said last week that it’s introducing more than 30 vehicles targeted specifically for Chinese consumers over the next three years to help it hone its focus on the market.
Some additional data, according to Bloomberg:
- Nissan Motor Co. reported a 2.9% sales decline
- Jaguar Land Rover posted a 46% drop
- China’s Geely Automobile Holdings Ltd. had a 19% decrease
- Great Wall Motor Co. reported a 2.5% gain
The industry continues to hope for catalysts from the Chinese government, betting on consumer incentives like tax cuts. Last month, we noted that retail sales of sedans, SUVs, minivans and multipurpose vehicles dropped 12% to 1.78 million units, according to the China Passenger Car Association. This was after an 18.5% drop in February and a 4% drop in January.
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Chen Hong, chairman of SAIC Motor, China’s biggest automaker, had said last month: “2019 will bring severe challenges.” Trying to rally his employees in an internal worker memo, he called for his company to “accelerate innovation and strive toward higher quality”. SAIC’s sales fell 17% in the first two months of 2019.Not only have we recently commented about collapses in other countries, noting auto registrations in Germany falling 1.1% in April, but we have also written about how the slowdown in the world of auto manufacturing is taking its toll on other industries, like the steel industry.
Days ago, we wrote about European steelmakers offering lower profit guidance on the back of softness in the automobile industry. ArcelorMittal, for instance, expects demand in Europe to contract by 1% this year, compared to their earlier forecast of 1% growth. Regional lobby group Eurofer predicted earlier this year that demand would fall by 0.4%.
The company said Thursday: “Market conditions in the first quarter of 2019 have been challenging. Demand has generally been lackluster, reflecting softness in manufacturing activity and continued weakness in automotive.”
The global auto recession has wreaked havoc, especially because products for cars are usually the most profitable for steelmakers. This is especially true for Germany’s premium brands that demand high-quality metal. The auto industry accounts for about 20% of total steel demand. Car sales in Europe have declined for seven straight months through March.
There was one small sliver of good news, as ArcelorMittal has projected demand will rise in China this year… but if April sales numbers are any indication, expect an adjusted downward revision in the coming days.
- The Latest Tariffs Come At A Time Of Weakening Economic Growth
Authored by Bryce Coward via Knowledge Leaders Capital blog,
The announced tariffs have come at a rather inopportune time, economically speaking.
Back in 2018 when the US was slapping tariffs on washer machines and solar panels (January ’18), steel and aluminum (March ’18) and Chinese goods broadly (July ’18) the economy looked to be strong and was getting an added boost from tax cuts and the deregulation push.
This time around, economic growth is weakening and the US faces added headwinds from monetary policy tightening and actual fiscal drag in 2020.
As we can see in the charts below, whether we look at manufacturing trends, indicators of employment or small business conditions, previous tariff rounds occurred when the economy was significantly stronger than it is today.
This helped cushion the blow at the time, a luxury the economy does not have today.
- US Army Colonel: Pentagon's Latest China Report A "Budget Ploy" To Bleed The Taxpayer
A former US Army Colonel has blasted Department of Defense’s (DOD) latest report on China’s military capabilities as a “budget ploy”.
“You’re looking at a situation where the only thing [the DOD] can ask for, in terms of fixing any of this, is money — more and more money” retired Colonel Lawrence “Larry” Wilkerson said of the DoD’s annual report prepared for Congress entitled, “Military and Security Developments Involving the People’s Republic of China 2019”.
US Navy in the Pacific Ocean, via US Navy/Reuters Wilkerson, who served as former chief of staff to US Secretary of State Colin Powell, described in an interview with The Real News that hyping the China threat taps into a well-trodden American pastime of fear-mongering in order to squeeze more precious taxpayer dollars towards inflated budgets.
The Pentagon report focused heavily on President Xi’s plans for rapid modernization of the People’s Liberation Army (PLA), especially China’s ambitious plans for the region’s “largest navy” — which has lately included ongoing construction of the country’s third aircraft carrier (the first full-sized one), with plans for seven total by 2025.
Watch the interview with Army Col. (ret.) Larry Wilkerson below.
Col. Wilkerson dismissed the idea that China’s aircraft carrier or latest much reported naval modernization initiatives were real causes for concern:
We’ve got a dozen [aircraft carriers]. They’ve got one at sea, one… about to come out, and another one perhaps, and ours are so far ahead of theirs that it’s 10, 15, 20 years before they even achieve the kind of capacity we have.
He explained that “aircraft carriers are extraordinarily vulnerable and we’re going to find that out when one of them with 5,000 hands and $14bn worth of taxpayer money is sunk in less than 30 minutes, whenever we get engaged in something real.”
Now a military analyst who teaches at The College of William & Mary in Virginia, Wilkerson addressed the familiar Pentagon cycle of threat inflation in the interview:
The [US] army could not expand; it could not take on a real enemy today without massive conscription and full mobilization. And I wonder if the nation could even stand that today. And so, you’re looking at a situation where the only thing [the DOD] can ask for, in terms of fixing any of this, is money— more and more money.
However, he did warn that the heightened rhetoric and blustering amidst a trade war could serve to paint both sides into a corner, resulting in a scenario of blindly bumbling toward war, as other analysts have described of the so-called “Thucydides Trap”.
Wilkerson said an increasingly aggressive US posture toward Beijing could create a “self-fulfilling prophecy,” wherein each minor escalation based on inflating threats begins “demarcating the highway to war with China,” – according to the interview.
- Can The US And China Ever Come To A Trade Agreement? It's Time For Some Behavioral Theory
Submitted by Nicholas Colas of DataTrek Research
Can the US and China come to a trade agreement? For Story Time Thursday we address that question with 2 behavioral finance studies. The first shows professional negotiators expect “fairness” during talks even more than laypeople. The second reveals significant cultural (US-China) differences on what constitutes a “fair” deal. Bottom line: markets like the predictability implicit in a model where companies/governments are profit/utility-maximizing agents. Behavioral finance reminds us that “fairness” can matter more.
Aside from our reminiscences of working for Steve Cohen, behavioral finance is the most popular theme for Story Time Thursday. Today we have two studies from that field that both relate to the market’s topic du jour: the ongoing trade talks between the US and China.
At the center of both analyses is the Ultimatum Game (UG), the most replicated study in the field. As a review of how it is structured and what it says about human nature here:
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Two strangers walk into a room and a researcher has them call a coin toss. The winner of the toss gets a sum of money (we’ll use $100 in this example).
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The winner must then offer some part of the $100 to the loser. If the loser accepts the split, both parties get to keep their shares. If the loser rejects the offer, then neither gets anything. Either way, the game is over.
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In theory, the winner should offer $1 of the $100 and the loser should accept it because something is better than nothing.
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In practice, countless UG studies have shown that losers almost always reject offers below $25 even though they “should” be happy to walk out with $1 – $10. The lesson of the Ultimatum Game: spite trumps classical marginal utility theory.
That’s how “normal” people play the game, but do skilled negotiators follow the same playbook? In theory, they shouldn’t since they know even a sub-25% offer is better than walking away empty-handed. But then again, since they are facing off against another professional perhaps they would expect a fairer offer from a one-shot game and reject even 30%. So which is it?
In 2014 researchers from several University of California schools published the results of a study that gave the answer. Over the course of 2 years they had 102 senior level US government officials and business leaders play an online version of the UG. Here were their results:
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Elite negotiators make higher offers (average $43) than laypeople ($39).
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But they also require higher offers to accept a deal: $31 versus $25 for the typical non-elite player.
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The more experienced the elite bargainer, the more they offered and the higher their threshold was to make a deal.
How this relates to US-China trade talks:
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Now you know why President Trump and his team were so unhappy with China’s recent attempt to walk back previously agreed terms. Mr. Trump’s Sunday tweet that sparked recent market volatility is a textbook response when seen through the lens of this study.
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Unfortunately, the behavior described in the study means both sides have to cede more ground than they want. Elite negotiators expect to see better-than-average offers, not worse. And their thresholds for taking a deal are higher.
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The upshot may be that a successful deal is one where both sides give up more than they have publicly portrayed. Therefore, whether US investors see a deal as a positive to the US economy will come down to what China unexpectedly agrees to as much or more than what the American side gives up.
The second Ultimatum Game study today goes to the question of cultural differences between the US and China. The work here comes from Chinese/German researchers and looked at whether older Chinese citizens who had lived under Mao played the UG differently from younger demographic cohorts. The short answer is yes, but the data in the study also highlights the cultural difference between Chinese UG players and those in the West:
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All Chinese age cohorts require higher offers than the 25% (US layperson) – 31% (US elite) we noted in the prior study to accept a deal. They range from a low of 34.7% (oldest) to 42.4% (those born between 1951 and 1975). Worth noting: lead Chinese negotiator Liu He was born in 1952.
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On the other side of the table, the mean offer for a Chinese UG player was also higher than average: 46 – 54% versus the 40% – 43% noted above.
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The bottom line here is that while this is just one study the numbers show a marked cultural difference between Chinese and American participants.
Where this leaves us: the Ultimatum Game is a good reminder that human decision-making during negotiations follows emotional guideposts, not financial/economic ones. Professional negotiators are no different than anyone else on that point and have even loftier expectations than laypeople. Culture also plays an underappreciated role.
That is why capital markets are so completely captured by US-China negotiations: they simply do not follow the cut-and-dried rules of profit maximization. Even if both sides truly want to cut a “fair” deal, how they reach one and what even fits that term will be deeply clouded by human emotion and judgment.
The bottom line: markets may seem volatile just now, but given the unpredictability of human nature when engaged in high stakes negotiations we think we’ve gotten off pretty cheaply so far… We doubt we’re out of the woods just yet.
Sources:
Elite negotiators: https://www.pnas.org/content/111/52/18536
Chinese Ultimatum Game: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0070769 -
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