- Hillary Clinton's Six Foreign-Policy Catastrophes
Hillary Clinton’s Six Foreign-Policy Catastrophes
Authored by Eric Zuesse for The Saker Blog,
INTRODUCTION TO THIS UPDATED REPUBLICATION
Though Hillary Clinton will, of course, be the direct topic here, we are now in the primaries-season for the 2020 elections, and almost all of the contenders for the Democratic Party nomination — and especially Biden, Buttigieg, and all of the others, except for Sanders and Gabbard — are foreign-policy clones of Ms. Clinton and of her former boss Mr. Obama. Therefore, Democrats should know what type of foreign policies they would be voting for, if they will be voting for such a candidate, as she and Obama both were. The foreign policies, that are documented here, were, after all, their foreign policies — not their campaign-rhetoric, but the actual, delivered, reality. This article describes that reality, up through the end of Obama’s first term. All of these policies were continued into Obama’s second term, which began in 2013.
This article was, in a shorter version, first published at Huffington Post on 16 August 2013, which had been copied to the Wayback Machine 198 times before being taken down by HuffPo sometime after 4 November 2019, the last copy that was made of it to the Wayback Machine. That article was, however, updated and expanded on 21 February 2016 at RINF.com and a few other sites. Between 2016 and now, around half of the links in that updated version became no longer functional; and, so, the 21 February 2016 version is now being restored again, here, as having 100% currently functioning links to the sources.
These were Hillary Clinton’s actual foreign policies, and are the foreign policies of Biden, Buttigieg, Warren, and most other Democratic Presidential candidates. Republicans might be even worse, but this article represents today’s Democratic Party foreign policies — the ugly truths, not the pretty promises. As you will see, there is unfortunately method in their madness. However, Democratic Party voters are just as closed-minded about the Democratic Party as Republican Party voters are about the Republican Party: for example, the reader-comments to this article, when it was excerpted on 22 February 2016 at the Democratic Party website Daily Kos, blamed some of the article’s named functionaries, underlings, but not the principals (Hillary Clinton and Barack Obama), and not the Democratic Party, whose policies these were — the policies of their own Party. It’s always only “the other Party” that’s rotten, not also “my Party” — not both halves of ‘our’ Government. It’s always only “the other guy” that needs to be replaced, not the rotten and corrupt, actually dictatorial, system. And this is how the rot continues on, instead of being replaced. It’s that self-deceit, which enables this rot to continue.
Here’s the article:
HILLARY CLINTON’S SIX FOREIGN-POLICY CATASTROPHES
Many commentators have here and here and here and here) that Hillary Clinton left behind no major achievement as the U.S. Secretary of State; but, actually, she did. Unfortunately, all of her major achievements were bad, and some were catastrophic. Six countries were especially involved: Honduras, Haiti, Afghanistan, Libya, Syria, and Ukraine. The harm she did to each country was not in the interest of the American people, and it was disastrous for the residents there.
Hillary Clinton at every campaign debate says “I have a better track-record,” and that she’s “a progressive who gets things done.” Here’s what she has actually done, when she was Secretary of State; here’s her track-record when she actually had executive responsibility for U.S. foreign-affairs. This will display her real values, not just her claimed values:
SUMMARY OF THE CASE TO BE PRESENTED
The central-American nation of Honduras is ruled today by an extremist far-right government, a fascist junta-imposed government, because of what Hillary Clinton and Barack Obama did in 2009. The lives of all but the top 0.001% of the population there are hell because of this. But the country’s aristocracy, or “oligarchy,” are doing fine.
The matter in Haiti was similar but less dramatic, and so it received even less attention from the U.S. Press.
Furthermore, under Secretary of State Clinton, failures at the U.S. Department of State also caused the basis for a hatred of the United States to soar in Afghanistan after the U.S. has drawn down its troops there. This failure, too, has received little coverage in the U.S. press, but our nation will be paying heavily for it long-term.
Hillary Clinton was the Administration’s leading proponent of regime-change, overthrowing Muammar Gaddafi in Libya. That worked out disastrously.
Clinton was also the Secretary of State when the 2006-2010 drought was causing massive relocations of population in Syria and U.S. State Department cables passed along up the chain of command — and the U.S. Government ignored them — the Assad government’s urgent request for aid from foreign governments to help farmers stave off starvation. The Clinton State Department ignored the requests and treated this as an opportunity to foment revolution there. It wasn’t only the Arab Spring, in Syria, that led to the demonstrations against Assad there. Sunni jihadist fighters streamed into Syria, from around the world, backed by the U.S., Saudi Arabia, Qatar, and Turkey. The U.S. was, in effect, assisting jihadists to oust the non-sectarian, secular Shiite leader of Syria and replace him with a fundamentalist Sunni dictator.
The groundwork for a coup d’etat in Ukraine was laid by Hillary Clinton, when she made her State Department’s official spokesperson Victoria Nuland, who had been the chief foreign-affairs advisor to Vice President Dick Cheney. Nuland then became the organizer of the 20 February 2014 coup in Ukraine, which replaced a neutralist leader of Ukraine, Viktor Yanukovych, with a rabidly anti-Russian U.S. puppet, Arseniy Yatsenyuk, and a bloody civil war. Nuland is obsessed with hatred of Russia.
On top of all that, Hillary Clinton is incredibly corrupt. And she treats subordinates like trash.
No well-informed Democrat will vote for her in the Democratic Party primaries. Here is what voters in the Democratic primaries need to know, before they vote:
HONDURAS
On 28 June 2009, the Honduran military grabbed their nation’s popular democratically elected progressive President, Manuel Zelaya, and flew him into exile.
The AP headlined from Tegucigalpa the next day, “World Leaders Pressure Honduras to Reverse Coup,” and reported: “Leaders from Hugo Chavez to Barack Obama called for reinstatement of Manuel Zelaya, who was arrested in his pajamas Sunday morning by soldiers who stormed his residence and flew him into exile.”
Secretary Clinton, in the press conference the day after the coup, “Remarks at the Top of the Daily Press Briefing”, refused to commit the United States to restoration of the democratically elected President of Honduras. She refused even to commit the U.S. to using the enormous leverage it had over the Honduran Government to bring that about.
Here was the relevant Q&A:
Mary Beth Sheridan. QUESTION: Madam Secretary, sorry, if I could just return for a second to Honduras, just to clarify Arshad’s point – so, I mean, the U.S. provides aid both under the Foreign Assistance Act and the Millennium challenge. So even though there are triggers in those; that countries have to behave – not have coups, you’re not going to cut off that aid?
SECRETARY CLINTON: Well, Mary Beth, we’re assessing what the final outcome of these actions will be. This has been a fast-moving set of circumstances over the last several days, and we’re looking at that question now. Much of our assistance is conditioned on the integrity of the democratic system. But if we were able to get to a status quo that returned to the rule of law and constitutional order within a relatively short period of time, I think that would be a good outcome. So we’re looking at all of this. We’re considering the implications of it. But our priority is to try to work with our partners in restoring the constitutional order in Honduras.
QUESTION: And does that mean returning Zelaya himself? You would insist on that in order to –
SECRETARY CLINTON: We are working with our partners.
She refused to answer the question, even though Zelaya had been an ally of the U.S., a progressive democrat. (Though Republicans decried Zelaya for pushing land-reform, the fact is that Honduras is virtually owned by two dozen families, and drastically needs to drag itself out of its feudal system. Doing that isn’t anti-American; it’s pro-American. It’s what Zelaya was trying to do, peacefully and democratically.
Our nation’s Founders fought a Revolution to overthrow feudalism – British – in our own country. Hillary was thus being anti-American, not just anti-democratic, here. This is stunning. The U.S had even been outright bombed by fascists, on the “day that will live in infamy,” December 7, 1941; and, then, we spilled lots of blood to beat those fascists in WWII. What was that war all about, if not about opposing fascism and fascists, and standing up for democracy and democrats? A peaceful democratic U.S. ally had now been overthrown by a fascist coup in Honduras, and yet Hillary Clinton’s response was – noncommittal?
The coup government made no bones about its being anti-democratic. On July 4th of 2009, Al Giordano at Narcosphere Narconews bannered “Honduras Coup Chooses Path of Rogue Narco-State”, and he reported that, “Last night, around 10 p.m. Tegucigalpa time, CNN Español interrupted its sports news programming for a live press conference announcement (‘no questions, please’) by coup ‘president’ Micheletti. There, he announced that his coup ‘government’ of Honduras is withdrawing from the Democratic Charter of the Organization of American States. … The Honduras coup’s behavior virtually assures that come Monday, the US government will define it as a ‘military coup,’ triggering a cut-off of US aid, joining the World Bank, the Inter-American Development Bank, PetroCaribe, the UN and the rest of the world in withdrawing economic support for the coup regime.” But that didn’t happen. The U.S. just remained silent. Why was our Secretary of State silent, even now?
It certainly couldn’t have been so on account of her agent on the ground in Honduras, the U.S. Ambassador to that country: he was anything but noncommittal. He was fully
American, not at all neutral or pro-fascist.
Here was his cable from the U.S. Embassy, reviewing the situation, for Washington, after almost a month’s silence from the Administration:
From: Ambassador Hugo Llorens, U.S. Embassy, Tegucigalpa, Honduras, 24 July 2009.
To: Secretary of State, White House, and National Security Council.
“SUBJECT: TFHO1: OPEN AND SHUT: THE CASE OF THE HONDURAN COUP”
This lengthy message from the Ambassador closed:
“The actions of June 28 can only be considered a coup d’etat by the legislative branch, with the support of the judicial branch and the military, against the executive branch. It bears mentioning that, whereas the resolution adopted June 28 refers only to Zelaya, its effect was to remove the entire executive branch. Both of these actions clearly exceeded Congress’s authority. … No matter what the merits of the case against Zelaya, his forced removal by the military was clearly illegal, and [puppett-leader Roberto] Micheletti’s ascendance as ‘interim president’ was totally illegitimate.”
On the same day when the Ambassador sent that cable, AFP headlined “Zelaya ‘Reckless’ to Return to Honduras: Clinton”, and reported that our Secretary of State criticized Zelaya that day for trying to get back into his own country. “‘President Zelaya’s effort to reach the border is reckless,’ Clinton said during a press conference with visiting Iraqi Prime Minister Nouri al-Maliki. … Washington supports ‘a negotiated peaceful solution to the Honduran crisis,’ Clinton said.” It wasn’t “the Honduran coup” – she wouldn’t call it a “coup” – it was “the Honduran crisis”; so, she accepted the junta’s framing of the issue, not the framing of it by Zelaya and everyone other than the fascists. She wanted “a negotiated peaceful solution” to the forced removal at gunpoint of Honduras’s popular democratically elected President. Furthermore, Hillary’s statement here was undiplomatic: if she had advice for what the elected President of Honduras ought to be doing, that ought to have been communicated to him privately, not publicly, and said to him by suggesting what he ought to do, not by insulting what he already was doing, publicly calling it “reckless.” Such a statement from her was clearly not meant as advice to help Zelaya; it was meant to – and did – humiliate him; and diplomats around the world could see this. Manifestly now, Hillary Clinton supported the fascists. However, her boss, the U.S. President, stayed silent.
During the crucial next two weeks, Obama considered what to do. Then, on 6 August 2009, McClatchy newspapers bannered “U.S. Drops Call to Restore Ousted Honduran Leader” and Tyler Bridges reported that Zelaya wouldn’t receive U.S. backing in his bid to be restored to power. Though all international organizations called the Honduran coup illegitimate, and refused to recognize the leader chosen by its junta, the Obama Administration, after more than a month of indecision on this matter, finally came out for Honduras’s fascists. According to James Rosen of McClatchy Newspapers three days later, the far-right Republican U.S. Senator Jim DeMint had “placed a hold on two nominees to senior State Department posts to protest Obama’s pushing for ousted Honduran President Manuel Zalaya’s return to power, which the administration backed away from last week.” Obama, after a month of silence, caved silently. Instead of his using the bully pulpit to smear the fascist DeMint publicly with his fascism, Obama just joined him in it, silently. Why?
Perhaps it was because the chief lobbyist hired in the U.S. by the Honduran aristocracy (whose thugs had installed this new Honduran government), was Hillary’s old friend, Lanny Davis. As slate.com had said on 27 August 2008, headlining “A Day in the Life of Hillary’s Biggest Fan”: “When it comes to defending Hillary Clinton, Lanny Davis has no rival.” He was the fascists’ fixer inside the Obama Administration. On 9 July 2009, The Hill bannered “Hondurans Lobby Against Deposed Leader” and reported that Honduras’s equivalent of the U.S. Chamber of Commerce (which was controlled by those two-dozen families) had hired “Lanny Davis, the former special counsel to President Bill Clinton,” and that, “The lobbying blitz began [6 July] Monday, one day before Zelaya met with Clinton as part of his push to be reinstated.” Lanny Davis had had his input to Hillary even before President Zelaya did. Moreover, The Hill reported that, “17 Republican senators, including Minority Leader Mitch McConnell (Ky.) [and DeMint] wrote Secretary Clinton and asked her to meet with officials from the interim government of Honduras.” America’s Republican leadership were immediately and strongly supporting Honduras’s fascists. This Republican Senators’ letter attacked “the rush to label the events of June 28th a coup d’etat,” and said that it instead reflected “‘the universal principle that people should choose their own leaders.’ In a 125-3 vote, the Honduran Congress approved of the actions taken to remove Mr. Zelaya from office and install Mr. Micheletti.” (The article “2009 Honduran coup d’état” at wikipedia says that after the military seized the President on June 28th, “Later that day, the Honduran Congress, in an extraordinary session, voted to remove Zelaya from office, after reading a false resignation letter attributed to President Zelaya.” A link to the forged letter was provided. To Republicans, that is how democracy is supposed to operate, not a “coup.” Just masked men with machine guns, and then forged documents and well-connected foreign lobbyists. The U.S. Ambassador’s cable on July 24th was emphatic that the “bogus resignation letter dated June 25 that surfaced after the coup” should be publicly recognized as bogus. But it wasn’t.)
So, the Honduran aristocracy (mainly the Facussé, Ferrari, Canahuati, Atala, Lamas, Nasser, Kattan, Lippman, and Flores, clans) had purchased a line straight to the U.S. Secretary of State, via Mr. Davis. And Obama caved. On 13 August 2009, Mark Weisbrot of the Center for Economic and Policy Research headlined a Sacramento Bee op-ed “Obama Tacitly Backs Military’s Takeover of Honduran Democracy” and he reported that the Administration’s recent “statements were widely publicized in the Honduran media and helped to bolster the dictatorship. Perhaps more ominously, the Obama administration has not said one word about the atrocities and human rights abuses perpetrated by the coup government. Political activists have been murdered, independent TV and radio stations have been shut down, journalists have been detained and intimidated, and hundreds of people arrested.” There was now, again as under Bush, widespread revulsion against the U.S. throughout Latin America. Also on the 13th, Dick Emanuelson, at the Americas Program of the Center for International Policy, headlined “Military Forces Sow Terror and Fear in Honduras” and he described in Honduras a situation very much like that which had occurred in Argentina when the generals there took over in 1976 and rounded up and “disappeared” leaders who constituted a threat to the aristocracy’s continued rule in that country.
The U.S. was now the only power sustaining the Honduran junta’s government. Hillary had said “We are working with our partners,” but she lied. It turned out that the U.S. was instead working against “our partners” – against virtually all of the world’s democratic nations. Brazil Magazine headlined on August 13th, “Brazil Urges Obama to Tighten the Vise on Honduras to Get Zelaya Back” and reported that Brazilian President Luiz Inacio Lula da Silva had urged President Obama to come out publicly for the “immediate and unconditional” restoration of Zelaya to office. It didn’t happen, however; and on Friday, August 21st, Mark Weisbrot thus bannered in Britain’s Guardian, “Obama’s Deafening Silence on Honduras: Seven weeks after the coup in Honduras, the US is hindering efforts to restore President Manuel Zelaya to power.” Weisbrot documented lies from the Obama Administration regarding the coup; and he noted, “The one thing we can be pretty sure of is that no major US media outlet will look further into this matter.” He was assuming that the U.S. had a controlled press, and it seems that he was correct, except for the McClatchy Newspaper chain, which courageously reported on the Honduran horrors.
Obama was lying – not even acknowledging that the coup was a coup – even though (as Weisbrot pointed out) “on Wednesday, Amnesty International issued a report documenting widespread police beatings and brutality against peaceful demonstrations, mass arbitrary arrests and other human rights abuses under the dictatorship. The Obama administration has remained silent about these abuses — as well as the killings of activists and press censorship and intimidation. To date, no major [U.S.] media outlet has bothered to pursue them.” America’s aristocracy were clearly supporting Honduras’s.
Nearly a hundred scholars signed a public letter saying that if only the U.S. were to come out clearly against the coup, “the coup could easily be overturned”, because only the U.S. was keeping the coup regime in power (via banking and other crucial cooperation with the coup government). The U.S. was key, and it chose to turn the lock on the Honduran prison, and leave its victims to be murdered.
During the following months, as the shamefulness of America’s position on this became increasingly untenable, Obama seemed to be gradually tilting back away from the coup in Honduras. However, Senator DeMint and some other Republicans travelled to Honduras and spoke publicly there against the U.S. Government, and endorsed the coup-installed Honduran leadership. DeMint headlined in Rupert Murdoch’s Wall Street Journal, on 10 October 2009, “What I Heard in Honduras” and he wrote: “In the last three months, much has been made of a supposed military ‘coup’ that whisked former Honduran President Manuel Zelaya from power and the supposed chaos it created. After visiting Tegucigalpa last week and meeting with a cross section of leaders, … I can report there is no chaos there. … As all strong democracies do after cleansing themselves of usurpers, Honduras has moved on.” All governments in the hemisphere except the U.S. labeled the coup a “coup,” but DeMint and other top Republicans such as Mitch McConnell simply denied that it was. DeMint received ovations in Washington, at the far-right Heritage Foundation, which he now heads. This U.S. Senator condemned Zelaya there as “a deposed would-be Marxist dictator,” and he referred to the junta as “friends of freedom.” He condemned Obama by indirection, as being the enemy, who led “an American foreign policy unmoored from our commitment to human rights and human freedom and tied instead to the President’s personal ambition,” perhaps communist. Obama remained silent, in the face of these lies against both Zelaya and himself.
The assertion by Republicans that the coup was not a “coup” was a blatant lie. Everyone worldwide except America’s Republicans (and the official U.S. regime) referred to it as a “coup.” Furthermore, Ambassador Llorens in Tegucigalpa was constantly speaking with leaders (but only leaders) of business, religious, civic, and other organizations throughout Honduras, and everyone he spoke with stated his position in regards to the “coup.” For example (from the Embassy cables), “Monsignor Juan Jose Pineda, the Auxiliary Bishop of Tegucigalpa … stated that the Church had not taken sides in relation to the coup d’etat,” but “vociferously condemned the poor treatment of the Church by what he believed to be elements of the anti-coup movement.” And the leaders of two conservative political parties “argued that anti-coup protests have not been peaceful.” Only America’s Republicans lied that it hadn’t been a “coup.” Not even Republicans’ friends in Honduras, the fascists there, did. It was a coup. Republicans simply lied, as usual. (This is why Fox “News” has been found in every study to have the most-misinformed audience of any major news medium – they’re being lied to constantly.)
On 5 October 2009, Jason Beaubien of NPR headlined “Rich vs. Poor at Root of Honduran Political Crisis”, and he reported that, though Honduran conservatives were charging that Zelaya secretly intended to make Honduras into a communist dictatorship, the actual situation in Honduras was, as explained by an economics professor there, that “power in Honduras is in the hands of about 100 people from roughly 25 families. Others estimate that Honduran elite to be slightly larger, but still it is a tiny group.” This professor “says the country’s elite have always selected the nation’s president. They initially helped Zelaya get into office, and then they orchestrated his removal” when President Zelaya pressed land- and other- reforms. If communists would ever come to power in Honduras, it will be because of fascists’ intransigence there, not because of progressives’ attempts to end the hammer-lock of the local feudal lords.
Adolf Hitler similarly used a popular fear of communism to persuade conservative fools to vote for himself and for other fascists; but fascists and communists are alike: enemies of democracy. This hasn’t changed. Nor has The Big Lie technique that fascists still use.
Then, on 6 October 2009, The New York Times bannered “Honduran Security Forces Accused of Abuse.” (“Abuse” had also been the term that the Times and other major media employed for torture when George W. Bush did it, but now they applied this euphemism to the outright murders perpetrated by Honduras’s junta.) Such “abuse” was “news” to people inside the United States, but not to the people in other nations around the world, where the horrors in Honduras were widely publicized. Also on October 6th, narcosphere.narconews.com/ headlined “Poll: Wide Majority of Hondurans Oppose Coup d’Etat, Want Zelaya Back,” and Al Giordano reported “the first survey to be made public since a July Gallup poll showed a plurality of Hondurans opposed the coup d’etat.” This poll of 1,470 randomly chosen Honduran adults found 17.4% favored the coup, 52.7% opposed it. 33% opposed Zelaya’s return to power; 51.6% favored it. 22.2% wanted the coup-installed leader to stay in power; 60.1% wanted him to be removed. 21.8% said the National Police were not “engaging in repression”; 54.5% said they were repressing. Furthermore, the survey found that “the two national TV and radio stations shut down by the coup regime happen to be the most trusted news sources in the entire country.” Finally, approval ratings were tabulated for the twenty most prominent political figures in the country, and Zelaya and his wife were rated overwhelmingly above all others, as, respectively, #1 and #2, the two most highly respected public figures in Honduran politics.
An American visitor to Honduras posted online photos of the country prior to Zelaya’s Presidency, and he described them: “It took me awhile to get used to the sight of heavily armed guards and policemen everywhere. … Every supermarket we visited had an armed guard, carrying a shotgun, patrolling the parking lot. Most restaurants or fast food establishments we visited, such as Pizza Hut, had an armed guard in the parking lot. … Only 30% of the people have wealth. The other 70% are poor. Being rich in Honduras can be dangerous. That is why most rich people live in walled or fenced compounds. … And they all have armed guards on the grounds.” This is the type of society that Wayne LaPierre and other officials of the NRA describe as the ideal – every man for himself, armed to the teeth. Republicans, like Honduras’s aristocrats, want to keep such a Paradise the way it is; but the vast majority of Hondurans do not – they want progress.
Naturally, therefore, the U.S.’s Republican Party was overwhelmingly opposed to Zelaya, and were thus opposed to the Honduran public, who didn’t like their feudal Paradise. Obama remained remarkably silent on the matter. The Obama Administration brokered a supposed power-sharing deal between Zelaya and the coup government, but it fell apart when Zelaya learned that Obama actually stood with the fascists in letting the coup government oversee the imminent election of Honduras’s next President – which would give the “election” to the fascists’ stooge. On 5 November 2009, the Los Angeles Times headlined an editorial “Obama Must Stand Firm on Honduran Crisis: A U.S.-brokered deal to return Honduran President Manuel Zelaya to office is unraveling, and the Obama administration seems to be wavering.” They closed by saying: “If the Obama administration chooses to recognize the [winner of the upcoming] election without Zelaya first being reinstated [with powers to participate in overseeing the vote-counting], it will find itself at odds with the rest of Latin America. That would be a setback for democracy and for the United States.” But it’s exactly what Obama did. On 9 November 2009, McClatchy Newspapers bannered “Honduran Deal Collapses, and Zelaya’s Backers Blame U.S.” Tyler Bridges reported that Senator DeMint now dropped his objections to a key State Department appointment, when the appointee, Thomas Shannon (and also Secretary of State Hillary Clinton herself), made clear that the Obama Administration agreed with DeMint. Thus, “Zelaya’s supporters, who’ve been organizing street protests against the [coup-installed] Micheletti regime, are down to their final card: calling on Hondurans to boycott the elections.”
On 12 November 2009, the Washington Post bannered “Honduras Accord Is on Verge of Collapse” and quoted a spokesperson for U.S. Senator John Kerry, head of the Senate Foreign Relations Committee, saying: “The State Department’s abrupt change in policy last week — recognizing the elections scheduled for November 29th even if the coup regime does not meet its commitments under the Tegucigalpa-San Jose Accord — caused the collapse of an accord it helped negotiate.” (Let’s hope that Kerry will turn out to be a better Secretary of State than his predecessor was.)
A week later, on November 19th, the Latin American Working Group bannered “Honduras: Things Fall Apart” and summarized the joint culpability of the Obama Administration, and of the Honduran fascists.
On 29 November 2009, the Heritage Foundation bannered “Heritage in Honduras: ‘I Believe in Democracy’,” and Big Brother propagandized: “Today the Honduran people are voting in an historic election with consequences for the entire region. Heritage’s Izzy Ortega is on the ground as an official election observer speaking with Hondurans practicing their right to vote. Watch his first interview below.” A typical reader-comment posted there was “I want WE THE PEOPLE back in the United States. For once in my life I’am jealous of another country!” Conservatives wanted fascism in the U.S.A. – not only in Honduras. Of course, the aristocracy’s stooge was “elected” in Honduras. (Zelaya wasn’t even a candidate in this “election.” Most democratic countries throughout the world did not recognize the results of this “election.” However, the U.S. did; and so did Israel, Italy, Germany, Japan, Peru, Costa Rica, and Panama.)
By contrast, on the same day, Costa Rico’s Tico Times headlined “Peaceful March Faces ‘Brutal Repression’ in San Pedro Sula” Honduras. Mike Faulk reported that, “About 500 people marching peacefully in the northwestern city of San Pedro Sula were repressed by tear gas and water cannons on Election Day today.” The next day, Agence France Presse headlined “Conservatives Win Honduran Election,” and reported that “Conservative Porfirio Lobo has claimed a solid win. … The United States was quick to underline its support.” Barack Obama was the leading (virtually the only) head-of-state supporting the Honduran fascist transfer of power to their new “elected” Honduran President. The major “news” media in the U.S. deep-sixed what was happening in Honduras, but the Honduran situation was widely reported elsewhere. Typical of the slight coverage that it did receive in the U.S., the Wall Street Journal bannered on November 26th, “Honduras Lurches Toward Crisis Over Election”, and their “reporter,” Jose de Cordoba, opened, “Honduran President Manuel Zelaya’s push to rewrite the constitution, and pave the way for his potential re-election, has plunged one of Latin America’s poorest countries into a potentially violent political crisis.” Rupert Murdoch’s rag never reported the gangster-government’s violence. Moreover, Zelaya had never pushed “to rewrite the constitution”; he had wanted to hold a plebiscite on whether there should be a constitutional convention held to rewrite the nation’s existing Constitution, which everyone but the Honduran aristocracy said contained profound defects that made democracy dysfunctional there. The editors of the former U.S.S.R.’s newspaper Pravda would have chuckled at Murdoch’s “reporting.” By contrast, for example, blog.AFLCIO.org had headlined on 16 November 2009, “Trumka: Free Elections Not Possible Now in Honduras.” The American labor movement was reporting on events in Honduras, but had been defeated by the U.S. aristocracy increasingly since 40 years earlier (Reagan), and therefore no longer constituted a major source of news for the American people. Richard Trumka was the AFL-CIO President, but was by now just a marginal character in the new fascist Amerika.
On 9 January 2010, the Honduras Coup 2009 blog translated from a Honduran newspaper published that day, and headlined “Honduras Is Broke.” Honduras’s Finance Minister, Gabriela Nuñez, was quoted as saying that international aid must keep coming in order for the nation to continue paying its bills, and that avoiding default is “a work from week to week.”
A few months later, the Council on Hemispheric Affairs headlined on 5 March 2010, “Secretary of State Hillary Clinton Does Latin America” and reported that, “While in Buenos Aires, she carelessly stated, ‘The Honduras crisis has been managed to a successful conclusion … It was done without violence.’ This is being labeled as a misguided statement considering the physical violence including murders, beatings, torture that the coup government used in order to repress the opposition. Many of these tactics are still being used. This diplomatic stumble is expected to draw significant attention to the multiple errors in the U.S. approach.” Moreover, while there, she was “announcing that the Obama administration will restore aid that had been previously suspended.” The commentator said that this drew attention to “a political decision that once again may have served to isolate the U.S. from much of Latin America.” Furthermore, “While in Costa Rica, … Clinton said the post-coup [Honduran] government … was, in fact, democratically elected,” which made a mockery of the term “democracy.” That election was perhaps even less democratic than the “elections” in Iran have recently been, but it was remarkably similar, with the main difference being that in Honduras the aristocracy controlled the “election,” whereas in Iran the theocracy did. Anyway, Hillary approved.
On 1 May 2010, Britain’s Guardian headlined regarding Honduras, “Cocaine Trade Turns Backwater into Hideout for Brutal Assassins: The Central American nation is on the brink of becoming a fully-fledged narco-state,” and reported that, “Corrupt police and drug gangs are blamed, with the government unable or unwilling to crack down on them.”
The Herald of Tegucigalpa, El Heraldo, headlined on 26 January 2011, “Presidente Asigna Medalla de Honor al Mérito a J. J. Rendón,” and reported that President Porfirio Lobo had decorated with the Order of Merit the master-propagandist who had deceived enough Honduran voters to “elect” Lobo (with the assistance of vote-rigging and terror). That was the same “John Rendon” (or actually Juan José Rendón) who had been hired by the George W. Bush Administration to deceive the American public into invading Iraq in 2003. This time, he was working for Barack Obama, instead of for George W. Bush, but it was fascism just the same.
Without Obama, Honduras’s fascists would have been defeated. Obama’s refusal to employ either his financial and banking power or his bully pulpit, and Hillary’s outright support of the fascist junta, together sealed the deaths of many thousands of Hondurans. The U.S. thus, single-handedly among all nations, kept Honduras’s newly-installed fascist regime in power. A U.S. professor who specialized in Honduras, Orlando Perez, said that Obama did this probably because he concluded “that Honduras’ political, military and economic elite wouldn’t accept Zelaya’s return”; in other words, that Obama wanted to serve Honduras’s aristocracy, regardless of the Honduran public, and even regardless of the increased contempt that Latin Americans would inevitably feel toward the U.S. from this matter.
The results for Hondurans were hellish. On 11 April 2011, McClatchy Newspapers bannered “Honduran Police Ignore Rise in Attacks on Journalists, Gays” and reported that within just those almost-two years, Honduras had become “the deadliest country in the hemisphere,” because of the soaring crime-rate, especially against homosexuals and against journalists. The new fascist government tacitly “sends a message to the criminals, the paramilitaries and the hit men that they can do as they please.”
Hondurans were by then five times likelier to be murdered than Mexicans were. Honduras’s aristocrats, however, were safe, because they hired their own private security forces, and also because the government’s security-apparatus was controlled by the aristocracy. Only the public were unprotected.
Fox “News” Latina bannered, on 7 October 2011, “Honduras Led World in Homicides in 2010” and (since Rupert Murdoch’s Fox is a Republican front) pretended that this had happened because Latin America was violent – not because Fox’s Republican friends had had their way in policy on Honduras, and had thus caused the Honduran murder-rate to soar. (During the latest year, whereas homicides had declined in all of the other high-homicide nations, homicides had skyrocketed 22% in Honduras – and that’s why Honduras now led the world in homicides, but Fox “News” didn’t mention any of these facts.)
The actual problem was that the U.S. had a Republican government under nominal “Democratic” leadership, both at the White House and at the State Department (not to mention at Treasury, Justice, and Education). Obama not only gave Rupert Murdoch a nice foil to gin-up his hate-machine; he also gave Murdoch the most politically gifted Republican in the country: Obama, a Republican in “Democratic” clothing. It certainly was so with regard to Honduran policy, in which Obama seemed to be following Hillary Clinton’s lead to the right.
On 21 October 2011, The Nation bannered “Wikileaks Honduras: US Linked to Brutal Businessman” and Dana Frank reported that, “Miguel Facussé Barjum, in the embassy’s words, is ‘the wealthiest, most powerful businessman in the country,’ one of the country’s ‘political heavyweights.’” He owned a 22,000-acre palm-oil plantation, including lots of vacant land that thousands of peasants or “campesinos” wanted to farm and make their homes. “The campesinos’ efforts have been met with swift and brutal retaliation,” hired killers – a cost of doing business (like exterminators). Furthermore, wikileaks cables from during George W. Bush’s Presidency indicated that “a known drug trafficking flight with a 1,000 kilo cocaine shipment from Colombia … successfully landed … on the private property of Miguel Facusse. … Its cargo was off-loaded onto a convoy of vehicles that was guarded by about 30 heavily armed men.” The plane was burned and bulldozed into the ground, and the U.S. Ambassador said that this probably couldn’t have happened without Facussé’s participation. But now, the U.S. was actually on the side of such people. Not only was the U.S. continuing as before in Honduras, but “The US has allocated $45 million in new funds for military construction,” including expansion of the U.S. air base that had participated in the 2009 coup. Other wikileaks cables indicated that someone from the U.S. Embassy met with Facussé on 7 September 2009. Furthermore, “A new US ambassador, Lisa Kubiske, arrived in Honduras this August. She is an expert on biofuels – the center of Miguel Facussé’s African palm empire.” Moreover, on 13 August 2009, hondurascoup2009.blogspot had headlined “Get to Know the 10 Families that Financed the Coup”, and cited a study by Leticia Salomón of the Autonomous University of Honduras, which said that, “A fundamental person in the conspiracy was the magnate Miguel Facussé, decorated by the Colombian Senate in 2004 with the Orden Mérito a la Democracia, and who today monopolizes the business of palm oil and in 1992 supported the purchase of land from campesinos at less than 10% of its actual value.” Furthermore, the coup “was planned by a business group lead [led] by Carlos Flores Facussé, ex-president of Honduras (1998-2002) and owner of the newspaper La Tribuna, which together with La Prensa, El Heraldo, TV channels 2, 3, 5 and 9 were the fundamental pillar of the coup.” Moreover, on 10 February 2010, the Honduras Culture and Politics blog headlined “Mario Canahuati Goes to Washington,” and reported that Honduras’s new Foreign Minister, Mario, was related to Jorge Canahuati, “owner of La Prensa and El Heraldo,” and also to Jesus Canahuati, who was the VP of the Honduran chamber-of-commerce organization that hired Lanny Davis. Meanwhile, Mario’s father, Juan Canahuati, owned textile factories that assembled clothing for major U.S. labels, and which would thus benefit greatly from the fascists’ roll-back of Zelaya’s increase in the minimum wage. (Other articles were also posted to the web, listing mainly the same families behind the coup.)
So, as such examples show, the aristocracy were greatly enriched by the Honduran coup, even though the non-criminal (or “legitimate”) Honduran economy shriveled. By supporting this new Honduran regime, Obama and Hillary assisted the outsourcing of clothes-manufacturing jobs, etc., to such police-states. International corporations would be more profitable, and their top executives and controlling stockholders would reap higher stock-values and capital gains and bigger executive bonuses, because of such fascist operations as the 2009 coup. If workers or campesinos didn’t like it, they could leave – for the U.S., where they would be competing directly against the poorest of our own country’s poor.
An article quoted Jose Luis Galdamez, a journalist for Radio Globo (a Honduran station briefly shut down by the junta) explaining how that nation’s elite impunity functions: “The rich simply send you out to kill … and then kill with impunity. They never investigate into who killed who, because the groups in power control the media, control the judiciary, and now control the government [the Executive Branch] again.” This is to say: In Honduras, hired killers are safe. The Government represents the aristocracy, not the public; so, aristocrats are free to kill. America’s congressional Republicans like this “Freedom.” It’s maximum liberty – for aristocrats: the people these “Representatives” actually serve.
On 18 November 2011, Mark Weisbrot in Britain’s Guardian headlined “Honduras: America’s Great Foreign Policy Disgrace”, and he reported that, when the junta’s man “Porfirio Lobo took office in January 2020, … most of the hemisphere refused to recognize the government because his election took place under conditions of serious human rights violations. In May 2011, an agreement was finally brokered in Cartagena, Colombia, which allowed Honduras back into the Organization of American States. But the Lobo government has not complied with its part of the Cartagena accords, which included human rights guarantees for the political opposition.” The frequent murders of non-fascist political and labor union leaders “in broad daylight” (so as to terrorize anyone who might consider to replace them) had continued, despite the accords. Weisbrot noted that, “when President Porfirio Lobo of Honduras came to Washington last month, President Obama Greeted him warmly” and Obama said, “What we’ve been seeing is a restoration of democratic practices and a commitment to reconciliation.” How nice. However, Lobo did comply with one aspect of the Cartagena agreement: he let Manuel Zelaya and his wife back into Honduras.
Honduras was now (even more than before Zelaya) under a “libertarian” government – a government that respected only property-rights of approved people, no personal or other rights for anyone (such as Facussé’s propertyless campesinos). Paul Romer, the husband of Obama’s former chief economist Christina Romer, was joining with other libertarians to promote the idea of a totally “free market” model city in Honduras. On 10 December 2011, Britain’s libertarian ECONOMIST magazine bannered “Hong Kong in Honduras,” and “Honduras Shrugged [a play on Ayn Rand’s Atlas Shrugged]: Two Start-Ups Want to Try Out Libertarian Ideas in the Country’s New Special Development Regions.” Then, on 6 September 2012, Britain’s Guardian bannered “Honduras to Build New City with Its Own Laws and Tax System.” However, the entrepreneur aiming to develop this new Honduran city freed from the law, the grandson of the far-right economist Milton Friedman, Patri Friedman, headlined at his Future Cities Development Inc., on 19 October 2012, “Closing Statement From Future Cities Development, Inc.” and he announced that though “passing with a vote of 126-1” in the Honduran legislature, his project was ruled unconstitutional by a judge, because it would remove that land from the Honduran legal system. Patri had been fundraising for this project ever since he had publicly announced at the libertarian Koch brothers’ Cato Institute, on 6 April 2009, “Democracy Is Not The Answer,” and he then said, “Democracy is rigged against libertarians.” He ended his statement by announcing “my proposal,” which was to “build new city-states,” where there would be no democracy, and only the investors would have any rights at all – an extreme gated community. Just months later, the new Honduran President, a libertarian like Patri, invited him to do it, but this judge killed the idea.
Inasmuch as Honduras was becoming too dangerous for Americans, the AP headlined on 19 January 2012, “Peace Corps Pullout a New Blow to Honduras,” and reported that, “The U.S. government’s decision to pull out all its Peace Corps volunteers from Honduras for safety reasons is yet another blow to a nation still battered by a coup and recently labeled [by the U.N. as] the world’s most deadly country.” Three days later, on the 22nd, Frances Robles of the Miami Herald, headlined “Graft, Greed, Mayhem Turn Honduras into Murder Capital of World,” and reported the details of a nation where aristocrats were protected by their own private guards, the public were on their own, and all new entrants into the aristocracy were drug traffickers and the soldiers and police who worked for those traffickers. Narcotics were now by far the most booming industry in Honduras, if not the only booming industry there post-coup. Robles reported, “Everybody has been bought,” in this paradise of anarchism, or libertarianism (i.e.: in this aristocratically controlled country).
On 12 February 2012, NPR headlined “Who Rules in Honduras? Coup’s Legacy of Violence.” The ruling families weren’t even noted here, much less mentioned, in this supposed news-report on the subject of “Who Rules in Honduras?” However, this story did note that, “Many experts say things got markedly worse after the 2009 coup.” (That was a severe understatement.)
Jim DeMint, who has since left the Senate, and who recently took over as the head of the far-right Heritage Foundation where he had formerly been a star, got everything he wanted in Honduras, and so did Hillary Clinton’s friend Lanny Davis – the aristocrats’ paid hand in the affair, on the “Democratic” side. (The aristocrats had many other agents lobbying their friends on the Republican side.) Honduras’s public got only hell. Four days later, on February 16th, Reuters headlined “Honduras Under Fire After Huge Prison Blaze”, and reported: “Survivors of a Honduran jailhouse fire that killed more than 350 inmates [some not yet tried, much less convicted], accused guards of leaving prisoners to die trapped inside their cells and even firing on others when they tried to escape.”
This was how law operated, in a supremely fascist nation. Dwight Eisenhower and the Dulles brothers had done a similar thing to the Iranians in 1953, and then to the Guatemalans in 1954; Obama now, though passively, did it to the Hondurans. When Ike did it in Iran, who would have guessed at the whirlwind that would result there 26 years later, in 1979? (Ironically, when Ike did it, the mullahs were delighted that the elected Iranian President, Mossadegh, whom they hated, had been overthrown. America now reaps their whirlwind.)
This is the type of hypocritical leadership that has caused the United States to decline in public approval throughout the world under Obama – ironic after his Nobel Peace Prize awarded within just months of his becoming President. On 10 December 2010, Gallup bannered “U.S. Leadership Ratings Suffer in Latin America”, and reported that approval of “the job performance of the leadership of the United States” had declined since 2009 in 14 of 18 nations in the Western Hemisphere. It had declined steepest in Mexico, Argentina, Honduras, and Venezuela. Honduras, however, was the only country where approval of the U.S. was now even lower than it had been under George W. Bush in 2008. This Honduran plunge since the 2009 coup had been that steep. Then, on 19 April 2012, Gallup headlined “U.S. Leadership Losing Some Status”, and reported that across 136 countries, approval of the U.S. had peaked in 2009 when George W. Bush was replaced by Obama, but that “the U.S. has lost some of its status” since 2009, and that the “U.S. Image Sinks in the Americas,” down one-quarter from its 2009 high, though still not yet quite as low in most countries as it had been under Bush. Then, three months later, on June 13th, the PewResearch Global Attitudes Project headlined “Global Opinion of Obama Slips, International Policies Faulted”, and reported that favorable opinion of the U.S. had sunk during Obama’s first term. It declined 7% in Europe, 10% in Muslim countries, 13% in Mexico, and 4% in China. However, it increased 8% in Russia, and 13% in Japan. It went down in eight countries, and up in two, and changed only 2% or less in three nations.
The global fascist push to eliminate Zelaya’s Presidency had first been well outlined by Greg Grandin in The Nation on 28 July 2009, headlining “Waiting for Zelaya”. He wrote: “The business community didn’t like Zelaya because he raised the minimum wage. Conservative evangelicals and Catholics – including Opus Dei, a formidable presence in Honduras – detested him because he refused to ban the ‘morning after’ pill. The mining, hydroelectric and biofuel sector didn’t like him because he didn’t put state funds and land at their disposal. The law-and-order crowd hated him because he apologized on behalf of the state for a program of ‘social cleansing’ that took place in the 1990s. … Zelaya likewise moved to draw down Washington’s military presence; Honduras, alone among Central American countries, hosts a permanent detachment of US troops.” Later that same year (2009), John Perkins, author of Confessions of an Economic Hit Man, came out with his new Hoodwinked, in which he said (p. 213): “I was told by a Panamanian bank vice president who wanted to remain anonymous, ‘Every multinational knows that if Honduras raises its hourly [minimum-wage] rate, the rest of Latin America and the Caribbean will have to follow. Haiti and Honduras have always set the bottom.’” The increase in Honduras’s minimum wage was widely cited as having probably been the coup’s chief source.
Zelaya offered an explanation as to why the U.S. helped the fascists. On 31 May 2011, “Democracy Now” radio headlined “Exclusive Interview with Manuel Zelaya on the U.S. Role in Honduran Coup”, and Zelaya revealed that when he was abducted from his house, “We landed in the U.S. military base of Palmerola,” before being flown from there out of the country, and that “Otto Reich started this.” Reich had been the fanatical far-right Cuban-American who ran U.S. Latin-American policy for the Republican Reagan and both the father and son Bush Administrations, including Iran-Contra against Nicaragua (which helped Iran’s mullahs), and the fascist 2002 coup against Venezuela’s popular elected President Hugo Chavez, which coup was then peacefully overturned and reversed, due to worldwide repudiation of the junta everywhere except the U.S. Government. Zelaya said that the coup against himself had been organized via both Reich and the previous, George W. Bush-appointed, U.S. Ambassador to Honduras, Charles Ford, who had subsequently been appointed to the U.S. Southern Command. Zelaya didn’t personally blame Obama. Zelaya said, “Even though Obama would be against the coup, the process toward the coup was already moving forward. … They are even able to bend the arm of the President of the United States, President Obama, and the State Department.” Zelaya portrayed a weak President Obama, not a complicit one. If this was true, then Lanny Davis was pushing against a weak leader, not against strong resistance within the then-new Democratic U.S. Administration. Hillary Clinton’s press conference the day after the coup reflected unconcern regarding democracy, not (like with Republicans such as Sen. DeMint) outright support of fascism. The situation that was portrayed by Zelaya was a U.S. Government that was heavily infiltrated by fascists throughout the bureacracy, and a new Democratic President and Secretary of State who had no stomach to oppose fascists – an Administration who were mere figureheads.
On 15 March 2012, Laura Carlson, at Foreign Policy In Focus, bannered “Honduras: When Engagement Becomes Complicity,” and she opened: “U.S. Vice President Joe Biden traveled to Honduras on March 6 with a double mission: to quell talk of drug legalization and reinforce the U.S.-sponsored drug war in Central America, and to bolster the presidency of Porfirio Lobo. The Honduran government issued a statement that during the one-hour closed-door conversation between Biden and Lobo, the vice president ‘reiterated the U.S. commitment to intensify aid to the government and people of Honduras, and exalted the efforts undertaken and implemented over the past two years by President Lobo.’ In a March 1 press briefing, U.S. National Security Advisor Tony Blinken cited ‘the tremendous leadership President Lobo has displayed in advancing national reconciliation and democratic and constitutional order.’ You’d think they were talking about a different country from the one we visited just weeks before on a fact-finding mission on violence against women. What we found was a nation submerged in violence and lawlessness, a president incapable or unwilling to do much about it, and a justice system in shambles.”
Carlson went on to note: “Land grabs to transfer land and resources from small-scale farmers, indigenous peoples, and poor urban residents into the hands of large-scale developers and megaprojects have generated violence throughout the country. Many of the testimonies of violence and sexual abuse that we heard from Honduran women regarded conflicts over land, where the regime actively supports wealthy interests against poor people in illegal land occupations for tourism, mining, and infrastructure projects, such as palm oil magnate Miguel Facusse’s actions.” She noted: “The United States helped deliver a serious blow to the Honduran political system and society. The United States has a tremendous responsibility for the disastrous situation.” And she closed: “There’s no excuse for spending U.S. taxpayer dollars on security assistance to Honduras as human rights violations pile up.” She called this “A Coup for Criminals.”
What Iran and Guatemala became to the historical record of Eisenhower’s Presidency, Honduras will be to that of Obama. Sometimes even a small country, even a banana republic, can leave a big black mark on a President’s record. Though Czechoslovakia was just a small and weak country, it’s even what Britain’s Prime Minister Neville Chamberlain is primarily remembered for nowadays – his yielding it to the fascists in 1938.
In November 2013, the Center for Economic Policy Research bannered a study, “Honduras Since the Coup”, and among the highlights they reported were:
“Economic growth has slowed since the 2009 coup. From 2006-2008 average annual GDP growth was 5.7 percent. In 2009 Honduras’ GDP, as with most countries in Central America, contracted due to the world recession. From 2010-2013, average annual growth has been only 3.5 percent.”
“Economic inequality, which decreased for four consecutive years starting in 2006, began trending upward in 2010. Honduras now has the most unequal distribution of income in Latin America.”
“In the two years after the coup, over 100 percent of all real income gains went to the wealthiest 10 percent of Hondurans.”
“Poverty and extreme poverty rates decreased by 7.7 and 20.9 percent respectively during the Zelaya administration. From 2010-2012, the poverty rate increased by 13.2 percent while the extreme poverty rate increased by 26.3 percent.”
“The unemployment situation has worsened from 2010-2012.”
Crime rates and other non-economic factors were unfortunately ignored in this study, but it indicated clearly that, from at least the economic standpoint, the public in Honduras suffered while the elite did not. Hillary Clinton and Barack Obama had done to Honduras something rather similar to what George W. Bush and his team did to Iraq, but with this major difference: Zelaya was a good and democratic leader of Honduras, whereas Saddam was a tyrant (though Iraq was even worse after his reign than during it). This “Democratic” U.S. Administration turned out to support fascism, much as its Republican predecessor had done.
The soaring murder-rate after the U.S.-supported coup caused a soaring number of escapees from the violence; they’re flooding into the U.S. now as illegal immigrants.
HAITI
In Haiti, the situation is similar as an example of the U.S. backing aristocrats, so as to keep the masses in poverty and for American aristocrats to profit from doing so. On 1 June 2011, The Nation headlined “WikiLeaks Haiti: Let Them Live on $3 a Day”, and Dan Coughlin and Kim Ives reported that, “Contractors for Fruit of the Loom, Hanes and Levi’s worked in close concert with the US Embassy when they aggressively moved to block a minimum wage increase for Haitian assembly zone workers, the lowest-paid in the hemisphere, according to secret State Department cables. … The factory owners told the Haitian Parliament that they were willing to give workers a 9-cents-per-hour pay increase to 31 cents per hour to make T-shirts, bras and underwear for US clothing giants like Dockers and Nautica. But the factory owners refused to pay 62 cents per hour, or $5 per day, as a measure unanimously passed by the Haitian Parliament in June 2009 would have mandated. And they had the vigorous backing of the US Agency for International Development and the US Embassy when they took that stand.” Hillary Clinton’s State Department pushed hard to reverse the new law. “A deputy chief of mission, David E. Lindwall, said the $5 per day minimum ‘did not take economic reality into account’ but was a populist measure aimed at appealing to ‘the unemployed and underpaid masses.’” An “Editor’s Note” from The Nation added: “In keeping with the industry’s usual practice, the brand name US companies kept their own hands clean, letting their contractors do the work of making Haiti safe for the sweatshops from which they derive their profits — with help from US officials.” Those “officials” were ultimately Clinton and Obama. On 3 June 2011, Ryan Chittum at Columbia Journalism Review headlined “A Pulled Scoop Shows U.S. Fought to Keep Haitian Wages Down”, and he added some perspective to the story: “Hanesbrands CEO Richard Noll … could pay for the raises for those 3,200 t-shirt makers with just one-sixth of the $10 million in salary and bonus he raked in last year.” And then, when the U.S. turns away “boat people,” trying to escape the “voluntary” slavery of the Haitian masses, the standard excuse is that it’s done so as to “protect American jobs.” But is that really where Hillary Clinton gets her campaign funds?
AFGHANISTAN
On 26 July 2009, Marisa Taylor bannered at McClatchy Newspapers, “Why Are U.S.-Allied Refugees Still Branded as ‘Terrorists?’,” and she reported that “DHS [Department of Homeland Security] is working with other agencies, such as the State Department, to come up with a solution” to the routine refusal of the United States to grant U.S. visas to translators and other local employees of the U.S. in Iraq and Afghanistan who wanted to move to the U.S. and who had overwhelming reason to fear retaliation from anti-Americans in their home countries after we left. The State Department did nothing. Then, Human Rights First headlined on 13 August 2009, “Senator Leahy on ‘Material Support’ Bars”, and reported that, “In a powerful statement submitted for the Congressional Record on August 5, 2009, Senator Leahy (D-VT) reaffirmed his commitment to ‘restore common sense’ to the bars to refugee and asylum status based on associations with what the Immigration and Nationality Act defines as terrorism,” which was “written so broadly” that it applied even to “children who were recruited against their will and forced to undergo military training, doctors (acting in accordance with the Hippocratic oath) … and those who fought against the armies of repressive governments in their home countries.”
The State Department failed to act. On 2 February 2013, the Washington Post bannered “Alleged Terrorism Ties Foil Some Afghan Interpreters’ U.S. Visa Hopes”, and Kevin Sieff in Kabul reported that, “As the American military draws down its forces in Afghanistan and more than 6,000 Afghan interpreters seek U.S. visas, the problem is threatening to obstruct the applications of Afghans who risked their lives to serve the U.S. government.” What kind of lesson is this teaching to interpreters and other local employees of the U.S. missions in unstable foreign countries? Helping the U.S. could be terminally dangerous.
LIBYA
And what happened afterwards?
(And what happened before?)
But what happened afterwards is even worse than people know: as Wayne Madsen recently reported, Hillary’s success at overthrowing Gaddafi served brilliantly the purposes of the U.S. aristocracy and of the jihadists who are financed by the Saud family and the other fundamentalist Sunni royal families in Arabia. Even if she doesn’t become President, she has already done enough favors for those royals so as to be able to fill to the brim the coffers of the Clinton Foundation.
SYRIA
A record drought in Syria during 2008-2010 produced results like this:
“Two years before the ‘Arab Spring’ even began:
In the past three years, 160 Syrian farming villages have been abandoned near Aleppo as crop failures have forced over 200,000 rural Syrians to leave for the cities. This news is distressing enough, but when put into a long-term perspective, its implications are staggering: many of these villages have been continuously farmed for 8000 years.
That source had been published on 16 January 2010.”
The drought continued on through 2010 and sporadically afterwards, and it intensified in Syria the already widespread ‘Arab Spring’ demonstrations against the existing regimes.
Even before the ‘Arab Spring’ demonstrations in 2011, the Syrian government was pleading with foreign governments for food aid, and these pleas were reported to Secretary of State Clinton, but she ignored them.
Obama grabbed this opportunity to dust off an old CIA 1957 plan to overthrow the Ba’athist Party that ruled Syria — the only secular, non-sectarian, party in Syria, and the only political force there that insisted upon separation between church and state. The Ba’athists were allied with Russia, and the U.S. aristocracy wanted to conquer Russia even after the end of communism there in 1990. Replacing a secular government by a fundamentalist Sunni Sharia law regime would end Syria’s alliance with Russia; so, Obama worked with other fundamentalist Sunni dictatorships in the region — Saudi Arabia, Qatar, UAE, Kuwait, and Turkey — to perpetrate a sarin gas attack in Syria that they’d all blame on Syria’s Ba’athist leader, Bashar al-Assad, even though the U.S. and its Arab partners had actually perpetrated it.
On 12 November 2011, Secretary of State Clinton said:
The failure of the Assad regime, once again, to heed the call of regional states and the international community underscores the fact that it has lost all credibility. The United States reiterates its calls for an immediate end to the violence, for free unfettered access for human rights monitors and journalists to deter and document grave human rights abuses and for Asad to step aside.
In other words: she was already demanding “regime change” in Syria. Back in 2002, she had similarly demanded “regime change in Iraq,” because the Ba’athist, Russia-allied, anti-sectarian, Saddam Hussein ruled there. She did it again in Syria — just as she had done it in Lybia in order to get rid of the non-sectarian Russia-allied dictator there, Muammar Gaddafi.
During the Democratic primary debate on 20 December 2015, her opponent Bernie Sanders said:
I worry too much that Secretary Clinton is too much into regime change and a little bit too aggressive without knowing what the unintended consequences might be.
Yes, we could get rid of Saddam Hussein, but that destabilized the entire region. Yes, we could get rid of Gadhafi, a terrible dictator, but that created a vacuum for ISIS. Yes, we could get rid of Assad tomorrow, but that would create another political vacuum that would benefit ISIS.
He said that defeating the jihadists in Syria should be completed before the issue of what to do about Assad is addressed. The questioner, David Muir, asked Clinton whether she agreed with that. She replied:
We are doing both at the same time.
MUIR: But that’s what he’s saying, we should put that aside for now and go after ISIS.
CLINTON: Well, I don’t agree with that.
She is obsessed with serving the desires of the U.S. aristocracy — even if that means the U.S. helps supply sarin gas to the rebels in Syria to be blamed on Assad, and even if it also means that the existing, Ba’athist, government in Syria will be replaced by a jihadist Sunni government that serves the Saud family and the other Arabic royal families.
UKRAINE
Secretary of State Hillary Clinton chose as being the State Department’s chief spokesperson Victoria Nuland who was previously the Principal Deputy National Security Advisor to Vice President Dick Cheney from 2003 to 2005, after having been appointed by President George W. Bush as the U.S. Deputy Permanent Representative to the anti-Russian military club NATO from 2000 until 2003. Her big passion, and her college-major, as a person who ever since childhood hated Russia, was Russian studies, and she “was twice a visiting fellow at the Council on Foreign Relations — as a ‘Next Generation’ Fellow looking at the effects of anti-Americanism on U.S. relations around the world, and as a State Department Fellow directing a task force on ‘Russia, its Neighbors and an Expanding NATO.’” Although her career started after the Soviet Union and its communism ended in 1990, it has nonetheless been obsessed with her hatred of Russia and with her passion for the U.S. aristocracy to take it over, as if communism hadn’t really been a factor in the “Cold War” — and she has been promoted in her career on that basis.
V.P. Cheney liked her “neo-conservatism,” which she shared with her husband, Robert Kagan, who had been one of the leading proponents for “regime change in Iraq.” (“Neo-conservatism” is the group of policy intellectuals who passionately argued for “regime change in Iraq” during the Bill Clinton and George W. Bush Administrations, and who support every policy to overthrow the leaders of any nation that’s at all friendly toward Russia.)
When Hillary Clinton retired in 2013, Obama made Nuland the Assistant Secretary of State for European and Eurasian Affairs, and Nuland’s first assignment (she was already at work on it by no later than 1 March 2013, which was before the U.S. Senate had even confirmed her appointment) was to overthrow the democratically elected government of Ukraine because Ukraine is next door to Russia and the U.S. aristocracy has, since communism ended in the Soviet Union in 1990, been trying to surround Russia by NATO missiles, most especially in Ukraine. President Obama hid from the public his hostility toward Russia until he became re-elected in 2012 (he even mocked his opponent, Mitt Romney, for saying, at 0:40 on this video, that Russia is “our number one geopolitical foe”), but then, once he was safely re-elected, immediately set to work to take over Ukraine and to add it to NATO. Then, in his National Security Strategy 2015, he identified Russia as being by far the world’s most “aggressive” nation. Hillary Clinton is determined to carry this anti-Russian hostility through as President, even though she lies as Obama does and so, similarly, won’t say it during the Democratic primaries. But the takeover of Ukraine was an Obama operation in which she played an important role, to set it up.
Here is the recording of Nuland on 4 February 2014, telling the U.S. Ambassador in Ukraine, Geoffrey Pyatt, whom to place at the top of the Ukrainian government when the coup will be completed, which occurred 22 days later. It was to be the culmination of her efforts, which had started even prior to 1 March 2013.
Here is the broader video of that coup.
Here is the head of the “private CIA” firm Stratfor saying it was “the most blatant coup in history.”
Here is the electoral map showing the voting percentages in each region of Ukraine for the election that had chosen the President, “Janukovych,” whom Obama overthrew in that coup. The region in purple on that map had voted 90% for “Janukovych.” It’s called Donbass and consists of Donetsk and Luhansk. It refused to accept the coup-imposed leaders. Obama wanted the residents there bombed into submission. Here’s a video of that bombing-campaign. Here’s another — specifically of firebombings (which are illegal). The money for that bombing-campaign came from taxpayers in U.S. and EU, and also from the IMF, in the form of loans that saddled Ukraine with so much debt it went bankrupt on 4 October 2015, as determined by a unanimous vote of the 15 international banks that collectively make this decision. The infamously high corruption in Ukraine went even higher after the U.S.-EU takeover of Ukraine. After Ukraine’s bankrupttcy, the IMF changed its rules so that it could continue to lend money there, until the people in Donbass are either exterminated or expelled. The U.S. President controls the IMF. For the international aristocracy, the U.S. President is the most important servant there is. Hillary Clinton wants to become that servant. It’s why her top twenty financial backers represent the U.S. aristocracy.
OTHER MATTERS
Finally, it should also be noted that Hillary’s record as the chief administrator at the State Department was also poor. The State Department’s own Accountability Review Board Report on Benghazi Attack said: “In the months leading up to September 11, 2012, security in Benghazi was not recognized and implemented as a ‘shared responsibility’ in Washington, resulting in stove-piped discussions and decisions on policy and security. Key decisions … or non-decisions in Washington, such as the failure to establish standards for Benghazi and to meet them, or the lack of a cohesive staffing plan, essentially set up Benghazi.” That’s failure at the very top. It’s not in Libya. It’s not even in Africa. It’s in “Washington.”
Who, at the State Department in “Washington,” had “buck stops here” authority and power? Hillary Clinton.
Republicans are obsessed with the Benghazi failure, because it reflects negatively upon her but not on themselves. However, Hillary’s real and important failures reflected negatively upon Republicans also, because these failures (such as her supporting fascists in Honduras) culminated actually Republican foreign-policy objectives, and dashed Democratic (and democratic) policy-objectives. This is the real reason why Republicans focus instead upon Hillary’s Benghazi mess.
Hillary Clinton also was a notoriously poor administrator of her own 2007-2008 presidential primary campaign. Even coming into 2014, some leading Democrats were afraid that if she were to become the Party’s candidate, then the entire Party would get “Mark Penned,” which is the euphemism for her inability to select top-flight people for key posts. Obama had a far higher-skilled campaign-operation than she did, even though she started out with an enormous head-start against Obama in 2008.
Back in 2006, the encyclopedic Democrat Jack Beatty headlined in The Atlantic, “Run, Barack, Run,” and he contrasted the “enthralling” presence and speaking-style of Barack Obama to the presence and speaking-style of the Party’s presumptive 2008 nominee. He said of Clinton: “As she showed in her speech at the memorial service for Coretta Scott King, Hillary Clinton is a boring, flat-voiced, false-gesturing platform speaker. She shouts into the microphone; Obama talks into it. Her borrowed words inspire no trust – they remind us of her borrowed foundation – and her clenched personality inspires little affection. Money can’t buy her love, nor buzz protect her political glass jaw. The question for Democrats is, Who will break it first? Will it be one of her Democratic challengers – Obama, Joe Biden, John Edwards – or John McCain?” He was hoping that it would turn out to be one of the Democrats, especially Obama, so as to avoid a continuation of the Bush years. He got his wish, even if not his intended result. (Obama was so gifted a con-man that even the brightest Democrats, such as Beatty, couldn’t see through his con. Nobody could – so, the Republicans had to invent an ‘Obama’-demon that was almost diametrically opposite to the real one, in order to provide a punching-bag that their suckers would hate. Republicans ended up punching actually the most gifted Republican since the time of Ronald Reagan — a black and charismatic version of Mitt Romney, the man who lost to Obama in 2012 though having created the model both for Obamacare and for Obama’s policies toward Wall Street, and even toward Russia.)
At the start of the present campaign, it had seemed almost inevitable that Hillary Clinton would be the Democratic Presidential nominee in 2016. A Quinnipiac poll released on 7 March 2013 was headlined “Clinton, Christie Lead The Pack In Early Look At 2016,” and reported that, “Former First Lady, and Secretary of State Clinton wins easily against any” opponent, from either Party.
Her public statements aren’t consistent, because she changes them whenever politically convenient to do so; but the statements of a liar are simply ignored by intelligent people, anyway. Her statements are ignored by intelligent voters. What matters is her actions, her actual record, which is lengthy, and ugly. Her record is, moreover, consistent. So, it leaves no doubt as to what her actual policies are: only fools will listen to anything that a liar such as she is, says on the stump, because she’s a con-person who is selling, essentially, a toxic dump, and trying to get top-dollar for it by describing the pretty land covering it over, and by crossing her fingers that not many people will smell any stench percolating up from down below. The only people who can intelligently trust her verbal commitments are her big donors, who hear those commitments in private, not in public, and who understand how to interpret them. Her voters are there merely to be conned, not to be served. She needs them to be the rug she walks upon in order to get back into the White House, where she intends to be serving real gold to her big donors, to make their bets, on her, profitable for them.
And here are her big donors — the people she seeks to serve there.
This presentation will now close with a brief update on the situation in Honduras, because that catastrophe was Hillary Clinton’s first one as the Secretary of State:
On 15 February 2016, Alexander Main, of the Center for Economic and Policy Research, headlined an op-ed in The New York Times, “An Anti-Corruption Charade in Honduras,” and he wrote there:
In Honduras, protests erupted when a local journalist revealed that millions of dollars of public funds from the country’s health care system had been funneled to the ruling National Party and the election campaign of President Juan Orlando Hernández. A handful of administrators and business executives have been indicted for other corruption in the health system, but no charges have been brought against Mr. Hernández or other top party officials over the diversion of funds to the party. … The country’s security forces are heavily infiltrated by organized crime — ‘rotten to the core,’ a former police official told The Miami Herald. Two weeks later, the official was shot dead. Scores of journalists, lawyers, land rights activists, gay rights advocates and opposition figures have been assassinated, without consequence for their killers. …
Sadly, the American government is ill positioned to offer help. In 2009, the State Department under Secretary Hillary Clinton helped a military coup in Honduras succeed by blocking efforts to restore the left-leaning president, Manuel Zelaya, to power. Since then, Washington’s diplomatic efforts have focused on shoring up a series of corrupt post-coup governments. More than 100 members of Congress have called on the Obama administration to condemn human rights violations by security forces, and have questioned America’s security assistance to Honduras.
Yet Washington continues to back Mr. Hernández.
Hillary Clinton did, indeed, have an impact as the Secretary of State, and it continues to this day, and will live on as a curse, probably for decades to come — especially in the lands that she played a principal role in helping to destroy.
She prides herself on her “experience,” as if having a title, “Secretary of State,” and performing miserably in that function, qualifies someone to be a good U.S. President. America’s press hasn’t challenged her on the claim, either. Thus, many people, who trust both her and the American press, think that there must be truth to her claim: that she has achieved a lot, and that what she has achieved was terrific for the American people, and for the world. They’ve been successfully deceived.
There is an alternative, within the Democratic Party: Bernie Sanders. Here is his experience. And here are his top donors.
CONCLUSION
Only fools vote for her. Her campaigns are targeting especially fools who are either female or black or Hispanic, but she (and her financial backers) will welcome any fool to vote for her, because clearly no non-fool (except those financial backers) will.
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PostScript:
This article was submitted to the major print news-media, and major online news-media, with the question: “Would you want this as an exclusive?” None replied even to say something like, “Maybe, give us a week to check out the linked sources.” None replied at all. Consequently, this article is now being provided free of charge to the public, and free of charge to all media to publish, but that’s the choice a journalist must make in order to present a truthful and reasonably comprehensive picture of Hillary Clinton’s record as the U.S. Secretary of State. Republican ‘news’ media don’t want this article, because it shows her as being hardly different from the Republicans on international matters; and Democratic ‘news’ media don’t want it, because it shows her as being hardly different from the Republicans on international matters. So, only the few news-media that are neither Republican nor Democratic, and are dedicated only to honestly and truthfully informing the public about the candidates for the U.S. Presidency, will publish it, even if it’s offered free-of-charge. About foreign affairs, there’s no truth in any of the large U.S. ‘news’ media: they’re all controlled by the U.S. aristocracy, who (in both Parties) agree overwhelmingly with the neoconservative (or American-imperialist) position on foreign-policy matters, and who are united against the interests of the publics in every nation, in favor of their own, personal, interests.
Here below are the news-media that had received the article, submitted to them for consideration as an exclusive, and all of which media rejected this article, without comment, so that you can see that the editors there know the information that’s revealed here (they have read it here, even if they didn’t already know it before and simply hid it from their readership). The reason they don’t want their readers to know these facts is that they don’t want the public to know that (except on purely groupist issues concerning women, Blacks and Hispanics — her voting-base) Hillary Clinton is actually a Republican in ‘Democratic’ verbal garb. Neither Republican, nor Democratic, ‘news’ media, want their readers to know that she’s actually a Republican — even more than her husband was. Anyway: here, you’ll see that though the information that has been included in this article is ignored in the reporting by all of the big reporters and by the talking heads on TV ‘news’, they’re not actually unaware of it; they’re simply not allowed to let the public know it.
Those media are: Vanity Fair, National Review, Rolling Stone, Harper’s, BusinessWeek and Bloomberg News, McClatchy newspapers, New York Times, Guardian, Washington Post, Mother Jones, The Nation, Progressive, The New Republic, New Yorker, Foreign Policy, Politico, Salon, Huffington Post, and Slate. (If any of your friends subscribe to or read those, why not pass this along to them, so that they’ll know what they don’t know about Hillary Clinton. Maybe they already know how bad the Republicans are, but do they know how bad the Clintons and Obama really are? Perhaps they don’t know it, from sources that want them not to know it.)
* * *
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
Tyler Durden
Sun, 12/15/2019 – 23:55 - Visualizing The World's Stock Market's Performance For The Past 30 Years
Visualizing The World’s Stock Market’s Performance For The Past 30 Years
Most investors around the world are familiar with the S&P 500 index.
Not only is it the most widely accepted barometer of U.S. stock market performance, but it’s also been on a 10-year bull run, now sitting at all-time highs near 3,170.
This week, Visual Capitalist’s Jeff Desjardins charts those historical returns, and then use the U.S. benchmark as a backdrop to compare other major stock markets around the world, such as those in Europe, Asia, and Canada.
Putting Them All at Scale
One challenge in comparing global markets directly is that all indices are on arbitrary scales.
To directly compare them, the most natural option would be to transform the data to percentage terms. While that’s all fine and dandy, it’s also a little boring.
To make things more interesting, we’ve collected historical data that goes back nearly 30 years for each index. This was mostly done using Macrotrends, a fantastic resource for historical data. We used November 26th, 1990 as a cut-off date, since that was the earliest data point available for some of the country indices used.
We then transformed all of this data to be on the same scale of the S&P 500, so performance can be directly compared to the common American stock market benchmark.
Comparing Markets Using the S&P 500
Alright, now that we have the same scale for each market, let’s dive into the data:
Note: Data has been transformed to match the scale of the S&P 500, and is current as of December 13, 2019
If you invested $100 in the U.S. market on November 26, 1990, you’d have over $1,000 today.
Over nearly 30 years, the S&P 500 has increased by 901%, which is the most out any of these major indices. If you invested in the German or Hong Kong markets, you’d have fairly similar results as well — each gained more than 800% over the same time period.
Meanwhile, the markets in Canada, France, and the United Kingdom have all increased, but at a far slower pace:
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In S&P 500 terms, Canada would be sitting at 1,717 — which is where the U.S. market was back in 2013.
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France would be at 1,160, a mark the S&P 500 last hit in 2010.
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The United Kingdom would sit at 1,072, also equivalent to 2010 for the U.S. market.
Finally, in S&P 500 terms, the Japanese stock market would be at a lowly 315 points today — roughly where it started 30 years ago. In other words, if you had invested $100 in Japanese stocks in 1990, you’d have gained just $1 over a period of three decades.
Tyler Durden
Sun, 12/15/2019 – 23:30 -
- Former CIA Spook: Eric Holder Just Revealed That The "Deep State Is Running Scared"
Former CIA Spook: Eric Holder Just Revealed That The “Deep State Is Running Scared”
Via Greg Hunter’s USAWatchdog.com,
Former CIA officer and counter-intelligence expert Kevin Shipp says that former Obama Administration Attorney General (AG) Eric Holder gave a big Deep State panic signal when he wrote in an Op-Ed last week in the Washington Post trashing current AG William Barr and his top prosecutor John Durham. Shipp explains,
“This is very significant. We all remember that Holder was Obama’s right hand man. Eric Holder was Barack Obama’s enforcer. The fact that Holder comes out this quickly after the Inspector General (IG) Horowitz Report comes out… and makes this veiled threat against Durham’s reputation. The fact that Eric Holder came out and made this statement is a clear indication to me they are running scared.
We have to understand it was Eric Holder that Barack Obama used to target the heads of corporations that spoke out publicly about Barack Obama. We know Holder was held in ‘Contempt of Congress.’ He spied on AP reporters, ran guns to drug cartels and blacked out the information. He spied on over a hundred journalists, and on and on we go…
They (Deep State) are convinced there are going to be indictments. Secondly, there is AG Barr’s outrage over (IG) Horowitz’s report and what it did not do. He made statements that there was spying and actions by government officials that need to be criminally looked into. Barr’s outrage over this shows me that there are going to be indictments, and that he is taking this seriously. Again, when Holder comes out and puts out this bombshell in the Washington Post, which is another indication that indictments are coming. John Brennan, former Obama Administration CIA Director, is going to be at the top of the list.”
Shipp says during the entire Trump Presidency, the mainstream media (MSM) has operated as a propaganda arm of the Deep State and the Democrats. Shipp contends,
“They put these stories out intentionally because they are creating their own story, and that is what the propaganda mainstream media does. It creates its own story…
They want to frame their latest story that there really wasn’t any spying on Trump. That’s what FISA warrants and applications are all about. They are all about spying.”
Shipp thinks this will be a big nail in the coffin of the MSM. Shipp says, “The mainstream media will never come back from this…”
“…because finally, through shows like this and others, the real information is coming out as to what the mainstream media has done. At the top of that list is the New York Times, the Washington Post, CNN and MSNBC…
What they did is they created the Russia collusion story as if it was reality, as if it was real. That is part of the procedure in doing this. Then, they invented the evidence, and that was the Steele Dossier. They portrayed this as evidence to create this false narrative. Then they sent this story out to each outlet, and all repeat the same story over and over and over again knowing the more they repeat it, the more people were going to believe it. Then, the FBI leaked information to the mainstream media. The FBI took that information leaked to the media and used their stories as evidence. Brennan leaked the dossier to the mainstream media as part of this whole machine.”
Shipp says the hoax of Russia collusion and the impeachment sham of President Trump is distracting us from other very big problems such as the extreme debt the country and the world is facing. Shipp says,
“Trump inherited a financial monster that was not his doing. When he was sworn into office, it already existed. It is very serious, and I think now or very soon the U.S. government will not be able to afford the interest on the national debt, much less paying off the debt itself.”
It is reported that central banks are buying record amounts of gold, and even Goldman Sachs is telling its clients to buy the yellow metal. Shipp says,
“This is a solid indicator that we are headed for the financial rapids with Goldman Sachs especially. Goldman Sachs is a global bank, and it’s one of the main banks in the United States. The fact that Sachs and others are building up gold reserves is a clear indication that they expect a financial downturn, to put it mildly, that is coming.”
Join Greg Hunter as he goes One-on-One with former CIA Officer and whistleblower Kevin Shipp.
Tyler Durden
Sun, 12/15/2019 – 23:05 - Is China Or The US The Biggest Global Superpower? Here's What The World Thinks
Is China Or The US The Biggest Global Superpower? Here’s What The World Thinks
Is the US still the world’s largest superpower? Some might argue that China may have already taken its place.
To be sure, the US still has the world’s largest economy by GDP, but doubts are growing about whether the US’s reputation, with a rising China increasingly seen as equal, or even more powerful, than the US.
A new study commissioned by the Pew Research Center found that more countries still believe the US is the world’s foremost economic superpower.
But among the world’s emerging economies, a growing number are growing more dependent on China.
In the US, a majority believe their own country is the No. 1 power, though there are stark partisan differences, with Democrats more likely to see China as No. 1.
Even if China’s rise is largely perceived as positive by the citizens of emerging market economies, the results show that they have more reservations about the country’s growing military might.
What’s perhaps even more interesting is how China’s neighbors feel about China. According to Pew, they generally feel more negative about both China’s growing economic and military might.
Generally speaking, China’s economic influence is seen in a similar or even slightly more positive light than the US’s. Still, the US remains, in terms of perception, the world’s largest economic and military power.
Across Latin America, to sub-Saharan Africa, to the Asia Pacific, more people see the US as the world’s top economy. So it makes sense that most of those who see the US as the top economy prefer having economic ties with the US over China.
The American Press seemingly fixates on the US’s crumbling relationship with its closest allies in Western Europe – something that we’ll be hearing even more about if Trump moves ahead with tariffs on Europe – but Pew’s research found that the US is viewed as the “top ally”.
The Pew survey was pretty ambitious: 38,426 people in 34 countries participated between May and October of this year.
Tyler Durden
Sun, 12/15/2019 – 22:40 - Colas: "I Met Paul Volcker A Few Years Ago…"
Colas: “I Met Paul Volcker A Few Years Ago…”
Submitted by Nicholas Colas of DataTrek Research
With Paul Volcker’s passing on Sunday we would like to dedicate Story Time Thursday to some personal recollections and lesser-quoted wisdom from “Tall Paul”.
#1: I met Paul Volcker a few years ago, and since we share a birthday (September 5th) I used that to start a conversation with him. His observation was that he had benefited greatly from the timing of his birth. “In my day, you got to start school as soon as you turned 5. Since the school year started in early September, I got to go earlier than most kids.” Paul Volcker was, at heart, a true analyst and considered the role of something over which he had no control as important to his eventual success.
Since there were many other people waiting to talk to him, my only other question was why his only long-form press interview as Fed Chair was with Andy Warhol’s Interview magazine. “That was Ida’s doing… no one in DC ever said no to Ida.” It’s true, that. Ida Ginsburg was a famous 1970s socialite who hosted the most exclusive dinner parties in Washington. She was a huge Warhol fan, and the feeling was mutual enough that Andy made her Interview’s DC editor and head interviewer.
#2: That Interview magazine article (June 1987) is not available online, but I have a hard copy and it shows much about why Volcker was so successful in his time as Fed Chair:
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On the Federal Reserve’s independence. Current Chair Powell is not the first Fed head to be threatened with firing. Then-Treasury Secretary Don Regan under President Reagan openly agitated for a change to the laws governing a Fed Chair’s tenure in order to remove Volcker. His policy of high interest rates to dampen inflation was not popular in the White House, of course. When asked if this scared him, Volcker’s reply was “No… what could I do about it?” White House pressure clearly played no role in Volcker’s thinking. He could not have cared less…
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On how much the general population understands monetary and fiscal policy. Volcker had a great deal of confidence in the American people: “It’s basically common sense, and sometimes ordinary people know what you’re dealing with better than very sophisticated people.” “Is something the matter if you don’t save very much? Is something the matter if you don’t invest very much? Those aren’t very complicated concepts.”
#3: The other interview with Volcker that sticks in my mind was one he gave PBS back in 2000 for its excellent series “Commanding Heights”. As Chair Powell mentioned at the start of Wednesday’s press conference, it was Volcker’s success in taming inflation that paved the path for decades of prosperity thereafter. As it turns out, it wasn’t just economic theory that guided Volcker’s thinking about monetary policy.
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Volcker saw the value of a country’s money as a national moral obligation. “The issue of money is a government responsibility predominantly, and to use that authority in a way that leads to inflation is a system that fools a lot of people, and to keep doing it you have to do it more and more.”
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He also saw a nation’s monetary system as central to its citizens’ confidence in all government: “It (bad monetary policy) corrodes trust, particularly trust in government. It is a governmental responsibility to maintain the value of the currency they issue. And when they fail to do that, it is something that undermines an essential trust in government.”
The bottom line is that, yes, Paul Volcker was the right person holding the right job at the right time in history but his guiding principles apply more broadly. He understood at a deep and intuitive level that all government institutions – including the Fed – have to connect their actions to the needs of ordinary citizens. At times, that takes conviction and even some risk to personal reputation. Get it right, as Volcker did, and the resultant success will outlive the individual who made the tough calls for the right reasons.
Source: PBS Interview: https://www.pbs.org/wgbh/commandingheights/shared/minitext/int_paulvolcker.html
Tyler Durden
Sun, 12/15/2019 – 22:15 -
- A Quarter Of Kids Treated At Transgender Clinics May Just Be Autistic, New Study Finds
A Quarter Of Kids Treated At Transgender Clinics May Just Be Autistic, New Study Finds
A few short days after former psychologists at the NHS’s flagship Gender Identity Development Service (GIDS) told Sky News they feared young people were “being over-diagnosed and then over-medicalised,” warning that:
“We fear that we have had front-row seats to a medical scandal.”
The Daily Mail reports that Australian doctors, writing in the Journal Of Autism And Developmental Disorders, stated that
“The few studies employing diagnostic criteria for ASD suggest a prevalence of 6-26 per cent in transgender populations.”
Notably, they added, that this was “higher than the general population, but no different from individuals attending psychiatric clinics.”
The Australians also quoted ‘definitive findings’ from a US study of almost 300,000 children, which discovered those with autism “were over four times as likely to be diagnosed with gender dysphoria” compared to those without autism.
Last year The Mail on Sunday unearthed an internal study by GIDS in London, also known as the Tavistock Clinic, which found 35 per cent of children and teenagers referred there between 2011 and 2017 had “moderate to severe autistic traits.”
A recent study published in the American Journal of Preventive Medicine found that 80 percent of gender minority students report having mental health problems, nearly double the rate of “cisgender” students.
This should not come as a huge surprise to many, as a reminder, in 2017, The American College of Pediatricians issued a statement condemning gender reclassification in children by stating that transgenderism in children amounts to child abuse.
“The American College of Pediatricians urges educators and legislators to reject all policies that condition children to accept as normal a life of chemical and surgical impersonation of the opposite sex. Facts – not ideology – determine reality.”
The policy statement listed eight arguments on why gender reclassification is harmful.
1. Human sexuality is an objective biological binary trait: “XY” and “XX” are genetic markers of health – not genetic markers of a disorder.
2. No one is born with a gender. Everyone is born with a biological sex. Gender (an awareness and sense of oneself as male or female) is a sociological and psychological concept; not an objective biological one.
3. A person’s belief that he or she is something they are not is, at best, a sign of confused thinking. When an otherwise healthy biological boy believes he is a girl, or an otherwise healthy biological girl believes she is a boy, an objective psychological problem exists that lies in the mind not the body, and it should be treated as such.
4. Puberty is not a disease and puberty-blocking hormones can be dangerous. Reversible or not, puberty-blocking hormones induce a state of disease – the absence of puberty – and inhibit growth and fertility in a previously biologically healthy child.
5. According to the DSM-V, as many as 98% of gender confused boys and 88% of gender confused girls eventually accept their biological sex after naturally passing through puberty.
6. Children who use puberty blockers to impersonate the opposite sex will require cross-sex hormones in late adolescence. Cross-sex hormones (testosterone and estrogen) are associated with dangerous health risks including but not limited to high blood pressure, blood clots, stroke and cancer.
7. Rates of suicide are twenty times greater among adults who use cross-sex hormones and undergo sex reassignment surgery, even in Sweden which is among the most LGBQT – affirming countries.
8. Conditioning children into believing a lifetime of chemical and surgical impersonation of the opposite sex is normal and healthful is child abuse.
Finally, as Paul McHugh, a renowned psychiatrist from Johns Hopkins University, told The College Fix, transgender people are being experimented on because the doctors treating transgender patients with hormones “don’t have evidence that (the treatment) will be the right one.”
He also criticized the manner of treatment given to many children who claim to be transgender.
“Many people are doing what amounts to an experiment on these young people without telling them it’s an experiment,” he told The Fix via phone.
“You need evidence for that and this is a very serious treatment. It is comparable to doing frontal lobotomies.”
Simply put, as McHugh dared to admit in public, the medical and psychiatric industries are reckless and irresponsible in their treatment of patients who claim to be transgender.
Tyler Durden
Sun, 12/15/2019 – 21:50 - Virtue Signaling To The Max: Dems Dis Their Own Debate
Virtue Signaling To The Max: Dems Dis Their Own Debate
Authored by Sarah Cowgill via LibertyNation.com,
The American electorate may be on the receiving end of an early Christmas present as the entire field of Democratic presidential wannabes that made the grade are boycotting their own December 19 debate. After months of pandering for press and polling numbers and increasing amounts of individual donors, a simple labor dispute has the field tweeting out their collective disgust at the battle taking place at the scheduled venue, Loyola Marymount University.
The issue is simple. No self-identifying Democrat will cross the picket line and snub UNITE HERE Local 11, the union representing cooks, dishwashers, cashiers, and servers – employed by global services company Sodexo – who toil away for Loyola Marymount University (LMU) students, faculty, and staff. In an ongoing – as in seemingly never ending – heated battle, UNITE HERE Local 11 is going toe-to-toe with Sodexo for increased wages and benefits.
What better stage to force Sodexo to their negotiating knees than the Democratic primary debate? Of course, everyone from LMU, UNITE HERE, and the Democratic National Committee – who had to move this tired sixth debate locale from UCLA to LMU over another labor dispute – is in a tizzy.
What’s The Deal?
Since early last spring, Local 11 has been in negotiations on a collective bargaining agreement with Sodexo – a subcontractor by Loyola Marymount University for foodservice operations and human resources, such as vetting and hiring workers on campus. But as negotiations between labor and corporate America rarely are an easy feat, there is no such resolution in the near future – namely by debate time. A picket line with all eyes on the not so magnificent seven who have qualified is an optic Local 11 would be foolish to pass up.
They didn’t waste a moment: One week out and Local 11 has a picket line ready to roll, daring the Dems to cross it.
Sen. Elizabeth Warren (D-MA) was the first to raise her Twitter fist in solidarity: “Unite Here is fighting for better wages and benefits—and I stand with them. The DNC should find a solution that lives up to our party’s commitment to fight for working people. I will not cross the union’s picket line even if it means missing the debate.”
Joe Biden
And then everyone else rushed to make the same pledge. Former Vice President Joe Biden said, “A job is about more than just a paycheck. It’s about dignity.”
Don’t you just feel warm and fuzzy inside now?
Susan Minato, Co-President of UNITE HERE Local 11, issued a public statement that seemed to mean more for the DNC. She said she “hoped that workers would have a contract with wages and affordable health insurance before the debate next week,” before adding the “or else” of a picket line.
DNC spokeswoman Xochitl Hinojosa tweeted the official party stance:
“Working with all stakeholders to find an acceptable resolution that meets their needs and is consistent with our values and will enable us to proceed as scheduled. Tom Perez would absolutely not cross a picket line and would never expect our candidates to either.”
Oh Please, Oh Please
As America readies for a holiday fraught with uncertainty, thanks to the actions of Congress, the Dems face yet another problem in getting a clear message to the electorate. Will the big day be lights out for the struggling field of candidates? Does anyone even tune in anymore for the debates?
This sixth weeding of candidates – if it happens at all – will be the first to be held in California before the state’s March 3, 2020, primary election. It’s a big deal to be in the state yammering about climate change, free stuff, and deflating the bad orange man to potential voters. Perhaps Tom Perez, the chair of the listing DNC ship, can use his experience as former President Barack Obama’s Secretary of Labor and get the job done. But I’d wager that America hopes the picket goes off and the debate doesn’t.
Tyler Durden
Sun, 12/15/2019 – 21:25 - AsiaPac Manufacturing PMIs Slump, But China Retail Sales Surge Amid Inflation Spike
AsiaPac Manufacturing PMIs Slump, But China Retail Sales Surge Amid Inflation Spike
The day started off poorly in AsiaPac with Aussie PMIs notably disappointing (both Services and Manufacturing in contraction).
The latest Commonwealth Bank Flash Composite PMI® pointed to a further marginal decrease in business activity across the manufacturing and service sectors in the final month of 2019. Weakness was particularly evident at manufacturers, which saw the sharpest decline in the 44-month survey history.
Commenting on the Commonwealth Bank Flash PMI data, CBA Chief Economist, Michael Blythe said:
“The PMI readings indicate that the Australian economy ended 2019 on a softish note. The RBA’s “gentle turning point” for the economy remains elusive. And the weakness in private spending evident in the Q3 GDP data looks to have continued in Q4, with a flow on to labour demand as well. There were also some early indications that the disruptions associated with the terrible bushfires around Sydney and elsewhere are having some impact.”
This was followed by New Zealand Institute of Economic Research lowering GDP growth expectations to 2.2% (from 2.3% in previous survey published in September), lowering wage inflation expectations as well as employment and raising overall inflation forecasts.
Then Japan’s PMIs hit with manufacturing contracting further and Services rebounding modestly (as the composite Japan PMI was flat from November (and still in contraction).
Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said:
“Latest survey data showed that the Japanese economy remained stagnant in December, following on from a similar outturn in November. Taking fourth quarter survey data as a whole, the poor performance in October could see Japan’s economy dip into contraction.
“The most disconcerting takeaway from fourth quarter survey data has been the marked loss of momentum in the service sector, which alongside domestic consumption, has been a key driving force of the economy in 2019, negating much of the manufacturing malaise. It is now clear that the service sector is unable to offset the industrial weakness, which does not bode well for growth prospects in 2020.
“That said, the recent stimulus package launched by Abe has the potential to breathe life back into the domestic economy. Indeed, this will certainly alleviate pressure on the Bank of Japan to take immediate policy action if the economic outlook worsens.”
And finally, the big kahuna, China released its November data – all of which were expected to improve sequentially after disappointing weakness in October.
Chinese data has miraculously rebounded in the last few weeks with China’s manufacturing PMIs coming in on the high side for November, with both the official and the Caixin gauges beating the median forecast and showing some improvement from October.
Source: Bloomberg
So here is tonight’s smorgasbord of ‘managed’ misinformation from China…
China’s New Home Prices rose at just 0.3% MoM – below expectations and the weakest growth since Feb 2018…
Source: Bloomberg
And then the rest of the China data avalanche hit…
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China’s Fixed Assets Investment YoY was +5.2% as expected and the same as October
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China Industrial Production YoY rose by 5.6% (the same as October but better than the expected 5.5% rise)
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China Retail Sales YoY jumped to +8.0% (from +7.2% and better than the 7.6% expected) but the impact of inflation, which will push the nominal level higher. CPI rose 4.5% in November year on year (thanks to soaring pork prices driving food inflation dramatically higher), well above the 3.8% rise in October.
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China Surveyed Jobless Rate remained at 5.1%
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China Property Investment YoY slowed modestly to +10.2%
So all in all, flat to positive reports from China
Source: Bloomberg
So the big question is, how much of a lift retail sales got from inflation.
Additionally, Bloomberg reports that Iris Pang, an economist at ING Bank, says retail sales are distorted somewhat by a long holiday in October that had depressed some spending. But, she does see the numbers overall as positive for growth.
As China’s credit impulse inched into the positive… (despite Chinese policy makers’ crackdown on shadow lending – credit extended outside of bank balance sheets – which has contracted for at least 14 straight months – and has been a major dampener for growth.)
Source: Bloomberg
And China defaults are soaring…
Source: Bloomberg
Of course, given the “phase one” deal that is being heralded by so many, all of this will be cleared up and economic growth will soar to the moon, alice. Or maybe, just maybe, none of the slowdown in economic growth was related to trade wars’ de minimus tariffs at all, and in fact, the limit of printing money, raising debt, and forcing consumption has been reached globally.
PBOC fixed the yuan below 7.00 (at 6.9915), the strongest since August 6th, and we note that Chinese stocks opened lower (despite the trade deal) but the China data – as one veteran EM trader noted – was little more than “recovery propaganda” at this point in the cycle.
Tyler Durden
Sun, 12/15/2019 – 21:07 -
- Why Illinois Property Taxes Won't Drop Without Major Spending Reform
Why Illinois Property Taxes Won’t Drop Without Major Spending Reform
Authored by Mark Glennon via Wirepoints.org,
A commenter here recently asked it this way: “How high would income taxes have to ramp in order to offset reducing Illinois’ property tax burden to that of Indiana, Iowa or Wisconsin?”
That’s a great angle to look at it from because you learn much by seeing that math. Don’t worry, we’ve done the math for you below. You’ll see that no meaningful property tax relief is possible without major, structural reforms that cut spending. You’ll also see that Governor JB Pritzker’s property tax relief task force cannot be expected to come up with much. Its report is due out by the end of this month.
The reason is simple. The numbers are overwhelming. Meaningful property tax cuts can’t be achieved without real spending reforms.
Here is the answer to that commenter’s question:
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If we cut Illinois’ residential property tax rates to match Indiana’s and shifted the burden to the state income tax, we’d have to cut property tax rates by 56% and nearly double the income tax. Seventeen billion dollars of property tax revenue would be lost, which represents 92% of what Illinois collects on the state income tax.
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Even to match Wisconsin’s property tax rates, which are fourth highest in the nation, Illinois would have to cut its property tax rates by 24%, and shifting that to the income tax would mean a $7.6 billion income tax increase – a 40% jump.
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Iowa’s property tax rates are one-third lower than ours, and cutting ours to match theirs would mean a $10 billion income tax hike – a 54% increase.
For perspective on how big those tax hikes would be, consider that the pending progressive income tax proposal – the “Fair Tax” – is optimistically estimated to raise just $3.5 billion of additional revenue. So, it would cost five times that to match Indiana’s property tax rates through an Illinois income tax hike. New revenue from the Fair tax is less than half of what it would take even to match high-tax Wisconsin’s property tax rate.
That’s just part of the absurdity of claims that the Fair Tax will help cut property taxes meaningfully. The $3.5 billion of new revenue from the Fair tax has already been promised away several times over. Endless messaging from supporters says the tax would also provide for fixing the state’s structural deficit, investing in schools and health care, fixing our crumbling infrastructure, creating thousands of jobs, “paying off the Republican Party’s old bills,” assuring that domestic violence shelters are kept open, helping stabilize our pensions, putting us on a path to fiscal stability and more. Truly paying for all that’s been promised from the Fair Tax would require tax rates that become absurd, which we’ve estimated before.
Nor can you expect much help from the Property Tax Relief Task Force. It’s not charged with producing the kinds of drastic spending reforms that are truly needed, including genuine pension reform and the constitutional amendment needed for that. Besides, the Pritzker Administration has ruled that out. The task force now has over 80 members, making it difficult to see how it will agree on anything bold. They already rejected a measure on perhaps the most obvious, albeit small, reform needed, which is putting an end to lawmakers running property tax appeal businesses as side jobs.
What about the pending legislation to consolidate investment functions of suburban and downstate police and firefighter pensions? Isn’t it supposed to relieve the property tax burden? It will only save an estimated $164 to $500 million per year, according to Pritzker, and that’s entirely speculative. That’s only 1.6% of property taxes at best, and nobody knows whether any savings from the plan will really go into property tax relief instead of being spent elsewhere.
The initial aspect of the problem is that Illinois property taxes are monstrous – highest in the nation along with New Jersey. They total $31 billion across the state, which is far higher than any other source of government revenue for Illinois and its municipalities.
But the ultimate, core problem when you add them together with all other taxes imposed statewide and locally is that we end up as America’s “least tax-friendly state,” as Kiplinger Personal Finance recently put it. It’s that total that’s the problem.
Maybe the Property Tax Task Force will suggest at least some of the reforms that would help, such as consolidation of school districts and other units of government. But returning Illinois to competitive levels of taxation and services will require a long list of reforms small and large that address the state’s total tax burden. They include real pension reform, collective bargaining reforms, ending unfunded mandates imposed by the state on municipalities and much more.
In summary, any meaningful property tax reduction, such as matching rates for neighboring states, would require reforms that our political establishment won’t consider.
Tyler Durden
Sun, 12/15/2019 – 20:35 -
- "Great Slowdown" – Indian Economy Headed Towards ICU, Warns Former Economic Official
“Great Slowdown” – Indian Economy Headed Towards ICU, Warns Former Economic Official
The former Indian Chief Economic Adviser Arvind Subramanian warned that the Indian economy is headed for increased financial hardships, reported Business Today.
Subramanian said the country’s current economic slowdown is considered a “Great Slowdown.” He suggested that the economy is headed towards an “intensive care unit,” referencing how the economy is on life support.
He warned that the second wave of twin balance sheet (TBS) crises is crushing the economy, which will develop into an even more massive crisis, expected to unfold in the year ahead.
“Look at electricity generation growth, it’s falling off the bottom, and it’s never been like this ever. So this is the sense in which I would say this is not just any slowdown, this is the great slowdown that India is experiencing and we should look at it with all seriousness …and the economy seems headed for the intensive care unit,” Subramanian said during a conference at Harvard University’s Centre for International Development.
Subramanian also warned about the TBS crisis in 2014 when he was Chief Economic Advisor under the Modi government.
TBS refers to the developing problems in corporate debt and increasing non-performing assets have led to difficulties in the country’s banking sector that have weighed on credit growth. This has further slowed the economy and will likely lead to more deceleration through 2020.
Subramanian said IL&FS Ltd, or Infrastructure Leasing & Finance Services crisis in 2018, was a “seismic event” as it triggered panic in banks and raised questions about sustainability.
The TBS problem in India will push the economy much lower into 2020. Already, growth in Q3 stood at its lowest in six years.
As economic growth rapidly slows, the Indian rupee has tumbled.
Industrial production growth is at the weakest level in a decade.
Business confidence has also plunged to decade lows.
And maybe because the 2016 recovery is over, a much longer-term downturn has resumed.
Clearly, the financial sector is the most significant imbalance in the system that could be corrected as the economy continues to decelerate.
Indian stocks are bumping up against a two-decade diagonal resistance line.
Saxo Bank’s Christopher Dembik, global head of macro research, warned on Twitter earlier this month, that “All the leading indicators point out it will get worse.”
India’s slowdown has certainly been the most under-appreciated aspect of the current global downturn. In Q3 this year, the Indian economy reached a 6-year low at 4.5% YoY, down from 5% in the previous quarter. All the leading indicators point out it will get worse. pic.twitter.com/sGajxI9Q4u
— Christopher Nicolas Dembik (@Dembik_Chris) December 2, 2019
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Putting this all together, it means that central banks’ are failing to stabilize the global economy as it seems their policies are becoming less effective than ever before. This also means desynchronization continues to persist in the global economy, and really in manufacturing hubs around the world, indicating that a massive rebound in global growth, already priced in by global equity markets for early 2020, might be a fantasy at the moment.
Tyler Durden
Sun, 12/15/2019 – 20:10 - Hyperinflation, Money Demand, & The Crack-Up Boom
Hyperinflation, Money Demand, & The Crack-Up Boom
Authored by Thorsten Polleit via The Mises Institute,
In the early 1920s, Ludwig von Mises became a witness to hyperinflation in Austria and Germany – monetary developments that caused irreparable and (in the German case) cataclysmic damage to civilization.
Mises’s policy advice was instrumental in helping to stop hyperinflation in Austria in 1922. In his Memoirs, however, he expressed the view that his instruction — halting the printing press — was heeded too late:
Austria’s currency did not collapse — as did Germany’s in 1923. The crack up boom did not occur. Nevertheless, the country had to bear the destructive consequences of continuing inflation for many years. Its banking, credit, and insurance systems had suffered wounds that could no longer heal, and no halt could be put to the consumption of capital.
As Mises noted, hyperinflation in Germany was not stopped before the complete destruction of the reichsmark. To illustrate the monetary catastrophe, one may take a look at the exchange rate of the reichsmark against the US dollar.
Before the start of World War I in 1914, around 4.2 marks would buy 1 US dollar. As soon as war action began, the convertibility of the mark was suspended and paper marks (papiermark) were issued, largely for financing war-related outlays. In 1918, after the end of World War I, 8.4marks bought 1 US dollar. In December 1919, the mark had depreciated to 46.8 per US dollar, and in December 1920 to 73.4 per dollar.
In July 1922, the US dollar cost 670 marks.
When French and Belgian troops occupied the Rhineland at the beginning of 1923, however, the exchange rate of the mark plummeted to 49,000 marks per US dollar.
On November 15, 1923, when hyperinflation reached its peak, the currency reform effectively made 1 trillion (1,000,000,000,000) papiermarkequal to 1 rentenmark, and as 4.2 trillion papiermark exchanged for 1 US dollar at that time, 4.2 rentenmark would equal 1 US dollar.
Increases in the Money Supply
The 20th century saw many hyperinflations, including China in 1949–50, Brazil in 1989–90, Argentina in the late 1980s and early 1990s, Russia in 1992, Yugoslavia in 1994, and, most recently, Zimbabwe in 2006–09. All of these hyperinflations were the direct result of a system of unfettered fiat money under government control — a system that produces money in a non-market-conforming way: the money supply is increased out of thin air by banks simply extending loans (circulation credit) and/or monetizing assets.
Hyperinflation is perhaps the darkest side of a government fiat money regime. Among mainstream economists, hyperinflation typically denotes a period of exceptionally strong increases in overall prices of goods and services, thus denoting a period of exceptionally strong erosions in the exchange value of money. Some people consider a rise in overall prices of 10 percent per month (which implies an annual rate of price increases of around 214 percent) as hyperinflation; others indentify hyperinflation as a monthly price rise of at least 20 percent (which implies an annual increase in prices of nearly 792 percent).
However, any such numerical definition can be criticized, as it refers to the symptom rather than the root cause of the accelerating loss of the purchasing power of money. Economically speaking, hyperinflation is the inevitable consequence of an ever-greater rise in the amount of money. And this is exactly what the monetary theory of the Austrian School of economics teaches: In fact, Austrian theory shows that inflation is the logical consequence of a rise in the money supply, and that hyperinflation is the logical outcome of ever-higher growth rates in the money supply.
According to the Austrian school, money is, like any other good, subject to the irrefutably true law of diminishing marginal utility. It is this law, which is implied by the axiom of human action, which is at the heart of Mises’s praxeology. As it relates to money, the law of diminishing marginal utility states that an increase in the quantity of money by an additional unit will inevitably be ranked lower (that is, valued less) than any same-sized unit of money already in an individual’s possession. This is because the new money can only be employed as a means for removing a state of uneasiness that is deemed less urgent than the least-urgent uneasiness which one has up to now been removing with the money in one’s possession.
Money Demand
People hold money because money has purchasing power (which people desire, given the fact of uncertainty as an undeniable category of human action), and the purchasing power of money is determined by the supply of and demand for money.
If a rise in the money supply is accompanied by an equal rise in money demand, overall prices and the purchasing power of money remain unchanged. Once people start to exchange their increased money holdings against other goods, however, prices will start to rise, and the purchasing power of money will fall. That said, it is rise of the money supply relative to the demand for money that brings to the fore the obvious effect of an increasing money supply: rising prices.
Mises saw that money demand plays a crucial role for the possibility of an unfolding hyperinflation. If the central bank is expected to increase the money supply in the future, people can be expected to rein in their money demand in the present — that is, increasingly surrendering money against vendible items. This would, other things being equal, drive up money prices. Mises noted that “this goes on until the point is reached beyond which no further changes in the purchasing power of money are expected.”4 The process of rising prices would come to a halt once people have fully adjusted for the expected increase in the money supply.
What happens, however, if people expect that, in the future, the money-supply growth rate will increase to ever-higher rates? In this case, the demand for money would, sooner or later, collapse. Such an expectation would lead (relatively quickly) to a point at which no one would be willing to hold any money — as people would expect money to lose its purchasing power altogether. People would start fleeing out of money entirely. This is what Mises termed a crack-up boom:
If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the ‘twenties, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse).5
The Unrelenting Power to Inflate
If people expect a forthcoming, drastic increase the money supply — but if they at the same time expect that such an increase will be limited (i.e., a one-off increase) — the central bank can actually orchestrate a debasing of money without causing its complete destruction. As long as government and its central bank succeed in making people believe that any future rise in the money supply will remain within an acceptable limit, from the viewpoint of the money holder, monetary policy is an effective and most perfidious instrument for expropriation and non-market-conforming income redistribution.
This may explain why Murray N. Rothbard, in his famous essay The Case for a 100 Percent Gold Dollar, wrote the following:
I am not saying that fiat money, once established on the ruins of gold, cannot then continue indefinitely on its own. Unfortunately … if fiat money could not continue indefinitely, I would not have to come here to plead for its abolition.6
Rothbard saw the danger that the government-controlled fiat money could be held up and running indefinitely, that it would not necessarily drive itself into a fatal and final collapse. As long as people do not expect that a money supply increase will spin out of control, the central bank is in a position to debase the currency without completely destroying it.
In other words: hyperinflation would be possible without destroying the money completely. The crack-up boom, as Mises pointed out, would unfold only when people come to the conclusion that the central bank will expand the money supply at ever-greater rates:
But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against “real” goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.7
Debt Levels
Today’s fiat-money regimes are characterized by ever-greater amounts of debt relative to real income — caused by policies that try to solve the economic problems caused by credit and money creation out of thin air by using even greater amounts of credit and money created out of thin air. And it is fair to say that the higher an economy’s overall debt level is, the more likely hyperinflation becomes.
To show this, let us assume that after a long period of money creation through bank circulation credit expansion a credit crisis emerges: Creditors are no longer willing to roll over maturing debt at prevailing interest rates. Borrowers cannot repay their obligations when payment is due, and neither can they afford paying higher borrowing costs. Investors start fleeing out of bonds, making interest rates increase sharply and thereby covering up unprofitable investment. More borrowers, including banks, fail to meet their obligations, and bankruptcies spread. Ensuing recession and rising unemployment aggravate the collapse of the credit structure.
Should investors in such a situation expect that the government and its central bank would opt for bailouts financed through additional money creation, the demand for money and fixed claims would most likely dry up. This would make it necessary for the central bank to extend ever-greater amounts of money to struggling borrowers in order to prevent the spread of bankruptcies. The larger the amount of outstanding debt is, the larger will be the potential increase in the money supply. The more the money supply grows, the more likely it is that there will be hyperinflation and a potential breakdown of money demand: the unfolding of a crack-up boom.
Tyler Durden
Sun, 12/15/2019 – 19:45 - What Will The Market Care About In 2020? Here Is Goldman's Answer
What Will The Market Care About In 2020? Here Is Goldman’s Answer
Now that two of the market’s greatest unknowns – Brexit/the UK election, and the “Phase One” part of the US-China trade war (with the Phase Two supposedly on the “to do” list after the Nov 2020 elections) – appear to have found an interim, if not fully satisfactory, resolution, a recurring question among the trader community is what will the market care about in the coming year.
Conveniently, an answer to that question is the topic of a Goldman report published over the weekend, and which points out that despite the immediate newsflow vacuum now that stocks will no longer rally on “optimism” of an imminent deal announcement, there is still quite a bit to occupy traders. Starting with the Treasury-market, Goldman notes that activity here will depend crucially on the Fed’s reaction function and the current pace of growth (among other things).
As shown in the chart below, sensitivity to inflation surprises picked up sharply in late 2017 and 2018 as the Fed hiked, as realized inflation moved towards the target, and as the risk of overheating entered the mainstream policy debate.
However, 2019 saw a reversal of all three trends, and inflation sensitivity declined arguably as a result.
Following the sharp tightening in financial conditions at the turn of the year, the combination of renewed growth fears, declining core inflation, and the dovish Fed pivot resulted in a roughly 50% decline in inflation sensitivity. Equity-market inflation sensitivity also declined, albeit more modestly.
In contrast, sensitivity to growth data picked up sharply in 2019, reflecting slowing growth and the return of recession fears. In fact, growth sensitivity in the bond market is already back to its level during the shale bust and capex-driven growth scare of 2016-17.
Looking ahead to 2020, Goldman expects another signal reversal, as its forecast of improving growth and diminished trade risks suggests scope for a modest pullback in sensitivity to growth data. Treasury-market sensitivity has already overshot relative to the bank’s predictions (see blue and red line in the left panel of Exhibit 6), and the end of the mid-cycle adjustment coupled with its expectation of firming US growth argues for more a normal degree of data sensitivity in early 2020.
Similarly, equity-market reactions to growth data could also wane a bit early next year if growth picks up.
It is also worth recalling that 2020 will be the year of the presidential election. As a result, Goldman analyzes the impact of elections on data sensitivity since 2000. Adding election dummy variables to the models shown in Exhibit 6, the bank finds a negative and significant “election effect” on growth sensitivity—with reactions to growth surprises attenuating in the quarter of presidential elections. Goldman analysts also find tentative evidence of attenuation in the quarter preceding the election (statistical power may be limited by the short sample).
The implications for 2020 are shown by the dotted lines above (i.e., a short-lived lull in data reactions in the coming fall 2020).
In contrast, the bank finds no such effects for inflation sensitivity. This may suggest that market participants view elections as more important for the growth outlook than for the near-term trajectory of core inflation (such that inflation news continues to be an important driver of price action, even if growth surprises are faded). In conclusion, Goldman expects inflation reactions to pick up gradually in 2020 as inflation rebounds towards the target and the Fed begins to contemplate its next move. All of that, of course, assumes that inflation will rebound next year as most on Wall Street now openly expect. However, if there is anything that 2019 once again vividly demonstrated, it is that when everyone expects something, the opposite happens.
Tyler Durden
Sun, 12/15/2019 – 19:20 - Deluge Of New Leaks Further Shreds The Establishment Syria Narrative
Deluge Of New Leaks Further Shreds The Establishment Syria Narrative
Authored by Caitlin Johnstone via Medium.com,
It’s been a bad last 24 hours for the war propagandists.
WikiLeaks has published multiple documents providing further details on the coverup within the Organisation for the Prohibition of Chemical Weapons (OPCW) of its own investigators’ findings which contradicted the official story we were all given about an alleged chlorine gas attack in Douma, Syria last year. The alleged chemical weapons incident was blamed on the Syrian government by the US and its allies, who launched airstrikes against Syria several days later. Subsequent evidence indicating that there was insufficient reason to conclude the chlorine gas attack ever happened was repressed by the OPCW, reportedly at the urging of US government officials.
The new publications by WikiLeaks add new detail to this still-unfolding scandal, providing more evidence to further invalidate attempts by establishment Syria narrative managers to spin it all as an empty conspiracy theory. The OPCW has no business hiding any information from the public which casts doubt on the official narrative about an incident which was used to justify an act of war on a sovereign nation.
RELEASE: Third batch of documents showing doctoring of facts in released version of OPCW chemical weapons report on Syria. Including a memo stating 20 inspectors feel released version “did not reflect the views of the team members that deployed to [Syria]”https://t.co/ndK4sRikNk
— WikiLeaks (@wikileaks) December 15, 2019
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The following are hyperlinks to the individual OPCW documents WikiLeaks published, with some highlights found therein:
A first draft of the OPCW’s July 2018 Interim Report on the team’s findings in Douma.
Contains crucial information that was not included in either the final draft of the July 2018 Interim Report or the March 2019 Final Report, including (emphasis mine):
1. The symptoms of the alleged victims of the supposed chemical incident were inconsistent with chlorine gas poisoning.
“Some of the signs and symptoms described by witnesses and noted in photos and video recordings taken by witnesses, of the alleged victims are not consistent with exposure to chlorine-containing choking or blood agents such as chlorine gas, phosgene or cyanogen chloride,” we learn in the unredacted first draft. “Specifically, the rapid onset of heavy buccal and nasal frothing in many victims, as well as the colour of the secretions, is not indicative of intoxication from such chemicals.”
“The large number of decedents in the one location (allegedly 40 to 45), most of whom were seen in videos and photos strewn on the floor of the apartments away from open windows, and within a few meters of an escape to un-poisoned or less toxic air, is at odds with intoxication by chlorine-based choking or blood agents, even at high concentrations,” the unredacted draft says.
This important information was omitted from the Interim Report and completely contradicted by the Final Report, which said that the investigation had found “reasonable grounds that the use of a toxic chemical as a weapon took place. This toxic chemical contained reactive chlorine. The toxic chemical was likely molecular chlorine.”
2. OPCW inspectors couldn’t find any explanation for why the gas cylinders supposedly dropped from Syrian aircraft were so undamaged by the fall.
“The FFM [Fact-Finding Mission] team is unable to provide satisfactory explanations for the relatively moderate damage to the cylinders allegedly dropped from an unknown height, compared to the destruction caused to the rebar-reinforced concrete roofs,” reads the leaked first draft. “In the case of Location 4, how the cylinder ended up on the bed, given the point at which it allegedly penetrated the room, remains unclear. The team considers that further studies by specialists in metallurgy and structural engineering or mechanics are required to provide an authoritative assessment of the team’s observations.”
We now know that a specialist was subsequently recruited to find an answer to this mystery. A leaked document dated February 2019 and published by the Working Group On Syria, Propaganda and Media in May 2019 was signed by a longtime OPCW inspector named Ian Henderson. Henderson, a South African ballistics expert, ran some experiments and determined that “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft,” writing instead that the cylinders being “manually placed” (i.e. staged) in the locations where investigators found them is “the only plausible explanation for observations at the scene.”
More on Ian Henderson in a moment.
3. The team concluded that either the victims were poisoned with some unknown gas which wasn’t chlorine, or there was no chemical weapon at all.
“The inconsistency between the presence of a putative chlorine-containing toxic chocking or blood agent on the one hand and the testimonies of alleged witnesses and symptoms observed from video footage and photographs, on the other, cannot be rationalised,” the unredacted first draft reads. “The team considered two possible explanations for the incongruity:
a. The victims were exposed to another highly toxic chemical agent that gave rise to the symptoms observed and has so far gone undetected.
b. The fatalities resulted from a non-chemical-related incident.”Again, none of this information made it into any of the OPCW’s public reports on the Douma incident. The difference between the information we were given (that a chlorine gas attack took place and the strong suggestion that it was dropped by Syrian aircraft) and the report the inspectors were initially trying to put together (literally the exact opposite) is staggering. For more insider information on the deliberation between OPCW inspectors who wanted their actual findings to be reported and the organisation officials who conspired to omit those findings, read this November report by journalist Jonathan Steele.
It’s worth noting that this memo is dated two weeks after the OPCW published its Final Report on the Douma incident in March 2019, because it further invalidates the bogus argument made by narrative management firms like Bellingcat claiming that the grievances of the dissenting OPCW inspectors had been satisfactorily addressed by the time the Final Report was published.
Clearly the concerns were not addressed, because the memo consists entirely of complaints, and according to its author “there are about 20 inspectors who have expressed their concern over the current situation.”
The memo’s author complains that the FFM report was made almost exclusively by team members who never even went to Douma, doing their research instead solely in “Country X”, which WikiLeaks speculates may be Turkey.
“The FFM report does not reflect the views of all the teams that deployed to Douma,” the memo says. “Only one team member (a paramedic) of the so-called ‘FFM core team’ was in Douma. The FFM report was written by this core team, thus by people who had only operated in Country X.”
“After the exclusion of all team members other than a small cadre of members who had deployed (and deployed again in October 2018) to Country X, the conclusion seems to have turned completely in the opposite direction. The FFM team members find this confusing, and are concerned to know how this occurred.”
The memo’s author is unnamed in the WikiLeaks document, but claims to have been “assigned the task of analysis and assessment of the ballistics of the two cylinders,” indicating that it was likely the aforementioned Ian Henderson. A concurrent publication by Peter Hitchens in the Daily Mail appears to confirm this. Hitchens reports that when Henderson lodged his Engineering Assessment in the OPCW’s secure registry after failing to get traction for his report, which the memo’s author also reports to have done, an unpopular unnamed OPCW official nicknamed “Voldemort” ordered that every trace of the report be removed.
“Mr Henderson tried to get his research included in the final report, but when it became clear it would be excluded, he lodged a copy in a secure registry, known as the Documents Registry Archive (DRA),” Hitchens reported. “This is normal practice for such confidential material, but when ‘Voldemort’ heard about it, he sent an email to subordinates saying: ‘Please get this document out of DRA … And please remove all traces, if any, of its delivery/storage/whatever in DRA’.”
So to recap, the OPCW enlisted a longtime ballistics expert with an extensive history of work with the organisation to run some experiments and produce an Engineering Assessment to explain how the alleged chlorine cylinders could have been found in the condition they were found in, and when he came to conclusions which were exculpatory for the Syrian government, his boss ordered every sign of it purged from the registry.
Again, not a whisper of any of this was breathed in the OPCW’s public reports on the Douma incident, despite somewhere around 20 inspectors having objections. The OPCW had no business hiding this from the public.
An internal email from May 2019 voicing further concerns.
The usual regime change fanatics helped provoke more OPCW leaks by flagrantly lying about a whistleblower. Read the whole thread here. https://t.co/fyrfBnoxM2
— Max Blumenthal (@MaxBlumenthal) December 15, 2019
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This interesting email, sent to the OPCW’s Office of Strategy and Planning Director Veronika Stromsikova, defended Ian Henderson and objected to the mistreatment of a principled and respected team member.
“A member of the FFM team has been suspended from his post and escorted from the OPCW building in a less than dignified manner,” the email’s author complains. “After more than 12 years, I believe, serving the OPCW with dedication and professionalism, Ian Henderson’s personal and professional integrity have taken a knock in the most public of fora, the internet. A falsehood issued by the OPCW, that Ian did not take part in the Douma FFM team, has been pivotal in discrediting him and his work.”
Indeed, as soon as Henderson’s Engineering Assessment was leaked this past May, Syria narrative managers like Idrees Ahmad, Brian Whitaker, and Bellingcat founder Eliot Higgins immediately set to work trying to spin him as merely a lone “disgruntled employee” who was “not a part of the Fact-Finding Mission”.
“The denial is patently untrue,” the email’s author writes. “Ian Henderson WAS part of the FFM and there is an abundance of official documentation, as well as other supporting proof, that testifies to that.”
But I don’t suppose we can expect to see any apologies or corrections from the usual suspects in light of this new information.
“We are not insisting on being right in our assertions, but we are demanding to be heard,” the email’s author writes. “We have desperately tried to limit expression of concerns to within the Organisation and will continue to do so. However, we have been stonewalled throughout by obfuscation, exclusion, and even thuggish and bullying behavior.”
The author wraps things up by explaining why they’re pushing so hard to be heard with a quote from Edmund Burke: “All that is required for evil to triumph is for good men to do nothing.”
Email communications between FFM members and their team leader Sami Barrek.
New leak: “It’s because the stakes are so high that we have a responsibility to guard against misrepresentation, by both sides.”
https://t.co/5U9OWbQEez
#Douma #wikileaks #syria #opcw— Dr. Roy Schestowitz (罗伊) (@schestowitz) December 15, 2019
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This July 2018 correspondence is significant mainly because it brings in hard evidence for the exchange described by the OPCW whistleblower “Alex” in the aforementioned Jonathan Steele report, which was described as follows:
“This request was rejected but Sami Barrek, the team leader, was put in charge of replacing the doctored version with what turned out to be a toned-down but still misleading report. During the editing four of the Douma inspectors, including Ian Henderson, the engineering expert, had managed to get Barrek to agree that the low levels of COCs [Chlorinated Organic Chemicals] should be mentioned. On the day before the new publication date, July 6, they found that the levels were again being omitted.”
The back-and-forth exchanges feature one or more anonymous team members arguing with Barrek that more information needs to be included in the Interim Report so that people won’t jump to conclusions that the team had found evidence it hadn’t. And sure enough, Moon of Alabama documented multiple mass media headlines which falsely claimed the Interim Report had asserted chlorine gas was used (that invalid claim wasn’t made until the Final Report in March 2019).
Here’s a sample exchange where one inspector tries to persuade Barrek to change the language in the report so readers will understand that the information they had about chlorinated organic chemical concentrations at the time hadn’t reached any “damning conclusion”, with Barrek throwing up inertia and saying he can unilaterally overrule them if he wants to:
Again, none of the findings which were inconsistent with the US narrative were included in either the final draft of the Interim Report or in the Final Report. Nothing about the low levels of chlorinated organic chemicals, nothing about the inconsistencies in symptoms with chlorine gas poisoning, nothing about the lack of damage to the cylinders, nothing about Ian Henderson’s findings. Nothing. The OPCW had no business withholding that information.
Eight weeks ago a whistleblower claimed to have documents showing “irregularities” in the OPCW’s investigation of a suspected chemical attack in Syria. Since then, only one document has surfaced. Where are the others? https://t.co/hacK3PeId1
— Brian Whitaker (@Brian_Whit) December 11, 2019
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These new leaks take care of the latest spin jobs by establishment narrative managers, who were just the other day beginning to argue that the fact that there hadn’t been any more OPCW leaks in a while indicated that the whole OPCW scandal was bogus. Sorry to disappoint you, fellas.
My full account of what took place at Newsweek.
Despite a number of offers, I decided to publish on my website because I take full responsibility for what’s reported
It’s a long piece so I recommend reading at a time when you can digest and on a computerhttps://t.co/obpcSgaa1A
— Tareq Haddad (@Tareq_Haddad) December 14, 2019
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The WikiLeaks documents and Hitchens’ Daily Mail article came out the same day as ex-Newsweek reporter Tareq Haddad shared emails sent to him by his editors forbidding him to publish information on the OPCW scandal, an important slice of information on the way mass media outlets stifle commentary on important stories that are inconvenient for US imperialism.
Newsweek’s foreign affairs editor Dimi Reider (who Haddad notes has Council on Foreign Relations ties) shot down Haddad’s pitch for a story about the OPCW scandal last month by falsely claiming that Bellingcat had “published a thorough refutation” of the story Haddad wanted to report on. In fact, as I documented at the time, Bellingcat had published an unbelievably pathetic spin job in which it tried to paint the whole OPCW scandal as a big misunderstanding.
Bellingcat argued that the concerns voiced in the leaked email published by WikiLeaks last month about the developing Interim Report in July 2018 had been fully addressed by the time the Final Report was published in March 2019, citing as evidence the fact that some slight adjustments had been made in the wording, like changing “likely” to “possible” and changing “reactive chlorine containing chemical” to “chemical containing reactive chlorine.” In focusing on this ridiculous, pedantic nonsense, Bellingcat tries to weave the narrative that because the whistleblower’s concerns were addressed with this pedantry, there was therefore no OPCW coverup. Never mind the fact that the multiple OPCW whistleblowers were still plainly so incensed by the organisation’s publishing that they felt the need to leak internal documents. Never mind that Bellingcat made no attempt whatsoever to address the aforementioned actual grievances by the OPCW whistleblowers like the low levels of chlorinated organic chemicals on the scene, the inconsistencies in symptoms and testimony with chlorine poisoning, or the Ian Henderson report.
But that’s what happens when mass media outlets like The New York Times and The Guardian publish swooning puff piece after swooning puff piece about Bellingcat; they grant a US government-funded narrative management firm so much unearned legitimacy that even a transparently bogus argument like the one they made about the OPCW scandal gets passed around newsrooms by credulous editors assuring each other that it’s a “thorough refutation” of facts and reality. Mass media outlets help puff up Bellingcat’s legitimacy, and in turn Bellingcat rewards them with an excuse to not have to ever challenge establishment narratives.
Reider also argued that Haddad’s report on the OPCW couldn’t be published because “not a single respected media outlet — many of whom boast far greater regional expertise, resources on the ground and in newsroom than Newsweek does — have taken the leak remotely seriously.”
That’s a great self-reinforcing system, isn’t it? MSM outlets validate US government-funded narrative managers like Bellingcat so they can tell them with authority why an unauthorised story shouldn’t be published, and each outlet sees the absence of other outlets reporting on it as evidence that it shouldn’t be reported on. And we wonder why no one’s reporting on the OPCW scandal.
Fake News By Omission — The Mass Media’s Cowardly Distortion Tool
“The exceptional silence on the OPCW scandal from imperial news media discredits them completely, but people won’t know about it unless they are told. Spread the word.” #OPCW #Syriahttps://t.co/MSrSh2vgP7
— Caitlin Johnstone ⏳ (@caitoz) December 6, 2019
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And Newsweek’s Digital Director Laura Davis gave Haddad the same answer, regurgitating the absolutely bogus Bellingcat line that the leaked email wasn’t newsworthy because “it predates the final report” and because no one else has written about it. It’s a system fully locked down against any oppositional reporting, and we can surmise that this is the norm for newsrooms throughout the English-speaking world.
Haddad also published a similar email he’d received from International Business Times then-editor-in-chief Julian Kossoff, who rejected a pitch he’d made for an opinion piece he’d written about the Khan Sheikhun incident in April 2017.
“Thanks for the suggested opinion piece,” Kossoff wrote. “However, I do not think we will be able to use it. Its narrative is highly controversial and likely to offend and only a writer or expert of repute (e.g Noam Chomsky) could get away with such an incendiary thesis.”
And what was this “incendiary thesis”? Well, Haddad published it with CounterPunch, so you can see for yourself. He simply argued what in my opinion should be a completely uncontroversial position: that there wasn’t yet enough evidence to be certain Assad was behind the attacks, and the US has a known history of entering into military entanglements based on lies, so the warmongers demanding Assad’s overthrow shouldn’t be listened to.
This insight into the dynamics behind the mass media’s lies by omission are very valuable, and they help us paint a better picture about the reason we’re not seeing more discussion of these OPCW leaks.
* * *
Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either Youtube, soundcloud, Apple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon or Paypal, purchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.
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Tyler Durden
Sun, 12/15/2019 – 18:55 - 'You Need Rehabilitation': Nunes Letter Dismantles Schiff Over FISA Lies, Stroking Steele, And Participating In Coverup
‘You Need Rehabilitation’: Nunes Letter Dismantles Schiff Over FISA Lies, Stroking Steele, And Participating In Coverup
“As part of your rehabilitation, it’s crucial that you admit you have a problem – you are hijacking the Intelligence Committee for political purposes while excusing and covering up intelligence agency abuses.” -Devin Nunes to Adam Schiff
Rep. Devin Nunes (R-CA) has written perhaps the most brutal ‘I told ya so’ letter in recent memory to Adam Schiff, his Democratic rival and chairman of the House Intelligence Committee.
After last week’s Inspector General report on FBI FISA abuse revealed Schiff was peddling lies to the American public in a February, 2018 ‘counter-memo’ to Nunes’s now-proven claims, Schiff passed the buck – telling Fox News host Chris Wallace on Sunday that he was ‘unaware’ of certain things unccovered by the IG – while failing to admit he’s been dead wrong on an ongoing basis about a number of things.
Nunes isn’t letting this go. In a Sunday letter, he reminded Schiff that “The IG’s findings of pervasive, major abuses by the FBI dramatically contradict the assertions of your memo released on February 24, 2018, in which you claimed, “FBI and DOJ officials did not ‘abuse’ the Foreign Intelligence Surveillance Act (FISA) process, omit material information, or subvert this vital tool to spy on the Trump Campaign.“
Schiff is in clear “need of rehabilitiation,” continues Nunes, adding “I hope this letter will serve as the first step in that vital process.“
“Outlining every false claim from your memo would require an extremely long letter,” Nunes continues, who then lists several key claims made by Schiff which ‘the IG report has exposed as false.’
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FBI and DOJ officials did not omit material information from the FISA warrant.
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The DOJ “made only narrow use of information from [Christopher] Steele’s sources about Page’s specific activities in 2016.”
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In subsequent FISA renewals, DOJ provided additional information that corroborated Steele’s reporting.
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The Page FISA warrant allowed the FBI to collect “valuable intelligence.”
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“Far from “omitting’ material facts about Steele, as the Majority claims. DOJ repeatedly informed the Court about Steele’s background, credibility, and potential bias.”
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The FI31 conducted a “rigorous process” to vet Steele’s allegations, and the Page FISA application explained the FBI’s reasonable basis for finding Steele credible.
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Steele’s prior reporting was used in criminal proceedings.
Nunes goes on to dismantle Schiff’s bullshit point by point using findings from the IG report, which include:
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Information provided by Christopher Steele played a “central and essential role” in the decision to seek a FISA warrant on Carter Page.
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There were seventeen “significant errors or omissions” in the FISA application and renewals, and the IG did not get satisfactory explanations for them.
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The Crossfire Hurricane team failed to inform the DOJ of “significant information”, and “much of that information was inconsistent with, or undercut” assertions in the FISA applications.
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The FBI relied solely on Steele information for its assertions about Page’s alleged coordination with Russians to hack the 2016 elections.
(See entire list below)
Nunes then calls out Schiff for defending Steele, who peddled his discredited, Clinton-funded dossier to the media six weeks before the 2016 US election.
“As you know, your misguided validation of the FISA warrant was part of a years-long pattern in which you touted Christopher Steele’s credentials and reliability,” writes Nunes.
“For example, during this committee’s March 20, 2017 open hearing, you claimed Steele “is reportedly held in high regard by U.S. Intelligence.” and proceeded to read into the congressional record numerous conspiracy theories proffered by Steele, all of which are false.”
Next, Nunes accused Schiff of participating in a coverup:
As is clear from the 16 report, Carter Page was the victim of a smear campaign that was funded by the Democratic National Committee and the Hillary Clinton campaign and was implemented by Christopher Steele and Fusion GPS. The FBI used these false allegations to obtain a warrant to spy on Page, a gross violation of an American citizen’s civil liberties. Your direct participation in the smear campaign against Page is extremely concerning. considering you are chairman of the committee responsible for uncovering precisely these sorts of abuses by the Intelligence Community. Instead of joining committee Republicans in exposing these abuses, however, you excused them. And by supporting the agencies’ stonewalling of our attempts to gather information on this affair, you helped cover up this misconduct.
Because of Schiff’s misdeeds, and his blind faith in the US intelligence communities which the House Intelligence Committee is supposed to monitor, Nunes says “This makes it clear your rehabilitation will be a long, arduous process.”
“this committee is responsible for overseeing the Intelligence Community and exposing abuses. Yet when the IG identified gross abuses in our jurisdiction, you expressed full faith in the agencies we’re supposed to be vigilantly monitoring. and you rejected any oversight whatsoever of their supposed clean-up efforts,” writes Nunes.
Read the entire letter below:
***
Dear Chairman Schiff:
As you are aware, on December 9, 2019, U.S. Department of Justice Inspector General (IG) Michael Horowitz published the results of his investigation of the FISA warrant and renewals obtained by the Federal Bureau of Investigations (FBI) and the Department of Justice (DOJ) to spy on Trump campaign associate Carter Page. The IG’s findings of pervasive, major abuses by the FBI dramatically contradict the assertions of your memo released on February 24, 2018, in which you claimed, “FBI and DOJ officials did not ‘abuse’ the Foreign Intelligence Surveillance Act (FISA) process, omit material information, or subvert this vital tool to spy on the Trump Campaign.”
After publishing false conclusions of such enormity on a topic directly within this committee’s oversight responsibilities, it is clear you are in need of rehabilitation, and I hope this letter will serve as the first step in that vital process.
Outlining every false claim from your memo would require an extremely long letter, so I will limit my summary to a few highlights. In your memo you made the following assertions:
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FBI and DOJ officials did not omit material information from the FISA warrant.
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The DOJ “made only narrow use of information from [Christopher] Steele’s sources about Page’s specific activities in 2016.”
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In subsequent FISA renewals, DOJ provided additional information that corroborated Steele’s reporting.
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The Page FISA warrant allowed the FBI to collect “valuable intelligence.”
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“Far from “omitting’ material facts about Steele, as the Majority claims. DOJ repeatedly informed the Court about Steele’s background, credibility, and potential bias.”
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The FI31 conducted a “rigorous process” to vet Steele’s allegations, and the Page FISA application explained the FBI’s reasonable basis for finding Steele credible.
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Steele’s prior reporting was used in criminal proceedings.
The IG report has exposed all these declarations as false. Despite your denial of any problems with the FISA warrant, the 16 found:
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Information provided by Christopher Steele played a “central and essential role” in the decision to seek a FISA warrant on Carter Page.
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There were seventeen “significant errors or omissions” in the FISA application and renewals, and the IG did not get satisfactory explanations for them.
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The Crossfire Hurricane team failed to inform the DOJ of “significant information”, and “much of that information was inconsistent with, or undercut” assertions in the FISA applications.
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The FBI relied solely on Steele information for its assertions about Page’s alleged coordination with Russians to hack the 2016 elections.
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The applications omitted information provided to the FBI about Page’s operational contact with another U.S. government agency and the agency’s positive assessment of him. In fact, an FBI official altered an email stating that Page was a source for another government agency in order to have it read the opposite—that he was “not a source.”
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FBI Director James Conley and Deputy Director Andy McCabe sought to include Steele’s reporting in the Intelligence Community Assessment even though the CIA dismissed the Steele information as `Internet rumor.”
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In FBI interviews, Steele’s own sources contradicted information from Steele that was used in the FISA applications.
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The significance of Steele’s prior reporting was ‘-overstated.”
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None of the Steele reporting on Caner Page used in the FISA applications could be corroborated, and some of it contradicted other information in the FBI’s possession.
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The FBI omitted information about Steele’s bias provided by DOJ official Bruce Ohr.
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The applications omitted exculpatory statements by Page and others.
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The FBI failed to reveal in the applications that the Democratic National Committee and the Hillary’ Clinton campaign were receiving and/or funding Steele’s work through Fusion UPS.
Overall, the Inspector General found, “That so many basic and fundamental errors were made by three separate, hand-picked teams on one of the most sensitive FBI investigations that was briefed to the highest levels within the FBI, and that FBI officials expected would eventually be subjected to close scrutiny, raised significant questions regarding the FBI chain of command’s management and supervision of the FISA process… In our view, this was a failure of not only the operational team, but also of the managers and supervisors, including senior officials, in the chain of command.” Indeed, the problems are so severe that the Inspector General has initiated an audit to further investigate FBI’s compliance with Woods Procedures in FISA applications.
As you know, your misguided validation of the FISA warrant was part of a years-long pattern in which you touted Christopher Steele’s credentials and reliability. For example, during this committee’s March 20, 2017 open hearing, you claimed Steele “is reportedly held in high regard by U.S. Intelligence.” and proceeded to read into the congressional record numerous conspiracy theories proffered by Steele, all of which are false. These included:
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Carter Page had a secret meeting with Rosneft CEO Igor Sechin.
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Sechin offered Page a brokerage fee involving the sale of 19 percent of Rosneft.
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Russians offered the Trump campaign dirt on Hillary Clinton in exchange for the Trump administration adopting policies favorable to Russia
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Paul Manafort chose Page to act as a go-between for the Trump campaign and Russia.
As is clear from the 16 report, Carter Page was the victim of a smear campaign that was funded by the Democratic National Committee and the Hillary Clinton campaign and was implemented by Christopher Steele and Fusion GPS. The FBI used these false allegations to obtain a warrant to spy on Page, a gross violation of an American citizen’s civil liberties. Your direct participation in the smear campaign against Page is extremely concerning. considering you are chairman of the committee responsible for uncovering precisely these sorts of abuses by the Intelligence Community. Instead of joining committee Republicans in exposing these abuses, however, you excused them. And by supporting the agencies’ stonewalling of our attempts to gather information on this affair, you helped cover up this misconduct.
I am particularly concerned by the press release you issued after the release of the IG report. I applaud you for acknowledging that the report identified “issues and errors” and “potential misconduct” connected to the FISA warrant. This acknowledgement, though dramatically downplaying the scale of the abuse the IG uncovered, could be a valuable first step – a baby step, but a step nonetheless – in your rehabilitation. Nevertheless, in your statement you expressed full faith in FBI Director Christopher Wray’s promise to address the problem: demanded that the implementation of reforms be confined to “career officials, away from the political arena;” and denounced Attorney General Bill Barr and U.S. Attorney John Durham for expressing concerns about these matters.
This makes it clear your rehabilitation will be a long, arduous process. As previously noted, this committee is responsible for overseeing the Intelligence Community and exposing abuses. Yet when the IG identified gross abuses in our jurisdiction, you expressed full faith in the agencies we’re supposed to be vigilantly monitoring. and you rejected any oversight whatsoever of their supposed clean-up efforts. If agencies with a documented, severe abuse problem should be trusted to police themselves, then it’s fair to ask why this committee even exists and what we’re supposed to be doing, if anything, aside from being exploited by you as a launching pad to impeach the president for issues that have no intelligence component at all.
As part of your rehabilitation, it’s crucial that you admit you have a problem – you are hijacking the Intelligence Committee for political purposes while excusing and covering up intelligence agency abuses. The next step will be to convene a hearing with IG Horowitz, as the Senate Judiciary Committee has done and the Senate Homeland Security Committee will do next week.
I understand taking action on this issue will be difficult for you, as it will be an implicit acknowledgment that you were wrong to deny these abuses and that you were complicit in the violation of an American’s civil liberties. I also understand such an acknowledgement is made even more difficult by the fact that you’ve already been discredited by your years-long false claim that the Trump campaign colluded with Russia to hack the 2016 presidential election.
Nevertheless, I refuse to believe you are beyond redemption. I invite you to work closely with me on your rehabilitation program, and look forward to your scheduling a committee hearing with IG Horowitz at the nearest opportunity.
Tyler Durden
Sun, 12/15/2019 – 18:32 -
- Second Damning FBI Lie About Carter Page Revealed In IG Report: Sperry
Second Damning FBI Lie About Carter Page Revealed In IG Report: Sperry
Thanks to the DOJ Inspector General report on FBI surveillance abuses, we now know that the agency didn’t just lie about former Trump campaign aide Carter Page – they fabricated evidence to obtain a surveillance warrant, excluding the fact that he had worked with the CIA.
But wait, there’s more!
Thanks to a deep dive into the IG report, the Mueller report, and interviews with Trump campaign officials, RealClearInvestigations‘ Paul Sperry has found another fraud on the American public perpetrated by James Comey’s FBI: The agency, as well as Special Counsel Robert Mueller, knew full well that Page wasn’t “an agent of Russia,” and that he had no role in gutting a pro-Russia / anti-Ukraine GOP platform plank at the 2016 convention.
Strap in, Sperry goes deep on this one.
***
Authored by Paul Sperry via RealClearInvestigations (emphasis ours)
The FBI and Special Counsel Robert Mueller repeatedly kept alive a damning narrative that investigators knew to be false: namely, that a junior Trump campaign aide as a favor to the Kremlin had “gutted” an anti-Russia and pro-Ukraine plank in the Republican Party platform at the GOP’s 2016 convention.
Federal authorities used this claim to help secure spy warrants on the aide in question, Carter Page, suggesting to the court that he was “an agent of Russia” – even though investigators knew that Page was working for U.S., not Russian, intelligence, and that they had learned from witnesses, emails and other evidence that Page had no role in drafting the Ukraine platform plank.
The revelation is buried in the Justice Department watchdog’s just-released report on FISA surveillance abuses. RealClearInvestigations fleshed out this unreported story with footnotes from the Mueller report and exclusive interviews with Trump campaign officials who worked on the convention platform.
Of all the Trump-Russia rumors, insinuations and falsehoods – from secret payments for shadowy hackers, to videotaped prostitutes with active bladders, to a clandestine rendezvous with Kremlin figures in Prague – the supposedly pro-Russia Ukraine platform alteration stands out. It seemed to offer early, public, concrete evidence of an actual bending of prospective U.S. policy to suit Moscow. The false narrative is also significant because it was initially pushed not by Democrats, but by associates of Republican Sen. John McCain and other so-called Never Trumpers. As a bipartisan red flag, it helped build momentum around a narrative of Trump treachery with, then as now, Ukraine playing a central role. It also shows how the Russia and Ukraine controversies were linked from the beginning by Trump’s foes.
This episode loomed so large that the first person Mueller’s team interviewed after taking over the Russia investigation in May 2017 was Rachel Hoff, who was serving as McCain’s policy adviser on the Senate Armed Services Committee. Like her boss, Hoff was no fan of President Trump. Agents sought to confirm with her reports that the Trump campaign had “gutted” the GOP’s platform plank on Ukraine to favor Russia during the party’s convention in Cleveland in early July 2016.
As a disgruntled convention delegate, Hoff got the story started by putting Washington Post columnist Josh Rogin in touch with another Never Trump delegate, Diana Denman, who had lost her bid to amend the GOP plank to call for providing “lethal” weapons to Ukraine to help fend off Russian incursions, according to people with direct knowledge of the matter. Instead, the platform called for “appropriate assistance to the armed forces of Ukraine.”
Denman was overruled because heavily arming Ukraine was out of step with the GOP consensus at the time – to say nothing of the Obama administration’s policy, which refused to arm the Ukrainians. And it was at odds with Trump’s stated position, which sought to avoid military escalation in the region, while encouraging the European Union to take a larger peacekeeping role.
On July 18, 2016, the Post ran Rogin’s sensational story under the misleading headline, “Trump Campaign Guts GOP’s Anti-Russia Stance on Ukraine.” Pushing the narrative that Trump was doing the Kremlin’s bidding, it quoted Hoff warning that Trump “would be dangerous for America and the world.” The story left out the key part of the final Trump-approved plank pledging aid “to the armed forces of Ukraine.” Reached by phone, Rogin declined comment.
This story was quickly amplified in the Steele dossier, the series of now-debunked opposition research memos alleging Trump-Russia collusion. Compiled by ex-British intelligence officer Christopher Steele for the Clinton campaign, those memos became a foundation for the FBI and Mueller probes even though – as this week’s IG report established – bureau agents knew that the material in them included demonstrably false assertions and exaggerated gossip dismissed as nonsense by Steele’s own purported source.
Steele also embellished the GOP convention story by claiming that Carter Page had played a key role in drafting the Ukraine plank as part of a commitment he had allegedly made to his Kremlin handlers “to sideline Russian intervention in Ukraine as a campaign issue.”
None of this was true. And the FBI — and Mueller — knew it, the Justice inspector general reveals in his report.
Still, the FBI presented the Steele dossier’s smear, cataloged as “Steele Report 95,” as key evidence in all four of its warrant applications to obtain wiretaps to eavesdrop on Page, according to the IG report.
To keep renewing the spy warrants, the FBI had to produce fresh evidence for FISA judges to support suspicions Page was “an agent of Russia.” Just a few weeks before the FISA warrant was set to expire in June 2017, Mueller had his investigators interview Hoff, as his first witness, followed by Denman, hoping they could provide fresh details to keep building an espionage case against Page and the Trump campaign.
But Mueller struck out.
According to agents’ notes documenting their June 2017 interview, as revealed in the IG report, Denham told the FBI that Page was not involved in the drafting of the Ukraine plank. But Mueller’s team did not update its fourth and final FISA warrant application on Page with this exculpatory information. Instead, it recited the same baseless claim that he had shaped the Ukraine policy with guidance from Russia. And the court renewed the warrant that June to electronically monitor Page, allowing the government to continue vacuuming up all of his emails, phone calls, text messages and other communications for another 90 days.
“Although the FBI did not develop any information that Carter Page was involved in the Republican Platform Committee’s change, the FBI did not alter its assessment of Page’s involvement in the FISA applications,” Justice Department Inspector General Michael Horowitz noted in his 476-page report released Monday.
Added Horowitz: “We found that, other than this information from Report 95 [of the Steele dossier], the FBI’s investigation did not reveal any information to demonstrate that Page had any involvement with the Republican Platform Committee.” Yet, “all four FISA applications relied upon information in the Steele reporting” alleging Page’s role in drafting the Republican plank on Ukraine and Russia.
A former U.S. Navy lieutenant, Page was never charged with espionage or any crime. He told RealClearInvestigations that he has received “numerous death threats that directly resulted from the false allegations” that he was a traitor.
The FBI and Mueller failed to correct the record about Page in their FISA warrant applications even after they identified the Trump campaign officials who actually had a hand in influencing the GOP plank, J.D. Gordon and Matt Miller. A July 14, 2016, email from Gordon confirmed what Page had personally told the FBI in an interview — that he had not taken part in the decision. The FBI knew about the email since at least March 2017, when agents sat down with Page. (Gordon and Page were chatting by email about the convention, and it’s clear from Page’s responses he had no idea what Gordon had done in the Ukraine-Russia platform drafting sessions. IG Horowitz published the relevant excerpt in his report and noted the FBI had the email in its possession.)
Still, Horowitz found, “The FBI never altered the assessment.”
Horowitz further concluded that the FBI should not have included the dossier’s rumor even in its original October 2016 application for a FISA warrant targeting Page, let alone its three renewals, because a confidential source the FBI assigned to spy on Page at the time found no basis for it. In the IG report, Horowitz noted that during that same month of October 2016, the FBI informant met with Page and tape-recorded him denying he was involved in the drafting of the Ukraine plank. Page told the informant, Stefan Halper, that he “stayed clear of that.”
Horowitz’s investigators established that the informant’s recorded statements were sent to the FBI agent assigned at the time to Page’s case, and were copied to a supporting team of other agents, supervisors and analysts. Yet the FBI also withheld that critical exculpatory evidence from the FISA court in the initial application for a warrant on Page (and then continued to deny the court the information in subsequent requests to monitor Page).
The lead case agent, unnamed in the report, told investigators the FBI was operating on a “belief” that Page was involved in the Ukraine and Russia platform, and that he and the FISA team were “hoping to find evidence of that” from the wiretaps. Despite all the snooping on Page, the FBI never collected the hoped-for proof.
The lead supervisor, also unidentified, told investigators “he did not recall why Page’s denial was not included.”
Horowitz reports that the exculpatory documents were also sent to a Justice Department attorney before the warrant was renewed for the first time in January 2017, “[y]et, the information remained unchanged in the renewal applications.”
Added Horowitz: “The attorney told us that he did not recall the circumstances surrounding this, but he acknowledged that he should have updated the descriptions in the renewal applications to include Page’s denials.”
The FBI also failed to inform surveillance court judges that Page was an “operational contact” for the CIA for several years, according to the Horowitz report. In 2013, Page also volunteered as a cooperating witness in an FBI espionage case, and helped put away a real Russian agent in 2016. This was additional exculpatory evidence the FBI kept from the FISA court, as RealClearInvestigations first reported last year.
Peter Strzok, then the FBI’s top counterintelligence official, rode herd on the Page wiretap requests and reported back to FBI attorney Lisa Page (no relation to Carter), who in turn, updated then-Deputy FBI Director Andrew McCabe.
Text messages previously uncovered by Horowitz and shared with Mueller revealed that Strzok and Page, who were having an affair, rooted for Hillary Clinton during the 2016 campaign and held Trump in complete contempt. In one exchange, they discussed the need to “stop” Trump from winning the election. And the two of them had also huddled with McCabe in his office to devise an “insurance policy” in the “unlikely event” Trump ended up winning.
The inspector general’s report points out that it was McCabe who urged investigators to look at the Clinton-funded dossier. The previous year, his Democratic politician wife, Jill, received hundreds of thousands of dollars in donations arranged by Clinton ally and Virginia’s governor at the time, Terry McAuliffe.
Strzok remained central to the investigation well into 2017 – until Mueller was forced to kick him off his team when the anti-Trump bias was revealed. The bureau fired him in 2018, the same year Lisa Page resigned from the FBI. In spite of their anti-Trump political bias, Horowitz said he found “no evidence” their bias influenced their investigative decisions.
Lawyers for Strzok and McCabe did not respond to requests for comment. The FBI and a spokesman for Mueller declined comment.
Putting Carter Page under surveillance starting in October 2016 effectively let the FBI spy on the Trump campaign since its beginnings, because it allowed the bureau to scoop up all of Page’s prior communications. Former Trump officials who have reviewed Horowitz’s new findings confirmed their view that the bureau was trying to make it look like Page and the Trump campaign were doing something sinister to help Russia.
“Page actually had no role in the platform, whatsoever,” Gordon, the Trump campaign’s director of national security, told RCI. “Failing to include the exculpatory information in the FISA application is horrifying.”
While it’s true that Trump sought better relations with Russia, Gordon said, there was nothing nefarious about the drafting of the Ukraine platform. He said the FBI simply assumed it was watered down as a favor to Russia based on a false narrative driven by liberal media outlets like the Post and Never Trumpers such as Rachel Hoff. He said the FBI, under the direction of McCabe, Mueller and former FBI Director James Comey, also wanted to believe the worst about Trump, whom they simply did not like.
Gordon noted that, except for the two Never Trump delegates, nobody in the platform drafting sessions raised a fuss about the Ukraine plank — not even the press.
“The media was present in the room, yet not one person wrote about the Ukraine issue,” he said — until, that is, the Never Trumpers went to the Washington Post that July and helped launch the Trump-Russia “collusion” myth.
Moreover, the narrative was untrue even on its own terms – without the spurious inclusion of Carter Page. Internal platform committee documents show the Ukraine plank could not have been weakened as claimed, because the “lethal” weapons language was never part of the GOP platform in the first place. The final language actually strengthened the platform by pledging direct assistance not just to the country of Ukraine, but to its military in its struggle against Russian-backed forces.
Far from “gutting” assistance, the Trump administration approved the transfer of tank-busting Javelin missiles to Kiev — something the Obama administration refused to do. More than 200 of those weapons have been sold to Ukraine since Trump took office. And the sale and delivery of Javelins never stopped even during this year’s temporary suspension of military aid to Ukraine that is now the subject of the Democrats’ impeachment proceedings.
The final draft of the Ukraine plank also branded Russia a menace, and pledged to stand against “any territorial change imposed by force in Ukraine.” Yet Mueller and his prosecuting staff of mostly Democratic donors still suspected collusion, and they dispatched FBI agents to grill Gordon about the drafting of the platform three times between 2017 and 2019. They also got a grand jury to subpoena his phone records.
In the end, the Mueller report found no Russian influence in the platform.
But the false narrative – that the Ukraine plank stood as early proof of the “extensive conspiracy” between the Trump campaign and Moscow that Steele alleged in his now-debunked dossier – has persisted.
Earlier this year, House Judiciary Committee Chairman Jerry Nadler demanded Gordon provide additional documents, and he has complied. Nadler is now marking up articles of impeachment against Trump over a request he lodged with Ukraine’s new president this summer to help investigate the former Clinton-friendly regime’s attempts to “sabotage” Trump’s election bid in 2016. Trump also asked Kiev to look into possible corruption involving former Vice President Joe Biden’s son Hunter and a Ukrainian energy oligarch.
Meanwhile, Nadler’s impeachment partner, House Intelligence Committee Chairman Adam Schiff, continues to insist that the Trump team “softened” the GOP platform to accommodate “Putin’s invasion of Ukraine.”
A retired Navy commander and former Pentagon spokesman, Gordon said he has run up a five-figure legal bill defending against what he calls a “hoax” perpetrated by Never Trumpers, the media, Comey, Mueller, and now congressional Democrats.
“In the vicious frenzy to destroy President Trump and his associates at all costs, they attempted to turn a routine foreign policy debate in conjunction with the four-year renewal of the GOP platform into a crime scene,” Gordon said in an interview with RCI.
“Incredibly,” he added, “the GOP platform change hoax [later] became the very first order of business in Mueller’s nearly two-year investigation.”
Tyler Durden
Sun, 12/15/2019 – 18:05 - Schiff: 'I Had No Idea FBI Was Committing Serious Abuses When I Said All That Stuff'
Schiff: ‘I Had No Idea FBI Was Committing Serious Abuses When I Said All That Stuff’
Rep. Adam Schiff (D-CA) can’t admit when he’s wrong.
After last week’s DOJ Inspector General report revealed that the FBI committed serious abuses while obtaining a warrant to spy on Trump campaign aide Carter Page – including fabricating evidence, Schiff was asked on Sunday by Fox News host Christ Wallace:
“Given what you know now … are you willing to admit that you were wrong in your defense of the FBI’s FISA process?“
To which Schiff replied: “I’m certainly willing to admit that the inspector general found serious abuses of FISA that I was unaware of.“
That’s an odd way of admitting your entire thesis has been dead wrong for three years.
Watch (via the Daily Caller)
In short:
Schiff’s correcting the record memo has turned out to be totally wrong (based on the I.G. Report)! A very big lie. @MariaBartiromo And @DevinNunes has turned out to be completely right. Congratulations to Devin. The Fake News Media should apologize to all!
— Donald J. Trump (@realDonaldTrump) December 15, 2019
Tyler Durden
Sun, 12/15/2019 – 17:40 - How Trump Opened A Pandora's Box By Announcing The "Phase One" Trade Deal
How Trump Opened A Pandora’s Box By Announcing The “Phase One” Trade Deal
Trump’s “Phase One” deal left pretty much everyone disappointed: from experts who were expecting a realistic compromise between the two superpowers instead of the ludicrous and completely undoable Beijing promise to quadruple US agricultural purchases to $50 billion (a detailed explanation why this is impossible can be read in the following thread by the former USDA Chief Economist and USTR ag negotiator, Joe Glauber)…
1. So here is why I am skeptical about the size of the Phase 1 deal. US ag exports to China in FY 2017 were about $21.8 billion. Soybean exports accounted for $14.6 billion. pic.twitter.com/5LXRiZtjcU
— JoeGlauber–IFPRI (@JoeGlauber1) December 15, 2019
https://platform.twitter.com/widgets.js
… to media pundits, to Trump’s political enemies (Schumer said the president “sold out” in phase one deal), to Wall Street banks (Goldman said “The Tariff Reduction Is Only Half What We Expected”).
Not unironically, the only party that appears to be happy with the outcome of the “Phase One” deal in addition to Trump of course, is China: as the Chinese foreign minister Wang Yi said on Saturday, the China-U.S. trade deal “ serves as bullish news for both countries and the rest of the world.”
Here alarms should be going off, because if indeed both Trump and China are happy with the deal outcome, by definition that means that the US is reverting back to the old “non zero-sum” world where US politicians catered to China in the context of a globalized world. In other words, Trump’s effort to keep China’s superpower ascent in check appears to have taken a back seat to the president’s desire to keep markets supporter and avoid the shock of a fresh re-escalation of the trade war.
But is that feasible?
Before, we answer that question, here is a recap of what the Trump admin announced on Friday as part of the “Phase One” trade deal:
- List 4B (December 15) tariffs suspended: This was in line with our expectations and media reports in recent days.
- List 4a (September 1) tariff ratereduced to 7.5% from 15%: This falls short of expectations influenced in recent days by the media reports, where WSJ suggested broader and deeper tariff reductions were possible.
- List 1-3 tariffs remain unchanged: This too fell short of what the broader tariff rollbacks hinted by the media in recent days.
The first complication is that while Trump explicitly agreed to roll back some tariffs, substantial ambiguity on agriculture: While both sides agreed on increased agricultural and other US commodity purchases by China, it’s unclear what level such purchases will reach and how this will be enforceable. Given the US’s focus on this issue, experts remain concerned (and confident) that disappointment on this point as negotiations continue would be a potential catalyst for re-escalation of tariffs.
Yet even assuming no major re-escalation in the context of Phase One, which is in the history books, what happens next?
Well, as Morgan Stanley’s policy strategist Michael Zezas writes, with the easy stuff, i.e., the generally hollow and/or impossible promises that make up the bulk of Phase 1, agreed upon, it is only the difficult stuff that has to be resolved, or as MS puts it, “key execution risks remain as the US/China relationship moves forward.“
Specifically, the end of Phase 1 and commencement of Phase 2 negotiations will materially strain goodwill: recall, “Phase 2” negotiations are, per the US, to commence immediately. And given that ‘Phase 1’ focused on the “easy” topics that were ‘low-hanging fruit’, Zezas warns that “Phase 2 negotiations could be more challenging, problematic, and potentially subject to stalls, as both sides debate the far more difficult issues of industrial policy.”
In other words, Trump may have taken what wasn’t broken, namely the tried and true strategy of ramping the market higher on daily speculation and “trade deal optimism”, i.e., leaks, rumors and innuendo that an easy to achieve Phase 1 deal was imminent, and “fixed it”, in the process replacing the easy Phase 1 outcome with the vastly more complex Phase 2 process, where an agreement between the two superpowers and a successful outcome is next to impossible.
Hence, Morgan Stanley argues the dynamic has shifted from ‘uncertain pause’ to ‘uncertain progress’, with the following key takeaways for investors:
- No game-changer for the tariff burden: About $380bn of imports remain under tariff. While phase 1 reportedly includes an agreement in principle to reduce all remaining tariffs over time as progress is made on phase 2, it is unlikely that such progress can be made quickly, if at all, given the relatively intractable nature of industrial policy issues.
- No game-changer for corporate confidence: While this deal is certainly more durable than another simple swap of agricultural purchases for a pause in tariffs, the experience of this trade conflict has created a high hurdle for what corporate executives would judge to be confidence-inspiring. And as Morgan Stanley has noted in the past, companies in the US and China have already put plans in motion to protect themselves from changes in the US/China dynamic. It also means that they are unlikely to revert back to baseline as a result of Friday’s (non) deal.
In other words, as Morgan Stanley concludes, “given the execution risks going forward that we cited earlier and the lack of clarity on important details, we don’t yet have the conviction that this deal can be a catalyst to a meaningful uptick in business confidence.”
As for markets, the outcome could be even more dire for one simple reason: over the past year, the interminably recurring catalyst that pushed stocks ever higher, was “optimism” that a deal was imminent. Well the Phase One is “now in the books”, and not even the most gullible traders – or algos – will believe that a Phase 2 deal can be done before the elections, or frankly, ever. As such, the most important crutch behind the market climbing the trade war Wall of Worry for the past year is now gone.
Worse, by removing the risk of trade war, the Fed’s monetary policy will no longer be constrained on the downside by the risk of a potential trade war re-escalation. This is critical because as we explained in August, it was the Fed itself that was underwriting Trump’s trade war.
That said, there is a silver lining: the Fed’s “NOT QE” bailout of the repo market remains, and as long as Powell continues to inject hundreds of billions (just to stabilize a handful of banks and push markets higher), the risk of market bloodbath remains remote. However, if and when this process too begins to taper some time in Q2 2020, that may be the time to watch out below. Worst of all for Trump – this will take place just a few months before the November election. What he plans to do to full the void left by both “Trade Deal” optimism and “NOT QE4” remains unclear.
Tyler Durden
Sun, 12/15/2019 – 17:40 - A History Of Inflationary Money: From 1844 To Nixon
A History Of Inflationary Money: From 1844 To Nixon
Authored by Alasdair Macleod via GoldMoney.com
So that we can understand the financial and banking challenges ahead of us, this article provides an historical and technical background. But we must first get an important definition right, and that is the cause of the periodic cycle of boom and bust. The cycle of economic activity is not a trade or business cycle, but a credit cycle. It is caused by fractional reserve banking and by banks loaning money into existence. The effect on business is then observed but is not the underlying cause.
Modern banking has its roots in England’s Bank Charter Act of 1844, which led to the practice of loaning money into existence, commonly described as fractional reserve banking. Fractional reserve banking is defined as making loans and taking in customer deposits in quantities that are multiples of the bank’s own capital. Case law in the wake of the 1844 act, having more regard for the status quo as established precedent than for the fundamentals of property law, ruled that irregular deposits (deposits for safekeeping) were no different from a loan. Judge Lord Cottenham’s ruling in Foley v. Hill (1848) 2 HLC 28 is a judicial decision relating to the fundamental nature of a bank which held in effect that
The money placed in the custody of the banker is to all intents and purposes, the money of the banker, to do with it as he pleases. He is guilty of no breach of trust in employing it. He is not answerable to the principal if he puts it into jeopardy, if he engages in haphazardous speculation.
This was undoubtedly the most important ruling of the last two centuries on money. Today, we know of nothing else other than legally confirmed fractional reserve banking. However, sound or honest banking, with banks acting as custodians, had existed in the centuries before the 1844 act and any corruption of the custody status was regarded as fraudulent.
This decision has shaped global banking to this day. It created a fundamental flaw in the gold-backed sound-money system, whereby the Bank of England, as a prototype central bank, could only issue extra sterling backed entirely by gold while a commercial bank could loan money into existence, the drawdown of which created deposit balances. The creation of these deposits on a systemwide basis meant that any excesses and deficiencies between banks were easily reconciled through interbank lending.
Bankers’ Groupthink and the Credit Cycle
While an individual bank could expand its balance sheet, the implications of all banks doing the same may have escaped the early banking pioneers operating under the 1844 act. Thus, when their balance sheets expanded to a multiple of the bank’s own capital, there was little cause for concern. After all, so long as a bank paid attention to its reputation it would always have access to the informal interbank market. And so long as it could call in its loans at short notice, the duration mismatch between funding by cash deposits and its loan book would be minimized.
Since the Bank Charter Act, experience has shown that the expansion of bank credit leads to a cycle of credit expansion, overexpansion, and then sudden contraction. The scale of bank lending was determined by its management, with lenders tending to be as much influenced by their own crowd psychology as by a holistic view of risk. Of course, the expansion of bank credit inflates economic activity, spreading a warm feeling of improving economic prospects and feeding back into increasing the bankers’ confidence even further. It then appears safe and reasonable to take on yet more lending business without increasing the bank’s capital.
With profits rapidly increasing due to lending being a multiple of the bank’s own capital, confident bankers begin to think strategically. They reduce their lending margins to attract business they believe to be important to their bank’s long-term future, knowing they can expand credit further against a background of improving economic conditions to compensate for lower margins. They begin to protect margins by borrowing short from depositors and offering businesses term loans, reaping the benefits of a rising slope in the yield curve.
The availability of cheap finance encourages businesses to enhance their profits in turn by increasing the ratio of debt to equity and by funding expansion through debt. By this point, a bank is likely to be raking in net interest on loan business amounting to eight or ten times its own capital. This means that an interest margin of a net two percent is a 20 percent return to the bank’s shareholders.
There is nothing like profitable success to boost confidence, and the line between it and overconfidence is naturally fuzzed by hubris. The crowd psychology fueled by a successful banking business leads to an availability of credit too great for decent borrowers to avail themselves of, so inevitably credit expansion becomes a financing opportunity for poorly thought out loan propositions.
Having oversupplied the market with credit, banks begin to expand their interests in other directions. They finance businesses abroad, oblivious to the fact that they have less control over collateral and legal redress generally. They expand by entering other lines of banking-related business, assuming that their skills as bankers can be extended into those other business lines profitably. A near contemporary example was Deutsche Bank’s failed expansion into global investment banking and principal trading in foreign securities and commodities. And who can forget Royal Bank of Scotland’s bid for ABN-Amro just as the credit cycle peaked before the last credit crisis.
At the time when their balance sheets have expanded to many multiples of their own capital, the banking crowd finds itself with lending margins too low to compensate for risk. Bad debts arising from their more aggressive lending decisions begin to materialize. One bank beginning to draw in its horns as it perceives it is out on a limb can probably be weathered by the system. But other bankers will stop and think about their own risks, bearing in mind that operational gearing works two ways.
Operational gearing may be marked by an unexpected event, or just an apparent loss of bullish momentum. With bad debts beginning to have an impact, groupthink quickly takes bankers from being greedy for more business to fearful of it. Initially, banks stop offering circulating credit, the overdraft facility that lubricates business activity. But when the credit tap is turned off former lending decisions begin to be exposed as bad, and investments in foreign lands begin to reflect their true risks. Lending in the interbank market dries up for the banks with poor or marginal reputations, and banks begin to report losses. Greed turns rapidly to fear.
The cycle of bank credit expansion then descends into a lending crisis, with increasing numbers of banks exposed as having taken on bad loans and becoming insolvent. A slump in business activity ensues. With frightening rapidity, all the hope and hype created by monetary expansion is destroyed by its contraction.
Before central banking evolved into acting as the representative and regulator for licensed banks, the credit cycle described above threw up some classic examples. Overend, Gurney and Company was the largest discount house in the world, trading in bills of exchange before it made long-term investments and became illiquid. When the railway boom faltered in 1866 it collapsed. The bank rate rose to 10 percent and there were widespread failures. Then there was the Baring crisis in 1890. Poor investments in Argentina led to the bank’s near bankruptcy. The Argentine economy slumped, as did the Brazilian one, which had been experiencing its own credit bubble. This time, a consortium of other banks rescued Barings. Nathan Rothschild remarked that if Barings hadn’t been rescued the entire banking system in London would have collapsed.
Out of Barings came the precedent of a central bank acting as lender of last resort, famously foreseen and promoted by Walter Bagehot.
In the nineteenth century it became clear that crowd psychology in the banks, the balance of greed and fear over lending, drove a repeating cycle of credit boom and slump. With the passage of time, bankers recovering their poise from the previous slump forgot its lessons and rhymed the same mistakes all over again. Analysts promoting theories of stock market cycles and cycles of economic activity need look no further for the underlying cause.
In the absence of credit expansion, businesses would come and go in random fashion. The coordinated expansion of credit changed that, with businesses being bunched into being created at the same time and then all failing at the same time. The process of creative destruction went from unnoticed market evolution to becoming a periodic violent event. Monetary institutions still ignore the benefits of events being random. Instead they double down, coordinating their interventions on a global scale with the inevitable consequence of making the credit cycle even more pronounced.
It is a huge mistake to call this repeating cycle a business cycle. The name implies that it comes down to the failure of free markets, of capitalism, when in fact it is entirely due to monetary and credit inflation licensed and promoted by governments and central banks.
The Rise of Central Banking
Following the Barings crisis of 1890, the concept of a lender of last resort was widely seen to be a solution to the alleged extremes of free markets. Initially, this meant that the bank nominated by the government to represent it in financial markets and to oversee the supply of bank notes took on a role of coordinating the rescue of a bank in difficulty in order to prevent a full-blown financial crisis. When the gold standard applied, however, it comprised the practical limitation of a central bank.
This was the general situation before the First World War. But, in fact, even under the gold standard there was significant inflation of base money occurring in the background. Between 1850 and 1914, aboveground gold stocks increased from about five thousand tons to nearly twenty-four thousand tons. Not all of it became monetary gold, but the amount that did was decided by the economic actors that used money, not the monetary planners as is the case today.
It was against this background that the US Federal Reserve Bank was founded in December 1913. Following World War I, the Federal Reserve became a powerful institution under the leadership of Benjamin Strong. Those early postwar years were turbulent: due to wartime inflationary financing, wholesale prices doubled in the US between 1914 and 1920 while the UK’s trebled. This was followed by a postwar slump, and by mid-1921 unemployment in the UK had soared to 25 percent. In the US, the Fordney-McCumber tariffs of 1922 restricted European debtors from trading with America, which was necessary to pay down their dollar debts. A number of countries descended into hyperinflation, and the Dawes Plan, designed to bail out the Europeans, followed in 1924.
Although America remained on a gold standard, Britain had suspended it, only going back to it in 1925. While the politicians decided overall policy, it was left to central bankers such as Strong at the Fed and Montague Norman at the Bank of England to manage the fallout. Their relationship was the most tangible evidence of central banks beginning to collaborate in the interests of mutual financial stability.
With the backing of ample gold reserves, Strong advocated for price targeting through the management of the money supply, particularly following the 1920–21 slump. His inflationary policies assisted in the management of the dollar-sterling exchange rate, supporting sterling, which at that time was not backed by gold. Strong also made attempts to develop a discount market in the US, which inflated credit markets further. One way and another, with the Fed following expansionary money policies and commercial bankers becoming more confident in lending prospects, monetary inflation fueled what came to be known as the Roaring Twenties.
That came to a sharp halt in October 1929, when the credit cycle turned, and the stock market crashed. Top to bottom, that month saw the Dow fall 35 percent. The trigger was Congress agreeing to the Smoot-Hawley Tariff Act on October 30, widely recognized at the time as a suicide note for the economy and markets, since it raised trade tariffs to an average of 60 percent from the Fordney-McCumber average of 38 percent. President Hoover signed it into law the following June, and by mid-1932 Wall Street had fallen 89 percent.
With such a clear signal to the bankers, it is not surprising that they drew in their horns, contracting credit and indiscriminatingly bankrupting their customers. All the expansion of bank credit since 1920 was reversed by 1934. Small banks went bankrupt in the thousands, overwhelmed by bad debts, particularly in the agricultural sector, as well as through loss of confidence among their depositors.
The depression of the 1930s overshadowed politics in the capitalist economies for the next forty years. Instead of learning the lessons of the destruction wrought through cycles of bank credit, economists doubled down, arguing that more monetary and credit inflation was the solution. To help economic sentiment recover, Keynes favored deficit spending by governments to take up the slack. He recommended a move away from savers being the suppliers of capital for investment in favor of the state taking a more active role in managing the economy through deficit spending and monetary inflation.
The printing of money, particularly dollars, continued under the guise of gold convertibility with the postwar Bretton Woods system. America accumulated enormous gold reserves; by 1957 they amounted to over twenty thousand tons — one-third of estimated aboveground gold stocks at that time. It felt secure in financing first the Korean and then the Vietnam War by printing dollars for export. Unsurprisingly, this led to the failure of the London gold pool in the late 1960s and to President Nixon suspending the fig leaf of dollar convertibility into gold in August 1971.
Once the dollar was freed from the discipline of gold, the repeating cycle of bank credit was augmented by the unfettered inflation of base money, a process that has continued to this day.
Tyler Durden
Sun, 12/15/2019 – 17:15 - It's D-Day For The Repo Market: On Monday $100 Billion In Liquidity Will Be Drained – What Happens Next?
It’s D-Day For The Repo Market: On Monday $100 Billion In Liquidity Will Be Drained – What Happens Next?
Last week’s apocalyptic report by repo market guru Zoltan Pozsar, which for those who missed it predicted that an imminent market crash and loss of control of overnight rates by the Fed would spark nothing short of QE4, sparked an unprecedented panic at the Federal Reserve, which just two days later unveiled a historic liquidity injection, in which the Fed promised to inject no less than $500 billion in the next 4 weeks to avert a catastrophic freeze in the repo market as we approach the year end “turn”, which would consist not only of a continuation of the Fed’s T-Bill POMO, but also a massive injection of nearly $500 billion in overnight and term repos in the coming days.
In other words, instead of a reactive QE4 – as predicted by Pozsar – the Fed will flood the repo market with a proactive firehose of liquidity.
There’s more: add in the incremental liquidity from the expanded overnight repo of about $50 billion and another $60 billion in T-Bill purchases, and the Fed will inject a total of just shy of $500 billion in the next 30 days. This also means that by Jan 14, the Fed’s balance sheet would have grown by a cumulative $365BN in “temporary” repos, and together with the expanded overnight repos, and the $60BN in monthly TBill purchases, and by mid-January, the Fed’s balance sheet, currently at $4.066 trillion, will surpass its all time high of $4.5 trillion!
The question then is whether this will be sufficient to refute the repo Doomsday predicted by Pozsar, one which was supposed to launch QE4, or will the Fed’s gargantuan liquidity injection still not be enough and lead to a collapse in the repo market.
Well, since the next key catalyst in the potential repo market turmoil is imminent, we may know as soon as tomorrow, when there is another large December corporate tax payment date (with as much as $78BN being remitted to the TSY) and another $54 billion in US Treasury settlements.
Recall, that as we explained last week, the mid-December funding dynamics looks very similar to mid-Sep except for the outsized role of the Fed. On Monday, Dec 16, Bank of America anticipates that $54Bn of UST coupon settlements coupled with what has historically been $30-50BN of corporate tax payments to UST. This could result in a UST cash balance inflow – or a liquidity drain – of up to $80-$100bn in just one day.
Also recall, every dollar of UST cash balance increase represents a similar USD reserve drain from the banking system, and a similar liquidity drain in mid-September culminated with the now historic explosion in overnight repo rates.
So should traders panic? Well, if the Fed’s gargantuan liquidity injection is anything to go by, the answer is no, and as BofA’s Mark Cabana writes, “despite the similarities we do not anticipate a material spike in funding due to the Fed’s ongoing reserve management operations.”
The main reason we do not anticipate considerable funding stress is due to the outsized presence of the Fed now vs mid-Sep. In mid-Sep the Fed was still under the impression it could drain reserves from the banking system without a material impact on funding levels. Since mid-Sept the Fed has learned the banking system has reached reserve scarcity and the Fed it is now adding reserves via repo operations and outright bill purchases to stabilize funding markets. The Fed will ensure it adds enough reserves to offset any Treasury cash balance drain in Dec.
Consider that as of last week, the Fed has provided $340bn in funding through their existing repo and bill purchase operations:
Furthermore, as revealed on Friday, in anticipation of the Monday liquidity drain, the Fed announced that it would expand the Monday term repo up to $50 billion, and extend the maturity date to January 17, allowing dealers to lock in excess liquidity well beyond the “turn”. However, contrary to Cabana’s expectation that “the Fed will increase O/N repo operation limits to around $200bn in the days surrounding Dec 16” there is some risk the Fed has misjudged how much net liquidity will be soaked up as a result of Monday’s drain.
As a result, Cabana notes that even with this operational change, funding could still be volatile as bank portfolios and money fund deposits get pared back amidst corporate outflows, while dealer intermediation of Fed repos may also be challenged with year-end regulatory reporting dynamics limiting how smoothly this funding gets passed along, something Pozsar discussed extensively last week.
In any case, the adjustment to Fed repo operations is the latest of measures undertaken to ensure repo remains relatively stable at year end, and although overnight repo markets will likely be volatile around year-end BofA’s concern around the turn has moderated in recent weeks and certainly after Friday’s announcement of a gargantuan liquidity backstop.
As a result, Cabana now “thinks the Fed has provided enough liquidity and dealers have adjusted their businesses around GSIB to ensure funding markets remain relatively stable leading into year end.” Ironically, the BofA strategist now sees risks that “funding trades too soft early in 2020 vs the Fed’s policy target range. This will likely result in one or two 5bps technical IOER increases to ensure fed funds does not fall below the Fed’s target range in 1H ’20” as the overall funding situation shifts from too little reserves, to too many, potentially forcing dealers to shift from the repo facility to the reverse repo facility!
Incidentally that observation was echoed by another repo market experts, Curvature’s Scott Skyrm, who on Friday penned the following year-end repo market prediction:
Soft December Funding
With the Fed committed to dumping $500 billion in liquidity into the market over year-end, there WILL be an abundance of cash overall. More cash will be added than will actually leave the market. However, the Fed is adding much of this cash via term RP operations over the next two weeks, whereas most of the cash is only needed for the Turn itself. I predict, by the last week in December, overnight GC rates will trade very soft. Perhaps opening at 1.50% each day – though GC will have a hard time dropping below the 1.45% RRP rate.
Soft Year-End Funding
I believe the Turn rate will close soft on year-end. Probably below 1.00%. What will be even more interesting is that Money Market Funds will be “crowded out” by the Fed cash entering the market. When Primary Dealer banks take billions of dollars of cash from the Fed, they will give all of their collateral to the Fed. That will leave little collateral for banks to give to Money Market Funds on the day of quarter-end – forcing the MMFs to go to the Fed’s RRP window. The Fed will effectively both loan cash into the market and borrow cash from the market.
Bottom line: after Pozsar’s apocalyptic forecast prompted the Fed to unleash a liquidity tsunami, fears about an imminent seizure in the repo market have faded, with BofA’s Cabana now writing that “overall, the Fed’s guiding hand should make market participants comfortable not to fear material repo stress around the mid-Dec corporate tax date and to believe any year-end funding pressures should be relatively short lived.”
Still, as Skyrm cautions, “there is still one major phantom year-end risk looming around the market. If the Fed’s term RP operations fully fund the Primary Dealer bank balance sheets and the banks cannot increase their balance sheets further, the last few Fed operations of the month might not have any takers. There is a chance there will be little Primary Dealer bank balance sheet left by year-end.”
In any case, when looking at tomorrow’s massive $100 billion liquidity drain, the repo market should be able to digest it without a spike in the G/C repo rate now that the Fed has effectively backstopped any and all year-end liquidity needs. If, however, the first repo prints come in elevated: at 2% or higher, it will mean that not even the Fed’s half a trillion dollar liquidity injection was enough, and that Pozsar’s fire and brimstone forecast is starting to come true.
Tyler Durden
Sun, 12/15/2019 – 16:50
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