- Former IRS Agent Admits: "Personal Income Tax is Actually Illegal"
Submitted by Mac Slavo via SHTFPlan.com,
It is tax day again.
Chances are, you’re done with the dirty business this year, or laying low in hopes that you aren’t audited or flat out persecuted. If not, the clock is quickly ticking.
But it is worth pointing out once again the many ways in which the federal tax scheme in the United States is illegal.
Moreover, the spending by the Federal government and the role of the Federal Reserve in issuing money create overlapping levels of evil that have driven the American people into mere serfs – albeit with cool toys and great TV reception.
Former IRS Special Agent Joe Bannister explains to CNBC what he found out about the reality of the tax code:
Essentially, its many pages are a work of legal fiction, operating under ‘color of law’ and used to oppress the people, and separate established wealth from everyone else.
Bannister argues that by the books, the incomes of most Americans are not subject to the tax code, but the use of intimidation and nebulous code language has prevented the vast majority from discovering the truth.
In this vintage clip, then-Congressman Ron Paul argues that the 16th Amendment wasn’t properly ratified, leaving the 1913 “law” dubious at best.
Nonetheless, the use of intimidation and the custom of “death and taxes” has left millions and millions of people guilty until proven innocent, often labeled as “tax cheats” who are targeted without due process and with police state vengeance… now, they are attaining the power to revoke your passport if you don’t pay what they say you owe!
Will the American people ever be free from the burden of illegal taxation?
The late Aaron Russo, who produced several classic Hollywood films, put it all out in his documentary “America: Freedom vs. Fascism.”
If you haven’t seen it, Russo digs into the questions behind the questions and exposes the naked fraud that is holding America hostage.
This is a must see documentary… and one to share with friends and family while they still have the nation’s ridiculous and obscene tax burden on their minds.
Make no mistake – simply knowing about this information will not protect you. As Russo has noted, the system is very much like a mob. If you don’t pay, they might hurt you, fine you, penalize you or even jail you. But none of that makes it right, fair or legal.
April 15th should be a reminder of how little freedom is left in the nation that so-often prides itself on being the leader of the free world – but the last thing Washington would ever do is let people be.
- Kyle Bass On The Resurgence Of Gold And The Looming "Run On Cash"
Hayman Capital founder Kyle Bass sat down recently for a conversation with Maria Bartiromo and Gary Kaminsky on Wall Street Week. He covered a variety of topics such as NIRP, income inequality, and the U.S. presidential race. As our regular readers know, Kyle correctly predicted the housing crisis, and is now calling for the yuan to be dramatically devalued.
On the growing use of negative interest rates as a central bank policy tool, he pointed out that while the central planners have their PhD's and elaborate excel models, the reality is that not all people behave rationally, and thus in the real world those types of policies won't necessarily work as intended. He also touched on the fact that a concern that should be on the front of everyone's mind is the fact that if NIRP goes full Shinzo Abe and banks start charging customers for keeping cash at their banks, that there will be a run on cash.
"I think this is where the academics are kind of clashing with the practitioners. I think on paper negative rates make a lot of sense if you're running academic models, but in reality they make no sense. Having seven or eight trillion dollars of debt trading at negative rates, having thirty year JGB's trading at fifty basis points is absolutely ludicrous. This experiment that's going on we all know will end poorly at some point in time, I just don't know when that time is."
"I think that one of the fears that they have is a run on cash. If they told you and I that they're going to tax your deposits by a hundred basis points, well it's better to put it in a safe or under your mattress. And that's why you see a resurgence in gold. The more they move to negative rates, the more gold is gonna take off because there's no carrying cost."
Regarding what's going on in Asia, he reiterates his call that there's a giant credit bubble (as we discussed here, here, and here) that's reached its breaking point and it's going to burst over the next two or three years. He says that he believes the implosion of the china credit bubble will have a 40-50% chance of causing a recession in the U.S. within the next year.
"From the perspective of what's going on in Asia, Asia has a giant credit bubble that they've been building for the last ten years or longer that has reached its atrophy level, and it's going to happen over the next two or three years. Whether that causes the U.S. to have a brief, minor recession, I think it's kind of forty, fifty percent chance in the next year personally."
He goes on to hammer the central banks' monetary policy decisions, saying that they can't generate true organic growth and that we've been doing the same thing for the past eight years and we're still in the situation we're in. Something Zero Hedge has been pointing out consistently over the past seven years.
"I don't buy this idea that monetary policy can generate true organic growth. It can help us out of a crisis, and it's proven to do so, but listen we've had eight years of full out excessive monetary and fiscal policies and here we are today. So when Lagarde goes to the G-20 and says we all need to work together, we've been working together. Everybody has been on easy monetary policy, we've pulled all the demand forward that we can, and now we're stuck with kind of stagnation and excess capacity and a lot of debt."
"Economics assumes that everyone is a rational actor, and we all know in this world there aren't many rational actors. That's where there's a divergence between academia and practitioners."
When the conversation turns to the U.S. presidential race, Bass said that Hillary would be the best choice given everyone that's running. When Maria mentioned that Hillary would raise taxes, Kyle lambasted the federal reserve easy monetary policy that only made the rich richer.
"So I'll give you a crazy answer, I think it's Hillary. I think she's the most sane actor of them all."
"Raising taxes, I mean, one thing you have to think about is this divide between the haves and the have-nots. One unintended consequence of Fed easy monetary policy has been this distributive nature where it made the rich richer. How many rich people do you know today that are worse off than they were at the peek of 2006. I don't know one, minus some of the Lehman people, I don't know one. What happened is we went to this policy where we went to QE, QE what that did was raise asset prices, well the only people with assets are rich people in general, so they became much more rich."
Watch the latest video at video.foxbusiness.com
- China Embraces Gold In Advance Of Post-Dollar Era
Submitted by Koos Jansen via AllChinaReview.com,
To challenge the US dollar hegemony and increase its power in the global realm of finance, China has a potent gold strategy. Whilst the State Council is preparing itself for the inevitable decay of the current international monetary system, it has firmly embraced gold in its economy. With a staggering pace the government has developed the Chinese domestic gold market, stimulated private gold accumulation and increased its official gold reserves in order to ensure financial stability and support the internationalisation of the renminbi.
“The outbreak of the crisis and its spillover to the entire world reflect the inherent vulnerabilities and systemic risks in the existing international monetary system…. The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run…”
Quote from Governor of the PBOC Zhou Xiaochuan 2009.
In the present zeitgeist we find ourselves on the verge of a shift in the global monetary order. The shocks through the financial complex in 2008 that reaffirmed the innate fragility of the US dollar as the world reserve currency have sparked China to become a vocal proponent of de-Americanization, although its end goal is communicated less clearly. Being the second largest economy of the world but relatively in arrears regarding physical gold reserves, China has a strong motive to surreptitiously work on its gold program until completion. For, if it would be candid in its gold ambitions, the price would significantly run higher, potentially disturbing financial markets and narrowing its window of opportunity to prepare for the next phase.
State Council Rapidly Developed Domestic Gold Market And Stimulated Private Hoarding
China has been infatuated with gold for thousands of years. In the mainland, gold mining and use can be traced back to at least 4,000 years ago, and the metal has always represented economic strength and was regarded as the emperors’ symbol of power. Although the Communist Party of China captured the monopoly in gold trade and heavily restricted private gold possession since 1949, in lockstep with the gradual liberalisation and the ascend of the Chinese economy the state started to develop the domestic gold market in the late seventies, which accelerated in 2002.
A new page was turned when the Gold Armed Police started operating in 1979, not coincidentally a few years after the US detached its dollar, the world reserve currency, from gold. This army division was initially assigned to gold mining exploration and has done so quite fruitfully. Since 1979, Chinese domestic mining output has grown 2,137 % from an annual 20 tonnes to an estimated 467 tonnes in 2015. In 1982, the first steps were taken in reviving China’s gold retail channels. For the first time since 1949 people were allowed to buy jewelry and the China Gold Coin Incorporation started issuing Panda coins. The Peoples Bank Of China (PBOC) continued to be the primary gold dealer that fixed the price and controlled all supply flows.
The real reform of the Chinese gold market was implemented on 30 October 2002 by the launch of the Shanghai Gold Exchange, erected to serve the full liberalisation of the domestic gold market. From that date the fixing of the gold price in China was transmitted from the PBOC to the free market. In 2004, the State Council approved gold as an investment for individuals and the PBOC slowly repelled control over supply flows. The Chinese gold market fiercely rose from its ashes. By 2007 the market was functioning as intended when nearly all gold supply and demand was flowing through the SGE system6. A year later, in 2008, the Shanghai Futures Exchange launched a gold futures contract supplementing existing derivatives at the SGE.
The Shanghai Gold Exchange (SGE), which is a subsidiary of the PBOC, is the very core of the Chinese physical gold market. Its infrastructure provides a single liquid exchange overseen by the state, granting all participants a trusty venue that can be efficiently developed and monitored. The mechanics of the Chinese market incentivise nearly all supply and demand to connect within the SGE system. As a consequence, by the amount of gold withdrawn from the vaults of the SGE – data that was published up until December 2015 in the Chinese Market Data Weekly Reports – we could gauge Chinese wholesale gold demand.
After the crisis in 2008, it became apparent in the higher echelons of the Chinese government that the development of the gold market and private accumulation had to accelerate to protect the Chinese economy from looming turmoil. Through state owned banks and media wires the citizenry were stimulated to diversify savings into physical gold. Currently, at Chinese banks, numerous gold saving programs can be entered into, or individuals can open an SGE account and purchase gold directly in the wholesale market.
“Individual investment demand is an important component of China’s gold reserve system, …. Practice shows that gold possession by citizens is an effective supplement to official reserves and is essential for our national financial security.”
Quote by the President of the China Gold Association 2012.
When the gold price came down sharply in April 2013, Chinese gold demand literally exploded as in a once in a lifetime event. In between 22 and 26 April, 117 tonnes of physical gold were withdrawn from the vaults of the SGE.
China has been a gigantic gold buyer ever since. Withdrawals from the vaults of the SGE in 2015 accounted for 2,596 tonnes (90 % of global annual mine output), up from a mere 16 tonnes in 2002. SGE withdrawal data correlates with elevated gold import by China.
Whilst clearly enjoying their bargain purchases, China has established a trend of increasingly obfuscating the true size of its gold demand. Not long ago several reports were released in the mainland that disclosed total gold demand to be the equivalent to SGE withdrawals. Since 2012 these reports have been hidden from public eyes and in January 2016 the SGE ceased publishing withdrawal data10. Although annual SGE withdrawals have exceeded 2,100 tonnes since 2013, what is generally publicised as gold demand is roughly half of this, merely the demand at jewelry shops and banks that excludes direct purchases from individual and institutional clients at the SGE. As a result, the global consensus is that Chinese gold demand is approximately 1,000 tonnes a year though in reality it’s twice this volume.
PBOC Accumulating Gold To Support Renminbi Internationalisation
To free itself from US dollar supremacy and force the sequent monetary system, China’s goal is to internationalise the renminbi. For achieving its target, gold is identified as the key. It is the absolute monetary asset to support the renminbi, the dollars’ Achilles heel and a hedge during monetary stress. Next to the swift progression in the Chinese private gold market we can observe the PBOC is covertly buying gold and has launched the Shanghai International Gold Exchange to prepare renminbi internationalisation.
“For China the strategic mission of gold lies in the support of renminbi internationalization, and so let China become a world economic power…. Gold is both a very honest asset and forms the very material basis for modern fiat currencies…. Gold is the world’s only monetary asset that has no counter party risk, and is the only cross-nation, cross-language … and cross-culture globally recognized monetary asset.
That is why in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 tonnes mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 tonnes, more than the US.”
Quote by the President of the China Gold Association 2014.
Not surprisingly, China’s strategy is everything but linear. Let us analyse the State Council’s most recent actions with respect to gold and the internationalisation of the renminbi. In addition to gold accumulation, the State Council has aimed to kick start renminbi internationalisation by having it included into the International Monetary Fund’s (IMF) basket of currencies, the Special Drawing Rights (SDR), in 2015. For acceptance, the IMF required openness of China’s international reserves, of which the PBOC hadn’t updated its gold reserves since 2009. Here we found the PBOC stretched between opposing forces; it obviously preferred to hoard gold in concealment not to disturb financial markets, while at the same time it was requested to open its books. In July 2015 the PBOC decided to revise its official gold reserves by 604 tonnes to 1,658 tonnes, which was probably not the whole truth but served both means, as markets barely reacted to the increment – the gold price has not increased since then – and the IMF has granted annexation of the renminbi into the SDR.
How much gold does the PBOC truly hold? Before we make an estimate we must first address the question, how and where does the PBOC buy gold? Some analysts assume the PBOC buys gold in the domestic market at the SGE. According to my research this is not true. My sources in the bullion industry tell me first hand that the PBOC buys gold in the international OTC market using Chinese banks as proxies. And this intelligence fits into the wider analysis, as there are many reasons why the PBOC would not buy gold through the SGE.
A rough estimate suggests the PBOC holds nearly 4,000 tonnes in gold reserves, more than twice the amount they officially disclose. In a quest for any clues we must visit the heart of the gold wholesale market. Data by the London Bullion Market Association points out there have been approximately 1,700 tonnes of monetary gold exported from London between 2011 and 2015. China’s central bank is the foremost suspect for these purchases, given its size and motives, and the tonnage exported from London is consistent with other sources that state the PBOC has bought roughly 500 tonnes a years since 2009. All clues together point to the PBOC holding roughly 4,000 tonnes currently. Although this remains speculation.
More of China’s gold strategy was revealed by the recent launch of the Shanghai International Gold Exchange (SGEI) that offers gold trading in renminbi for clients worldwide, in an attempt by China to strengthen the internationalisation of the renminbi. In itself the SGEI clearly underlines China’s gold ambitions16, but the punch line was added with the launch of the Silk Road Gold Fund in 201517. Led by the SGE(I), the $16 billion fund will boost the gold industry along the Silk Road and in turn “will facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal”, according to the Chinese state press agency Xinhua18. Not only is China trying to persuade all mining and consumption of gold along the Silk Road economic project to be settled through the SGEI in renminbi, additionally the Chinese promote gold as an essential component of central banks’ international reserves going forward.
We must conclude that the State Council views gold as part of the coming international monetary system. Why else does it quickly develop the domestic gold market to be embedded in financial markets, surreptitiously accumulate vast gold reserves and establish a framework to boost gold business on the Eurasian continent around the SGEI? In my view, China contributes significant value to its gold strategy in the shadow of the apparent failure of the current fiat monetary system. And if true, China’s central bank having nearly 4,000 tonnes of gold is well on its way to introduce the next phase.
- Police Unleash Teargas After Massive Migrant Brawl Erupts At Paris Train Station
It appears Europe's refugee 'problem' is un-fixed again. Riot police were called in to break up a violent clash between hundreds of migrants and a 'vigilante group' near a Paris metro station. As The Daily Mail reports, footage from Stalingrad metro, where more than a thousand migrants have been living rough, showed hundreds of men brawling with metal poles and planks of wood.
Riot police used tear gas to disperse the crowd…
The police are said to have been pelted with bottles and debris when the arrived at the scene of the fight between the homeless migrants and a so called 'anti crime brigade' from Stalingrad, which lies in the 19th arrondissement of Paris. The video was filmed from the relative safety of a nearby apartment on the Boulevard de la Vilette. At least four migrants were wounded in the riot, which was one of two that erupted last night. Both men were rushed to the nearby Lariboisière hospital for treatment.
Almost 1,000 migrants have arrived in the area in just over a month, many travelling from Calais having crossed the Mediterranean from Africa and the Middle East. French Interior Minister Bernard Cazeneuve had earlier announced the removal of the camp in a joint statement with Paris Mayor Anne Hidalgo, but the migrants returned with makeshift mattresses two weeks later.
- The Keynesian House Of Denial
Submitted by David Stockman via Contra Corner blog,
We use the term “Keynesian” loosely to stand for economic interventionists of all schools. The followers of JM Keynes and Milton Friedman alike fit that category. So do some of the more rabid supply siders who claim the power to stimulate ultra-high economic growth with the tools of tax policy alone.
The common denominator is economic statism. That is, the assumption that the state, including its central banking branch, is indispensable to economic progress and prosperity.
As the various denominations of the Keynesian economic church have it, capitalism is always veering toward the ditch of under-performance and recession when left to its own devices and natural tendencies; and, if neglected by the wise policy-makers of the central state too long, it lapses toward outright depression and collapse.
Our purpose here is not to correct the particular philosophical and analytic errors associated with each of these Keynesian or statist variants. On any given day we make it pretty clear the central banking based mutation of modern Keynesianism is predicated on two cardinal errors. Namely, the myth of demand deficiency and the false presumption that central bank pegging of interest rates, yield curves and other financial prices will enhance macro-economic performance while not harming the efficiency, stability and efficacy of money and capital markets.
That’s completely wrong. The very worst thing the state can do is meddle with and falsify financial market prices. Sooner or later cheap debt, repressed volatility, stock market “puts” and artificially inflated asset prices drain the genius of markets out of capitalism. What remains in the financial system is raw speculation for the purpose of rent gathering and leverage for the purpose of supercharged gambling.
On the other hand, what gets lost is true capital formation, honest price discovery and allocative efficiency. These are the building blocks of true macroeconomic expansion and rising wealth.
The irony is that the theories of Keynes and Friedman were designed to enable exactly that. Yet after having been morphed and melded into the cult of central banking in recent decades they have become a generator of main street stagnation and impoverishment.
In that regard, we have frequently pointed out that behind all the pretentious jargon and faux economic science of the likes of Yellen, Bernanke, Dudley and Fischer is little more than the “D” word. They believe that an economy can never have enough Debt.
At the end of the day there is no other purpose for the lunacy of 87 straight months of ZIRP and the fraud of $3.5 trillion worth of QE/bond-buying with digital credits conjured from nothing. It’s all designed to get the primary economic agents—households, business and governments—-to borrow and spend.
The contemporary central bank based mutation of the old Keynesian and Friedmanite fallacies is rooted in this debt-centric economics but is far more dangerous. Owing to his anti-gold standard worldview, Friedman failed to realize that fiat money was nothing more than debt, but at least he swore an oath of restraint in the form of a fixed rule (such as 3% per annum) for the growth of credit money.
Even Keynes was not completely beguiled by the elixir of debt. His fiscalist angle had more to do with the class snobbery of the early 20th century English literati than an open-ended embrace of debt.
He simply felt that businessmen where less enlightened then high-minded civil servants as he had been at the British Treasury. When the former episodically lost their animal spirits, they left the economy awash in excess savings and the working class bereft of jobs. The function of the state, therefore, was to borrow the excess during periods of macroeconomic slack and put it to good use in public works——even digging holes (with or without spoons) and refilling them.
This got popularized in the notion of “pump priming” as originally articulated by New Deal activists such as Mariner Eccles. But the primitive counter-cyclical policy of the 1930s and the far more sophisticated Keynesian New Economics of the 1960s did not embrace the never too much debt predicate of Bernanke and Yellen.
After all, it was LBJs Keynesian advisors who campaigned aggressively for a anti-inflationary tax hike and fiscal retrenchment in the white hot “guns and butter” economy of 1968. The Democrat’s Walter Heller and the Republican’s Herb Stein differed as to when and how much pump-priming was warranted, but they agreed that it was only an occasional tonic and that the budget should be balanced over the cycle.
This long forgotten catechism of fiscal balance over the business cycle is crucially important; adherence to it would not have led to an endless rise in the public leverage ratio.
When President Kennedy’s New Economics team took over in the early 1960s, they argued for stimulative tax-cuts and temporary deficits. But none claimed that the American economy was drastically impaired because the permanent public debt was only 40% of GDP, not today’s 103%. And they further believed that even the incremental public debt from stimulative deficits would be soon paid back by the resulting gains in GDP and tax collections.
For that matter, total credit outstanding in the public and private sectors combined was only 150% of GDP, not today’s 340%. And that do make a difference. At the century-old historic debt-to-GDP ratio of 150%, the US economy would be dragging around $27 trillion of debt today, not its actual albatross of $62 trillion.
The fact is, the Keynesian fiscalist of the New Economics could not even have imagined today’s leverage ratios on the business and household sectors, either.
Needless to say, the transformation of the ideas of Keynes and Friedman into the doctrine and practice of plenary central banking has resulted in a hybrid mutant. Counter-cyclical pump-priming has now become the practice of permanent stimulus and the presumption that capitalism is always defaulting into underperformance and worse.
Likewise, the temporary allocation of “excess savings” from the private to the public sector has become the permanent expansion of fiat credit money. And this massive growth of central bank balance sheets, in turn, has resulted in a monumental and fraudulent inflation of government bond prices.
Most destructive of all, the Friedmanite 3% rule of money supply growth has become forgotten, inoperative and irrelevant. In a fractional reserve banking system where Greenspan essentially abolished via sweep accounts the need for reserves on deposit money, Bernanke/Yellen nevertheless flooded the system with $2.4 trillion of excess reserves where virtually none were needed at all.
What this means is that policy makers and the main stream media that xerox their proclamations, prognostications and pettifoggery have become myopic. To wit, so long as the central bank is in full-on stimulus mode——and by any historical standard a 38 bps money market rate is exactly that—–the economy can not fail or lapse into recession. Economic growth and expansion are definitional.
That’s why central bankers and their Wall Street camp followers never see recession coming. It can’t happen on their watch!
So this week we got another flashing yellow light. The core data from the business economy warns that the current tepid and long-in-the-tooth business expansion is coming to an end and that the next recession is lurking just around the corner, if it has not already arrived.
With the March decline, industrial production has now dropped during 13 out of the last 16 months. As Mish demonstrates in the charts below, this has never happened when the US economy was in an actual “escape velocity” mode.
To be sure, Keynesian apologists claim that industrial production is not so important any more. But as we shall demonstrate next week, that’s pure rationalization.
The Eccles Building and its Washington/Wall Street acolytes have become a House of Keynesian Denial because the assumption that capitalism is an 80 pound recessionary weakling without the constant ministrations of the state is dead wrong.
Chapter and verse on that statist error is the topic on deck for next week. Not even the supply siders have escaped its deadly grasp.
- Saudi Arabia is the OPEC Villian (Video)
By EconMatters
Saudi Arabia really should negotiate a Production Freeze agreement where Iran can get back to producing 4 Million Barrels per day.
Russia and Saudi Arabia both need to start cutting Oil Production and not just freezing oil production at all time production highs. They should be following what the Shale Industry is doing with regard to production cuts in the United States. It is unreasonable to expect Iran after 20 years of sanctions not to be able to ramp up some production as Saudi Arabia (A fellow OPEC Member) has gained much oil market share at Iran`s expense over the last 20 plus years of international sanctions.
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- Draft Of Doha "Oil Freeze" Agreement Leaked
With the world’s attention about to focus on Qatar where in just a few hours the Doha OPEC “freeze” meeting is supposed to start (without the presence of Iran which has made it clear it won’t freeze production but “supports the decision for other OPEC and non-OPEC countries to freeze crude oil production” so everyone except Iran), moments ago Tass presented a glimpse of what will be announced.
According to the Russian news agency, a draft agreement of the oil producer countries expected to be signed tomorrow in Doha stipulates that the output will be frozen at the level of January 2016 until October, Azerbaijan’s Energy Minister Natiq Aliyev said in an exclusive interview with TASS on Saturday on the eve of a major off-schedule conference of OPEC and non-OPEC oil producing nations.
“The draft agreement is not large,” Aliyev said. “It is as follows: the states gathering in Doha have reached a conclusion that for normalizing the oil price they agreed to freeze the output at the level of January 2016 until October.”
In other words, the member nations will agree to “freeze” production at output levels that are already record high for the Saudis, Russians and Iraq, even as Iran just boosted its production by some half a million barrels per day.
There is just one problem: there is no actual enforcement mechanism, and since this is OPEC where everyone looks to cheat before everyone else, it means that the ink on the agreement won’t be dry yet, and every country will be pumping like mad to new record-er highs.
According to Tass, the agreement in Doha to freeze oil output will be “gentlemen-like” as the draft stipulates no control mechanisms, Aliyev went on to say.
Aliyev said that “the agreement is gentlemen-like as the countries realize that the maintained norms of output will suit the joint interests. It does not envisage any control mechanisms and each country should observe its implementation.” Which, incidentally, is decidedly false as Saudi Arabia clearly has had its own unique interests ever since the November 2014 OPEC meeting which saw Saudi Arabia break out on its own and in the process effectively end the OPEC production cartel.
“There is no need in a supervisory body,” he said. “No proposals have come since it will have no influence on the countries.”
So… why is OPEC even pretending to freeze production? Oh yes, in hopes the algos will be dumb enough to attempt another forced short squeeze.
“We are ready to sign the agreement in a form that we have seen,” Aliyev said.
Which is another lie, as just last night the Saudi deputy crown price said without Iran, the world’s biggest oil producer will also not sign. Not adhering to the truth did not stop the Azerbaijani, however, who continued:“We believe that all the delegates who arrived in Doha are set to sign it, or why then they came here, otherwise.”
Meanwhile, OPEC has already set its price target as a result of tomorrow’s farcical agreement.
The oil price will be climbing up slowly but persistently to $50 per barrel by the end of 2016 after big oil producer countries seal a deal in Doha, Azerbaijan’s Energy Minister Natiq Aliyev told TASS on Saturday.
“The higher is the price the better,” Aliyev said. “But we expect that it will be slowly and gradually increasing towards $50 per barrel by the year’s end. The next year we will be satisfied with the price of $60 per barrel.”
Natiq Aliyev may be quickly disappointed with his $50 forecast, unless he is of course right, in which case US shale producers who have been taking every opportunity to hedge future production around $40, will promptly resume pumping at maximum capacity and add to the global oil glut which as of this moment is between 2 and 3 million barrels per day, and where the real problem remains a lack of demand to force the excess supply into equilibrium.
* * *
Finally, for those who missed it on Friday, here again is Citi’s one minute assessment of how the market will react to the “gentleman-like agreement”
If there is no agreement, then expect a sharp oil market sell-off on Monday. If there is an agreement in name but market participants realize it has no teeth, except a slower sell-off.
To summarize:
- Iran will be absent as it wants no part of a production freeze
- Saudis have confirmed no production freeze unless Iran also freezes
- A gentleman-like agreement to cap production until October (or another 5 months of headline-driven algo stop hunts higher) at what are already record production levels for the top oil producing nations.
- No enforcement mechanism.
We fully expect the algos to fall for it again, especially with an early momentum jolt higher courtesy of 1 or 2 central banks.
- Marathon Oil Wants You
After shaving ~13% of their work force in 2015, Marathon Petroleum is asking you to come back and given them a second chance.
Via LinkedIn:
If you only have a bachelor’s degree, Marathon has an internal auditor position just for you:
- "America First" – The Trump Slogan the Establishment Hates
Submitted by Justin Raimondo via AntiWar.com,
Why do they hate Donald Trump?
Why has the Establishment pulled out all the stops in an effort to smear him, stop him, and crush him underfoot? Every single day the “mainstream” media unleashes a foam-flecked fusillade of fury at the GOP front-runner: he’s a “racist,” he’s “corrupt,” his campaign manager is a “bully,” he “incites violence,” etc. etc. ad nauseam.
Of course the media is going to attack any Republican candidate. However, this time the GOP elite is joining in, and the level of ferocity is something we haven’t seen since 1964. That was the year Barry Goldwater’s trip to Germany provoked a report by Daniel Schorr on the CBS Evening News that falsely linked the GOP candidate to German neo-Nazis – while Nelson Rockefeller denounced Goldwater’s delegates as “extremists” who “feed on fear, hate, and terror.”
Yes, “terror”!
The same violence-baiting hysteria is being deployed against Trump, but one has to wonder what’s behind it. I was watching Bill O’Reilly the other day, and he was saying that it has to do with the elite’s visceral dislike of Trump as a personality. They think he’s a “vulgarian” who appeals to the rubes in flyover country. Well, there’s something to that: these consumers of arugula and “artisan” cheese no doubt disdain the hamburgers-and-beer crowd embodied by Trump’s persona, but there’s more to it than that. And I can sum it up in two words: foreign policy.
Yes, yes, I know: foreign policy isn’t supposed to figure in presidential elections. Dan Drezner keeps telling us that. And yet I couldn’t help but notice that the anti-Trump hysteria hit a high note (or is that a new low?) when he came out with a series of foreign policy pronouncements and started attacking NATO. The hairs on the back of the necks of the foreign policy wonks must’ve stood at attention when he adopted “America first” as his campaign slogan.
An article in USA Today gives voice to the panic of the elites at this evocation of a past they thought they’d successfully banished from the American political landscape:
“In embracing “America First’’ as his guiding foreign policy philosophy, Donald Trump appropriated – spontaneously, it seems – one of the most denigrated political slogans of the last century, and one that evokes an isolationism Trump himself explicitly rejects.
“’It’s a rotten term that evokes the naive idiots, defeatists and pro-Nazis who wanted to appease Hitler and make friends with him’ before World War II, says Susan Dunn, author of 1940: F.D.R., Willkie, Lindbergh, Hitler – The Election Amid the Storm. That said, she doesn’t think the old phrase means much today.
“Trump’s use of an expression so dated and discredited reflects his willingness to dip into the past for catch phrases that, no matter their historical baggage, can still appeal to voters.”
Ms. Dunn’s book is a compendium of every falsehood ever hurled at the America Firsters: she lionizes the corporate shill Wendell Wilkie, and – prefiguring the anticipated theft of the GOP nomination this year – whitewashes the effort by the Eastern Establishment to bring in “the barefoot boy from Wall Street’ at the last moment to stop the “isolationist” Taft, stealing delegates and pressuring them financially to support the elite’s chosen candidate. Dunn’s line is similar to that of the Communist Party, which, at the time, was aligned with Roosevelt: they acted as the vanguard of the anti-Taft pro-war forces, hurling accusations of pro-Nazism and anti-Semitism at such “bigots” as Norman Thomas, Gerald Ford, and other America Firsters who wanted to keep us out of the European conflagration.
Chicago Tribune publisher Robert Rutherford McCormick, whose newspaper valiantly stood against the Anglophile-warmongering tide, accurately predicted that entering the war would have to mean yet another long struggle, this time against the Soviet Union – and that’s precisely what occurred. Yet court historians of Dunn’s ilk are blind to such prescience: according to her, Wilkie was a hero for turning against the GOP after his humiliating defeat and becoming one of Roosevelt’s lapdogs.
Dunn is quite wrong about something else as well: the slogan “America First” does mean something today, which is why she and her comrades on both sides of the political aisle are screaming bloody murder whenever Trump repeats the forbidden phrase. Trump’s other catchphrases – “the silent majority’’ and “Make America great again” – “were in the Political Rhetoric Hall of Fame when Trump found them,” the USA Today piece goes on to inform us, but “not America First, which overnight went from one of the most popular rallying cries in U.S. politics to the most bankrupt.”
Bankrupt? Really? At its height, the America First Committee was the biggest antiwar movement in American history, with 900,000 members and majority support. Americans remembered the tragedy of World War I – that vicious killing field that only succeeded in creating the conditions for a repeat – and wanted no part of the European horror show. Yet the elites were solidly pro-interventionist: the Eastern Establishment, which worshipped England, and the left-wing radical professors, who worshipped “Uncle” Joe Stalin, were united in their determination to get us into the war. Their allegiances, in both cases, were to a foreign power – thus their opposition adopted the only possible brand name: America First.
World War II is the supreme narrative of the interventionists, both right and left, whose version of its genesis bears no more resemblance to its true origins than does the creation story of the Bible to the Big Bang theory. As Patrick J. Buchanan points out in his Churchill, Hitler, and the Unnecessary War, World War II was merely a continuation of World War I, the latter making the former nearly inevitable. And the results of the second conflagration embroiled us in half a century of conflict. As Pat put it in his newspaper column:
“They went to war for Poland, but Winston Churchill abandoned Poland to Stalin. Defeated in Norway, France, Greece, Crete and the western desert, they endured until America came in and joined in the liberation of Western Europe.
“Yet, at war’s end in 1945, Britain was bled and bankrupt, and the great cause of Churchill’s life, preserving his beloved empire, was lost. Because of the ‘Good War,’ Britain would never be great again.
“And were the means used by the Allies, the terror bombing of Japanese and German cities, killing hundreds of thousands of women and children, perhaps millions, the marks of a ‘good war’?
“[Washington Post columnist Richard] Cohen contends that the evil of the Holocaust makes it a ‘good war.’ But the destruction of the Jews of Europe was a consequence of this war, not a cause. As for the Japanese atrocities like the Rape of Nanking, they were indeed horrific.
“But America’s smashing of Japan led not to freedom for China, but four years of civil war followed by 30 years of Maoist madness in which 30 million Chinese perished.”
We are now in the midst of yet another global struggle, the “war on terrorism,” which has decimated the Middle East, exhausted the US military, driven us to the edge of bankruptcy, and led to nothing but horror and blowback on a scale not even anti-interventionist critics of the decision to enter it imagined.
For Trump to raise the banner of America First in this context challenges so many political and financial interests, so many of the underlying assumptions of US foreign policy since the end of World War II, that the vicious assault on his politics and his character is entirely explicable. Like his predecessors in the America First movement – who weren’t “Nazi sympathizers,” as the smear artist Dunn avers, but ordinary Americans who wanted to simply live in peace – Trump wants a Fortress America that will keep the country safe behind two oceans and a renewed vigilance without going abroad in search of monsters of destroy.
He wants out of NATO, out of South Korea and Japan, out of harm’s way for American military personnel – all too many of whom have come back either in body bags or horribly maimed, only to be treated like unworthy supplicants by a heartless bureaucracy and left to sit on street corners begging for change.
The America Firsters became “obsolete,” USA Today informs us, “But they never went away.”
Of course we didn’t. That’s because ordinary Americans – as opposed to the foreign lobbyists, the arms contractors, and the laptop bombardiers in their Washington “thinktanks” – have always been reluctant to go crusading overseas. The 9/11 attacks induced a fit of madness that made them forget their common sense objections to trying to make alien cultures into Arabic versions of Kansas, but that soon wore off as the costs – in troops and treasure – added up. And as their own country began to disintegrate, both physically and culturally, while George W Bush was busily engaged in “nation-building” in Afghanistan, Americans began to ask: is it worth it?
Today the answer to that question is clearly a firm negative – except, of course, in the precincts of power on the Potomac.
Of all the “experts” hauled out to attack Trump and his “America First” foreign policy, my favorite is left-wing dingbat and “historian” Adam Hochschild, a co-founder of Mother Jones magazine, who blithers that we’re too “deeply enmeshed” to put our own interests first:
“Trump can no more successfully pretend we’re not involved than isolationists of the 1930s could. How can we put ‘America First’ as far as climate change is concerned? Trump does not have the power to make rising ocean waters lap only at other countries’ shores.”
This is what the globalists are reduced to, now that the neoconservative version of internationalism is out of style: we have to keep policing the world because the seas are rising!
One good thing about climate change is that, as the oceans rise, they’ll engulf coastal areas such as the Bay Area, where dingbat Hochschild resides, and he’ll be forced to “enmesh” himself in Middle America – Trump Country – where normal Americans live. Although perhaps he’ll prefer to go under, along with the rest of the die-hard arugula-consuming Trump-hating elites….
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