Today’s News 18th February 2016

• America's Largest Union Refuses To Back Hillary Over Sanders

  In what could be the biggest blow yet for her campaign, the leader of the America's largest federation of unions (counting 12 million active and retired "everyday Americans") has chosen not to endorse Hillary Clinton over Bernie Sanders.

  Clinton has racked up endorsements from 18 unions, according to The Hill, including the Service Employees International Union and the National Education Association, while Sanders has garnered just three union endorsements.

   

  Many of these unions have expressed support for the labor policies touted by Sanders, but believe Clinton is more electable.

  But, in a relative win for the Sanders' campaign, according to Huffington Post, the American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) – the largest federation of unions in the United States,  made up of fifty-six national and international unions, together representing more than 12 million active and retired workers – will not be endorsing Hillary…

  Richard Trumka – the president of the AFL-CIO – told members of the executive council that the body won't be holding a vote on whether to endorse Democratic presidential candidates Hillary Clinton or Bernie Sanders at its annual winter meeting in San Diego.

   

  "Following recent discussion at the AFL-CIO’s Executive Committee meeting and subsequent conversations with many of you, I have concluded that there is broad consensus for the AFL-CIO to remain neutral in the presidential primaries for the time being and refrain from endorsing any candidate at this moment," Trumka said.

   

  The decision is a coup for Sanders' backers within organized labor. Clinton has managed to lock down endorsements from unions representing a majority of unionized workers in this country. But the AFL-CIO endorsement is the most potent of all, and it won't be going to Clinton — at least, not yet.

   

  Under AFL-CIO procedures, an endorsement by the executive council needs to be ratified by leaders of the federation's member unions. It's likely that Clinton doesn't yet have the required votes for an endorsement to be ratified.

  In his email to members, Trumka said the council would "continue its ongoing discussion" about the 2016 campaign, and thus we suspect this is merely a stalling tactic as quid-pro-quo negotiations are undertaken. Although, given the trend in her numbers…

  

   

  And this…

  "We're extremely happy" about the decision, said RoseAnn DeMoro, executive director of National Nurses United, a union that has broken away from many other labor groups and endorsed Sanders.

  Anything is possible in this election season.

  

  

  

  

  

• The People Vs. The Police State: The Struggle For Justice In The Supreme Court

  Submitted by John Whitehead via The Rutherford Institute,

  “We are not to simply bandage the wounds of victims beneath the wheels of injustice, we are to drive a spoke into the wheel itself.”—Dietrich Bonhoeffer

  The untimely death of Supreme Court Justice Antonin Scalia has predictably created a political firestorm.

  Republicans and Democrats, eager to take advantage of an opening on the Supreme Court, have been quick to advance their ideas about Scalia’s replacement. This is just the beginning of the furor over who gets to appoint the next U.S. Supreme Court justice (President Obama or his successor), when (as soon as Obama chooses or as long as Congress can delay), how (whether by way of a recess appointment or while Congress is in session), and where any judicial nominee will stand on the hot-button political issues of our day (same-sex marriage, Obamacare, immigration, the environment, and abortion).

  This is yet another spectacle, not unlike the carnival-like antics of the presidential candidates, to create division, dissension and discord and distract the populace from the nation’s steady march towards totalitarianism.

  Not to worry. This is a done deal. There are no surprises awaiting us.

  We may not know the gender, the orientation, the politics, or the ethnicity of Justice Scalia’s replacement, but those things are relatively unimportant in the larger scheme of things.

  The powers-that-be have already rigged the system. They—the corporations, the military industrial complex, the surveillance state, the monied elite, etc.—will not allow anyone to be appointed to the Supreme Court who will dial back the police state. They will not tolerate anyone who will undermine their policies, threaten their profit margins, or overturn their apple cart.

  Scalia’s replacement will be safe (i.e., palatable enough to withstand Congress’ partisan wrangling), reliable and most important of all, an extension of the American police state.

  With the old order dying off or advancing into old age rapidly, we’ve arrived at a pivotal point in the makeup of the Supreme Court. With every vacant seat on the Court and in key judgeships around the country, we are witnessing a transformation of the courts into pallid, legalistic bureaucracies governed by a new breed of judges who have been careful to refrain from saying, doing or writing anything that might compromise their future ambitions.

  Today, the judges most likely to get appointed today are well-heeled, well-educated (all of them attended either Yale or Harvard law schools) blank slates who have traveled a well-worn path from an elite law school to a prestigious judicial clerkship and then a pivotal federal judgeship. Long gone are the days when lawyers without judicial experience such as Earl Warren, William Rehnquist, Felix Frankfurter, and Louis Brandeis could be appointed to the Supreme Court.

  As Supreme Court correspondent Dahlia Lithwick points out, “a selection process that discourages political or advocacy experience and reduces the path to the Supreme Court to a funnel” results in “perfect judicial thoroughbreds who have spent their entire adulthoods on the same lofty, narrow trajectory.”

  In other words, it really doesn’t matter whether a Republican or Democratic president appoints the next Supreme Court justice, because they will all look alike (in terms of their educational and professional background) and sound alike (they are primarily advocates for the government).

  Given the turbulence of our age, with its police overreach, military training drills on American soil, domestic surveillance, SWAT team raids, asset forfeiture, wrongful convictions, and corporate corruption, the need for a guardian of the people’s rights has never been greater.

  Unfortunately, as I document in Battlefield America: The War on the American People, what we have been saddled with instead are government courts dominated by technicians and statists who march in lockstep with the American police state.

  This is true at all levels of the judiciary.

  Thus, while what the nation needs is a constitutionalist, what we will get is a technician.

  It’s an important distinction.

  A legal constitutionalist believes that the authority of government derives from and is limited by a body of fundamental law (the Constitution) and strives to hold the government accountable to abiding by the Constitution. A judge of this order will uphold the rights of the citizenry in the face of government abuses.

  Justice William O. Douglas, who served on the Supreme Court for 36 years, was such a constitutionalist. He believed that the “Constitution is not neutral. It was designed to take the government off the backs of the people.” Considered the most “committed civil libertarian ever to sit on the court,” Douglas was frequently controversial and far from perfect (he was part of a 6-3 majority in Korematsu vs. United States that supported the government’s internment of American citizens of Japanese descent during World War II). Even so, his warnings against a domineering, suspicious, totalitarian, police-driven surveillance state resonate still today.

  A legal technician, on the other hand, is an arbitrator of the government’s plethora of laws whose priority is maintaining order and preserving government power. As such, these judicial technicians are deferential to authority, whether government or business, and focused on reconciling the massive number of laws handed down by the government.

  John Roberts who joined the Supreme Court in 2005 as Chief Justice is a prime example of a legal technician. His view that the “role of the judge is limited…to decide the cases before them” speaks to a mindset that places the judge in the position of a referee. As USA Today observes, “Roberts’ tenure has been marked by an incremental approach to decision-making — issuing narrow rather than bold rulings that have the inevitable effect of bringing the same issues back to the high court again and again.”

  Roberts’ approach to matters of law and justice can best be understood by a case dating back to his years on the U.S. Court of Appeals for the District of Columbia. The case involved a 12-year-old black girl who was handcuffed, searched and arrested by police—all for eating a single French fry in violation of a ban on food in the D.C. metro station. Despite Roberts’ ability to recognize the harshness of the treatment meted out to Ansche Hedgepeth for such a minor violation—the little girl was transported in the windowless rear compartment of a police vehicle to a juvenile processing center, where she was booked, fingerprinted, and detained for three hours, and was “frightened, embarrassed, and crying throughout the ordeal”—Roberts ruled that the girl’s constitutional rights had not been violated in any way.

  This is not justice meted out by a constitutionalist.

  This is how a technician rules, according to the inflexible letter of the law.

  Circuit Judge Sri Srinivasan of the DC Court of Appeals, who is rumored to be a favorite pick for Scalia’s spot on the court, is another such technician. When asked to strike down a 60-year-old ban on expressive activities in front of the Supreme Court Plaza, Srinivasan turned a blind eye to the First Amendment. (Ironically, the Supreme Court must now decide whether to declare its own free speech ban unconstitutional.)

  By ruling in favor of the ban, Srinivasan also affirmed that police were correct to arrest an African-American protester who was standing silently in front of the Supreme Court wearing a sign protesting the police state on a snowy day when no one was on the plaza except him.

  Srinivasan’s rationale? “Allowing demonstrations directed at the Court, on the Court’s own front terrace, would tend to yield the opposite impression: that of a Court engaged with — and potentially vulnerable to — outside entreaties by the public.”

  This view of the Supreme Court as an entity that must be sheltered from select outside influences—for example, the views of the citizenry—is shared by the members of the Court itself to a certain extent. As Lithwick points out:

  “The Court has become worryingly cloistered, even for a famously cloistered institution… today’s justices filter out anything that might challenge their perspectives. Antonin Scalia won’t read newspapers that conflict with his views and claims to often get very little from amicus briefs. John Roberts has said that he doesn’t believe that most law-review articles—where legal scholars advance new thinking on contemporary problems—are relevant to the justices’ work. Ruth Bader Ginsburg, Scalia’s opera-going buddy, increasingly seems to revel in, rather than downplay, her status as a liberal icon. Kennedy spends recesses guest-teaching law school courses in Salzburg.”

  Are you getting the picture yet?

  The members of the Supreme Court are part of a ruling aristocracy composed of men and women who primarily come from privileged backgrounds and who have a vested interest in maintaining the status quo.

  These justices, all of whom are millionaires in their own rights, circulate among an elite, privileged class of individuals, attending exclusive events at private resorts orchestrated by billionaire oil barons, traveling on the private jets of billionaires, and delivering paid speeches in far-flung locales such as Berlin, London and Zurich.

  When you’re cocooned within the rarefied, elitist circles in which most of the judiciary operate, it can be difficult to see the humanity behind the facts of a case, let alone identify with the terror and uncertainty that most people feel when heavily armed government agents invade their homes, or subject them to a virtual strip search, or taser them into submission.

  If you’ve never had to worry about police erroneously crashing through your door in the dead of night, then it might not be a hardship to rule as the Court did in Kentucky v. King that police should have greater leeway to break into homes or apartments without a warrant.

  If you have no fear of ever being strip searched yourself, it would be easy to suggest as the Court did in Florence v. Burlington that it’s more important to make life easier for overworked jail officials than protect Americans from debasing strip searches.

  And if you have never had to submit to anyone else’s authority—especially a militarized police officer with no knowledge of the Constitution’s prohibitions against excessive force, warrantless searches and illegal seizures, then you would understandably give police the benefit of the doubt as the Court did in Brooks v. City of Seattle, when they let stand a ruling that police officers who had clearly used excessive force when they repeatedly tasered a pregnant woman during a routine traffic stop were granted immunity from prosecution.

  Likewise, if you’re not able to understand what it’s like to be one of the “little guys,” afraid to lose your home because some local government wants to commandeer it and sell it to a larger developer for profit, it would be relatively easy to rule, as the Supreme Court did in Kelo v. New London, that the government is within its right to do so.

  Now do you understand why the Supreme Court’s decisions in recent years, which have run the gamut from suppressing free speech activities and justifying suspicionless strip searches to warrantless home invasions and conferring constitutional rights on corporations, while denying them to citizens, have been characterized most often by an abject deference to government authority, military and corporate interests?

  They no longer work for us. They no longer represent us. They can no longer relate to our suffering.

  In the same way that the Legislative Branch, having been co-opted by lobbyists, special interests, and the corporate elite, has ceased to function as a vital check on abuses by the other two branches of government, the Judicial Branch has also become part of the same self-serving bureaucracy.

  Sound judgment, compassion and justice have taken a back seat to legalism, statism and elitism.

  Preserving the rights of the people has been deprioritized and made to play second fiddle to both governmental and corporate interests.

  In the case of the People vs. the Police State, the ruling is 9-0 against us.

  So where does that leave us?

  The Supreme Court of old is gone, if not for good then at least for now.

  It will be a long time before we have another court such as the Warren Court (1953-1969), when Earl Warren served alongside such luminaries as William J. Brennan, Jr., William O. Douglas, Hugo Black, Felix Frankfurter and Thurgood Marshall.

  The Warren Court handed down rulings that were instrumental in shoring up critical legal safeguards against government abuse and discrimination. Without the Warren Court, there would be no Miranda warnings, no desegregation of the schools and no civil rights protections for indigents.

  Yet more than any single ruling, what Warren and his colleagues did best was embody what the Supreme Court should always be—an institution established to intervene and protect the people against the government and its agents when they overstep their bounds.

  That is no longer the case.

  We can no longer depend on the federal courts to protect us against the government. They are the government.

  Yet as is the case with most things, the solution is far simpler and at the same time more complicated than space allows, but it starts with local action—local change—and local justice. If you want a revolution, start small, in your own backyard, and the impact will trickle up.

  If you don’t like the way justice is being meted out in America, then start demanding justice in your own hometown, before your local judges. Serve on juries, nullify laws that are egregious, picket in front of the courthouse, vote out judges (and prosecutors) who aren’t practicing what the Constitution preaches, encourage your local newspapers to report on cases happening in your town, educate yourself about your rights, and make sure your local judges understand that they work for you and are not to be extensions of the police, prosecutors and politicians.

  This is the only way we will ever have any hope of pushing back against the police state.

  

  

  

  

  

• Gov Officials Admit Turkey Has REPEATEDLY Carried Out False Flag Terror

  Terror attacks have repeatedly rocked Turkey over the last year.

  The government has blamed ISIS and Kurds for the attacks … and is about to use this "justification" to launch troops into Syria.

  But there is an alternative explanation.  Specifically, government officials have admitted that Turkey has repeatedly carried out false flag attacks.

  For example:

  (1) The Turkish Prime Minister admitted that the Turkish government carried out the 1955 bombing on a Turkish consulate in Greece – also damaging the nearby birthplace of the founder of modern Turkey – and blamed it on Greece, for the purpose of inciting and justifying anti-Greek violence.

  (2) The former Italian Prime Minister, an Italian judge, and the former head of Italian counterintelligence admit that NATO, with the help of the Pentagon and CIA, carried out terror bombings in Italy and other European countries in the 1950s and blamed the communists, in order to rally people’s support for their governments in Europe in their fight against communism. As one participant in this formerly-secret program stated: “You had to attack civilians, people, women, children, innocent people, unknown people far removed from any political game. The reason was quite simple. They were supposed to force these people, the Italian public, to turn to the state to ask for greater security” (and see this) (Italy and other European countries subject to the terror campaign had joined NATO before the bombings occurred). And watch this BBC special.

  Turkish false flag attacks carried out pursuant to this program include – by way of example only:

  • The murder of the Turkish Prime Minister (1960)

  • Terror attacks in Turkey kill hundreds (1971)

  • Shootings in Istanbul, Turkey (1977)

  (3) A top Turkish general admitted that Turkish forces burned down a mosque on Cyprus in the 1970s and blamed it on their enemy. He explained: “In Special War, certain acts of sabotage are staged and blamed on the enemy to increase public resistance. We did this on Cyprus; we even burnt down a mosque.” In response to the surprised correspondent’s incredulous look the general said, “I am giving an example”.

  (4) High-level American sources admitted that the Turkish government – a fellow NATO country – carried out the chemical weapons attacks blamed on the Syrian government; and high-ranking Turkish government admitted on tape plans to carry out attacks and blame it on the Syrian government.

  Two members of the Turkish parliament stated:

  Sarin was sent to Syria from Turkey via several businessmen.

   

  ***

   

  The purpose of the attack was allegedly to provoke a US military operation in Syria which would topple the Assad regime …

  Pulitzer-prize winning investigative reporter Seymour Hersh – who uncovered the Iraq prison torture scandal and the Mai Lai massacre in Vietnam  – previously reported that high-level American sources tell him that the Turkish government carried out the chemical weapons attacks blamed on the Syrian government.

  As Hersh noted:

  ‘We knew there were some in the Turkish government,’ a former senior US intelligence official, who has access to current intelligence, told me, ‘who believed they could get Assad’s nuts in a vice by dabbling with a sarin attack inside Syria – and forcing Obama to make good on his red line threat.’

  Indeed, it’s long been known that sarin was coming through Turkey.

  (5) While Turkey pretends it’s fighting ISIS, Turkey is actually one of the main supporters of ISIS.

   

  

  

  

  

• Bullard Admits It's "Unwise" To Continue Rate Hikes, Says "If Needed" Will Do More QE

  For the latest confirmation of just how trapped in a corner of its own making the Fed now finds itself, look, or rather read no further than the presentation given moments ago by St. Louis Fed president James Bullard before the CFA Society in St. Louis which was circular, confusing, illogical, and thus a splendid summary of the Fed’s “thinking” from beginning to end.

  In it Bullard, who one month ago said he favors 4 rate hikes in 2016, said that it would now be “unwise” for the Fed to continue hiking interest rates given declining inflation expectations and recent equity market volatility, in comments that mark a stark change of direction for one of the Fed’s more hawkish inflation foes. 

  What he really meant is that having digested the Fed’s policy error which was the decision to hike rates in December in the middle of a global recession (as warned here quite explicitly) not only did global markets tank, but so did inflation expectations (the 5Y5y inflation outlook for the US was lower than that for Europe as recently as one week ago) with the market now pricing in not only a halt to rate hikes, but a return to ZIRP if not Negative rates in the U.S.

  And here comes the first confirmation of just how confused the Fed is:

  • BULLARD SAYS FED HAD GOOD REASONS TO HIKE IN DECEMBER AND DOES  NOT CONSIDER THE MOVE A MISTAKE

  Yes, the Fed it hiked: and the hike itself led to the collapse in not only inflation expectations but markets, and the latest devaluation of the Yuan. But one clearly can not be a Fed economist to realize all these very simple things.

  The ironies continues: Bullard, who for much of last year argued for an earlier rate hike, said he now feels key assumptions supporting higher rates have been undermined.

  Inflation expectations have fallen “too far for comfort,” making it more probable inflation itself will fall and continue to miss the Fed’s 2 percent target, Bullard said in remarks prepared for delivery to a gathering of financial analysts.

  “I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations,” Bullard said. In addition, declining equity prices and other tightened financial conditions have made dangerous asset bubbles “less of a concern over the medium term.”

  As a result, it would be “unwise” for the Fed to continue hiking interest rates given declining inflation expectations and recent equity market volatility.

  And just like that, Bullard admits that just like all throughout the 2009-2015 period, the Fed remains hostage to the market’s every whim.

  Then there was the topic of bubbles, which was mentioned on at least 8 separate occasions in his presentation. His point here was simple: at 2100, the S&P is too high and so the Fed was justified to hike; at 1900 the S&P is too low and the bubbles have popped. It appears that for the Fed, the Fed balance sheet implied fair value of 2,000 for the S&P is the perfect sweet spot of “fair value”. 

  This lunacy is best summarized by the following tweet:

  Bullard says one reason for hiking was to prevent bubbles. Then after they hike and stocks fall he says they should pause hiking. Circular?

  — GreekFire23 (@GreekFire23) February 18, 2016

  Here is one of the Fed’s biggest fake hawks justifying the need for a full Fed relent, and halting the rate hike cycle until risk asset prices increase:

  • BULLARD:TIPS SPREADS DOWN 100 BP; WANT TO SEE COME BACK UP

  But what about the Fed’s own inflation survey which suggest far higher inflation expectation?

  • BULLARD:DON’T TRUST SURVEY MEASURES OF INFL EXPCNS; TOO STATIC

  Translation: these aren’t influenced by the S&P500 so ignore them.

  Another question: what if the market is simply reflecting the slide of the world into another recession?

  • BULLARD: DON’T THINK GLOBAL MKT SELL-OFF PREDICTING RECESSION

  Oh ok. But what if it is?

  • BULLARD: PLENTY OF CAPACITY TO EASE IF NEED TO

  Yeah, 25 basis points.

  But the punchline, and why tonight’s speech was a rerun of the first Bullard moment from October 15, 2014 when the market soared after Bullard hinted at QE4 was the following:

  • BULLARD: MOST NATURAL OPTION IF NEED WOULD BE FURTHER Q.E.

  And there it is: the first admission that the Fed is not only contemplating NIRP – in the middle of a rate-hike cycle no less – but also QE.

  What should be most troubling for the Fed is that while any other time a Fed hint of more QE would have sent futures soaring, that this time nothing is happening as a result of the “second Bullard moment” is the most disturbing sign that not only can the Fed can no longer jawbone the market higher, even with the most nonsensical statements and hidden promises, but that the Fed is on the verge of losing control of the market.

  For those who wish to waste 5 minutes of their life, his presentation is below (pdf)
  

  

  

  

  

  

• How Government Buys Your Support

  Submitted by James Brovard via The Mises Institute,

  In Iraq and Afghanistan, US military officers routinely handed bundles of cash to local residents to buy influence and undermine resistance to the American occupation. Such payments came in especially handy after US troops inadvertently killed innocent civilians or sheep. Billions of dollars were shoveled out with little or no oversight as part of the Pentagon’s “Money as a Weapon System” program.

  In the same way, politicians have long relied on money as a weapon system to buy votes or to undermine resistance to Washington. Presidents and congressmen are not carrying out a formal counterinsurgency against the American people. But they realize that addicting citizens to government handouts is the easiest way to breed mass docility and stretch their power.

  Politicians are dividing Americans into two classes — those who work for a living and those who vote for a living. Federal food programs are now feeding more than 100 million Americans. Since 1983, the number of people receiving aid from the federal government has more than doubled — rising from 66 million to 153 million people. The number of people tapping means-tested handout programs has soared from 42 million to 109 million. Dependency has skyrocketed during an era of relative prosperity.

  In the same way that King Henry VIII cemented his power by distributing seized monasteries to his supporters in the early 1500s, contemporary politicians buttress their power by showering hundreds of billions of dollars on likely voters.

  Like medieval kings who distributed land to any favored lackey, today’s politicians feel entitled to redistribute income to any group they please. Nowadays, there is no property title half as sacrosanct as a politician’s decree that some group deserves more handouts. But every new benefit program increases political control over recipients and over the people forced to finance the benefits.

  Handouts provide cheap halos for politicians. Some people view government handouts as if they are nothing more than good intentions made manifest. But every government aid intervention shifts the incentives on how millions of people live. Federal student aid drove up college tuition which is helping spawn demands for federally-paid free tuition for all students. Medicaid and Medicare roiled the health care system and sparked perpetual inflation that spurs demands for nationalized health care. ObamaCare is spawning millions of new dependents who will view politicians as saviors in the coming years.

  Politicians and bureaucrats strive to undermine traditional American virtues and maximize the number of people on the dole. The Agriculture Department is financing propaganda recruiting programs for food stamps. Recent reforms in most states allow people to snare food stamps merely by making a phone call or filling out an online application. That is far less bothersome than going to a job interview.

  The Obama administration claims that the surge of food stamp dependency is making America prosperous because each dollar given in food stamps supposedly generates $1.84 in economic activity. If that was true, then government could make us all rich by giving food stamps to everyone. In reality, handouts are merely political multipliers.

  Good faith government handouts are almost as rare as good faith wars. The welfare state buttresses itself with an array of statistical sleights intended to make citizens appear worse off than they are. USDA conducts an annual “food security” survey whose results are widely reported (including by Obama) as a proxy for the number of hungry Americans. If someone feared running out of food on a single day (but didn’t run out), that is an indicator of being “food insecure” for the entire year. If someone craved organic kale but could only afford conventional kale, that is another “food insecure” indicator. However, families receiving food stamps are over 50 percent more likely to be ”food insecure” than similar low-income households not on food stamps, according to a analysis. And “Food insecurity” was far more widespread in 2013 (14.3 percent of all households) than in 2007 (11.1 percent) even though the number of food-stamp recipients rose from 26 million to 47 million in the same period.

  H.L. Mencken quipped that “every election is a sort of advanced auction of stolen goods.” The more politicians promise to some people, the more they entitle themselves to seize from everyone else. The federal government poached more than $3 trillion in taxes last year — largely to bankroll payments and services to its dependents.

  The more people who depend on Washington, the more difficult it becomes to leash politicians. For scores of millions of voters, the biggest peril from Washington is that politicians may curtail their handouts. The more people who receive government aid, the less attention will likely be paid to government abuses.

  Handouts tamper with elections as effectively as passing out hundred dollar bills at the polling booth. Unfortunately, using tax dollars to buy reelection is perfectly legal under federal campaign finance rules. And as long as government dependents are political assets, it is absurd to expect politicians to make reasonable or fair decisions on who gets what. Ironically, some of the politicians who want to effectively make work optional also want to make voting mandatory.

  Politicians have a long history of pauperizing the public to perpetuate their power. Plutarch observed of the dying days of the Roman Republic, “The people were at that time extremely corrupted by the gifts of those who sought office, and most made a constant trade of selling their voices.” Montesquieu warned in 1748: “It is impossible to make great largesses to the people without great extortion: and to compass this, the state must be subverted. The greater the advantages citizens seem to derive from their liberty [of voting], the nearer they approach towards the critical moment of losing it.”

  Politicians cannot undermine self-reliance without subverting self-government. The ultimate victim of handouts is democracy itself. The more important entitlement reform is to prohibit politicians from buying one person’s vote with another person’s paycheck.

  

  

  

  

  

• Venezuela Devalues Currency By 37% As Maduro Announces 62-Fold Increase In Gasoline Prices

  Maybe because between the specter of defaulting in under three months, the threat of handing over its gold to Deutsche Bank, or the reality of rampant hyperinflation and a collapsing society, the already crushed population of Venezuela did not have enough things to worry about, moments ago Venezuela’s Nicolas Maduro unveiled a double whammy of “shock and awe” when the socialist president not only announced the latest devaluation of the country’s official currency, but also presented his countrymen with the first gasoline price increase since 1996.

  These moves represent the latest attempt to stem a widening economic crisis, though critics of the socialist leader quickly dismissed the moves as insufficient.

  On the devaluation side, the latest measure of desperation will lower the strongest official exchange rate by 37% to 10 bolivars per dollar from 6.3, and streamline the previous three-tiered system into a dual exchange rate mechanism. The weaker of the two rates will be a “free float” based on an existing system that currently sells dollars at around 200 bolivars, Maduro said.

  As Reuters reports, critics immediately questioned the latter claim, noting that the government has repeatedly announced “free-floating” systems that withered away precisely because authorities never allowed them to be determined by demand.

  Meanwhile, Venezuela’s true “free floating”, market-clearing currency, the black-market “dolar today” recently plunged to over 1,000 per dollar, and was at 1,045.90 as of today. It is this currency that Maduro has sought to eliminate by actually suing the website that reports what it is on a daily basis.

  

   

  That was the largely irrelevant awe, especially since virtually nobody transacts at the official exchange rate which is over 100 times stronger than Venezuela’s true currency level.

  As for the shock, it came in the form of 62-fold increase in the price of 95-octane gasoline to 6 bolivars/liter.

  The price of premium gasoline will rise by 1,329 percent, but fuel is so heavily subsidized that fueling a small car will still cost about half the price of a soft drink, or about $0.23 based on the black market exchange rate. 91-octane gasoline will cost 1 bolivar per liter

  Putting these prices in perspective for western readers should result in laughter: the new price for 95-octane is equivalent to $0.11/gallon using weakest official Simadi FX rate of about 203 VEF/USD, and 5 times less using the black market FX rate. The price previously was 0.097 bolivar/liter or about one-fifth of a U.S. cent per gallon.

  And while the price is indeed laughable to western readers, price increases such as this one are all too tragic to the local population which is paid in local currency terms, and for whom this is merely the latest checkmark on the hyperinflationary wall.

  Maduro’s attempt to make the price increase more palatable failed: “The time has come for a system that guarantees access to oil products but that covers the cost PDVSA pays to produce it,” Maduro says during a national TV broadcast. “Venezuela has the cheapest gasoline in the world. The cost is almost nothing,” Maduro said before announcing new price.

  But if it’s almost nothing then why do it, aside from antagonizing your already miserable people?

  The reason is that the measures are meant to help shore up the OPEC nation’s finances as plummeting oil prices and a collapsing state-led economic model have left the country with a severe recession, triple-digit inflation and chronic product shortages.

  “This is a necessary measure, a necessary action to balance things, I take responsibility for it,” Maduro said, in reference to the fuel hike during a combative four-hour speech in which he insulted opposition leaders and occasionally used foul language.

  The reforms risk fueling triple-digit inflation at a time when millions are struggling to make ends meet, and comes two months after the ruling Socialist Party suffered a blistering defeat in parliamentary elections due to anger over the crisis.

  The package will likely be seen by Wall St. investors, who are increasingly concerned about a potential default, as mildly positive but still vastly insufficient to help Venezuela make some $10 billion in debt payments amid a major cash crunch.

  “Bottom line is no change to cashflow for this year and hefty year end debt payments,” wrote Siobhan Morden of Nomura in an email.

  “The devaluation from 6.3 to 10 will not have a relevant impact,” wrote economist and pollster Luis Vicente Leon on Twitter. “With respect to the gasoline, the only way to consolidate is to adjust (the price) regularly, otherwise it will be pulverized by inflation.”

  Critics say the only solution to Venezuela’s economic problems is to entirely dismantle the 13-year-old currency system created during the government of late socialist leader Hugo Chavez.

  Which will happen, but not before Maduro first sells all the country’s gold, and then proceeds to obliterate the domestic economy, formerly known as the “socialist paradise” of Latin America.

  We hope Bernie Sanders is paying close attention.

  

  

  

  

  

• ISIS Stops Handing Out Snickers Bars, Gatorade As Cash Crunch Deepens

  Late last month, we reported that ISIS has cut its fighters’ salaries in half due to “exceptional circumstances the caliphate is facing.”

  Those “exceptional circumstances” include Russia’s unrelenting aerial campaign against the group’s illicit oil trafficking business in Syria. The US-led “coalition” likes to take credit for helping to cripple the oil trade, but in reality it was Vladimir Putin (and Zero Hedge) that put the issue in the spotlight in November.

  After Putin’s comments at the G20 summit in Antalya and the subsequent aggressive push by the Russian air force to disable the group’s oil production and transport capabilities, the US was effectively forced to join the party. Asked why The Pentagon hadn’t hit ISIS oil trucks during the 14 months the US has supposedly been bombing the group, Washington responded by claiming that America didn’t want to risk collateral damage. In other words, Washington’s excuse for not targeting Islamic State’s $450 million/year oil trade is that the US was worried about a few truck drivers.

  In any event, the group’s ability to fund its activities through the sale of stolen oil has been curtailed and it will be months (at least) before that money can be recouped through the capture of Libyan crude. That means less money for fighters and civil servants.

  And it also means no more Gatorade.

  And no more Snickers bars.

  “The extremists who once bragged about minting their own currency are having a hard time meeting expenses, thanks to coalition airstrikes and other measures that have eroded millions from their finances since last fall,” AP reports. “Having built up loyalty among militants with good salaries and honeymoon and baby bonuses, the group has stopped providing even the smaller perks: free energy drinks and Snickers bars.”

  

  Yes, no more damn Snickers. And when it comes to taxes and utility bills, it’s now “dollars only.” Here’s AP again:

  Within the last two weeks, the extremist group started accepting only dollars for “tax” payments, water and electric bills, according to the Raqqa activist, who asked to be identified by his nom de guerre Abu Ahmad for his safety. “Everything is paid in dollars,” he said. His account was bolstered by another ex-Raqqa resident, who, like Ahmad, also relies on communications with a network of family and acquaintances still in the city.

  That’s exceptionally ironic because it was just last August when ISIS released a propaganda video announcing the return on the gold dinar which the group said was set to replace a worthless “piece of paper called the Federal Reserve dollar note.” Back to AP:

  “Circumstances include the dramatic drop in global prices for oil — once a key source of income — airstrikes that have targeted cash stores and oil infrastructure, supply line cuts, and crucially, the Iraqi government’s decision to stop paying civil servants in territory controlled by the extremists.

   

  A former Raqqa resident now living in Beirut said Syrians abroad are sending remittances in dollars to cover skyrocketing prices for vegetables and sugar. The resident, whose wife and baby still live in the city, did not want his name used for their safety. One of the other ex-residents, now living in Gaziantep, Turkey, said the road to Mosul was cut off late last year, and prices have risen swiftly — gas is up 25 percent, meat up nearly 70 percent, and sugar prices have doubled.

   

  In Iraq, where Islamic State has slowly been losing ground over the past year, the Iraqi government in September cut off salaries to government workers within territory controlled by the extremists, after months of wavering about the humanitarian costs paid by those trapped in the region. Iraqi officials estimate that Islamic State taxed the salaries at rates ranging from 20 to 50 percent, and analysts and the government now estimate a loss of $10 million minimum each month.

   

  In the Iraqi city of Fallujah, fighters who once made $400 a month aren’t being paid at all and their food rations have been cut to two meals a day, according to a resident. The account of the resident, who spoke on condition of anonymity for fear of death at the hands of extremists, was supported by that of another family trapped in Fallujah that said inhabitants can only leave the city if they pay $1,000 — a sum well beyond the means of most in the Sunni-majority city that was the first in Iraq to fall to Islamic State in 2014.

  IS is also allowing Fallujah residents to pay $500 for the release of a detainee, the family in Fallujah told the AP, saying that they believed the new policy was put in place to help the group raise money — a system akin to bail.

   

  Mosul residents contacted by AP say IS has begun fining citizens who do not adhere to its strict dress code, rather than flogging them as before. The residents say they believe this is in response to financial problems in part because the group has already confiscated anything valuable, namely cars and other goods that are later resold in Syria.

  As an aside, the Assad government still pays the salaries of civil servants in Raqqa. Those salaries are likely also taxed at high rates in order to line the pockets of top ISIS officials and, ironically, to continue the battle to destabilize Syria. 

  In any event, one important thing to note here is that to the extent ISIS is running out of cash, it isn’t a consequence of one airstrike on a Mosul cash center as AP and other Western media would have you believe. We’re talking about an organization that brings in a billion dollars a year here, so destroying a few million in hard currency isn’t going to make a difference. 

  This is a direct result of Russia’s move to decimate the oil trafficking business and that includes the PR effort to put Turkey’s role in the international spotlight. 

  Going forward, the big question is this: to what extent will ISIS be able to plug the funding gaps by commandeering assets in Libya, where the group isn’t subject to Russian airstrikes and where government (to the extent there is a government) forces aren’t backed by a major state actor like Iran? 

  Or perhaps the better question is this: how long before Libya becomes yet another theatre in World War III?

  *  *  *

  For those who might have missed it, here’s the actual ISIS document announcing the pay cuts:

  

  Islamic State

  Bayt Mal al-Muslimeen

  Wilayat al-Raqqa

  Decision no.: n/a

  Month of Safr 1437 AH [c. November-December 2015]

  In the name of God, the Compassionate, the Merciful

  God Almighty has said: “Go forth, lightly or heavily armed. And wage jihad with your wealth and souls in the path of God. That is best for you if you know” (al-Tawba 41) [Qur’an 9:41]. And on the authority of Anas (may God be pleased with him): that the Prophet (SAWS) said: “Wage jihad against the mushrikeen with your wealth, souls & tongues”- Musnad Ahmad: Musnad Anas Malek (11798).

  Jihad of wealth has been mentioned with jihad of soul in the Qur’an in ten cases, and in nine of those cases jihad of wealth has been presented beforehand over jihad of the soul, and only in one case has jihad of the soul been presented beforehand over jihad of wealth. And on the authority of Omar bin al-Khattab (may God be pleased with him): “The Messenger of God (SAWS) ordered us to give charity and that coincided with the time I had some wealth. So I said: ‘Today I will outdo Abu Bakr, if ever I have outdone him.’ So I came with half of my wealth, and so the Messenger of God (SAWS) said: ‘What have you left for your family?’ I said: ‘The same amount.’ And Abu Bakr came with all he had, so he said: ‘Oh Abu Bakr, what have you left for your family?’ He said: ‘I have left for them God and His Messenger.’ I said: ‘By God, I can never outdo him in anything.'” (muttafiq alayhi).

  So on account of the exceptional circumstances the Islamic State is facing, it has been decided to reduce the salaries that are paid to all mujahideen by half, and it is not allowed for anyone to be exempted from this decision, whatever his position. Let it be known that work will continue to distribute provisions twice every month as usual.

  And God is the guarantor of success.

  

  

  

  

  

• China Food Prices Soar Most Since 2013 As Producer Prices Hit 47th Straight Month Of Deflation

  Another month and another massive deflationary print for Chinese Producer Prices. Year-over-year, PPI dropped 5.3% ('better' than the 5.3% drop expected and the 5.9% plunge last month) making this the 47th month in a row of deflation with mining's collapse picking up again to -19.8% YoY. On th emore worrisome side, CPI rose 1.8% YoY, below expectations of +1.9% but still the hottest consumer price rise since August (and this was amid the greatest credit binge in history) driven by the biggest jump in food prices since 2013.

   

  47th months and counting of PPI deflation… (all that stimulus is not helping)

  

   

  But it is Consumer Prices that are more worrisome for the "gimme moar easing" brigade as the headline CPI hit 1.8% YoY – th emost since August, driven by a 4.1% surge in food costs – the most since Dec 2013…

  

   

  And the blame for missing expectations – well they learned that from the Americans…

  • *CHINA M/M CPI AFFECTED BY COLD WEATHER, CHINESE NEW YEAR

  The month-on-month rise in CPI was affected by cold weather which lead to a rise in vegetable and fruit prices, as well as a pork price increase over the Lunar New Year holiday, the National Bureau of Statistics said in statement.

  So to summarize, apart from New Years, Weather, and Pork prices, amid the biggest credit binge in recorded history (China January TSF rose half a trillion dollars), PPI continued to limp towards its deflationary hell and PPI missed expectations.. The trouble is of course that with protests already seen in the streets, social unrest will escalate dramatically if food prices start to soar even more.

  

  

  

  

  

• 9 Searing Images From Today's Deadly "Terrorist" Attack In Turkish Capital

  Earlier today, a massive explosion shook the Turkish capital of Ankara, where a vehicle packed with explosives was detonated while military buses were passing by. 

  It was “an act of terrorism,” Deputy Prime Minister Bekir Bozdag said. “We reaffirm our strong partnership with our NATO ally Turkey in combating the shared threat of terrorism attacks,” US State Department spokesperson Mark Toner proclaimed.

  

  “The attack targeted a shuttle bus carrying military personnel, and there were several other military vehicles nearby – all of which were waiting at the traffic lights. Most of the casualties are believed to be soldiers,” BBC reports, adding that “the Turkish army strongly condemned the attack and called it ‘a treacherous terror act'”. 

  Right. A “treacherous terror act” that’s sure to be trotted out as an excuse for an invasion of Syria where Kurdish forces are looking to close the Azaz corrider and cut off Sunni rebels from their supply lines to Turkey. 

  Ankara explosion: Turkish soldiers targeted, PKK or ISIS main suspects. If PKK, Turkish retaliation in Kurdish controlled Syria may follow.

  — Jonathan Rugman (@jrug) February 17, 2016

  Or, as we put it moments after the blast: “Expect this to be pinned on either ISIS or the PKK. If it’s the latter, Ankara will once again claim that the group is working in concert with the YPG and that will be all the evidence Erdogan needs to march across the border.”

  While we wait to see whether this will indeed serve as the excuse Erdogan needs to send troops into Syria, we bring you the following images from the site of the deadly attack which killed “at least” 28 people. 

  Via Reuters

  

  

  

  

  

  

  

  

  
  

  

  

  

  

• 21 New Numbers That Show That The Global Economy Is Absolutely Imploding

  Submitted by Michael Snyder via The Economic Collapse blog,

  After a series of stunning declines through the month of January and the first half of February, global financial markets seem to have found a patch of relative stability at least for the moment.  But that does not mean that the crisis is over.

  On the contrary, all of the hard economic numbers that are coming in from around the world tell us that the global economy is coming apart at the seams.  This is especially true when you look at global trade numbers.  The amount of stuff that is being bought, sold and shipped around the planet is falling precipitously. 

  So don’t be fooled if stocks go up one day or down the next.  The truth is that we are in the early chapters of a brand new economic meltdown, and I believe that all of the signs indicate that it will continue to get worse in the months ahead.  The following are 21 new numbers that show that the global economy is absolutely imploding…

  #1 Chinese exports fell by 11.2 percent year over year in January.

  #2 Chinese imports were even worse in January.  On a year over year basis, they declined a whopping 18.8 percent.

  #3 It may be hard to believe, but Chinese imports have now plunged for 15 months in a row.

  #4 In India, exports were down 13.6 percent on a year over year basis in January.

  #5 In Japan, exports declined 8 percent in December on a year over year basis, while imports plummeted 18 percent.

  #6 For the sixth time in six years, Japanese GDP growth has gone negative.

  #7 In the United States, exports were down 7 percent on a year over year basis in December.

  #8 U.S. factory orders have fallen for 14 months in a row.

  #9 The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008.

  #10 This month the Baltic Dry Index fell below 300 for the first time ever.

  #11 It is now cheaper to rent a 1,100 foot merchant vessel than it is to rent a Ferrari.

  #12 Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January.

  #13 Due to a lack of demand for trucks, Daimler just laid off 1,250 U.S. workers.

  #14 Even though Saudi Arabia and Russia have agreed to freeze oil production at current levels, the price of U.S. oil has still fallen below 30 dollars a barrel.

  #15 It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy.

  #16 According to CNN, 67 oil and gas companies in the United States filed for bankruptcy during 2015.

  #17 The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

  #18 All over America, retail stores are shutting down at a stunning pace.  The following list of store closures comes from one of my previous articles…

  -Wal-Mart is closing 269 stores, including 154 inside the United States.

  -K-Mart is closing down more than two dozen stores over the next several months.

  -J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

  -Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

  -The Gap is in the process of closing 175 stores in North America.

  -Aeropostale is in the process of closing 84 stores all across America.

  -Finish Line has announced that 150 stores will be shutting down over the next few years.

  -Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

  #19 The price of gold is enjoying its best quarterly performance in 30 years.

  #20 Global stocks have fallen into bear market territory, which means that about one-fifth of all global stock market wealth has already been wiped out.

  #21 Unfortunately for global central banks, they have pretty much run out of ammunition.  Since March 2008, central banks have cut interest rates 637 times and they have purchased a staggering 12.3 trillion dollars worth of assets.  There is not much more that they can do, and now the next great crisis is upon us.

  Without any outside influences, the global economy and the global financial system will continue to rapidly fall apart.

  But if we do have a major “black swan event” take place, that could cause the bottom to fall out at any moment.

  In particular, I am deeply concerned about the possibility that World War III could be sparked in the Middle East.  In an article that I published earlier today entitled “Turkey Is Asking The United States To Take Part In A Ground Invasion Of Syria“, I included a quote from Turkish Foreign Minister Mevlut Cavusoglu that reveals just how eager Turkey and Saudi Arabia are for war to begin…

  “Some countries like us, Saudi Arabia and some other Western European countries have said that a ground operation is necessary,” Turkish Foreign Minister Mevlut Cavusoglu told Reuters in an interview.

   

  However, this kind of action could not be left to regional powers alone. “To expect this only from Saudi Arabia, Turkey and Qatar is neither right nor realistic. If such an operation is to take place, it has to be carried out jointly, like the (coalition) air strikes,” he said.

  The Turks and the Saudis very much want the United States to take a leading role in any ground invasion of Syria, but the Obama administration is not likely to do that.

  So we shall see if the Turks and the Saudis are willing to go ahead without us.  Let us hope that they do not decide to invade Syria, because that could start the biggest war in the Middle East that any of us have ever seen.

  Unfortunately, Turkey is already attacking.

  Turkey has been shelling Kurdish and Syrian military positions in northern Syria for four days in a row even though the Obama administration has been urging them to stop.

  The first month and a half of 2016 has already been quite chaotic, and the stage is set for global events to greatly accelerate during the months ahead.

  Sadly, the mainstream media in the United States is largely ignoring the preparations for a ground invasion of Syria, and they keep telling us that the global economy is going to be just fine, so most ordinary Americans are going to be absolutely blindsided by what is about to happen.

  

  

  

  

  

• Australia Stops "Cooking" Its Jobs Report And The Result Is A Disaster: Full-Time Jobs Plunge Most Since 2013

  One week ago, we were delighted to report that Australia admitted that its glorious, 6 and 8-sigma outlier job numbers from October and November, were nothing but a “technical issue” glitch, in other words, one big political lie.

  

   

  Specifically it was Treasury Secretary John Fraser, who admitted during testimony to parliamentary committee that jobs growth for the two months in question “may be overstated.”  What’s the reason? The same one the propaganda bureau always uses when its lies are exposed: “technical issues”, 

  There were some “technical issues” in October and November that may have made the employment figures “look a little bit better than otherwise would be the case,” he said. The technical issues relate to “rolling off” of participants in the labor survey.

   

  Australia’s economy added 55,000 jobs in October and a further 74,900 in November, before shedding 1,000 in December to produce the record quarterly gain. Questions regarding the accuracy of the data have been raised following acknowledgment by the statistics agency in 2014 of measurement challenges.

  In conclusion we asked “why the sudden admission it was all a lie? Simple: weakness in commodity prices “is far greater than people had been expecting,” Fraser said in earlier remarks to the panel. Australia is now “swimming against the tide” because of uncertainties in the global economy, he added.”

  What this really meant, as we translated, is that: “we need more easing, and to do that, the economy has to go from strong to crap.” And with the Australian economy suddenly desperate for lower rates from the RBA, one can ignore the propaganda lies, and focus once again on the far uglier truth.

  That “far uglier truth” was revealed moments ago, when not only was the “jobs miracle” of October and November buried for good…

  

   

  … but suddenly – as we predicted – the far uglier truth finally emerged, when Australia reported that not only did total jobs tumble by 7,900, far below the +13,000 forecast (down from the December’s 800 job decline)…

  

   

  … but the actual number of full-time jobs plunged by 40,600, the biggest monthly plunge since October 2013!

  

   

  The end result a sudden, and unexpected bounce in the unemployment rate from 5.80% to 6.00%, some 20 basis point above the consensus estimate.

  And judging by the corresponding tumble in the AUDUSD, suddenly the realization that the RBA – no longer able to delay reality – will be the next bank to ease as the Chinese deflationary tsunami proves to strong for anyone to resist.

  

  

  

  

  

  

• Housing 'Recovery' Hope Humbled As Billings & Purchases Plunge

  Following this morning's weak Starts and Permits data, even homebuilders are starting to lose faith in the recovery meme but there is a long way to go before that is priced in. Perhaps the follwoing two data points will help to wake up the rest of the investing public that all is not as well as hoped. For the 3rd week in a row mortgage applications for purchases slid (reflecting the 'now')…

  

   

  and even more worrying, Architecture Billings tumbled into contraction (below 50) throwing doubt on the imminent future as the inquiry index plunged from 60.5 to 55.3.

  

   

  Still, stocks are surging – led by homebuilders – so everything must be fine, right?

  

  

  

  

  

  

• "Bigger Than Watergate" – Hillary Clinton And The Syrian Bloodbath

  While we would be the first to admit that we disagree with Jeffrey Sachs on virtually every other issue, on the topic of Hillary Clinton, the ongoing Syria bloodbath which has come to define the geopolitical situation for the past 3 years, and how this is an event that would  “surely rival Watergate in shaking the foundations of the US establishment” if the truth were fully known, we agree 100 percent. 

  Hillary Clinton and the Syrian Bloodbath, by Jeffrey Sachs, originally posted on HuffPo

  In the Milwaukee debate, Hillary Clinton took pride in her role in a recent UN Security Council resolution on a Syrian ceasefire:

  But I would add this. You know, the Security Council finally got around to adopting a resolution. At the core of that resolution is an agreement I negotiated in June of 2012 in Geneva, which set forth a cease-fire and moving toward a political resolution, trying to bring the parties at stake in Syria together.

  This is the kind of compulsive misrepresentation that makes Clinton unfit to be President. Clinton’s role in Syria has been to help instigate and prolong the Syrian bloodbath, not to bring it to a close.

  In 2012, Clinton was the obstacle, not the solution, to a ceasefire being negotiated by UN Special Envoy Kofi Annan. It was US intransigence – Clinton’s intransigence – that led to the failure of Annan’s peace efforts in the spring of 2012, a point well known among diplomats. Despite Clinton’s insinuation in the Milwaukee debate, there was (of course) no 2012 ceasefire, only escalating carnage. Clinton bears heavy responsibility for that carnage, which has by now displaced more than 10 million Syrians and left more than 250,000 dead.

  As every knowledgeable observer understands, the Syrian War is not mostly about Bashar al-Assad, or even about Syria itself. It is mostly a proxy war, about Iran. And the bloodbath is doubly tragic and misguided for that reason.

  Saudi Arabia and Turkey, the leading Sunni powers in the Middle East, view Iran, the leading Shia power, as a regional rival for power and influence. Right-wing Israelis view Iran as an implacable foe that controls Hezbollah, a Shi’a militant group operating in Lebanon, a border state of Israel. Thus, Saudi Arabia, Turkey, and Israel have all clamored to remove Iran’s influence in Syria.

  This idea is incredibly naïve. Iran has been around as a regional power for a long time–in fact, for about 2,700 years. And Shia Islam is not going away. There is no way, and no reason, to “defeat” Iran. The regional powers need to forge a geopolitical equilibrium that recognizes the mutual and balancing roles of the Gulf Arabs, Turkey, and Iran. And Israeli right-wingers are naïve, and deeply ignorant of history, to regard Iran as their implacable foe, especially when that mistaken view pushes Israel to side with Sunni jihadists.

  Yet Clinton did not pursue that route. Instead she joined Saudi Arabia, Turkey, and right-wing Israelis to try to isolate, even defeat, Iran. In 2010, she supported secret negotiations between Israel and Syria to attempt to wrest Syria from Iran’s influence. Those talks failed. Then the CIA and Clinton pressed successfully for Plan B: to overthrow Assad.

  When the unrest of the Arab Spring broke out in early 2011, the CIA and the anti-Iran front of Israel, Saudi Arabia, and Turkey saw an opportunity to topple Assad quickly and thereby to gain a geopolitical victory. Clinton became the leading proponent of the CIA-led effort at Syrian regime change.

  In early 2011, Turkey and Saudi Arabia leveraged local protests against Assad to try to foment conditions for his ouster. By the spring of 2011, the CIA and the US allies were organizing an armed insurrection against the regime. On August 18, 2011, the US Government made public its position: “Assad must go.”

  Since then and until the recent fragile UN Security Council accord, the US has refused to agree to any ceasefire unless Assad is first deposed. The US policy–under Clinton and until recently–has been: regime change first, ceasefire after. After all, it’s only Syrians who are dying. Annan’s peace efforts were sunk by the United States’ unbending insistence that U.S.-led regime change must precede or at least accompany a ceasefire. As the Nation editors put it in August 2012:

  The US demand that Assad be removed and sanctions be imposed before negotiations could seriously begin, along with the refusal to include Iran in the process, doomed [Annan’s] mission.

  Clinton has been much more than a bit player in the Syrian crisis. Her diplomat Ambassador Christopher Stevens in Benghazi was killed as he was running a CIA operation to ship Libyan heavy weapons to Syria. Clinton herself took the lead role in organizing the so-called “Friends of Syria” to back the CIA-led insurgency.

  The U.S. policy was a massive, horrific failure. Assad did not go, and was not defeated. Russia came to his support. Iran came to his support. The mercenaries sent in to overthrow him were themselves radical jihadists with their own agendas. The chaos opened the way for the Islamic State, building on disaffected Iraqi Army leaders (deposed by the US in 2003), on captured U.S. weaponry, and on the considerable backing by Saudi funds. If the truth were fully known, the multiple scandals involved would surely rival Watergate in shaking the foundations of the US establishment.

  The hubris of the United States in this approach seems to know no bounds. The tactic of CIA-led regime change is so deeply enmeshed as a “normal” instrument of U.S. foreign policy that it is hardly noticed by the U.S. public or media. Overthrowing another government is against the U.N. charter and international law. But what are such niceties among friends?

  This instrument of U.S. foreign policy has not only been in stark violation of international law but has also been a massive and repeated failure. Rather than a single, quick, and decisive coup d’état resolving a US foreign policy problem, each CIA-led regime change has been, almost inevitably, a prelude to a bloodbath. How could it be otherwise? Other societies don’t like their countries to be manipulated by U.S. covert operations.

  Removing a leader, even if done “successfully,” doesn’t solve any underlying geopolitical problems, much less ecological, social, or economic ones. A coup d’etat invites a civil war, the kind that now wracks Afghanistan, Iraq, Libya, and Syria. It invites a hostile international response, such as Russia’s backing of its Syrian ally in the face of the CIA-led operations. The record of misery caused by covert CIA operations literally fills volumes at this point. What surprise, then, the Clinton acknowledges Henry Kissinger as a mentor and guide?

  And where is the establishment media in this debacle? The New York Times finally covered a bit of this story last month in describing the CIA-Saudi connection, in which Saudi funds are used to pay for CIA operations in order to make an end-run around Congress and the American people. The story ran once and was dropped. Yet the Saudi funding of CIA operations is the same basic tactic used by Ronald Reagan and Oliver North in the Iran-Contra scandal of the 1980s (with Iranian arms sales used to fund CIA-led covert operations in Central America without consent or oversight by the American people).

  Clinton herself has never shown the least reservation or scruples in deploying this instrument of U.S. foreign policy. Her record of avid support for US-led regime change includes (but is not limited to) the US bombing of Belgrade in 1999, the invasion of Afghanistan in 2001, the Iraq War in 2003, the Honduran coup in 2009, the killing of Libya’s Muammar Qaddafi in 2011, and the CIA-coordinated insurrection against Assad from 2011 until today.

  It takes great presidential leadership to resist CIA misadventures. Presidents get along by going along with arms contractors, generals, and CIA operatives. They thereby also protect themselves from political attack by hardline right-wingers. They succeed by exulting in U.S. military might, not restraining it. Many historians believe that JFK was assassinated as a result of his peace overtures to the Soviet Union, overture he made against the objections of hardline rightwing opposition in the CIA and other parts of the U.S. government.

  Hillary Clinton has never shown an iota of bravery, or even of comprehension, in facing down the CIA. She has been the CIA’s relentless supporter, and has exulted in showing her toughness by supporting every one of its misguided operations. The failures, of course, are relentlessly hidden from view. Clinton is a danger to global peace. She has much to answer for regarding the disaster in Syria.

  

  

  

  

  

• Japanese Trade Data Collapses, Crushes "Devalue Our Way To Prosperity" Dreams

  Seriously – how many more times can a central bankers' policies be exposed for the total sham that they are?

  “The turmoil in global markets is making companies cautious about spending and also weakening global demand. That will be negative to Japanese exports,” Hiroaki Muto, chief economist at Tokai Tokyo Research Center in Tokyo, said before the trade report was released.

   

  “There will be no driver for Japan’s economy as domestic consumption may remain weak, and sluggish exports and production may weaken capital spending in the coming months.”

  Japanese trade data was just unleashed on the world… and it is abysmal.

  • *JAPAN JAN. EXPORTS FALL 12.9% Y/Y

  Notably worse than the expected 10.9% drop and the biggest YoY plunge since October 2009. This was driven by a collapse in exports to the most rapidly contracting marginal economy in the world: China. According to Bloomberg, "exports to China, Japan’s largest trading partner, were down almost 18 percent, driving an overall decline of nearly 13 percent in the value of overseas shipments in January from a year earlier. Imports dropped 18 percent, leaving a 645.9 billion yen ($5.7 billion) trade deficit, the Ministry of Finance said on Thursday."

  But we thought that the market had decided China was fine?

  Some more humor from Bloomberg:

  Falling exports compound poor sentiment in Japan, where wage gains have stagnated, consumer prices are barely rising and households are reluctant to spend. This year stocks have plunged and the yen has gained more than 5 percent against the dollar amid concerns over China’s slowdown and U.S. growth. This adds to worries about the seesawing nature of Japan’s economy between modest growth and contraction.

  Sarcasm aside, the chart below proves once and for all that the devaluation of the JPY did less-than-nothing to improve Japan's competitiveness…

  

   

  And then there is Imports – reflecting the "modest" improvement in the domestic economy…

  • *JAPAN JAN. IMPORTS FALL 18.0% Y/Y

  Nope – complete carnage!! The biggest YoY drop since october 2009…

  

   

  Is it any wonder Abe says no more stimulus and Kuroda did not unleash anymore QE – they know it's over and now it's desperation.

  We leave it to Alhambra's Jeff Snider to sum up… Japan is the very definition of insanity…

  GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling it a failure? In about six weeks, Kuroda’s massive “stimulus” will mark its third anniversary and the best that can be said of it is that GDP has gone nowhere. Two and three quarters years later, real GDP (SAAR) in the last three months of 2015 was the slightest bit higher than Q2 2013 when everyone was so sure “stimulus” was all so sure.

  

  The media provides all the evidence necessary as to why everything is so “unexpected.”

  The data suggest Japan’s economy is still plagued by the weakness of domestic demand as it enters a fourth year of record monetary stimulus, with wages not rising fast enough to persuade consumers to spend.

  There is no sign of a downward spiral in the economy but with the yen rising to trade at Y113.8 to the dollar in recent weeks, the figures put pressure on the Bank of Japan for even more monetary stimulus to encourage a strong round of wage rises this spring.

  While economists try to determine if technical definitions for recession have been met, the plain truth of QQE is that monetary “stimulus” put Japan into recession almost immediately and it has never left. The key for any recession definition are the words “significant” and “sustained.” In other words, it is a significant and sustained deviation from the prior or underlying growth trend. By Japan’s GDP figures alone, Japan is in a significant and sustained period of weakness or contraction even when compared to the unsatisfactory growth that prevailed before it.

  

  Since the first appearance of negative GDP in Q4 2013, long before the tax change, Japan’s average quarterly (SAAR) growth rate has been -0.07%. Period to QQE from just after the earthquake quarter, GDP averaged 1.74%. No matter how you present the GDP data, there was a significant change in economic growth dating to or close to QQE’s introduction. Since that burst of monetarism was enormous, just as policymakers had once claimed (curious, again, that commentary about QE in whatever form is derived by its tense; it will be powerful and effective vs. it was disappointing and needed more), that leaves little doubt as to the source of the economy’s digression from at least its prior trend, unacceptable as that might have been.

  

  The fact that Japanese households have borne the brunt of the disaster only confirms its negating nature. Prior to QQE, household spending and income had been better than the overall GDP figures; after QQE, that relative position has reversed and intensely so. Nobody would accuse the Japanese economy of being robust between the tsunami and the start of 2013, but at least for households there was steady growth without “inflation” and disorder. Japan was certainly in need of re-orientation and reform so that its system could finally become a full economy once again, but QQE was the exact opposite of what was required – especially since it was just amplifying what had already failed nine times (at least) before.

  

  The Bank of Japan and Abenomics in general put the Japanese economy into a recession from which it hasn’t yet recovered; nor are there any signs that it is even close to doing so. The conditioned response in the media and by economists is entirely the problem – it doesn’t take much to realize that “stimulus” created the recession, therefore more “stimulus” will likely only do the same.

  “Consumption was weak, even after taking out seasonal factors, as households tightened their purse strings,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “The downside risks to Japan’s economy are likely to increase as the yen’s gains may damp capital spending and exports, and private consumption also is looking weak. There’s no clear driver to support Japan’s economy.”

  That’s an astounding piece of commentary after nearly three years; to have “no clear driver to support Japan’s economy” is utterly damning. Monetarism doesn’t work, that much is inarguable no matter which data you use or how you use it. That it is directly harmful may be somewhat debatable, but that view is becoming less so with each passing quarter. Japanese households, in particular, were at least experiencing some steady growth prior and now they are most certainly not. Central bankers declare that the cost of implementing a full recovery, yet it is nowhere to be found even in overall GDP (which is the most generous account of any economy). After three years (let alone fifteen), there is no basis anymore for “stimulus.” None.

  Sure enough, stocks are rallying in the dismal news in anticipation of some more insanity from Kuroda…

  

  

  

  

  

  

• BREXIT Risk Spikes To Record High

  Amid today's summit and Cameron's looming pitch to The Brits, the market is starting to take the risk of UK's exit from the EU seriously…

  Various indicators across markets can be used as a 'sentiment' guide for fears (or hopes) about BREXIT, but, as MacroMan notes, perhaps the simplest and cleanest is the 3/6/12 month implied vol butterfly in GBP/USD, given that the referendum is widely expected for June, a little over four months from now.

  

   

  MacroMan continues,

  Simply put, the butterfly is more negative (i.e., pricing the average of 3 and 12 month vol under 6 month vol) than it has been in the 20 year history of the Bloomberg dataset.

   

  (Actually, there was a lower print on 9/11/01 , but Macro Man's taking it as read that ensuring valid closes for the cable vol curve wasn't a priority that day, so smoothed it out.)

   

  The only period that remotely comes close was, funny enough, just over a year ago, when Britain was looking at the possible prospect of a hung Parliament.

   

  One could easily argue that an existential issue such as Britain's membership of the EU should command a larger vol premium than a hung parliament.

  So – simply put – if you thought the market was shrugging off BREXIT fears, think again… as some 'markets' are growing very concerned

  

  

  

  

  

• Land Of The Debt Slave: Texas Man Arrested At Gunpoint For Not Paying $1500 Student Loan

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Laws are effective only to the extent they are enforced. A law on the books has little impact if prosecution is highly unlikely.

   

  The failure to punish big corporations or their executives when they break the law undermines the foundations of this great country: If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, then the promise of equal justice under the law has turned into a lie. The failure to prosecute big, visible crimes has a corrosive effect on the fabric of democracy and our shared belief that we are all equal in the eyes of the law.

   

  Under the current approach to enforcement, corporate criminals routinely escape meaningful prosecution for their misconduct. This is so despite the fact that the law is unambiguous: if a corporation has violated the law, individuals within the corporation must also have violated the law. If the corporation is subject to charges of wrongdoing, so are those in the corporation who planned, authorized or took the actions. But even in cases of flagrant corporate law breaking, federal law enforcement agencies – and particularly the Department of Justice (DOJ) – rarely seek prosecution of individuals. In fact, federal agencies rarely pursue convictions of either large corporations or their executives in a court of law. Instead, they agree to criminal and civil settlements with corporations that rarely require any admission of wrongdoing and they let the executives go free without any individual accountability.

   

  – From the post: Elizabeth Warren Releases Blistering Report on Corporate Criminality – Singles Out SEC Uselessness

  What a cute little Banana Republic this America has become. Our government can’t put a single bank executive in jail for destroying the global economy, but when a mere peasant is caught not paying back his student debt, a team of U.S. Marshals arrive at his door to arrest him at gunpoint.

  Land of the thief, home of the slave, indeed.

  Fox26 reports:

  Believe it or not, the US Marshals Service in Houston is arresting people for not paying their outstanding federal student loans.

  Paul Aker says he was arrested at his home last week for a $1500 federal student loan he received in 1987.

  He says seven deputy US Marshals showed up at his home with guns and took him to federal court where he had to sign a payment plan for the 29-year-old school loan.

   

  Congressman Gene Green says the federal government is now using private debt collectors to go after those who owe student loans.

   

  Green says as a result, those attorneys and debt collectors are getting judgements in federal court and asking judges to use the US Marshals Service to arrest those who have failed to pay their federal student loans.

   

  Our reliable source with the US Marshal in Houston say Aker isn’t the first and won’t be the last.

   

  They have to serve anywhere from 1200 to 1500 warrants to people who have failed to pay their federal student loans.

  Now here’s the most absurd part. Yahoo notes that:

  Unfortunately, it looks like it was a lapse in communication that landed Aker in handcuffs (to be clear, he did not spend time in jail — he was escorted by Marshals to court). And, to add insult to injury, he was ordered to pay more than $1,200 in fees back to the U.S. Marshals service for the cost of arresting him. 

  Yes, Federal US Marshals spent $1,200 arresting a guy for $1,500 in debt. Brilliant use of taxpayer funds. Yet somehow they still can’t find a single bank executive who did anything wrong.

  Watch the following clip for more information:

  Thanks for playin’ America.

  

  

  

  

  

• "Perma-bears" 2 – BofA Economist 0

  It was just last month when we checked in on BofA economist Ethan Harris who, in May of 2015 derided the “perma-bear” crowd for crowing about an abysmal Q1 GDP print.

  “Looking ahead, it is much too soon to declare victory, but we expect the data to improve in the months ahead as seasonal and other distortions fade,” Harris concluded, suggesting that if the double-adjusted data continued to “improve”, BofA’s economics team would be able to proclaim that the bears had been vanquished once and for all.

  8 months later, Harris admitted that “a series of shocks have undercut [his] optimism.” Those shocks are, i) slumping oil prices, ii) the demise of HY, iii) generally terrible news from the US industrial sector, and iv) market “moodiness” related to China and oil.

  Of course all of those factors were already at play at the beginning of last year. Saudi Arabia had already begun its war on the US shale space which would have been all the evidence you needed to predict both the collapse of oil prices and the turmoil in HY, it was already abundantly clear that US corporates were eschewing capex for buybacks, and if you didn’t see the writing on the wall in China by January of 2015, then you can’t really call yourself an economist.

  “Who could have possibly anticipated these ‘shocks’”?, we asked last month. “Oh yes, those pesky perma-bears, who actually looked at all economic indicators, not just the ones goalseeked to validate some initial (and erroneous) hypothesis,” we said, answering our own question as we are so very often forced to do.

  BofA went on to lower their 2016 GDP forecast from 2.3% to 2.1%.

  On Wednesday, Harris is back and although he’s doing his best to stay positive (bless his heart), he’s willing to admit that “recent market fragility” will likely force the Fed to lean more dovish and he also says “the stock market is pricing in a 50% or so probability of a recession.”

  Apparently, Harris is also “surprised” by the strength of the dollar (because who could have seen that coming given the epic diveregence in monetary policy between the Fed and other DM CBs) and the tightening in financial conditions. He also concedes that “Q4 GDP growth was particularly weak.” Here’s an excerpt from Harris’ latest note: 

  It has been an ugly start to the New Year: at Friday’s close, the S&P 500 was down 8.8% year to date (11.6% off its November high), 10-year treasury yields were down about 50bp ytd, and there had been a further widening in high yield spreads. Capital markets seem to be pricing in a 50% or higher probability of a US recession. For example, a simple probit model shows that the 6 month growth rate in the S&P500—falling by 8.8% from July to January — is signaling a 49% chance of a recession starting sometime in the next 12 months (Chart 3). Our rates team has developed an adjusted yield curve measure that signals a 68% probability of recession.

  

   

  But don’t worry, Harris believes the market as well as BofA’s rate team may be “peddling fiction.” Here’s why: 

  In our view, the weakness in 4Q GDP reflects both the erratic nature of recent GDP releases and some temporary factors holding down growth. The weakness in the second half of last year also reflects three partly temporary headwinds.  

   

  Inventories rose about $113bn in both 1Q and 2Q last year. That is about double the sustainable pace. With moderate sales growth, companies were forced to slow production to slow the accumulation. Investment has now slowed to $69bn, slicing 0.7pp and 0.5pp off of growth in the last two quarters. As a result, we believe the adjustment is largely over: we expect a 0.2pp drag from inventories in 1Q and no drag thereafter. A similar story applies for the collapse in the mining sector: the worst is behind us. The third, and most important, headwind is the strong dollar.  

  And while Harris doesn’t necessarily see the strong dollar problem as being “temporary” like the other headwinds facing the econony, he does say it’s important to remember that “the equity market is not the economy” (an effort to downplay the market’s pricing in of a looming recession).

  Harris is right. The equity market is not the economy. Although judging by the Fed’s new reaction function, we’re not sure Janet Yellen agrees.

  

  

  

  

  

  

• How Far Will The U.S. Go If Turkey Invades Syria?

  Submitted by Gregory Copley via OilPrice.com,

  The Government of Turkey has now put itself in a position whereby it must act rapidly and precipitously to avoid moving to an ultimately losing strategic position in the war against Syria, which could result in being forced back to fight a full-scale civil war to prevent the break-up of the State into at least two components, one being a new Kurdish state.

  Turkey’s leadership, in insisting – in 2011-12 – on sponsoring a proxy war to overthrow Syrian President Bashar al-Assad, has already led to a refugee crisis of irreversible strategic damage to Europe, but Turkish Presisdent Reçep Tayyip Erdogan, the Saudi Arabian military-political leadership, the U.S. Barack Obama administration, and the Qatari Emir now find themselves with nowhere to go except to escalate further in the hope that the Syrian revival, backed by Russia and Iran, will collapse.

  Clear indications are emerging in Washington, DC, that the Pentagon is preparing to support a direct military invasion of Syria by Turkish Armed Forces, despite the Munich accord in the week ending February 13, 2016, which was meant to bring about a ceasefire in Syrian fighting. US officials have been actively engaged with those of Turkey and possibly Saudi Arabia in the preparations for ground force attacks on Kurd-ish military formations inside northern Syria, and U.S. Air Force Fairchild A-10 strike aircraft have deployed over northern Syrian territory in early February.

  The planned intervention by Turkey (and possibly other powers, such as Saudi Arabia) is specifically not aimed at countering the activities of ISIS (asad-Dawlah al-Islamiyah  al-‘Iraq wash-Sham/Islamic State), but solely about countering the growing capability of Syrian- and Iraqi-based Kurdish fighters, and to offset the gains which Syrian Government forces, supported by Russian and Iranian/HizbAllah forces, made in and around Aleppo.

  The prospect of yet another abandonment of the Kurds is causing considerable division within some U.S. military and intelligence circles, but the fiction is that the Turkish battle is with ISIS.

  It is understood that the Turkish Government wishes to establish a cordon sanitaire inside Syria, along the Turkish border, to prevent the flow of Kurdish fighters from Syria into Turkey, where they are reportedly supporting the civil war which is now underway in the Kurdish areas of Turkey. General Adem Huduti, commander of the Second Turkish Army, based in Malatya, has primary ground force responsibility for the areas contiguous with Syria and Iraq, and was believed to be key to the operation, which could engage, initially, some 20,000 or so of the Second Army’s 100,000-man strength, supported by Turkish Army Avia-tion AH-64W helicopter gunships, and other airborne systems, and possibly Turkish Air Force fixed-wing ground attack support and fighter cover, to protect against Syrian and Russian Air Force fighters. At least two armored brigades, with modern main battle tanks, and two mechanized infantry brigades, would be deployed, based on current observations of forward deployments by the Second Army. They would be sup-ported by self-propelled 15mm artillery.

  The Obama Administration and the Government of Turkish President Erdoan and Prime Minister Ahmet Davutoglu appear to have calculated — probably correctly — that the Russian Government would not di-rectly interfere with the assault on Kurdish forces, the YPG [People's Protection Units (Kurdish: Yekîneyên Parastina Gel)] in a move designed to split those forces, driving to a depth of some 25 miles inside Syria.

  Meanwhile, it should be expected that a number of false-flag attacks would be mounted by U.S. and Turk-ish operators to give the impression that the Turkish incursion would be responding to humanitarian con-cerns. Questions, then, should be raised by reports of attacks on February 14-15, 2016, by aircraft against civilian hospital targets in Aleppo. False-flag attacks (ie: purporting to be from one side, but in reality by another) have been used consistently by Islamist forces since the Sarajevo attacks (blamed on the Serbs) in the 1990s, and through later conflicts.

  The proposed major military assault into Syria holds considerable risk for Turkey, not the least of that being a possible accidental escalation of hostilities with Russia, but it now seems unavoidable if Ankara is not to see a major disaster, not only wasting more than five years of intense effort to overthrow the Syrian Gov-ernment of President Bashar al-Assad, but also to avert the unfettered escalation of the Kurdish war to wrench a large part of Turkey away from Ankara to create a new Kurdish state which would link with Iraqi and Syrian Kurds. Already, Turkey has paid an enormous price in unanticipated consequences from its ef-fort to lead a coalition (Turkey, Saudi Arabia, Qatar, and the U.S.) into overthrowing Assad.

  The war has taken far longer than anticipated, and has cost Turkey all of its regional allies; it has also united the Kurds of Turkey, Iraq, and Syria into a desire to finally create their Kurdish state; it has generated a refugee flow from Syria and Iraq which is now beyond Ankara’s capacity to manage; and it has created a major rift between Turkey and the European Union, while costing Turkey most of its political support in Washington (except from the Obama White House and the State Dept.). Moreover, the escalation has led to the Russo-Turkish rift, in which Russian sanctions against Turkey are now starting to bite into an already fragile Turkish economy.

  At the same time, the Iranian Government feels that Iranian vital strategic interests have been directly challenged by Ankara, and that while Iran had few options but to trade through Turkey during the period of international sanctions, it now — with sanctions being lifted — no longer has to hold back so much in de-fending its interests against Turkish depredation.

  Senior levels of the U.S. Defense Dept., albeit impacted by consistent browbeating from the White House, have said repeatedly that there were no vital U.S. interests at stake which would warrant a major U.S. military intervention inside Syria, but no Defense official would countermand a direct order from the White House to undertake covert or support operations assisting the Turkish position. The White House and Ankara have been seeking triggers which would force the U.S. into a position where it would have to intervene directly.

  Russia is unlikely to provide that casus belli, largely because of the 1936 Montreux Convention could give Turkey the right to close the Bosphorous transit link between the Black Sea and the Mediterranean to Russian naval shipping in the event of a formal state of war between Turkey and Russia. Moscow has consist-ently refused to rise directly to Turkish military provocations. Rather, it has preferred to respond politically and economically.

  It has been obvious for some time to Russian, Kurdish, Iranian, and Syrian officials that Turkey would have to lash out to defend its position.

  As a result, all of those states in confrontation with Turkey have had time to begin bolstering their defenses in the area which Turkey intends to invade in Syria.

  Moreover, the reality is that Turkey now places itself in the position, de facto, of declaring war on Syria. This has a significant new element and catalyst:

  Turkey and its allies have been operating through a range of proxies, including ISIS, the al-Nusra Front, and so on to wage war on Syria. Thus, at least, Syrian forces would, in facing a conventional Turkish military invasion, legitimately be able to respond militarily, if they could gain the territorial foothold to do so. Thus the determination by Damascus and Moscow to regain as much territory in and around Aleppo as quickly as possible. This raises the question, however, of whether Turkey would use this as a pretext to attempt to engage NATO forces, or at least the forces of the US.

   

  NATO as a whole has been resisting Turkish overtures to join the conflict, or to allow Turkey to cite “Article Five” of the North Atlantic Treaty, stating that an attack on a NATO member is an attack on all of the alliance.

  But the Obama Administration, with less than a year to run on its term, is also throwing caution to the winds, and is empowered in this by the diversion of U.S. political attention on the November 2016 Presidential elections. President Obama hopes to move the U.S. into an irrevocable military action in Syria before the Washington political establishment can warn him off it. And he might succeed. But to what end? This has become an ideological commitment for the White House. The engagement by U.S. President William Clinton in fabricating a casus belli for intervention in Serbia in the 1990s provides a precedent, and there has for some time been a strong psychological campaign underway to sway Western public/political opinion on the necessity for armed intervention in Syria.

  What, then, are the options open to the governments and forces seeking to oppose the Turkish military intervention, knowing that, at the very least, Turkish forces would be able — with their strong combined arms operations and advanced systems, supported by U.S. and Turkish command and control operations — to make swift and significant gains inside Syrian territory?

  There are several factors. Firstly, Turkish forces should be expected to attempt more than one cross-border operation, in an attempt to divide Kurdish forces. Secondly, Kurdish forces themselves should be expected to respond with their own “diversionary” attacks behind Turkish lines, well inside Turkey, alt-hough Turkey has ample forces to deal with that in the initial stages.

  It must be assumed that the Kurdish forces would have already been reinforced with significant anti-tank capabilities. As the Turkish Army discovered when it moved into Iraqi Kurdistan on several occasions, it cannot expect to emerge unscathed from the operation. Moreover, Russian and Syrian forces will have utilized the available time to determine how best, for example, to cut or minimize Turkish abilities to re-supply its forces inside and around Aleppo, and Ankara may have to accept that to gain its cordon sanitaire it may also lose Aleppo back to the Syrian Government.

  Moreover, while the cordon sanitaire may push Kurdish forces back from the Turkish border, this does not necessarily guarantee that Turkey can maintain its logistical lines with ISIS. The Russian destruction of the ISIS oil trade routes to Turkey may continue to erode the economic viability of the Islamic Caliphate, and cut into the revenues being earned from that trade by the Erdo?an family.

  Whatever happens, the Russian economic sanctions against Turkey, coupled with the prospective loss of Iranian trade, the ongoing decline in energy transit revenues, and the now-determined and organized Kurdish bid for a new state to be carved out of Turkey mean that Ankara is grasping at straws to reverse its fortunes. Little wonder that Washington has been increasing its pressures on Israel to restore relations with Turkey to supply gas from Israeli Mediterranean fields in the future, to compensate for the losses from Russian-controlled sources.

  It is even possible that the U.S. may even seek a viable solution to the Turkish military occupation of the northern 37 percent of Cyprus since 1974 (unlike the Turkish-biased 2004 Annan Plan), in order to get Cyprus – a strategic partner with Israel, Greece, and Egypt on the gas fields – to go along with the U.S. plan to get Mediterranean gas to Turkey to save it from the Russian sanctions.

  

  

  

  

  

• "The Islamic Rape Of Europe" – A Polish Magazine's Shocking Cover

  You would have thought that if there was any one event that could turn Europeans against the notion that the EU is capable of accommodating the millions of asylum seekers fleeing the war-torn Mid-East it would be a terrorist attack on a major European capital.

  As it turns out, sentiment towards refugees was remarkably resilient in the wake of the Paris attacks. Sure, France closed its borders, but by and large, it appeared that Europeans viewed the attacks as a reminder of why people were fleeing Syria and Iraq rather than as emblematic of what they would ultimately export to Western Europe.

  But sentiment did eventually sour. Not due to a terrorist attack, but rather due to a wave of sexual assaults on New Year’s Eve.

  Women gathered in the city center in Cologne, Germany reported being groped and robbed by “gangs” of Arabs, and once reports of the attacks made international headlines, victims came out of the woodwork as allegations poured in from Austria to Finland, to Sweden where several prominent newspapers alleged a vast coverup of incidents that allegedly took place at a youth festival in central Stockholm’s Kungsträdgården last August.

  The revelations have sparked a massive backlash against refugees and have also served to whip certain segments of the population into a nationalistic furor that now threatens to upend the political establishment in a number of European countries.

  “We have seen what they are capable of. They are testosterone bombs,” far-right Dutch politician Geert Wilders said last month. “It’s sexual terrorism, a sexual jihad,” he added.

  Now, in what will likely go down as one of the most politically incorrect sets of images in recent memory, wSieci (a conservative Polish magazine) has run a cover story entitled “The Islamic Rape of Europe.” Here are the rather edgy visuals:

  

  

  Make no mistake, we certainly understand Europe’s frustration with what, if the allegations are true, are a series of deplorable attacks and with the ineptitude officials have shown when it comes to tackling the bloc’s refugee crisis.

  But we can’t help but wonder whether it occurred to wSieci that Syria and Iraq (where the refugees are coming from) have been getting “raped” by the West and its regional allies for more than a decade. Metaphorically speaking of course.

  

  

  

  

  

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