- Obama: We Can't Let Truth Come Out About Saudi Involvement In 9/11, Or Else America's Terrorism Will Be Revealed
Obama told CBS News today that we can’t allow bipartisan legislation subjecting the Saudis to potential liability for terrorism … or else other countries could retaliate against the US (starting at 0:40):
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Similarly, White House spokesman Josh Earnest said today:
“The whole notion of sovereign immunity is at stake,” Earnest told reporters Monday. “It could put the United States, and our taxpayers, and our service members and our diplomats at significant risk, if other countries were to adopt a similar law."
As Cal Thomas points out at the Washington Times:
The intent of the Senate bill is to clarify the immunity normally given to foreign governments. It says such immunity should not apply when nations are found culpable of committing terrorist attacks that kill Americans on U.S. soil.
Why would the U.S. be worried about retaliation by other countries … being held accountable for terrorism?
Well, the director of the National Security Agency under Ronald Reagan – Lt. General William Odom – noted:
By any measure the US has long used terrorism. In ‘78-79 the Senate was trying to pass a law against international terrorism – in every version they produced, the lawyers said the US would be in violation.
And – while Saudi Arabia is certainly a huge sponsor of terrorism worldwide – experts from the right and the left agree that the U.S. is actually the world's largest sponsor of terrorism. And see this.
Postscript: Of course, it would be nice if everyone – including both the Saudis and Americans – moved past this and stopped committing terror.
But it doesn't seem like either country is willing to commit to that …
- Saint Or Sinner – Government Eyes Are Watching Every Move You Make
Submitted by John Whitehead via The Rutherford Institute,
“The way things are supposed to work is that we’re supposed to know virtually everything about what [government officials] do: that’s why they’re called public servants.
They’re supposed to know virtually nothing about what we do: that’s why we’re called private individuals. This dynamic – the hallmark of a healthy and free society – has been radically reversed. Now, they know everything about what we do, and are constantly building systems to know more. Meanwhile, we know less and less about what they do, as they build walls of secrecy behind which they function. That’s the imbalance that needs to come to an end. No democracy can be healthy and functional if the most consequential acts of those who wield political power are completely unknown to those to whom they are supposed to be accountable.” ? Glenn Greenwald
Government eyes are watching you.
They see your every move: what you read, how much you spend, where you go, with whom you interact, when you wake up in the morning, what you’re watching on television and reading on the internet.
Every move you make is being monitored, mined for data, crunched, and tabulated in order to form a picture of who you are, what makes you tick, and how best to control you when and if it becomes necessary to bring you in line.
Simply by liking or sharing this article on Facebook or retweeting it on Twitter, you’re most likely flagging yourself as a potential renegade, revolutionary or anti-government extremist—a.k.a. terrorist.
Yet whether or not you like or share this particular article, simply by reading it or any other articles related to government wrongdoing, surveillance, police misconduct or civil liberties is enough to get you categorized as a particular kind of person with particular kinds of interests that reflect a particular kind of mindset that might just lead you to engage in a particular kinds of activities.
Chances are, as the Washington Post reports, you have already been assigned a color-coded threat score—green, yellow or red—so police are forewarned about your potential inclination to be a troublemaker depending on whether you’ve had a career in the military, posted a comment perceived as threatening on Facebook, suffer from a particular medical condition, or know someone who knows someone who might have committed a crime.
In other words, you might already be flagged as potentially anti-government in a government database somewhere—Main Core, for example—that identifies and tracks individuals who aren’t inclined to march in lockstep to the police state’s dictates.
The government has the know-how.
As The Intercept recently reported, the FBI, CIA, NSA and other government agencies are increasingly investing in and relying on corporate surveillance technologies that can mine constitutionally protected speech on social media platforms such as Facebook, Twitter and Instagram in order to identify potential extremists and predict who might engage in future acts of anti-government behavior.
Now all it needs is the data, which more than 90% of young adults and 65% of American adults are happy to provide.
When the government sees all and knows all and has an abundance of laws to render even the most seemingly upstanding citizen a criminal and lawbreaker, then the old adage that you’ve got nothing to worry about if you’ve got nothing to hide no longer applies.
Apart from the obvious dangers posed by a government that feels justified and empowered to spy on its people and use its ever-expanding arsenal of weapons and technology to monitor and control them, we’re approaching a time in which we will be forced to choose between obeying the dictates of the government—i.e., the law, or whatever a government official deems the law to be—and maintaining our individuality, integrity and independence.
When people talk about privacy, they mistakenly assume it protects only that which is hidden behind a wall or under one’s clothing. The courts have fostered this misunderstanding with their constantly shifting delineation of what constitutes an “expectation of privacy.” And technology has furthered muddied the waters. However, privacy is so much more than what you do or say behind locked doors. It is a way of living one’s life firm in the belief that you are the master of your life, and barring any immediate danger to another person (which is far different from the carefully crafted threats to national security the government uses to justify its actions), it’s no one’s business what you read, what you say, where you go, whom you spend your time with, and how you spend your money.
Unfortunately, privacy as we once knew it is dead.
George Orwell’s 1984—where “you had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized”—has become our reality.
We now find ourselves in the unenviable position of being monitored, managed and controlled by our technology, which answers not to us but to our government and corporate rulers.
Consider that on any given day, the average American going about his daily business will be monitored, surveilled, spied on and tracked in more than 20 different ways, by both government and corporate eyes and ears. A byproduct of this new age in which we live, whether you’re walking through a store, driving your car, checking email, or talking to friends and family on the phone, you can be sure that some government agency, whether the NSA or some other entity, is listening in and tracking your behavior.
As I point out in my book Battlefield America: The War on the American People, this doesn’t even begin to touch on the corporate trackers that monitor your purchases, web browsing, Facebook posts and other activities taking place in the cyber sphere.
For example, police have been using Stingray devices mounted on their cruisers to intercept cell phone calls and text messages without court-issued search warrants.
Doppler radar devices, which can detect human breathing and movement within in a home, are already being employed by the police to deliver arrest warrants and are being challenged in court.
License plate readers, yet another law enforcement spying device made possible through funding by the Department of Homeland Security, can record up to 1800 license plates per minute. Moreover, these surveillance cameras can also photograph those inside a moving car. Reports indicate that the Drug Enforcement Administration has been using the cameras in conjunction with facial recognition software to build a “vehicle surveillance database” of the nation’s cars, drivers and passengers.
Sidewalk and “public space” cameras, sold to gullible communities as a sure-fire means of fighting crime, is yet another DHS program that is blanketing small and large towns alike with government-funded and monitored surveillance cameras. It’s all part of a public-private partnership that gives government officials access to all manner of surveillance cameras, on sidewalks, on buildings, on buses, even those installed on private property.
Couple these surveillance cameras with facial recognition and behavior-sensing technology and you have the makings of “pre-crime” cameras, which scan your mannerisms, compare you to pre-set parameters for “normal” behavior, and alert the police if you trigger any computerized alarms as being “suspicious.”
State and federal law enforcement agencies are pushing to expand their biometric and DNA databases by requiring that anyone accused of a misdemeanor have their DNA collected and catalogued. However, technology is already available that allows the government to collect biometrics such as fingerprints from a distance, without a person’s cooperation or knowledge. One system can actually scan and identify a fingerprint from nearly 20 feet away.
Developers are hard at work on a radar gun that can actually show if you or someone in your car is texting. Another technology being developed, dubbed a “textalyzer” device, would allow police to determine whether someone was driving while distracted. Refusing to submit one’s phone to testing could result in a suspended or revoked driver’s license.
It’s a sure bet that anything the government welcomes (and funds) too enthusiastically is bound to be a Trojan horse full of nasty, invasive surprises. Case in point: police body cameras. Hailed as the easy fix solution to police abuses, these body cameras—made possible by funding from the Department of Justice—will turn police officers into roving surveillance cameras. Of course, if you try to request access to that footage, you’ll find yourself being led a merry and costly chase through miles of red tape, bureaucratic footmen and unhelpful courts.
The “internet of things” refers to the growing number of “smart” appliances and electronic devices now connected to the internet and capable of interacting with each other and being controlled remotely. These range from thermostats and coffee makers to cars and TVs. Of course, there’s a price to pay for such easy control and access. That price amounts to relinquishing ultimate control of and access to your home to the government and its corporate partners. For example, while Samsung’s Smart TVs are capable of “listening” to what you say, thereby allowing users to control the TV using voice commands, it also records everything you say and relays it to a third party, e.g., the government.
Then again, the government doesn’t really need to spy on you using your smart TV when the FBI can remotely activate the microphone on your cellphone and record your conversations. The FBI can also do the same thing to laptop computers without the owner knowing any better.
Drones, which are taking to the skies en masse, are the converging point for all of the weapons and technology already available to law enforcement agencies. In fact, drones that can listen in on your phone calls, see through the walls of your home, scan your biometrics, photograph you and track your movements, and even corral you with sophisticated weaponry.
Technology has upped the stakes dramatically.
All of these technologies add up to a society in which there’s little room for indiscretions, imperfections, or acts of independence—especially not when the government can listen in on your phone calls, monitor your driving habits, track your movements, scrutinize your purchases and peer through the walls of your home.
In such an environment, you’re either a paragon of virtue, or you’re a criminal.
This is the creepy, calculating yet diabolical genius of the American police state: the very technology we hailed as revolutionary and liberating has become our prison, jailer, probation officer, Big Brother and Father Knows Best all rolled into one.
Thus, to be an individual today, to not conform, to have even a shred of privacy, and to live beyond the reach of the government’s roaming eyes and technological spies, one must not only be a rebel but rebel.
As Philip K. Dick, the visionary who gave us Minority Report and Blade Runner, advised:
If, as it seems, we are in the process of becoming a totalitarian society in which the state apparatus is all-powerful, the ethics most important for the survival of the true, free, human individual would be: cheat, lie, evade, fake it, be elsewhere, forge documents, build improved electronic gadgets in your garage that’ll outwit the gadgets used by the authorities.
There is no gray area any longer.
- Boston Fed Says "Markets Are Wrong," Rates Are Going Higher, Sooner
Gold and bond prices dropped and stocks popped as yet another open-mouth operation went underway this evening from none other than Boston Fed president Eric Rosengren. Ahead of next week's FOMC meeting, and just days after another Fed president said no April hike, Rosengren spewed firth that "I don't think financial markets have it right." Of course, what this preacher means is that while stock markets are perfectly efficient (and correct), bonds and rate futures areclearly inefficient and "investor outlooks for Fed rate hikes are too pessimistic," because "the US economy is fundamentally sound."
- *ROSENGREN: GRADUAL FED RATE INCREASES `ABSOLUTELY APPROPRIATE'
- *FED'S ROSENGREN SAYS U.S. ECONOMY `FUNDAMENTALLY SOUND'
- *ROSENGREN: INVESTOR OUTLOOK FOR FED RATE HIKES TOO PESSIMISTIC
Seriously!!
Of course, after a day of oil/stock rebounds on dismal disappointment in Doha, this makes perfect sense…
Federal Reserve Bank of Boston President Eric Rosengren issued a stark warning to markets Monday, telling traders and investors they are seriously underestimating how many rate rises the U.S. central bank is likely to deliver over the next few years.
"I don't think the financial markets have it right," Mr. Rosengren said in a speech given in New Britain, Conn., at Central Connecticut State University.
"While I believe that gradual federal-funds rate increases are absolutely appropriate, I do not see that the risks are so elevated, nor the outlook so pessimistic, as to justify the exceptionally shallow interest rate path currently reflected in financial futures markets," he said.
yeah you are probably right – what is wrong with this US economy?
Ignore this though he say – it's wrong too!!
- *ROSENGREN: 1Q GROWTH DISAPPOINTING, JOBS DATA MORE OPTIMISTIC
As WSJ notes, however, Rosengren, currently an FOMC voter, has long skewed toward the dovish end of the Fed scale.
While he's been on board with the Fed raising rates he's definitely banged the drum for moving slowly. So his speech this evening is notable because he puts markets on warning for holding what he views as the wrong outlook on rates.
He says nothing about the April FOMC, but that said, if Mr. Rosengren thinks markets are underestimating what the Fed will do, investors and traders might want to listen.
There was some reaction in markets…
So – interest-rate markets are wrong; macro data is mostly wrong (apart from the jobs data); and The Fed is right?
As we showeed in our discussion of the Fed’s forecasts, these predictions have continued to fall short of reality.
“Besides being absolutely the worst economic forecasters on the planet, the Fed’s real problem is contained within the table and chart below. Despite the rhetoric of stronger employment and economic growth – plunging imports and exports, falling corporate profits, collapsing manufacturing and falling wages all suggest the economy is in no shape to withstand tighter monetary policy at this juncture.”
“Of course, if the Fed openly suggested a ‘recession’ could well be in the cards, the markets would sell off sharply, consumer confidence would drop and a recession would be pulled forward to the present. This is why “what the Fed says” is much less important than what they do.”
And here is Alan Greenspan meeting with Dixie Noonan et al on March 31, 2010:
This is a reason why the Board is getting an unfair rap on this stuff. We didn’t forecast better than anyone else; we regulated banks that got in trouble like anyone else. Could we have done better? Yes, if we could forecast better. But we can’t. This is why I’m very uncomfortable with the idea of a systemic regulator, because they can’t forecast better.
This comes from the person in charge of the most powerful central bank in the world; a world which now is reliant exclusively on central bankers for its day to day pretend existence.
- Florida Airport Gives TSA The Boot, Will Outsource Screening To Private Company
It goes without saying that if the people of any country want something done efficiently, and in the most cost-efficient manner, they do it themselves or outsource it to private third-party service providers, instead of entrusting it to a bunch of bureaucrats and unmotivated government workers.
Finally, airports in the United States are starting to come to that realization as well. So far, private security agents monitor at least 22 airports in major cities like San Francisco and Kansas City. The latest airport to replace the TSA is the Punta Gorda Airport in Florida.
As Sputnik reports, Florida’s Punta Gorda airport has begun to privatize security, taking the keys away from the what according to many is America’s most inept, inefficient and often, grotesquely demeaning governmental organization, the TSA, and handing them over to a firm called ISS Action, a security company out of Queens, New York.
Sadly, ISS Action and similar private companies won’t take complete control of security operations at airports they operate in. Government oversight will still be in place to ensure proper safety checks are being made.
Nonetheless, the move to privatize airport screening will prove to be better for both travelers and taxpayers, as a private organization cannot afford to be inefficient and wasteful, or it will soon find itself out of business.
Pam Seay of the Charlotte County Airport Authority said the move will save the airport money, while making security more efficient and perhaps friendlier. In other words, it will eliminate government workers.
In a congressional report released in 2012, it was found that among other things, the TSA was wasting hundreds of millions in taxpayer money as it purchased expensive technologies and forgot to use them. And certainly ignore the countless accusations of groping and abuse of personal privacy by the same “entitled” members of this organization.
Perhaps this money and all future cost savings can be redeployed to those who are getting social security taken away from them so the government can “save money.”
We can only hope that just like UnitedHealth’s amicable departure from Obamacare exchanges (now out of five states and growing by the day), the example set by Punta Gorda will be followed by most other airports who
- Malaysia CDS Spike After Abu Dhabi Puts Scandal-Ridden 1MDB In Default
Over the better part of the past year, we’ve documented the curious case of 1MDB, Malaysia’s government investment fund founded in 2009.
It’s a long and exceptionally convoluted story that doesn’t exactly lend itself to a concise summary but suffice to say that the development bank was something of a black box right from the beginning and in 2013, some $680 million allegedly tied to 1MDB ended up in Malaysian PM Najib Razak’s personal bank account just prior to an election.
There are any number of twists and turns in the 1MDB story including two bond offerings facilitated by a Goldman banker with ties to Najib and his wife, some shenanigans with a subsidiary of an Abu Dhabi sovereign wealth fund, a questionable Cayman Islands account or two, a dispute with KPMG, and an Australian firm that specialized in Malaysian penny stocks, but at the end of the day, Malaysians just want to know what exactly will come of an investigation into how Najib ended up with nearly three quarters of a billion dollars.
A quick reminder on the Abu Dhabi connection. Back in September, as the WSJ reported, the corruption scandal around 1MDB spilled beyond the country’s borders, as officials at a United Arab Emirates state investment vehicle rose questions about more than a billion dollars in money that they said is missing.
Abu Dhabi had long been a source of support for the fund, 1Malaysia Development Bhd., which was set up six years ago by Malaysian Prime Minister Najib Razak to develop new industries in the Southeast Asian country. Then, in September, as 1MDB tries to fend off a cash crunch, its backers in Abu Dhabi are asking what happened to a $1.4 billion payment the fund said it made but which they never received, two people familiar with the matter said.
The disputed payments were related to the purchase of power plants around the world by the Malaysian fund in 2012. A state investment fund in Abu Dhabi, the International Petroleum Investment Co., or IPIC, guaranteed the $3.5 billion in bonds that 1MDB issued to finance the purchase, according to the bond offering documents. In return, IPIC was to receive options to buy a 49% stake in the power plants as well as collateral for the bond.
According to 1MDB’s financial statements, the Malaysian fund made a collateral payment of $1.4 billion. A draft report into 1MDB’s activities by Malaysia’s auditor general said the payment went to a subsidiary of IPIC called Aabar Investments PJS.
The problem is that IPIC’s consolidated financial statements contain no reference to the receipt of the payment. Two people familiar with the matter said IPIC and Aabar never received the money. It isn’t clear what happened to the funds. 1MDB didn’t respond to requests for comment.
Since then, even as more news revealed just how extensive the embezzlement and corruption surrounding 1MDB truly were with the explicit involvement of Malaysian PM Najib Razak, the Abu Dhabi money was never found.
* * *
Fast forward to today, when 6 months later, the question of Abu Dhabi’s missing money has resurfaced with a bang, and suddenly threatens to drag down not only 1MDB but the entire Malaysian state.
As the FT reports, the dispute between an Abu Dhabi sovereign fund and Malaysia’s troubled state fund 1MDB over more than $1bn in missing payments hit a crescendo on Monday when the Emirates investment vehicle said its Malaysian counterpart was “in default” on an agreement between the two and terminated the deal.
The catalyst was a filing on the LSE made on Monday according to which the Gulf emirate’s abovementioned International Petroleum Investment Company (IPIC) ended its relationship with its Southeast Asian counterpart.
The Abu Dhabi fund said 1MDB and Malaysia’s ministry of finance were in default on the deal, including an obligation to pay $1.1bn plus interest, and that 1MDB continued to be bound by its commitments under the agreement.
In short, Abu Dhabi wants its money and is willing to push 1MDB in default to get it.
Ipic was now considering options to remedy the alleged default, including referring the matter to the appropriate dispute resolution forum, it added in its regulatory filing.
Furthermore, Ipic and its Aabar subsidiary issued a London Stock Exchange statement last week in which they denied ownership of Aabar Investments PJS Ltd, a company that received billions of dollars in payments from 1MDB. Ipic and Aabar said in the filing that they were aware of reports that “substantial payments” were made to that company, which is incorporated in the British Virgin Islands, another offshore tax haven. They also said they had received no payments from the company and received no liabilities on its behalf.
* * *
The move is the latest twist in an affair that has buffeted Malaysia’s government and prompted investigations in at least five countries including the US and Switzerland.
To be sure, the case shouldn’t be very difficult to prosecute since Malaysia appears to have run out of goodwill with another critical counterparty, Switzerland after Swiss authorities said they have found “serious indications” that about $4bn has been misappropriated from Malaysian state companies. They widened their investigation last week to look at the roles of two former officials with responsibility for Abu Dhabi sovereign funds.
For its part, the FT adds, 1MDB said in a that interest was payable on Monday on its $1.75bn 2022 bonds. The Malaysian fund said that a “dispute has recently arisen” between the two funds and that Ipic had not paid the interest.
The 1MDB statement went on: “1MDB wishes to make clear that it and its group entities will meet all of their other obligations under any other financing arrangements and have ample liquidity to do so.”
Malaysia’s finance ministry said in a statement on Monday that it would “continue to honour all of its outstanding commitments in the financial markets”.
In short, nobody really knows what is going on as Christian de Guzman, a credit analyst at Moody’s in Singapore, confirmed. “There’s a lot of uncertainty about what’s going on, but one thing is clear — progress on 1MDB’s debt rationalisation has been cast into doubt.”
Alas, the situation will only deteriorate from here.
As a reminder, it is none other than Najib Razak, Malaysia’s prime minister, who heads 1MDB’s advisory board. The PM has battled allegations centred on $681m transferred to his personal bank account, which critics claim is linked to 1MDB. Both Mr Najib and 1MDB deny wrongdoing and the prime minister has been cleared by Malaysia’s attorney-general. Which means that for any resolution to be reached on the missing funds it would involve the implication of the prime minister, which would therefore mean that creditors of 1MDB have an awkward choice: write off their exposure, or pursue the funds with the risk of unleashing another political crisis.
To get a sense of just how deep the Malaysian corruption rabit hole goes, consider that Nazir Razak, Najib’s brother, announced on Monday that he was taking a voluntary leave of absence from his role as chairman of CIMB, Malaysia’s second-biggest bank by assets, while a review took place into transfers into his own personal account. The move follows reports that he received $7m ahead of the 2013 elections in Malaysia.
In other words, everyone was stealing, the only question is how much, and whether those who actually owe the money will come looking for it.
And while bankers in Kuala Lumpur say that while the alleged default is unlikely to threaten Malaysia’s sovereign rating, as the risk from 1MDB is already factored in, it will hamper efforts to contain the political scandal around the affair.
Markets, however, beg to differ and following the news of 1MDB’s alleged default, Malaysia 5 year CDS spiked by 11 bps, the most since March 21, to 163 bps as the market starts to quietly ask whether this ongoing scandal may just drag down the entire Malaysian state.
- One Trader Finally Loses It
Over the weekend, Bloomberg View’s quasi-economist wrote his latest laughable article, one which supposedly “explained” how “Everyone Worries Too Much About ‘Black Swans‘”, which in addition to being a rambling, meandering stream of consciousness that as is regularly the case with this particular author, made little sense, sparked a Twitter feud with the Nassim Taleb, the person who made the concept of a Black Swan into a household name.
We were therefore very amused to note that none other than former FX trader and fund manager, Richard Breslow who also writes for Bloomberg, seemingly had an epileptic fit upon reading the abovementioned drivel and wrote his own scathing reaction from the perspective of an actual trader, a rection which not only threw up on every argument of the so-called economist’s logic, but on everything else that now is passed off simply as, well, “the new normal.”
Here is Richard Breslow:
No One Worries Enough About Black Swans
Trading is a hard business. The world is becoming a more complicated place: a number out of China may do more to the price of your U.S. shares in a retailer than, well, U.S. retail sales. Yet creeping, dangerously, into the investment advice dialog is the argument that buying and holding no matter what the event is the winning strategy.
If you ever needed a “past results don’t guarantee…” disclaimer it’s especially true now.
It’s not surprising that such shallow reasoning is becoming commonplace. Sure beats staying late at the office doing cash-flow analysis. Bad things happen and the Fed will cut rates. Worked time and again. Presto chango, that financial crisis was a buying event, stupid. It’s gotten much worse post the latest financial crisis, as it’s assumed asset prices are the main (sole) focus of the all powerful central banks.
To buy (pun intended) into this you have to presuppose that Black Swan events are easily controllable episodes that last short amounts of time. That the authorities have unlimited firepower to counteract every natural and man-made disaster.
Equally scary, academics as well as analysts have taken to arguing that investors are overestimating the probability of crisis events. You don’t need to be a Taleb or Mandelbrot to calculate that we have been having once in a hundred year events on a regular basis for the last thirty years. Did a crisis happen, if you made money?
This flawed logic argues not only buy every dip, but why waste money on hedges? It assumes unlimited deep pockets and the nerve of a non-sentient computer. Just go “all in.” Looking more like today’s world all the time. Portfolio theory thrown right out the window. Perhaps Harry Markowitz will have his Nobel revoked.
A portfolio built to only withstand stress thanks to central bank intervention is one destined to blow-up spectacularly. The embedded flaw in this new logic is that central banks give investors perfect foresight. And nothing can go wrong. Re-read the Investment Process section of those prospectuses.
* * *
Thanks Richard, and to this we can only add the following: while there is no longer any doubt that it is constant central bank intervention that continues to prop and push up markets both in the US and around the globe, these same central planners must be getting very confused: “why are traders angry if we continue to push markets higher and help everyone make money?” One day they will get it.
- The Whole System Is Built Upon Lies And "We're In The Terminal Phase"
Submitted by Mac Slavo via SHTFPlan.com,
At this point, despite major highs in U.S. stock markets and reassurances from no less than President of the United States himself that the economy is sound, one only need to look around to understand that we are on the cusp of what researcher and collapse strategist Michael Snyder of The Economic Collapse Blog calls the “early chapters of a total meltdown.” In his latest interview with Future Money Trends Snyder notes that the fundamental economic problems we face can be seen across the globe. The United States, Europe, Asia, and South America are all crashing and no one will be immune to what comes next.
We’re in the terminal phase of the greatest debt bubble in all of human history… The crisis that happened last time around… it was just a warning signal of what would happen if we didn’t fix our problems… and of course we didn’t fix them.
It’s not sustainable… There’s going to be a permanent, massive adjustment and a loss of faith in the current system… as it unravels and implodes we’re going to see economic pain on a scale that is historic, like we’ve never seen before… when this thing finally blows it’s going to bring the existing system down.
Full Interview via Future Money Trends:
While most Americans think that near-record breaking stock markets are a sign of recovery and revival in the U.S. economy, Snyder goes on to warn that what we’ve seen in Greece, Cyprus, and Argentina, and what’s happening right now in Venezuela, is a coming reality to Americans.
That could mean everything from bank holidays wherein governments authorize the seizure of account holders’ deposits, to a full-on collapse scenario like Venezuela where food, toilet paper and basic necessities become totally unavailable.
Michael Snyder explains that the one asset class to protect and preserve wealth in the midst of crisis is precious metals and well known billionaire investors have been rapidly acquiring everything they can their hands on in recent months. And as we’ve seen just this year, when panic is the order of the day capital shifts into gold and silver as a crisis hedge.
But that’s not all you can do to prepare for the next wave, says Snyder, and diversifying your approach to collapse-proofing your life will be critical because we simply don’t know exactly how events will play out over coming months and years:
There’re are different strategies that are required to get through a period of crisis, even if it’s just a recession, but especially if it escalates to a full-blown historic financial crisis.
For example. if people have money in financial markets they may want to evaluate what their risk is… because if things start crashing are they going to be able to survive if their investments crash to a 40% or 50% decline… can you weather that? Can you survive that?
A lot of people are moving into gold and silver as a way to insulate themselves, to protect their wealth during a time of crisis.
Of course, not everyone’s in the markets. One thing I really recommend to people is to have an emergency fund in the case you lose your job or there’s a business reversal… you just look back at 2008 and all of a sudden there was a huge downturn and millions of people lost their jobs…
We’re already seeing corporate revenues fall… corporate profits fall… Job cut announcements by major firms in the United States were up 32% in the first quarter of 2016… We’re already starting to see it happen… people are going to lose their jobs.
And because more than 60% of all Americans are living paycheck-to-paycheck when people lose their jobs they don’t have anything to fall back on… they can’t pay the mortgage… they can’t pay the bills… then we start seeing people lose their homes… foreclosures go up..
People go from living a very comfortable lifestyle to being on the street very rapidly.
You’ve got to have that cushion… you’ve got to have that emergency fund.
But an emergency fund may not be enough, because when the global economy detonates it could bring serious monetary and financial problems with it. And that means supply chains for core essentials like food could dry up because of credit freezes like we saw in Greece. Or, your money will be worth so little because of hyperinflation that you simply won’t have enough of it to put food on the table. And that’s why Snyder advocates owning alternative hard assets and supplies:
In the longer-term… we do believe in storing up food and basic supplies… We don’t think we’re going to need them in the next week or the next month… or even in the short-term time frame… but in the mid- or long-term we believe those things are going to start to come into play…
We’re just in the early chapters… we’re just seeing the early shaking.
As it all plays out we believe we’re going to see a total meltdown.
So, for example, if some day you can go to the bank and can’t get money out of the ATM, what are you going to do?
That’s one of the reasons why we recommend not having your eggs in one basket. Spread your assets around to different banks… different types of investments, whether it’s precious metals or different types of hard assets.
Having your assets spread around in different places makes it harder, if there is an emergency or crisis, for you to be in a situation of hardship because you can’t get access to what you need.
The whole system is built upon lies. And while the powers that be tout stability, what they’ve created is anything but.
And when the house of cards comes tumbling down you can be sure that the elite will be safely tucked away in their bunkers watching it all play out live on their satellite feeds.
They’ve already started preparing for the meltdown by diversifying into precious metals, buckets of food, personal defense armaments and other tangible assets that will be impossible to find during a crisis event.
- Days After Wells Fargo Admits Defrauding The Government, NY Fed Rewards It With Primary Dealer Status
Back on April 9 we described the latest example of how criminal Wall Street behavior leads to zero prison time and just more slaps on the wrist, when Warren Buffett’s favorite bank, Wells Fargo, admitted to “deceiving” the U.S. government into insuring thousands of risky mortgages. According to the settlement, Wells Fargo “admits, acknowledges, and accepts responsibility” for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.
In short: it admitted that is deceived and defrauded the government.
Its “punishment” – a $1.2 billion settlement of a U.S. Department of Justice lawsuit, the highest ever levied in a housing-related matter.
And now, having suffered so much trauma which led to precisely nobody going to prison, less than two weeks later it’s time for Wells to get its reward: as Bloomberg reported earlier, the “bond market’s most exclusive clubs got a new member” when the NY Fed granted the criminal Wells Fargo Primary Dealer status.
The brokerage arm of Wells Fargo & Co., the third-biggest U.S. bank by assets, was designated a U.S. primary dealer by the Federal Reserve Bank of New York on Monday. It’s the first addition to the list since February 2014, when the U.S.-based brokerage of Toronto-Dominion Bank was included. The roster of primary dealers has grown to 23 firms from as low as 17 in 2008, although it remains below its 1988 peak of 46.
“A long process of working with the Fed has come to a conclusion,” Elise Wilkinson, a spokeswoman for San Francisco-based Wells Fargo, said by phone. “The scope and scale of what we’ve been doing, it’s been at the level of a primary dealer for a long time.” The process took years, Wilkinson said, declining to elaborate.
We dread to ask just what that is.
Others were quick to jump on board and congratulate Wells: “Inclusion of a well-capitalized, well-rated firm onto the primary dealer list can only be a positive for the Treasury market,” Kevin McPartland, head of research for market structure and technology at financial-services consulting firm Greenwich Associates, said in an e-mail.
Of course, the only reason why Wells was granted PD status is because as Bloomberg reminds us, Wells Fargo has been expanding its lineup of bond-trading businesses as its competitors shrink. The bank has plans to start trading single-name credit default swaps, people with knowledge of the matter said last month.
And what better way to get an implicit stamp of approval than by saying it is a Fed primary dealer, a position which also grants its direct Treasury auction access.
Primary dealers are required to make “reasonably competitive” bids for a pro-rata share of every U.S. debt auction, according to the New York Fed. Last year, a total $2.1 trillion of Treasury bills, notes and bonds were issued, according to Sifma. The firms also trade with the Fed as it implements monetary policy, and provide market commentary for the New York Fed’s trading desk.
“Wells Fargo is moving up the ranks in investment banking and being a primary dealer in Treasury instruments signifies their rising importance in finance,” Bill Smead, chief executive officer at Seattle-based Smead Capital Management, which holds Wells Fargo shares and manages about $2.4 billion, said by e-mail.
“This is important when other sources of revenue are scarce and will be one more way higher interest rates would be helpful to overall profits,” he said.
Sure is, and now if only Wells can pull a Goldman and “Lehman” one of its key competitors, its revenue potential will be unmatched by almost any other bank.
- Nine Meals From Anarchy
Submitted by Jeff Thomas via InternationalMan.com,
In 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.” Since then, his observation has been echoed by people as disparate as Robert Heinlein and Leon Trotsky.
The key here is that, unlike all other commodities, food is the one essential that cannot be postponed. If there were a shortage of, say, shoes, we could make do for months or even years. A shortage of gasoline would be worse, but we could survive it, through mass transport or even walking, if necessary.
But food is different. If there were an interruption in the supply of food, fear would set in immediately. And, if the resumption of the food supply were uncertain, the fear would become pronounced. After only nine missed meals, it’s not unlikely that we’d panic and be prepared to commit a crime to acquire food. If we were to see our neighbour with a loaf of bread, and we owned a gun, we might well say, “I’m sorry, you’re a good neighbour and we’ve been friends for years, but my children haven’t eaten today – I have to have that bread – even if I have to shoot you.”
But surely, there’s no need to speculate on this concern. There’s nothing on the evening news to suggest that such a problem even might be on the horizon. So, let’s have a closer look at the actual food distribution industry, compare it to the present direction of the economy, and see whether there might be reason for concern.
The food industry typically operates on very small margins – often below 2%. Traditionally, wholesalers and retailers have relied on a two-week turnaround of supply and anywhere up to a 30-day payment plan. But an increasing tightening of the economic system for the last eight years has resulted in a turnaround time of just three days for both supply and payment for many in the industry. This a system that’s still fully operative, but with no further wiggle room, should it take a significant further hit.
If there were a month where significant inflation took place (say, 3%), all profits would be lost for the month for both suppliers and retailers, but goods could still be replaced and sold for a higher price next month. But, if there were three or more consecutive months of inflation, the industry would be unable to bridge the gap, even if better conditions were expected to develop in future months. A failure to pay in full for several months would mean smaller orders by those who could not pay. That would mean fewer goods on the shelves. The longer the inflationary trend continued, the more quickly prices would rise to hopefully offset the inflation. And ever-fewer items on the shelves.
From Germany in 1922, to Argentina in 2000, and to Venezuela in 2016, this has been the pattern whenever inflation has become systemic, rather than sporadic. Each month, some stores close, beginning with those that are the most poorly capitalised.
In good economic times, this would mean more business for those stores that were still solvent, but in an inflationary situation, they would be in no position to take on more unprofitable business. The result is that the volume of food on offer at retailers would decrease at a pace with the severity of the inflation.
However, the demand for food would not decrease by a single loaf of bread. Store closings would be felt most immediately in inner cities, when one closing would send customers to the next neighbourhood seeking food. The real danger would come when that store also closes and both neighbourhoods descended on a third store in yet another neighbourhood. That’s when one loaf of bread for every three potential purchasers would become worth killing over. Virtually no one would long tolerate seeing his children go without food because others had “invaded” his local supermarket.
In addition to retailers, the entire industry would be impacted and, as retailers disappeared, so would suppliers, and so on, up the food chain. This would not occur in an orderly fashion, or in one specific area. The problem would be a national one. Closures would be all over the map, seemingly at random, affecting all areas. Food riots would take place, first in the inner cities then spread to other communities. Buyers, fearful of shortages, would clean out the shelves.
Importantly, it’s the very unpredictability of food delivery that increases fear, creating panic and violence. And, again, none of the above is speculation; it’s a historical pattern – a reaction based upon human nature whenever systemic inflation occurs.
Then … unfortunately … the cavalry arrives
At that point, it would be very likely that the central government would step in and issue controls to the food industry that served political needs rather than business needs, greatly exacerbating the problem. Suppliers would be ordered to deliver to those neighbourhoods where the riots are the worst, even if those retailers are unable to pay. This would increase the number of closings of suppliers.
Along the way, truckers would begin to refuse to enter troubled neighbourhoods, and the military might well be brought in to force deliveries to take place.
But why worry about the above? After all, inflation is contained at present and, although governments fudge the numbers, the present level of inflation is not sufficient to create the above scenario, as it has in so many other countries.
So, what would it take for the above to occur? Well, historically, it has always begun with excessive debt. We know that the debt level is now the highest it has ever been in world history. In addition, the stock and bond markets are in bubbles of historic proportions. They will most certainly pop, but will that happen in a year? Six months? Next week?
With a crash in the markets, deflation always follows as people try to unload assets to cover for their losses. The Federal Reserve (and other central banks) has stated that it will unquestionably print as much money as it takes to counter deflation. Unfortunately, inflation has a far greater effect on the price of commodities than assets. Therefore, the prices of commodities will rise dramatically, further squeezing the purchasing power of the consumer, thereby decreasing the likelihood that he will buy assets, even if they’re bargain priced. Therefore, asset holders will drop their prices repeatedly as they become more desperate. The Fed then prints more to counter the deeper deflation and we enter a period when deflation and inflation are increasing concurrently.
Historically, when this point has been reached, no government has ever done the right thing. They have, instead, done the very opposite – keep printing. A by-product of this conundrum is reflected in the photo above. Food still exists, but retailers shut down because they cannot pay for goods. Suppliers shut down because they’re not receiving payments from retailers. Producers cut production because sales are plummeting.
In every country that has passed through such a period, the government has eventually gotten out of the way and the free market has prevailed, re-energizing the industry and creating a return to normal. The question is not whether civilization will come to an end. (It will not.) The question is the liveability of a society that is experiencing a food crisis, as even the best of people are likely to panic and become a potential threat to anyone who is known to store a case of soup in his cellar.
Fear of starvation is fundamentally different from other fears of shortages. Even good people panic. In such times, it’s advantageous to be living in a rural setting, as far from the centre of panic as possible. It’s also advantageous to store food in advance that will last for several months, if necessary. However, even these measures are no guarantee, as, today, modern highways and efficient cars make it easy for anyone to travel quickly to where the goods are. The ideal is to be prepared to sit out the crisis in a country that will be less likely to be impacted by dramatic inflation – where the likelihood of a food crisis is low and basic safety is more assured.
Editor’s Note: Unfortunately most people have no idea what really happens when a currency collapses, let alone how to prepare…
We think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.
But if you want to be truly “crisis-proof” there's more to do…
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