- Russia-Gate Spreads To Europe
Authored by Robert Parry via ConsortiumNews.com,
Ever since the U.S. government dangled $160 million last December to combat Russian propaganda and disinformation, obscure academics and eager think tanks have been lining up for a shot at the loot, an unseemly rush to profit that is spreading the Russia-gate hysteria beyond the United States to Europe…
British Prime Minister Theresa May
Now, it seems that every development, which is unwelcomed by the Establishment – from Brexit to the Catalonia independence referendum – gets blamed on Russia! Russia! Russia!
The methodology of these “studies” is to find some Twitter accounts or Facebook pages somehow “linked” to Russia (although it’s never exactly clear how that is determined) and complain about the “Russian-linked” comments on political developments in the West. The assumption is that the gullible people of the United States, United Kingdom and Catalonia were either waiting for some secret Kremlin guidance to decide how to vote or were easily duped.
Oddly, however, most of this alleged “interference” seems to have come after the event in question. For instance, more than half (56 percent) of the famous $100,000 in Facebook ads in 2015-2017 supposedly to help elect Donald Trump came after last year’s U.S. election (and the total sum compares to Facebook’s annual revenue of $27 billion).
Similarly, a new British study at the University of Edinburgh blaming the Brexit vote on Russia discovered that more than 70 percent of the Brexit-related tweets from allegedly Russian-linked sites came after the referendum on whether the U.K. should leave the European Union. But, hey, don’t let facts and logic get in the way of a useful narrative to suggest that anyone who voted for Trump or favored Brexit or wants independence for Catalonia is Moscow’s “useful idiot”!
This week, British Prime Minister Theresa May accused Russia of seeking to “undermine free societies” and to “sow discord in the West.”
What About Israel?
Yet, another core problem with these “studies” is that they don’t come with any “controls,” i.e., what is used in science to test a hypothesis against some base line to determine if you are finding something unusual or just some normal occurrence.
Israeli Prime Minister Benjamin Netanyahu speaking to a joint session of the U.S. Congress on March 3, 2015, in opposition to President Barack Obama’s nuclear agreement with Iran. (Screen shot from CNN broadcast)
In this case, for instance, it would be useful to find some other country that, like Russia, has a significant number of English speakers but where English is not the native language – and that has a significant interest in foreign affairs – and then see whether people from that country weigh in on social media with their opinions and perspectives about political events in the U.S., U.K., etc.
Perhaps, the U.S. government could devote some of that $160 million to, say, a study of the Twitter/Facebook behavior of Israelis and whether they jump in on U.S./U.K. controversies that might directly or indirectly affect Israel. We could see how many Twitter/Facebook accounts are “linked” to Israel; we could study whether any Israeli “trolls” harass journalists and news sites that oppose neoconservative policies and politicians in the West; we could check on whether Israel does anything to undermine candidates who are viewed as hostile to Israeli interests; if so, we could calculate how much money these “Israeli-linked” activists and bloggers invest in Facebook ads; and we could track any Twitter bots that might be reinforcing the Israeli-favored message.
No Chance
If we had this Israeli baseline, then perhaps we could judge how unusual it is for Russians to voice their opinions about controversies in the West. It’s true that Israel is a much smaller country with 8.5 million people compared to Russia’s 144 million, but you could adjust for those per capita numbers — and even if you didn’t, it wouldn’t be surprising to find that Israel’s interference in U.S. policymaking still exceeds Russian influence.
Russian President Vladimir Putin with German Chancellor Angela Merkel on May 10, 2015, at the Kremlin. (Photo from Russian government)
It’s also true that Israeli leaders have often advocated policies that have proved disastrous for the United States, such as Prime Minister Benjamin Netanyahu’s encouragement of the Iraq War, which Russia opposed. Indeed, although Russia is now regularly called an American enemy, it’s hard to think of any policy that President Vladimir Putin has pushed on the U.S. that is even a fraction as harmful to U.S. interests as the Iraq War has been.
And, while we’re at it, maybe we could have an accounting of how much “U.S.-linked” entities have spent to influence politics and policies in Russia, Ukraine, Syria and other international hot spots.
But, of course, neither of those things will happen. If you even tried to gauge the role of “Israeli-linked” operations in influencing Western decision-making, you’d be accused of anti-Semitism. And if that didn’t stop you, there would be furious editorials in The New York Times, The Washington Post and the rest of the U.S. mainstream media denouncing you as a “conspiracy theorist.” Who could possibly think that Israel would do anything underhanded to shape Western attitudes?
And, if you sought the comparative figures for the West interfering in the affairs of other nations, you’d be faulted for engaging in “false moral equivalence.” After all, whatever the U.S. government and its allies do is good for the world; whereas Russia is the fount of evil.
So, let’s just get back to developing those algorithms to sniff out, isolate and eradicate “Russian propaganda” or other deviant points of view, all the better to make sure that Americans, Britons and Catalonians vote the right way.
- Back-To-Back Hindenburg Omens
About a week ago, we warned about the infamous bearish stock market pattern developing in US equities coined by some as the ‘Hindenburg Omen’. The pattern is known for its bearish tendencies developed after the Hindenburg disaster of 1937. The key understanding is breadth deterioration, when more stocks hit 52-week lows than 52-highs. Since the warning, a liquidity gap has developed in stocks thwarting any attempt at new all time highs.
Fast forward to this morning and a very ironic situation has unfolded in the skies 50-miles north of London. And no – it’s not a giant penis drawn by US-Navy pilots in F-18s – it’s a true ‘Hindenburg Omen’ as the world’s longest airship crashed early this morning. The £25m airship called ‘Airlander 10’ appeared to “break in two,” a witness told the BBC. Reports suggest the airship broke free from mooring less than 24-hours after a successful test. At the time, no-one was on board of the aircraft, but Bedfordshire police, paramedics and fire crews were alerted and treated a women who suffered minor injuries.
According to the Guardian,
The roads around the airfield were closed amid concerns that aviation fuel and helium could escape from the airship. However, police said they believed the helium would soon dissipate.
Hybrid Air Vehicles (HAV), the company that developed the airship confirmed there had been an incident. It said the craft was not on a flight at the time and had since been deflated.
An investigation has been launched to find out what happened.
Local residents took to social media and snapped shocking pictures of the crashed airship appearing to be more deflated than Tom Brady’s footballs.
#Airlander has died ????anyone know what happened? pic.twitter.com/0kYdWKHRkr
— Mark Jefferies (@airdisplays) November 18, 2017
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Another concerned resident indicated ground crews rushed to slice open the aircraft to release helium after the crash.
Nobody's laughing as #Airlander blows over and techs rush to cut it open to release helium. pic.twitter.com/pxYdG5igvN
— Annabel Ossel (@AnnabelOssel) November 18, 2017
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Airship community is in tears this morning…
.@STEMAirlander We are very sorry to see this wonderful aircraft looking so sad this morning. Lots of people feeling gutted. #STEM #avgeeks #bedfordshire #cardington #Airlander pic.twitter.com/AzT7pvO52F
— Sci-Hi Education (@SciHiEd) November 18, 2017
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The Airlander 10 is/was the world’s largest aircraft produced by Hybrid Air Vehicles. The airship is classified as a helium airship powered by four diesel engines driving large propellers on each side of the craft. Hybrid Air Vehicles originally built this aircraft for the United States Army’s Long Endurance Multi-intelligence Vehicle (LEMV) program in 2012, but was cancelled one-year later.
To give perspective of the Airlander’s size, a Boeing 747 can pretty much fit inside the craft.
Perhaps the United States Army made the right decision in 2013, as it appears the Airlander 10 has many kinks that still need to be worked out. In late 2016, the Airlander 10 had a slow motion crash during a landing approach where damage to the cockpit was heavily sustained, but the crew of two was untouched.
Bottomline: Back to back ‘Hidenburg Omens’ for US-stocks and now the largest aircraft in the world crashing this morning is an ominous sign and we hope it’s not a redux of 1937 where markets crashed in excessive around 50%.
- "Gasping For Air" – Atlanta Nursing Home Staff Laugh As WWII Veteran Dies After Calling For Help
Authored by Mac Slavo via SHTFplan.com,
Staff at the Northeast Atlanta Health and Rehabilitation Center laughed as a decorated World War II veteran took his last gasps of air after frantically calling for help six different times, according to a shocking new investigation from 11Alive.com.
The investigation included the release of a never before seen hidden camera video that not only completely contradicted statements given by the nursing home staff but also proved, without a shadow of doubt, that the nursing home essentially let the decorated veteran die as if it were a joke.
The video is so disgusting that attorneys for the nursing home repeatedly tried to stop its release, going through a series of court battles with the local news station in which they hoped that the media would be ordered to censor the footage.
Thankfully, the judge in the case ruled in favor of actual journalism and the nursing home, after seeing no other possible outcome, eventually dropped their appeal to the Georgia State Supreme Court.
In the 11Alive investigation, the news outlet details the fact that a nurse who was on duty at the time directly lied about what actually happened before being confronted with the hidden camera video.
In the video deposition, former nursing supervisor Wanda Nuckles tells the family’s attorney, Mike Prieto, how she rushed to Dempsey’s room when a nurse alerted her he had stopped breathing.
Prieto: “From the time you came in, you took over doing chest compressions…correct?”
Nuckles : “Yes.”
Prieto: “Until the time paramedics arrive, you were giving CPR continuously?”
Nuckles : “Yes.”
The video, however, shows no one doing CPR when Nuckles entered the room. She also did not immediately start doing CPR.
“Sir, that was an honest mistake,” said Nuckles in the deposition. “I was just basing everything on what I normally do.”
[…]
When nurses had difficulty getting Dempsey’s oxygen machine operational during, you can hear Nuckles and others laughing.
Prieto: “Ma’am, was there something funny that was happening?”
Nuckles : “I can’t even remember all that as you can see.”
“The video shows the veteran calling for help six times before he goes unconscious while gasping for air. State records show nursing home staff found Dempsey unresponsive at 5:28 am. It took almost an hour for the staff to call 911 at 6:25a.m,” the 11Alive report read.
Amazingly, the Georgia Board of Nursing told 11Alive that the nurse seen in the above video, as well as another nurse on duty at the time, were only forced to surrender their licenses in September of this year, almost three years after the disgusting incident!
“Nursing board president Janice Izlar says she cannot confirm when the state knew about the video, but the board’s action came shortly after 11Alive sent her and other board staff a link to view the video,” 11Alive continued.
The deceased veteran, 89-year-old James Dempsey was a decorated World War II veteran who was from Woodstock, Georgia. Dempsey’s family received a settlement from the nursing home in 2014 so were unable to comment on the investigation.
- The U.S. Is Crushing Its Clean Energy Forecasts
Paris, schmarish…
In a February 2007 report, the United States Department of Energy made thirty-year predictions for the country's energy usage and production. As Statista's infographic below shows, using data from the non-profit international environmental pressure group Natural Resources Defense Council, these forecasts have so far been smashed.
You will find more statistics at Statista
Martin Armstrong details that actual CO2 emissions in 2016 have undercut the 2006 predictions by 24 percent.
In terms of the energy mix, power generated from coal was 45 percent beneath the forecast while clean(er) alternatives natural gas and wind/solar power saw overshoots of 79 and 383 percent, respectively.
Renewable energy infrastructure is also expanding at a much faster rate than was thought ten years ago. 2006's prediction for installed solar was a massive 4,813 percent shy of the 2016 reality. The U.S now also has installed wind capacity of 82 gigawatts, 361 percent more than had been hoped for.
In fact, energy consumption in total was also 17 percent lower than expected… which is odd and perhaps a better indication of the recovery-less recovery's reality?
- We're Living In The Age Of Capital Consumption
Authored by Ronald-Peter Stöferle via The Mises Institute,
When capital is mentioned in the present-day political debate, the term is usually subject to a rather one-dimensional interpretation: Whether capital saved by citizens, the question of capital reserves held by pension funds, the start-up capital of young entrepreneurs or capital gains taxes on investments are discussed – in all these cases capital is equivalent to “money.” Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience. Money is “only” the simplifying aid that enables us to record the incredibly complex heterogeneous capital structure in a uniform manner. It serves as a basis for assessing the value of these diverse forms of capital.
Modern economics textbooks usually refer to capital with the letter “C”. This conceptual approach blurs the important fact that capital is not merely a single magnitude, an economic variable representing a magically self-replicating homogenous blob but a heterogeneous structure. Among the various economic schools of thought it is first and foremost the Austrian School of Economics, which stresses the heterogeneity of capital. Furthermore, Austrians have correctly recognized, that capital does not automatically grow or perpetuate itself. Capital must be actively created and maintained, through production, saving, and sensible investment.
Moreover, Austrians emphasize that one has to differentiate between two types of goods in the production process: consumer goods and capital goods. Consumer goods are used in immediate consumption – such as food. Consumer goods are a means to achieve an end directly. Thus, food helps to directly achieve the end of satisfying the basic need for nutrition. Capital goods differ from consumer goods in that they are way-stations toward the production of consumer goods which can be used to achieve ultimate ends. Capital goods therefore are means to achieve ends indirectly. A commercial oven (used for commercial purposes) is a capital good, which enables the baker to produce bread for consumers.
Through capital formation, one creates the potential means to boost productivity. The logical precondition for this is that the production of consumer goods must be temporarily decreased or even stopped, as scarce resources are redeployed toward the production of capital goods. If current production processes generate only fewer or no consumer goods, it follows that consumption will have to be reduced by the quantity of consumer goods no longer produced. Every deepening of the production structure therefore involves taking detours.
Capital formation is therefore always an attempt to generate larger returns in the long term by adopting more roundabout methods of production. Such higher returns are by no means guaranteed though, as the roundabout methods chosen may turn out to be misguided. In the best case only those roundabout methods will ultimately be continued, which do result in greater productivity. It is therefore fair to assume that a more capital-intensive production structure will generate more output than a less capital-intensive one. The more prosperous an economic region, the more capital-intensive its production structure is. The fact that the generations currently living in our society are able to enjoy such a high standard of living is the result of decades or even centuries of both cultural and economic capital accumulation by our forebears.
Once a stock of capital has been accumulated, it is not destined to be eternal. Capital is thoroughly transitory, it wears out, it is used up in the production process, or becomes entirely obsolete. Existing capital requires regularly recurring reinvestment, which can usually be funded directly out of the return capital generates. If reinvestment is neglected because the entire output or more is consumed, the result is capital consumption.
It is not only the dwindling understanding of the nature of capital that leads us to consume it without being aware of it. It is also the framework of the real economy which unwittingly drives us to do so. In 1971 money was finally cut loose entirely from the gold anchor and we entered the “paper money era.” In retrospect, it has to be stated that cutting the last tie to gold was a fatal mistake. Among other things, it has triggered unprecedented instability in interest rates. While interest rates displayed relatively little volatility as long as money was still tied to gold, they surged dramatically after 1971, reaching a peak of approximately 16 percent in 1981 (10-year treasury yield), before beginning a nosedive that continues until today. This massive decline in interest rates over the past 35 years has gradually eroded the capital stock.
An immediately obvious effect is the decline in so-called “yield purchasing power”. The concept describes what the income from savings, or more precisely the interest return on savings, will purchase in terms of goods. The opportunity to generate interest income from savings has of course decreased quite drastically. Once zero or even negative interest rate territory is reached, the return on saved capital is obviously no longer large enough to enable one to live from it, let alone finance a reasonable standard of living. Consequently, saved capital has to be consumed in order to secure one's survival. Capital consumption is glaringly obvious in this case.
It is beyond question that massive capital consumption is taking place nowadays, yet not all people are affected by it to the same extent. On the one hand, the policy of artificially reducing the interest as orchestrated by the central banks does negatively influence the entrepreneurs’ tasks. Investments, especially capital-intensive investments seem to be more profitable as compared to a realistic, i. e. non-interventionist level, profits are thus higher and reserves lower. These and other inflation-induced errors promote capital consumption.
On the other hand, counteracting capital consumption are technological progress and the rapid expansion of our areas of economic activity into Eastern Europe and Asia in recent decades, due to the collapse of communism and the fact that many countries belatedly caught up with the monetary and industrial revolution in its wake. Without this catching-up process it would have been necessary to restrict consumption in Western countries a long time ago already.
At the same time, the all-encompassing redistributive welfare state, which either directly through taxes or indirectly through the monetary system continually shifts and reallocates large amounts of capital, manages to paper over the effects of capital consumption to some extent. It remains to be seen how much longer this can continue. Once the stock of capital is depleted, the awakening will be rude. We are certain, that gold is an essential part of any portfolio in this stage of the economic cycle.
- Who's Next? Venezuela's Collapse Puts These Nations At Risk
"It's a wake-up call for a lot of people who will say ‘Look, the stuff I own is actually very risky'…" warns Ray Jian, who oversees about $6 billion at Pioneer Investment Management Ltd. in London. "People have been ignoring risks in places like Lebanon for a long time," and the official default of Venezuela this week has emerging-market money managers are looking to identify countries that might run into trouble down the road.
While Bloomberg reports that while none are nearly as badly off as Venezuela – where a combination of low oil prices, economic mismanagement and U.S. sanctions did the country in – traders are scouting for credit risk, from Lebanon, where Prime Minister Saad Hariri’s sudden resignation has once again thrust the nation into a Saudi-Iran proxy war, to Ecuador, where recently elected President Lenin Moreno continues to expand the debt load in a country with a history as a serial defaulter.
1. Lebanon:
One of the world’s most indebted countries, Lebanon may hit a debt-to-gross domestic product ratio of 152 percent this year, according to International Monetary Fund forecasts. That’s coming at a time when political tension is rising. Hariri’s abrupt resignation, announced from Riyadh on Nov. 4, triggered about $800 million of withdrawals from the country as investors speculated that the nation would be in the crosshairs of a regional feud between the Saudis and Iranians. While the central bank says the worst may be over, credit-default swaps have hit a nine-year high.
2. Ecuador:
After a borrowing spree, the Andean nation’s external debt obligations over the next 12 months ballooned to a nine-year high relative to the size of its GDP. Ecuador probably has the highest default risk after Venezuela, according to Robert Koenigsberger, the chief investment officer of Gramercy Funds Management. The country will be vulnerable “when the liquidity environment changes and they can no longer go to the market to get $2.5 billion to plug the hole," he said. Finance Minister Carlos de la Torre told Bloomberg in an email on Thursday that there is "no default risk" for any of Ecuador’s debt commitments and the nation’s indebtedness is nowhere near "critical" levels.
3. Ukraine:
While the Eastern European nation’s credit-default swaps have declined from their 2015 highs, persistent economic struggles are giving traders reason for caution. GDP expansion has slowed for three consecutive quarters and the World Bank warns that the economy is at risk of falling into a low-growth trap. Ukraine’s parliament approved next year’s budget on Tuesday as it eyes a $17.5 billion international bailout.
4. Egypt:
Egypt’s credit-default swaps are hovering near the highest since September. The cost for protection surged in June as regional tensions heated up amid a push by the Saudis to isolate Qatar. While Egypt has been able to boost foreign-currency reserves and is on course to repay $14 billion in principal and interest in 2018, its foreign debt has climbed to $79 billion from $55.8 billion a year earlier.
5. Pakistan:
Pakistan’s credit-default swaps surged in late October and linger near their highest level since June. South Asia’s second-largest economy faces challenges as it struggles with dwindling foreign reserves, rising debt payments and a ballooning current account deficit. Pakistan is mulling a potential $2 billion debt sale later this year. Speaking at the Bloomberg Pakistan Economic Forum last week, central bank Deputy Governor Jameel Ahmad played down concerns over the country’s widening twin deficits.
6. Bahrain:
Bahrain’s spread rose dramatically in late October to the highest since January after it was said to ask Gulf allies for aid. The nation is seeking to replenish international reserves and avert a currency devaluation as oil prices batter the six Gulf Cooperation Council oil producers. Although its neighbors are likely to help, Bahrain could still be left with the highest budget deficit in the region, according to the IMF.
7. Turkey:
Despite high yields, investors are still reluctant to buy Turkish bonds. The nation has been caught up in a blur of political crises, driving spreads on credit-default swaps to their highest level since May. Turkey was the only holdover on S&P Global Ratings’s latest “Fragile Five” list of countries most vulnerable to normalization in global monetary conditions.
- The Coming Economic Downturn In Canada
Authored by Deb Shaw via MarketsNow.com,
- Canadian GDP growth has outperformed this year, helping the Canadian dollar
- As GDP growth slows and the Bank of Canada turns neutral, catalysts turning negative
- Crude oil and real estate look set for a downturn, with negative implications for the currency
Given its natural resource-based economy, Canada is a boom and bust kind of place. This year, the country has enjoyed a significant boom. Thanks to a government stimulus program, rising corporate capital expenditures and consumer spending, Canada’s GDP growth has been nothing short of spectacular in 2017. According to Statistics Canada, the latest reading for year-over-year GDP growth is a healthy 3.5% (as of August 2017). While this is stronger than all major developed countries, growth is decelerating from its most recent peak in May 2017 (when GDP growth was an astounding 4.7%). A visual overview of historical GDP growth is shown below for reference:
Turning a corner: Canadian growth comes back down to earth
Source: Statistics Canada
Following the crude oil bust in the second quarter of 2014, Canadian growth rates cratered. While the country avoided a technical recession, the economic outlook was poor until early 2016. After crude oil returned to a bull market in the first quarter of 2016, the fortunes of the country turned. Given limited growth in 2015, the economy had no problem delivering 2%+ year-over-year growth rates in 2016. As a substantial stimulus program ramped up government spending in 2017, growth rates have continued to accelerate this year.
Storm clouds on the horizon: crude oil and real estate
While Canada has delivered exceptional growth in the last two years, the future outlook is much more challenging. Beyond the issue of base effects (mathematically, year-over-year GDP growth will be much tougher next year), key sectors including the oil & gas industry and Canadian real estate look ripe for a downturn.
Crude bull market intact today, but at risk in 2018
As WTI crude strengthens beyond $55, crude oil is clearly in a bull market today. Looking at figures from the International Energy Agency, global demand growth continues to run ahead of supply growth. Thus the ongoing bull market is supported by fundamentals. Thanks to the impact of hurricanes and infrastructure bottlenecks in 2017, US shale hasn’t entirely fulfilled its role as the global ‘swing producer’ this year. The dynamics of supply growth versus demand growth are shown below:
Who invited American shale? US supply ruins the crude oil party
Source: International Energy Agency, forward OPEC supply estimates via US EIA
Unfortunately, the status quo looks set to change as US supply returns with a vengeance. According to estimates from the IEA, supply growth will outstrip demand growth in the first quarter of 2018. Digging deeper into supply estimates, US shale is once again to blame. Our view is that this changing dynamic will lead to a new bear market in crude oil. Looking back at recent history, crude prices formed a long-term top in the second quarter of 2014 once supply growth overtook demand. Similarly, crude prices bottomed in the first quarter of 2016 once supply growth fell below demand in early 2016. Given Canada's dependence on crude oil exports, a bear market for the commodity is likely to result in a weaker currency.
As China enters its latest real estate downturn, Canada not far behind
While Canadian real estate has enjoyed a great year, the future outlook is much tougher. Similar to its peers in Australia and New Zealand, Canadian real estate prices tend to lag real estate prices in China. This is both because Canada’s economy is deeply intertwined with China, and because the country is a big destination for overseas investment from China. While overseas investors make up a relatively small portion of buyers (around 5% according to government estimates), they serve an important role by acting as the marginal buyer for prime property. A comparison of new house prices in China versus Canada is shown below for reference:
Canadian real estate boom set to run out of steam
Source: Statistics Canada, China National Bureau of Statistics
As Chinese new house prices accelerated significantly in early 2015, Canadian real estate prices followed in 2016. As the Chinese market is now decelerating, negative growth appears to be on the horizon. In March 2015, Chinese house price growth bottomed at -6.1%. While the Canadian bull market continues for now (September new house prices registered at 3.8%), a downturn is likely over the next 6-12 months. As real estate makes up 13% of Canadian GDP, a significant decline in the fortunes of the industry are likely to spill over to the broader economy.
Implications for the Canadian dollar
At the beginning of the year, the Canadian dollar enjoyed a wide number of bullish catalysts including accelerating GDP growth, rising rate hike expectations, a relatively strong crude oil market and speculator sentiment that was at a bearish extreme. These catalysts, and the Bank of Canada’s actions in particular, helped the currency strengthen until late September.
Today, almost every factor that drives the Canadian dollar is working against it. Future GDP growth rates are set to keep decelerating. Looking at the Bank of Canada, its outlook for future rate hikes is now “cautious”. This is a big change from its hawkish tilt earlier this year. While speculator sentiment is no longer at bullish extremes, waning interest in the Canadian dollar is weighing on the currency. The ongoing NAFTA negotiations are another source of potential political risk. Finally, an impending downturn for both crude oil and Canadian real estate further worsen the picture. Thus, our longer term outlook on the Canadian dollar is bearish.
- Apple Diversity Chief Forced Out After Saying White Men Can Also Be 'Diverse'
Silicon Valley's disdain for its mostly white, mostly male tech workforce has reached absurd new heights.
The New York Post is reporting that, after just six months on the job, Apple Diversity Chief Denise Young Smith, who was named vice president of diversity and inclusion in May, has resigned her post after making a “controversial” comment last month during a summit in Bogota, Colombia.
What was Young’s crime? She insinuated that “diversity” can still exist among a group of white men because of their different life experiences.
“There can be 12 white, blue-eyed, blond men in a room and they’re going to be diverse too because they’re going to bring a different life experience and life perspective to the conversation,” the inaugural diversity chief said.
“Diversity is the human experience,” she said, according to Quartz. “I get a little bit frustrated when diversity or the term diversity is tagged to the people of color, or the women, or the LGBT."
That’s right: Young, who is – for the record – a black woman, has been forced out of Apple because her views on diversity were too inclusive.
As the Post pointed out, Young’s comments appeared to defend Apple’s overwhelmingly white and male leadership at a time when the company’s makeup is markedly uneven. This begs the question: What, exactly, was she defending them from?
Young, a 20-year Apple veteran who previously served as the company’s head of worldwide human resources (a senior level position), was later forced to apologize for her remarks, telling Apple staff that her comments “were not representative of how I think about diversity or how Apple sees it."
“For that, I’m sorry,” she said in an email. “More importantly, I want to assure you Apple’s view and our dedication to diversity has not changed."
“We deeply believe that diversity drives innovation,” an Apple spokesman told TechCrunch in a statement. “We’re thrilled to welcome an accomplished leader like Christie Smith to help us continue the progress we’ve made toward a more diverse workplace."
In 2017, only 3 percent of Apple’s leaders were black, and women held just 23 percent of tech jobs, according to Fortune. Female leadership stood at 29 percent, Apple said.
“Meaningful change takes time,” the company said in its diversity report. “We’re proud of our accomplishments, but we have much more work to do."
Smith will leave the company at the end of the year. Taking over as VP of inclusion and diversity will be Christie Smith, who spent 17 years as a principal at Deloitte.
She is also a white woman.
- Golden Catalysts
Authored by James Rickards via The Daily Reckoning,
The physical fundamentals are stronger than ever for gold.
Russia and China continue to be huge buyers. China bans export of its 450 tons per year of physical production.
Gold refiners are working around the clock and cannot meet demand.
Gold refiners are also having difficulty finding gold to refine as mining output, official bullion sales and scrap inflows all remain weak.
Private bullion continues to migrate from bank vaults at UBS and Credit Suisse into nonbank vaults at Brinks and Loomis, thus reducing the floating supply available for bank unallocated gold sales.
In other words, the physical supply situation has been tight as a drum.
The problem, of course, is unlimited selling in “paper” gold markets such as the Comex gold futures and similar instruments.
One of the flash crashes this year was precipitated by the instantaneous sale of gold futures contracts equal in underlying amount to 60 tons of physical gold. The largest bullion banks in the world could not source 60 tons of physical gold if they had months to do it.
There’s just not that much gold available. But in the paper gold market, there’s no limit on size, so anything goes.
There’s no sense complaining about this situation. It is what it is, and it won’t be broken up anytime soon. The main source of comfort is knowing that fundamentals always win in the long run even if there are temporary reversals. What you need to do is be patient, stay the course and buy strategically when the drawdowns emerge.
Where do we go from here?
There are many compelling reasons why gold should outperform over the coming months.
Deteriorating relations between the U.S. and Russia will only accelerate Russia’s efforts to diversify its reserves away from dollar assets (which can be frozen by the U.S. on a moment’s notice) to gold assets, which are immune to asset freezes and seizures.
The countdown to war with North Korea is underway, as I’ve explained repeatedly in these pages. A U.S. attack on the North Korean nuclear and missile weapons programs is likely by mid-2018.
Finally, we have to deal with our friends at the Fed. Good jobs numbers have given life to the view that the Fed will raise interest rates next month. The standard answer is that rate hikes make the dollar stronger and are a head wind for the dollar price of gold.
But I remain skeptical about a December hike. As I explained above, the market is looking in the wrong places for clues to Fed policy. Jobs reports are irrelevant; that was “mission accomplished” for the Fed years ago.
The key data are disinflation numbers. That’s what has the Fed concerned, and that’s why the Fed might pause again in December as it did last September.
We’ll have a better idea when PCE core inflation comes out Nov. 30.
Of course, the Fed’s main inflation metric has been moving in the wrong direction since January. The readings on the core PCE deflator year over year (the Fed’s preferred metric) were:
January 1.9%
February 1.9%
March 1.6%
April 1.6%
May 1.5%
June 1.5%
July 2017: 1.4%
August 2017: 1.3%
September 2017: 1.3%
Again, the October data will not be available until Nov. 30.
The Fed’s target rate for this metric is 2%. It will take a sustained increase over several months for the Fed to conclude that inflation is back on track to meet the Fed’s goal.
There’s obviously no chance of this happening before the Fed’s December meeting.
A weak dollar is the Fed’s only chance for more inflation. The way to get a weak dollar is to delay rate hikes indefinitely, and that’s what I believe the Fed will do.
And a weak dollar means a higher dollar price for gold.
Current levels look like the last stop before $1,300 per ounce. After that, a price surge is likely as buyers jump on the bandwagon, and then it’s up, up and away.
Why do I say that?
There’s an old saying that “a picture is worth a thousand words.” This chart is a good example of why that’s true:
Gold analyst Eddie Van Der Walt produced this 10-year chart for the dollar price of gold showing that gold prices have been converging into a narrow tunnel between two price trends – one trending higher and one lower – for the past six years.
This pattern has been especially pronounced since 2015. You can see gold has traded up and down in a range between $1,050 and $1,380 per ounce. The upper trend line and the lower trend line converge into a funnel.
Since gold will not remain in that funnel much longer (because it converges to a fixed price) gold will likely “break out” to the upside or downside, typically with a huge move that disrupts the pattern.
At the extreme, this could imply a gold price on its way to $1,800 or $800 per ounce. Which will it be?
The evidence overwhelmingly supports the thesis that gold will break out to the upside. Central banks are determined to get more inflation and will flip to easing policies if that’s what it takes.
Geopolitical risks are piling up from North Korea, to Saudi Arabia, to the South China Sea and beyond.
The failure of the Trump agenda has put the stock market on edge and a substantial market correction may be in the cards. Acute shortages of physical gold have also set the stage for a delivery failure or a short squeeze.
Any one of these developments is enough to send gold soaring in response to a panic or as part of a flight to quality. The only force that could take gold lower is deflation, and that is the one thing central banks will never allow. The above chart is one of the most powerful bullish indicators I’ve ever seen.
Get ready for an explosion to the ups ide in the dollar price of gold. Make sure you have your physical gold and gold mining shares before the breakout begins.
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