Today’s News 21st April 2016

• Treasury Removes Jackson From $20 Bill, Will Replace Him With Harriet Tubman

  Presenting an artist's impression of what your new $20 bill will soon look like.

  

   

  It's official.

  Moments ago Politico reported that the U.S. Treasury will announce that it plans to replace former President Andrew Jackson on the $20 bill with Harriet Tubman, the sources said. There will also be changes to the $5 bill to depict civil rights era leaders including Marian Anderson, Eleanor Roosevelt and Martin Luther King Jr.

  Not every dead president is being scraped however: treasury Secretary Jack Lew on Wednesday will announce a decision to keep Alexander Hamilton on the front of the $10 bill and put leaders of the movement to give women the right to vote on the back of the bill.

   Lew's decision comes after he announced last summer that he was considering replacing Hamilton on the $10 bill with a woman. The announcement drew swift rebukes from fans of Hamilton, who helped create the Treasury Department and the modern American financial system. Critics immediately suggested Hamilton take Jackson off the $20 bill given the former president's role in moving native Americans off their land.

  Jackson may remain on the $20 bill in some capacity, but will clearly be demoted.

  Lew told POLITICO last July that Treasury was exploring ways to respond to critics. “There are a number of options of how we can resolve this,” Lew said. “We’re not taking Alexander Hamilton off our currency.”

  * * *

  Here is the official statement from the US Treasury:

  Treasury Secretary Lew Announces Front of New $20 to Feature Harriet Tubman, Lays Out Plans for New $20, $10 and $5

   

  4/20/2016 ?

  WASHINGTON – In a letter to the American people, Treasury Secretary Jacob J. Lew today announced plans for the new $20, $10 and $5 notes, with the portrait of Harriet Tubman to be featured on the front of the new $20.

   

  Secretary Lew also announced plans for the reverse of the new $10 to feature an image of the historic march for suffrage that ended on the steps of the Treasury Department and honor the leaders of the suffrage movement—Lucretia Mott, Sojourner Truth, Susan B. Anthony, Elizabeth Cady Stanton, and Alice Paul.  The front of the new $10 note will maintain the portrait of Alexander Hamilton.

   

  Finally, he announced plans for the reverse of the new $5 to honor events at the Lincoln Memorial that helped to shape our history and our democracy and prominent individuals involved in those events, including Marian Anderson, Eleanor Roosevelt and Martin Luther King Jr.

   

  The reverse of the new $20 will feature images of the White House and President Andrew Jackson.

   

  In his letter, Secretary Lew noted that the Bureau of Engraving and Printing will work closely with the Federal Reserve to accelerate work on the new $20 and $5 notes, with the goal that all three new notes go into circulation as quickly as possible, consistent with security requirements.

  Here is Jacob Lew's "explanatory" letter:

  An Open Letter from Secretary Lew:

   

  When I announced last June that a newly redesigned $10 note would feature a woman, I hoped to encourage a national conversation about women in our democracy.  The response has been powerful.  You and your fellow citizens from across the country have made your voices heard through town hall discussions and roundtable conversations, and with more than a million responses via mail and email, and through handwritten notes, tweets, and social media posts.  Thank you for sharing this thoughtful and impassioned feedback.

   

  Over the course of the last 10 months, you put forth hundreds of names of people who have played a pivotal role in our nation’s history.  Many of you proposed that our new currency highlight democracy in action and reflect the diversity of our great nation.  Some of you suggested we skip the redesign of the $10 note, which is the next in line for a security upgrade, and move immediately to redesigning the $20 note.  And others proposed unconventional ideas, such as creating a $25 bill.

   

  I have been inspired by this conversation and today I am excited to announce that for the first time in more than a century, the front of our currency will feature the portrait of a woman—Harriet Tubman on the $20 note.

   

  Since we began this process, we have heard overwhelming encouragement from Americans to look at notes beyond the $10.  Based on this input, I have directed the Bureau of Engraving and Printing to accelerate plans for the redesign of the $20, $10, and $5 notes.  We already have begun work on initial concepts for each note, which will continue this year.  We anticipate that final concept designs for the new $20, $10, and $5 notes will all be unveiled in 2020 in conjunction with the 100th anniversary of the 19th Amendment, which granted women the right to vote.

   

  The decision to put Harriet Tubman on the new $20 was driven by thousands of responses we received from Americans young and old.  I have been particularly struck by the many comments and reactions from children for whom Harriet Tubman is not just a historical figure, but a role model for leadership and participation in our democracy.  You shared your thoughts about her life and her works and how they changed our nation and represented our most cherished values.  Looking back on her life, Tubman once said, “I would fight for liberty so long as my strength lasted.”  And she did fight, for the freedom of slaves and for the right of women to vote.  Her incredible story of courage and commitment to equality embodies the ideals of democracy that our nation celebrates, and we will continue to value her legacy by honoring her on our currency.  The reverse of the new $20 will continue to feature the White House as well as an image of President Andrew Jackson.

   

  As I said when we launched this exciting project: after more than 100 years, we cannot delay, so the next bill to be redesigned must include women, who for too long have been absent from our currency.  The new $10 will honor the story and the heroes of the women’s suffrage movement against the backdrop of the Treasury building.  Treasury’s relationship with the suffrage movement dates back to the March of 1913, when advocates came together on the steps of the Treasury building to demonstrate for a woman’s right to vote, seven years prior to the passage of the 19th Amendment.  The new $10 design will depict that historic march and honor Lucretia Mott, Sojourner Truth, Susan B. Anthony, Elizabeth Cady Stanton, and Alice Paul for their contributions to the suffrage movement.  The front of the new $10 will continue to feature Alexander Hamilton, our nation’s first Treasury Secretary and the architect of our economic system.

   

  The reverse of the new $5 will depict the historic events that have occurred at the Lincoln Memorial.  In 1939, at a time when Washington’s concert halls were still segregated, world-renowned Opera singer Marian Anderson helped advance civil rights when, with the support of First Lady Eleanor Roosevelt, she performed at the Lincoln Memorial in front of 75,000 people.  And in 1963, Martin Luther King, Jr. delivered his historic “I Have a Dream” speech at the same monument in front of hundreds of thousands.  Honoring these figures will bring to life events at the Lincoln Memorial that helped to shape our history and our democracy.  The front of the new $5 will continue to feature President Lincoln.

   

  Due to security needs, the redesigned $10 note is scheduled to go into circulation next.  I have directed the Bureau of Engraving and Printing to work closely with the Federal Reserve to accelerate work on the new $20 and $5 notes.  Our goal is to have all three new notes go into circulation as quickly as possible, while ensuring that we protect against counterfeiting through effective and sophisticated production.

   

  This process has been much bigger than one square inch on one bill, and along the way, we heard about countless individuals who contributed to our democracy.  Our website, modernmoney.treasury.gov, will highlight many of the names that we heard throughout this process, and help tell some of the many stories that inspired us.  Of course, more work remains to tell the rich and textured history of our country.  But with this decision, our currency will now tell more of our story and reflect the contributions of women as well as men to our great democracy.

   

  Thank you,

   

  Secretary Jacob J. Lew

  * * *

  Confused? Disturbed? Angry? You are not alone. The following rant by Mac Slavo expressed many feeling about the proposed change.

  Andrew Jackson, Who Fought Central Bank, Removed from $20 As “Public Concern for Liberty” Erased

  

  The War on Cash has many fronts.

  The latest battle is for the face of the currency itself, and the central bankers, who control the front anyway, have imposed a symbolic defeat against the leaders in America’s past who have fought against the stranglehold of the money makers.

  Naturally, there are liberal politics at play, fighting for every inch of ground in the war for ideological re-engineering. History is being whitewashed, various figures of antiquity rolling in their graves….

  At stake is a dispute for the powers of government even better than the more famous duel between Aaron Burr and Alexander Hamilton, of whom we also speak.

  The iconic $20 bill, with the face of President Andrew Jackson, and the $10 bill, with the face of the nation’s first Treasury Secretary, Alexander Hamilton, have long pitted two ideological extremes against each other as they pass along as some of the most used denominations in circulation.

  But now, the money powers at the Treasury Department have decided that it is time to add a woman’s face to the money supply as well.

  As such, the powers-that-bank have decided to oust Andrew Jackson from the line up, and with it, part of his legacy.

  It will be “removed in favor of a female representing the struggle for racial equality,” according to CNN, while an early proposal to remove Alexander Hamilton’s bill will be scrapped, though the proposal includes a redesign on the backs of his and several other notes with scenes from the Woman’s Suffrage Movement, Susan B. and all the gals.

  Treasury Secretary Jack Lew is expected to announce this week that Alexander Hamilton’s face will remain on the front of the $10 bill and a woman will replace Andrew Jackson on the face of the $20 bill, a senior government source told CNN on Saturday.

  Dramatically, it seems that there was a backlash to counter the coup against Hamilton, including support from former Federal Reserve chairman Ben Bernanke:

  The decision to make the historic change at the expense of Hamilton drew angry rebukes from fans of the former Treasury Secretary. The pro-Hamilton movement gained steam after the smash success of the hip-hop Broadway musical about his life this year.

   
  Those pressures led Lew to determine that Hamilton should remain on the front of the bill.

  And there’s a reason for Bernanke’s bias towards Hamilton.

  Here’s the scoop from the Economic Policy Journal, who called it a “despicable decision”:

  It was Hamilton, who from the early days of the nation clamored for a central bank and a strong interventionist federal government.

   

  I have quoted Thomas DiLorenzo on the evil Hamilton before:

   

  Hamilton was a compulsive statist who wanted to bring the corrupt British mercantilist system — the very system the American Revolution was fought to escape from — to America. He fought fiercely for his program of corporate welfare, protectionist tariffs, public debt, pervasive taxation, and a central bank run by politicians and their appointees out of the nation’s capital….

   

  Hamilton complained to George Washington that “we need a government of more energy” and expressed disgust over “an excessive concern for liberty in public men”…

   

  The Philadelphie Federal Reserve publication. A History of Central Banking in America, reports:

   

  Alexander Hamilton, the first Secretary of the Treasury, urged Congress to also assume the war debts of the individual states and then create a national bank to help refinance all these debts. Hamilton’s proposal faced major opposition. Critics said that Hamilton’s bank was unconstitutional, would be a monopoly, and would reduce the power of the states. Although Hamilton won, the bank’s charter was limited to 20 years.

  And that’s right where Andrew Jackson’s legacy with the banks picks up.

  With the charter of the first “Bank of the United States” ending, Jackson was determined to stop the charter of the second “Bank of the United States” and famously stated:

  “You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.” (Andrew Jackson, to a delegation of bankers discussing the recharter of the Second Bank of the United States, 1832)

  President Jackson likened their agents to the hydra-beast, with its many heads, and even survived an assassination attempt, by staving off an attacker personally.

  

  The bankers, and the powerful families including the Rothschilds who supported it, wanted a “national bank” because they could load the board with “their” guys and outweigh the will of the people and the normal channels of government.

  

  Of course, the same exact state of affairs has been going on today for more than a century with the Federal Reserve, which is run by the successors to the same exact banking interests, including the still immensely-powerful Rothschild family.

  The struggle is depicted well in “The Money Masters,” which spans several centuries of history with the threat of banking powers over individual sovereignty in stark contrast. To be sure, there is an important and nefarious plot afoot to ensnare you, your family and everyone on the block with debt.

   

  There is a line, and you should figure out what side of it you’re going to be on.

  Jackson narrowly succeeded in staving off banker domination of the U.S. during his day.

  Of course, Andrew Jackson, who was the United States’ seventh president, was also a complete controversy his entire lifetime. It is no surprise that the same people who took down the Confederate flag from the South on the back of a mass shooting tragedy are now trying to tear down the image of a particularly controversial and intriguing figure from the American past.

  Jackson was a recalcitrant and unyielding general and war hero, and later an outsider riding a wave of populist support into the White House, bringing in sometimes unscrupulous companions, and plenty of Masons. Many of his backers were diametrically opposed to the entrenched power of New York bankers and speculators, as well as patrician politicians who dominated the first phase of politics in the nation’s history. Jackson played a nasty role in the Trail of Tears affairs with Indians, too, and with the South and Western expansion of slave-friendly territories. Many shades of grey.

  Meanwhile, behind the scenes in the founding days of this country, Alexander Hamilton, an advocate of strong central government, and maneuvered on behalf of his banker masters to collectivize the war debt from the states and create a central bank to control the financial strength of the country, and ingrain the early United States with the mindset of the British masters they had just fought to shake off.

  After the creation of the Federal Reserve in 1913, and the crisis and consolidation of wealth during the Great Depression, and ever since the 2008 economic collapse, the rule by bankers has become a foregone conclusion, though there will be more chances to shake off their yoke of control. (BitCoin is one possible avenue; Congressionally-controlled greenbacks another; gold and silver yet another…)

  Erasing Andrew Jackson from the faces of the fiat funny-money that is passed around by an increasingly ignorant and dependent society (which itself has adopted digital currency as the new norm) will further cut off the past from the masses, and ensure their enslavement.

  

• Meet Trump 2.0: "Be Afraid, Anti-Trump Forces, Be Very Afraid"

  Authored by Chris Cillizza, originally posted at The Washington Post,

  Gone was "Lyin' Ted."  In its place was "Senator Cruz." Gone was the long-winded speech that went nowhere. In its place was a succinct recitation of states and delegates won. Gone was the two-day vacation as a reward for winning. In its place was an early morning trip to Indiana followed by another planned stop in Maryland.

  Donald Trump 2.0 made his official debut Tuesday night following his sweeping victory in New York, a win that looks to net him 90 delegates and reestablishes him as the man to beat in the Republican presidential race.

  That version of Trump was markedly more disciplined, gentler and more appealing than the version of Trump we've seen for much of the last year. And, that fact should scare the hell out of establishment Republicans who believed that their efforts to keep Trump from the 1,237 delegates he needs to formally capture the GOP nomination was beginning to catch on.

  Why? Because it's clear, at least for now, that Trump is listening to his new political advisers — chief among them convention manager Paul Manafort and national field director Rick Wiley. Trump's change in tone on Tuesday night was absolutely unmistakeable to anyone who has paid even passing attention to his campaign to date.  The man who had built his frontrunning campaign on a willingness to always and without fail take the race to its lowest common denominator — was suddenly full of respect for the men he beat and full of facts about the state of the race.

  "We have won millions of more votes than Senator Cruz, millions and millions of more votes than Governor Kasich," Trump said. "We've won, and now especially after tonight, close to 300 delegates more than Senator Cruz."

  The change in tone is absolutely necessary if Trump wants to not only find a way to 1,237 delegates but also unite the party behind him in any meaningful way heading into the general election campaign this fall. The truth is that Trump has to play an outsider and an insider game from here on out. The outsider game is to keep winning primaries by convincing margins like he did in New York. The insider game is to show unbound delegates as well as party leaders and influencers that he can be magnanimous, that he can be a uniting force within the party.

  Calling Cruz "Lyin' Ted" is a great laugh line at a Trump rally but accusing the Texas senator of holding up the Bible and then putting it down and lying isn't exactly the sort of rhetoric you need or want from a candidate who needs to bring the party together behind a common enemy in Hillary Clinton. It's the difference between being voted "class clown" and being elected student body president. The former delights in taking the low road for cheap laughs. (I speak from experience.) The latter takes the high road even if it's against his or her own natural instincts.

  Can Trump keep it up?  Discipline on a single night or even a single week is one thing. Discipline over several months amid what will be continued attacks from both Cruz and the "stop Trump" movement is something else. And, listening to your new advisers when they are, well, new is easier than listening to them when it's been a few months of biting your tongue and fighting back some of your natural attack instincts.

  But, Trump has shown — both on Tuesday night and over the past week or so — an ability to reign himself in that suggests he understands that this new and improved version of himself is the one that can actually win the Republican presidential nomination. 

  Be scared, anti-Trump forces. Be very scared.

  *  *  *

  And as Reuters reports, the message appears to be getting through as U.S. Republican officials began meeting on Wednesday, a day after Donald Trump's crushing victory in a New York presidential nominating contest, and said he has been winning growing acceptance within their ranks – but they want to see the billionaire do more to mend fences with the party establishment.

  Trump was the focus for the party's spring meeting of 168 Republican National Committee (RNC) members in Hollywood, Florida. The three-day conclave at an oceanside resort will take stock of the race for the White House and prepare for a possible contested convention in July in Cleveland.

   

  The New York real estate mogul's win Tuesday in his home state over rivals Ted Cruz and John Kasich was an important milestone for RNC members, who said it could put him on a pathway to acquire the 1,237 delegates needed to win the nomination outright without a contested convention.

   

  "There are a fair number of RNC members who were discounting his chances of success when we met in January and now see that he’s building a substantial lead and may in fact get to 1,237 before we get to the convention," said Steve Duprey, an RNC member from New Hampshire.

   

  "The New York results were such an overwhelming win," Duprey said. "It's impressive. That's what I've heard people talking about."

  Trump, Cruz and Kasich all sent envoys to the meeting to explain their pathways to the nomination.

  South Carolina Republican Party Chairman Matt Moore said Trump's recent hiring of Rick Wiley, a Republican veteran who was former presidential candidate Scott Walker's campaign manager, was a good sign.

   

  "It’s a positive signal despite a lack of general outreach over the past year, and I think the Trump campaign, for all the bluster, recognizes that the RNC will be an integral partner if he is the nominee and it’ll be almost impossible to win the presidency without the RNC as a partner," Moore said.

  In a good sign for Trump, there appeared to be no significant move by the Republican leadership, at least at this meeting, to change the rules governing the convention. There has been talk of rewriting the rules in a way that could benefit an establishment-backed candidate like Kasich.

  

  

• Oil Market Hype And Crisis Signal Greater Troubles Ahead

  Submitted by Brandon Smith via Alt-Market.com,

  Most people are not avid followers of economic news, and I don’t blame them. Financial analysis is for the most part boring and tedious and you would have to be some kind of crazy to commit a large slice of your life to it.

  However, those of us who are that crazy do what we do (and do it independently) because underneath all the data and the charts and the overnight news feeds we see keys to future events. And if we are observant enough, we might even be able to warn people who don’t have the same proclivities but still deserve to know the reality of the world around them.

  Most Americans and much of the rest of the planet probably was not aware of the recent oil producer’s meeting in Doha, Qatar this past Sunday, nor would they have cared. A bunch of rich guys in white dresses talking about oil production levels does not exactly spark the imagination. What the masses missed, though, was an event that could affect them deeply and economically for many months to come.

  A little background highly summarized…

  After the derivatives and credit crisis launched in 2007/2008 the Federal Reserve responded to disastrous levels of deflation with a fiat money printing bonanza. Everyone knows this. The problem was the central bankers never had any intention of actually using all that “cash” to support Main Street or the fundamentals of the economy.

  Instead, they used their printing press and digital loan transfers to artificially re-inflate the coffers of banks and major corporations. It was a blood transfusion for vampires, if you will.

  Through the use of TARP (Troubled Asset Relief Program), quantitative easing, artificially low interest rates, and probably a host of secret actions we’ll never hear about, a steady stream of capital (or debt, to be more precise) was pumped through corporate conduits. The goal? To keep the U.S. from immediate bankruptcy through treasury bond purchases, to boost bank credit, and to allow companies to institute an unprecedented program of stock buybacks (a method by which a corporation buys back its own shares to reduce the amount on the market, thereby manipulating the value of the remaining shares to higher prices).

  As the former head of the Federal Reserve Dallas branch, Richard Fisher admitted in an interview with CNBC:

  “What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.

   

  It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow."

  Why would the Fed want to engineer a hollow rally in stocks? As I have said in the past, they did this because they know that the average American watches about 15 minutes of television news a day and gauges the health of the economy only on whether the Dow is green or red. From 2009 to 2015, the Fed felt it needed to support markets through fiat and keep the public placated and apathetic.

  Stocks and bonds were not the only assets being propped up by the Fed, though. In tandem, oil markets were artificially inflated.

  Oil suffered a historic spike in 2008, then collapsed to near $40 (WTI). Starting in 2009 and the initiation of major stimulus measures by the Fed, oil prices came back with a vengeance; almost as if the spike in 2008 was merely a measure to psychologically prepare the public for what was to come. In 2010 prices climbed near the $90 mark, then in 2011 they peaked at around $115 a barrel.

  Then, something magical happened – in December, 2013, the Fed announced the Taper of QE3, something very few people predicted would actually happen (you can read this article breaking down why I predicted it would happen).

  The taper involved slowly cycling out Fed purchases a month at a time. By mid-2014 the taper was nearing completion. Suddenly, oil markets began to tank. By October, 2014 the Fed finished the taper and oil collapsed, from $95 a barrel to a low of under $30 a barrel at the beginning of 2016. The correlation between the Fed taper and the overwhelming drop in oil prices is undeniable. Clearly, high oil prices were primarily dependent on Fed QE.

  

  While equities fluctuated heavily after the end of QE3, they were still supported by the Fed’s other pillar – near zero interest rates. NIRP allowed the Fed to continue funneling cheap or free money to banks and corporations so they could keep stock buybacks rolling, but oil was done for.

  Now, until recently, oil markets have NOT reflected the true state of the global economy. All other fundamental indicators have been in decline since the crash of 2008, including global exports, imports, the Baltic Dry Index, manufacturing, wages, real employment numbers, etc. Oil consumption in the U.S., according to the World Economic Forum, has sunk to lows not seen since 1997. Current levels of oil consumption are FAR below projections made in 2003 by the Energy Information Administration. By most tangible measurements, we never left the crisis of 2008.

  

  Oil demand continued to fall but prices remained high because of Fed intervention. My theory: As with stocks, the Fed at that time needed to pump up the only other indicator the mainstream might notice as a sign of dangerous deflation – energy prices.  Dwindling demand is the real problem being hidden in chaos surrounding arguments over production.  The establishment prefers we focus completely on supply while ignoring the warnings of falling demand.

  QE was the first pillar to be pulled from the false recovery, and oil markets plunged. At the end of 2015, the Fed removed the second pillar of NIRP and raised interest rates. OPEC members met to discuss a possible production freeze agreement but the conference failed to produce anything legitimate. This resulted in stocks crashing in extreme volatility to meet up with oil.

  Then something magical happened once again. In mid-February, OPEC members and non-members arranged yet another meeting, this time with much fanfare and steady rumors hinting at a guaranteed production freeze deal. Oil began to climb back from the brink, and stocks rallied over the course of six more weeks.  All eyes were on Doha, Qatar and the oil agreement that would "save markets".

  I bring up the recent history of oil markets because I want to give some perspective to those people who suffer from a disease I call "ticker tracking".  This disease causes extreme short attention span issues and loss of long term memory.  The dopamine addiction of ticker tracking makes people forget about long term trends and their relation to the events of today, to the point that they ignore all fundamentals in the name of watching little red and green lines day in and day out.

  For example, the fact that the Doha meeting failed but did not result in an immediate and massive slide in oil and stocks sent ticker trackers crowing that the market "will never be allowed to fall".  Their affliction keeps them from realizing that the effects of Doha, like any other major financial event in the past, take TIME to set in.  Not to mention, they seem oblivious to the implications of oil struggling to move comfortably beyond $40 a barrel.

  Remember, oil was around $60 (WTI) six months ago, and had held over $100 (WTI) for years before then.  The crash in oil markets has ALREADY happened, folks.  What we are witnessing today is the last vestiges of that crash playing out in extreme volatility.  Now we wait for equities to fall and meet oil, as they did at the beginning of 2016, and as they eventually will again.

  Are stocks tracking oil prices? It may not be an absolute correlation, and they do tend to decouple at times, but the overall trend has been consistent; when oil falls, stocks loosely follow.

  The Doha meeting was always a farce; that much was obvious before it even took place. Bloomberg along with other media outlets were planting rumors of backroom deals between Russia and Saudi Arabia before the Doha event which would solidify a production freeze. Numerous mainstream “experts” claimed an agreement was essentially a sure thing. Even some skeptics within the liberty movement were doubtless that a deal was certain because “the internationalists would never allow oil prices to continue to drag on the public perception of the economy.”

  First, I am not a believer in the idea that global economic decisions are really made at these meetings. Any nation that has a central bank that is tied to the Bank of International Settlements and the International Monetary Fund is a CONTROLLED nation. Period. Economic arrangements are handed down from on high, not debated spontaneously in open forums. Read Harper’s 1983 article on the BIS titled “Ruling The World Of Money” for more information on how globalists control the economic policies of nations.

  Second, even if a person believes that such vital economic decisions as a global oil production freeze are decided in closed meetings while the press waits just outside, why would anyone buy into the Doha event?

  I am not quite sure why some people were gullible enough to think that after 15 YEARS of oil producers refusing to come together on any form of meaningful agreement they would suddenly shake hands this year. The only hope markets had was the possibility that the Doha meeting would result in an empty deal that they could spin in the mainstream news as a legitimate “production freeze.” Apparently they won’t even be getting that.

  The Doha talks ended in failure. All the signs said this would happen. As I wrote in my article “Lost Faith In Central Banks And The Economic End Game”:

  For anyone who was betting on oil markets to continue their rally past the $40 per barrel mark, there was a lot of bad news. Saudi Arabia crushed optimism by announcing that it would not be entertaining a “production freeze” proposal unless ALL other oil producing nations, including Iran, also agreed to it.

   

  Iran then doubly crushed optimism by announcing an increase in production rather than committing to a freeze.

   

  Russia then administered the final blow by releasing data showing that their oil output had risen to historic levels, indicating that they will not be entering into any agreement on a production freeze.

   

  Besides a recent overly optimistic (and rather suspicious inventory draw) which has caused a short term rebound, all indicators show that oil will be headed back to the lows seen at the beginning of this year.

  The effects of the Doha failure were delayed by a convenient labor strike in Kuwait, which caused algo trading computers to buy en masse despite the negative news.  As I pointed out on Monday, though, the Kuwait situation would be very short lived.  Now, it is time to watch and wait for Saudi Arabia and Iran to begin battling over market share and increasing production even more.  These things take a little time to develop.

  Currently oil has dropped back below $40(WTI) and markets are extremely volatile. I do not believe the failure of the Doha meeting alone will translate to a fantastic drop in stocks. But, I do believe that it is a very heavy straw added to the camel's back, and there is a negative trend developing before our very eyes that will become apparent in the next couple of months.

  As I have said in the past, a market entirely supported by rumors and hearsay can rally quickly, but also lose all gains at the drop of a hat. What the Doha debacle represents is a signal that the establishment is incrementally abandoning support for market systems.  This is translating to a loss of faith in central banks and major financial institutions.

  On top of this, look at the incredible amount of misinformation and misdirection that went into Doha, now completely exposed. The truth is crystal; the MSM lied and obfuscated helping the establishment to drive up oil prices and stocks, all for a mere six to eight weeks of market security.  As soon as these lies were revealed, volatility began to return.

  If the oil market bubble can implode (as it already has) in such a way due to the striking of fundamentals, then stocks can also be destabilized as well. It will happen, and I believe 2016 is the year it will happen.

  There are those out there that miscalled how the Doha meeting would end because they were blinded by a particularly dangerous bias; they have assumed that central banks and internationalists want or need to continue propping up markets indefinitely. This is not necessarily true. In fact, I have outlined time and again evidence showing that they are planning the opposite. That is to say, they are planning to deliberately bring down markets in a controlled manner.

  Oil was the most recent system to be undermined, and stocks will likely follow before the year is out. The fall in oil and the circus at Doha signals a change in strategy by the globalists. It signals a shift towards the controlled demolition of our economy and the centralization of fiscal power into a single global administrative entity. Order out of chaos.

  There is a steady stream of events in the next few months that can be used as a steam valve for sinking global markets. Watch the April Fed meeting carefully. The Fed recently held two “emergency meetings” along with a third surprise meeting between President Barack Obama and Fed Chair Janet Yellen. The last time such a meeting occurred the Fed hiked rates less than a month later. I expect that the Fed will raise rates once again either this month or in June.

  Also, watch for the Brexit (the British exit from the EU) referendum in June. Such a development would greatly shock an already unsteady Europe as well as the rest of the West.

  And, of course, watch for trends in oil and stocks, but do not get caught up in the day-to-day mindlessness of ticker tracking. It is pointless and will not help you to understand what is happening economically. In any economic crisis, stocks are the LAST indicator to turn negative and daily analysis by itself is in no way a crystal ball.

  The next couple of months should be very interesting. Stay vigilant.

  

  

• George Soros Warns "China Resembles US In 2008", Hard Landing "Practically Unavoidable"

  China's credit growth in March (and $1 trillion surge in total social financing in Q1) is a "warning sign" according to billionaire George Soros, "because it shows how much work is needed to stop the slowdown." Speaking at an event in new York this evening, Soros commented on "troubling developments" in China, the anti-corruption drive's impact on capital outflows and the real-estate bubble "feeding on itself." His conclusion, rather ominously, was that despite all the naysayers and fiction-peddlers, China "resembles US in 2007-8," before credit markets seized up and spurred a global recession.

  As Bloomberg reports, Billionaire investor George Soros said China’s debt-fueled economy resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession.

  China’s March credit growth figures should be viewed as a warning sign, Soros said at an Asia Society event in New York on Wednesday. The broadest measure of new credit in the world’s second-biggest economy was 2.34 trillion yuan ($362 billion) last month, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey and signaling the government is prioritizing growth over reining in debt.

   

  [ZH – f one adds up the Total Social Financing injected in the first quarter, one gets a stunning $1 trillion dollars in new credit, or $1,001,000,000,000 to be precise, shoved down China's economic throat. As shown on the chart below, this was an all time high in dollar terms, and puts to rest any naive suggestion that China may be pursuing "debt reform." Quite the contrary, China has once again resorted to the old "growth" model where GDP is to be saved at any cost, even if it means flooding the economy with record amount of debt.

  

   

  With China's debt/GDP already estimate at 350%, how much longer can China sustain this stunning debt (and by definition, deposit) growth continue?]

   

  Soros, who built a $24 billion fortune through savvy wagers on markets, has recently been involved in a war of words with the Chinese government. He said at the World Economic Forum in Davos that he’s been betting against Asian currencies because a hard landing in China is “practically unavoidable.” China’s state-run Xinhua news agency rebutted his assertion in an editorial, saying that he has made the same prediction several times in the past.

  Soros then went on to note that China’s capital outflow is a growing phenomenon driven by the nation’s anti-corruption campaign, which makes people nervous and spurs them to pull money out, and added that…

  China’s decoupling of the yuan from the U.S. dollar can help rebalance the currency.

   

  The linking to a basket of currencies is a “very positive, healthy” development for world.

  Finally in an ironic twist for a man who has all too often used the press for his own ends…

  China’s lack of a free press is “troubling development".

  Of course one should bear in mind that Soros is among those who are betting heavily on the eventual devaluation of The Yuan against the USD, and as we noted previously, the cracks are starting to show… As the Chinese corporate bond market begins to break…

  

   

  At least 64 Chinese firms have postponed or scrapped planned note sales this month, six times more than the same period a year earlier.

  And as BofA's David Cui explains, if poorly handled, they may cause significant financial instability…

  Since 2015, eight SOE bond issuers have run into repayment problems; four since February. We believe that the sharply accelerating pace and the growing chance of genuine defaults are largely behind the recent widening of credit spreads (Bond yield rising, credit spread widening & impact on stocks, Apr 15). In our view, any major SOE bond default would be difficult for the financial system to handle – as it is unexpected, it could lead to panic selling/a credit crunch (2016 Year-Ahead: what may trigger financial instability, Jan 3). At this stage, we expect that most problematic SOE bonds, if not all, will get largely bailed out. But this is a key risk that we need to monitor for the equity market outlook.

  Chart 1 shows the dates when the potential defaults were first reported vs. the credit spread of 5Y AA-rated enterprise bonds (more details on the bonds, Table 1). Among the eight, Tianwei, Erzhong, Sinosteel, China Coal Huayun and China Railway Materials are central SOEs; Guangxi Nonferrous, Yun Feng and Dongbei Special Steel are local ones. The media reported that some of these SOEs actively sought defaults in order to lessen their debt burdens – a few even reshuffled their assets in preparation (Caixin, Apr 18). This clearly raises the chance of genuine defaults in the bond market’s mind, in our view.

  

   

  

  Based on our assessment, the dynamics among the key stakeholders are as follows: some SOEs want to default; many local governments may lack the financial resources to save their SOEs from defaulting; the central government has the resources (after all, it can print), but needs to balance short-term financial stability with moral hazard concerns; the bond underwriters, many of them banks that lend to the same SOEs, need to balance financial interests against the risk of reputation damage and potential lawsuits; bond holders may go on a buying strike to force bail-outs.

  At this stage, we expect the central government and the bond underwriters to largely come up with the money to prevent any significant default of SOE bonds. It appears to us that, leading up to the 19th Party’s Congress in late 2017 (when a new group of leaders will be officially announced), a top priority of the central government is to prevent a financial crisis. For banks, the cost of bail-outs could be hidden for quite some time, so the incentive for them to suppress defaults is strong, in our view. Actually, there was at least one case in which a listed bank used its WMP under management to cover a defaulting bond ((Shadow banking default, pace accelerated sharply since mid-2015, Apr 7).

  If our expectation is right, the bond market could calm down as soon as it sees signs that bail-outs are the likely scenario. This would kick the can down the road, using liquidity to paper over a solvency issue.

  If, against our current expectation, the government/underwriters keep in mind:

  Implicit guarantee & contagion risk: SOEs default on loans all the time, but banks don’t “panic” unless there is a deposit run. However, the same stability cannot be maintained as easily in the shadow-banking sector. The shadow-banking sector is largely a market where greed, fear and herd mentality reign supreme. For years, bond buyers believed that bonds issued by any government-related entity, including SOEs and LGFVs, were bullet-proof. If this perceived “implicit” guarantee is broken, at a minimum, credit spreads would widen sharply and, at the worst, panic selling could develop, generating a negative spiral. Moreover, contagion risk could be high: if this “promise” is broken, will the market still believe in perceived government guarantees elsewhere, including those on RMB, the A-share market or housing prices?

   

  Expensive valuation: before the latest widening, credit spreads for AAA and AA+ rated LGFV bonds and enterprise bonds (largely SOEs’) were very narrow, at between 50-100pbs. As a result, the risk of holding on to these bonds is asymmetrical, unless one believes that the government will lower the risk-free rate significantly going forward (Bond yield rising, credit spread widening & impact on stocks, April 18). As a result, the market is biased toward selling at the moment, by our assessment.

   

  Leverage: the more transparent part of bond leverage is via repos and structured funds, which appear manageable at this stage (Bond market: leverage & potential defaults, 23 Oct 2015). However, a risk is that there could be significant amount of hidden leverage. Anecdotally, some banks provide loans to WMPs under their management to buy bonds, so the WMPs can achieve the “promised” returns to WMP buyers (currently, around 4% p.a.)

   

  A lack of transparency: the most important buyers of bonds in China include WMPs managed by banks, brokers and fund subsidiaries, banks themselves, money market funds and bond mutual funds, and insurers. While risk responsibility is clear-cut for most bond buyers, it is not so for the WMPs. Legally speaking, WMP buyers own the downside risk. However, the way that WMPs are sold in China has led many buyers to believe that these products are essentially term deposits. As a result, if financial institutions decide to pass on some of the default losses to these buyers, they may stop buying en masse, essentially generating a “bank” run in the shadow-banking sector (Risk of bank-run WMPs is rising, Feb 28). By the way, if the financial institutions, including banks, allow some SOE bonds to default, they will most likely pass on at least some of the losses. If they have to bear the losses themselves, they’d be much better off bailing out the bonds in stealth before the defaults, both financially and politically.

  Even without a panic, if the bond market becomes more cautious as a result of SOE bond defaults, there could be negative implications on credit flow, credit cost, economic growth, commodity demand, the RMB and the stock market.

  

  

• Does Saudi Arabia Have $750 Billion In Assets To Sell?

  As we reported over the weekend, based on NYT info, the Saudi finance minister said the kingdom would sell up to $750 billion in Treasury securities and other assets if Congress passed a bill that would allow the Saudi government to be held responsible for any role in the September 11, 2001 terror attacks. Senators Chuck Schumer of New York and John Cornyn of Texas introduced the “Justice Against Sponsors of Terrorism Act (JASTA) last fall, but the legislation seemed to gain some new traction after a related segment on 60 Minutes earlier this month.

  The punchline, of course, was that Saudi officials indicated they would sell its dollar-denominated assets if the law passed to avoid having those assets frozen by American courts.

  But does Saudi Arabia even have $750 billion of assets to sell?

  For the answer we go to Stone McCarthy who note that while they can’t answer that question definitively – recall that the exact amount of Saudi Treasury holdings remains a mystery as it is not broken out separately – here’s what they do know from the Treasury International Capital (TIC) data.

  First, the Treasury doesn’t specifically report Saudi Arabia’s holdings of U.S. securities. Instead, Saudi Arabia’s holdings are combined with the holdings of the following countries into a category called Asian exporters: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar and United Arab Emirates.

   

  At the end of January, Asian oil exporters held $563.6 billion of U.S. securities, with Treasuries and U.S. equities accounting for 92.2% of the total. Treasury holdings totaled $268.2 billion.

   

  

   

  These figures reflect holdings that Treasury can directly attribute to the Asian oil exporting countries. Regular readers of our updates on the TIC data know that foreign investors often hold securities at custodial institutions in other countries. For example, in February, the five major custodial centers held $1.1 trillion of Treasury securities. It’s possible that Saudi Arabia has holdings of securities parked in custodial accounts, but there’s no way to know that for sure from the TIC data.

   

  

  Also keep in mind that as we have previously reported, the Saudis were said to have been one of the most aggressive sellers of US-denominated assets in late 2015 and early 2016 to fund the country’s budget deficit as Petrodollar revenues collapsed.

  So, in short, the answer is nobody knows for sure, but if the Saudis did have $750 billion several months ago, they probably have far less as of this moment.

  

  

• The 2016 "Rage, Fear, & Anger" Election: Ron Paul's Deep Dive Into The Real Issues

  Ron Paul offers his detailed assessment of the 2016 presidential campaign this far. This is no candidate play-by-play, but a look at the strong undercurrents in society that are driving the debate. The people are very angry. But why? And what should be done about it?

   

  Full Speech (via RonPaulLibertyReport.com), [yes it's long but grab a glass of wine – or bottle of scotch – and comprehend what America faces]

  THE MIDDLE-CLASS RAGE, FEAR AND ANGER

  The middle class, which as defined by politicians now includes almost everyone, is angry, fearful, and filled with rage. When politicians address this group it’s frequently defined as “populism,” of which there are many varieties. Whether liberals, conservatives, libertarians, socialists, or authoritarians, when the people become restless and angry, demanding change, the politicians pay attention. This reflects a need to appeal to the masses, and a populist message is well received. But there is never real agreement on the analysis and suggested solutions to the problems. Instead, scapegoats are easily found. Economic understanding is not of high priority, and demagoguery is a useful tool for politically mobilizing the “victims.” Since there are real reasons given for the conditions that exist, competition arises among those who want to take charge of the crisis and benefit politically. This only increases the anxiety and anger of the people, who see themselves as victims of an unfair system.

  Until the political economic crisis became readily apparent, most politicians were unaware of the rapidly increasing distortions in wealth distribution. The dangers are conveniently ignored because most people live for the short term. If one is doing well financially, even though the system is financed with the whole country living beyond its means, worrying about preparing for a rainy day seems like wasted energy. However the payment is now coming due, and because few plan or understand it, any threat to benefits – both earned and unearned – creates great anxiety. Fear of being squeezed out of a share of the benefits that come with government intervention becomes the driving force for the whole country. The one group that seems the least worried about current conditions is the “one percent” who are financially secure by living off the special interest financial system. This does not include the wealthy who are financially rewarded for providing products and services that consumers choose to buy.

  But even the one percent who benefit from government programs and the monetary system are concerned that the current uprising will interfere with their privileged position.

  The size, determination, and anger of the current populist uprising is signaling that huge changes are coming both politically and economically. This generates a competitive blame-game when politicians get involved and try to benefit from the chaos. Republicans blame the Democrats and the Democrats blame the Republicans for the problems. It’s never an issue of philosophy but rather partisanship, personalities, or simply blaming poor management. False perceptions are commonplace as a consequence of government-controlled education that steers people away from the sad realities of economic planning that the people have blindly accepted for many decades.

  The fear and anger are only increased by the combination of a failed but never-questioned economic policy, and the demagogues, either ignorant or malicious, who provide magical promises to erase the injustices that are clearly visible.

  Though the nature of the breakdown is an economic issue caused by excessive government, those suffering – and the politicians who claim they can restore prosperity – demand more government intervention in our lives and in the economy.

  The entitlement mentality is now seen as a fundamental right even though it depends on government use of force to transfer wealth from one group to another. The liberal mantra has always been that the use of force backed up by guns is legitimate and moral. This is accepted as being morally superior to voluntarism for helping the poor. The irony is that it’s precisely this philosophy that impoverishes the middle class, increases the poverty of the poor, and provides the unearned benefits of the crony capitalists who were the recipients of the great bailout in 2009.

  We are witnessing the end of an era, but since denial and ignorance prevails few are aware of it. The current special interest entitlement system is on its last legs, but the recipients and the political power brokers believe a change in leadership is all that is needed. It’s not the system that’s at fault, they argue, it’s only better management that is required. It is readily apparent that the failure of this approach is leading to more fear and anger. 

  Too often the anger is thought to be a partisan issue. The claim is either that it’s all President Obama’s fault or George W. Bush’s fault – yet both parties have followed the same false philosophy of interventionism in both domestic Keynesianism and international empire-building, putting them both at fault.

  The people searching for answers conclude the government constantly lies to them. It’s easy to see the system rewarding those who control political power. Concern and understanding the inequities in wealth distribution are not authentic. Ignorance prevails even for the well-intentioned, which results in a deadly erosion of middle class wealth. Debt and deficits are not a serious concern, and both parties continue the endless wasteful spending that only aggravates the pervasive economic inequities that drive the people’s fears.

  Most Americans, now more than ever, have become aware of the terrible conditions the Federal Reserve has caused by its policies that result in ever more distortions in the transfer of wealth to the very wealthy at the expense of the middle class. Many people remain apathetic as to the details of Federal Reserve policy, but others recognize that the Fed is the financier of the welfare state and the endless wars that consume wealth. Our ability to issue the reserve currency of the world gives us a free ride for unlimited spending, debt, and borrowing. 

  Middle class anger results because the evidence is now available that the system is failing and the politicians offer only vague platitudes and rash promises that few citizens believe. The factions that compete for government benefits become more competitive and angry as they see the financial pie shrinking and the ability of government to deliver on their promises failing.

  When benefits, seen as entitlements, shrink, the recipients become fearful and angry and demand political action. This means more handouts, whether it’s for the rich or poor, without any understanding as to why the system is failing. The demagogues, who are aware of the problem, are quick to use this discord to gain greater political power while ignoring the true nature of the problem and the changes needed.

  It’s easy for presidential candidates to respond to legitimate concerns that have prompted the anger and fear. But if there is little understanding of the true nature of the problem and the proposed solutions, this won’t help to quiet the disgruntled electorate. The groups that claim they are being mistreated more than others will continue to be varied and increasing in numbers.

  Slogans and clichés, though they have been helpful to the politicians in the past, will not be believed and will only increase the anger. This leads the candidates to compete to be the most authoritarian in their promises to take care of everybody’s demands.

  The problems have been developing for almost 100 years. Progressivism, which was accepted in the early part of the 20th century, cannot be reversed by any single election. Vague political promises to patch up the system currently being used will no longer suffice.

  Real wages and the standard of living of the average American family have dropped in the 21st century and are almost where they were back in 1971 – the year we completely abandoned the gold standard. The ongoing crisis is deeply structural and not a management problem. Those who still spout the idea that stopping waste, fraud, and abuse in order to finance the perpetual demands of the people without a major overhaul of our political and economic system have no credibility and the people know it. Too many remain convinced that debt is not a problem and more debt and more monetary inflation is what is needed to restore economic growth. The masses have been taught and conditioned to believe that unlimited government spending and debt is the solution and not a cause of the crisis.

  But, it is a problem. As long as our politicians and the American people remain in denial, the problems will get much worse, the anger will accelerate, and violence in our cities will increase.

  The current ongoing destruction of the middle class and the anger it causes are the big issues we face. Economic conditions are the overriding issue, but the least understood. Most Americans are aware that the politicians are in over their heads and are not providing any sensible answers to the dilemma. Believing that a left or right wing noisy demagogue will save us is wishful thinking.

  Ignorance of economics has allowed years of excessive spending, but that is coming to an end. The entitlement mentality claims it’s a strictly moral issue for the government to take care of people in need. A combination of bad economic policy and confused morality has created the conditions that are threatening us today – not only in the US but worldwide as well.

  We must wake up and realize that much of the wealth the average American has enjoyed for decades has been an illusion, built on debt and a bizarre form of money. But the payment is now coming due and no one wants to accept the obvious: we are unable to pay for our extravagant spending on domestic welfare to both the rich and poor, while maintaining an unaffordable world empire. The result has only been anger. There is no understanding that market forces are now required and that the debt must be liquidated in order to restore economic growth to the system.

  The question of who must pay is a major political and economic one. Currently the middle class is aware of a major problem, but doesn’t have the foggiest understanding as to the causes or the solutions. So far the penalty has fallen on the shoulders of the middle class with a loss of good jobs, inflation, and a lot lower standard of living – something the government is unwilling to acknowledge. The fact that there’s a lack of understanding of economic policy contributes to the growing socio-economic crisis and the fear and anger that continue to worsen.

  The politicians are scurrying around searching for those they can blame for the crisis. Actual answers from the candidates are secondary to who achieves the political power to distribute a shrinking economic pie.

  WHO’S TO BLAME?

  Who gets blamed depends solely on the political persuasion of the accuser. If it comes from a leftist politician it’s always free markets, profits, not enough government transfer payments to the poor, not enough government spending, and of course, greed – regardless of how one’s money was earned. The solution is always to raise taxes.

  If it comes from a right or populist politicians, it’s immigrants, China’s unfair trade and currency policies, threats of terrorism, Mexico border policies, and an urgent need to sacrifice liberty for safety, xenophobia, or not enough militarism. Too often the blame is couched only in partisan terms – it’s the Democrats fault; it’s the Republicans fault; or it’s all Obama’s fault or George W. Bush’s fault. Philosophic views are not important, only effective demagoguery is.

  Too often it leads to a desire for a tyrannical type of government, coming from both the far left and the far right, that makes rash promises as to the ease with which the problems will be solved. We’re constantly being told that what we need is a new tougher boss who will get things done, without knowing exactly what policies will be pursued.

  It’s easy to find scapegoats – either racially motivated or based on faulty economic thinking. Little blame is placed at the door of the Federal Reserve’s ridiculous monetary policy, which has been so destructive. Negative interest rates are not topics in the presidential debates or the campaigns. Simply, one side blames economic downturn on the free market and another side blames the lack of tariffs and too much labor competition. Political changes are much easier to bring about by placing blame than by getting people to understand the true cause of our economic problems. The sad part is, it’s the economic explanation of poverty and the unfair distribution of wealth that is the issue that drives all political rhetoric while searching for scapegoats. The answers are out there, but we have a long way to go to convince the citizens and the leadership in this country who claim that more government is the solution.

  The fear of ISIS is used to justify the dangerous foreign policy we follow – a policy that has significantly contributed to the economic crisis, with trillions of dollars spent in recent decades on unwise militarism. Blaming foreign terrorism for our economic and debt crisis may have been a goal of Osama bin Laden, but only we can take the responsibility for the spending excesses for which we are now being forced to pay.

  There’s been little disagreement among the candidates that sacrificing personal liberty under today’s circumstances is required to provide security. It’s easy for the politicians to blame too much liberty – both economic and civil – as the problem. There should be little doubt that our crisis does not come from too much freedom, yet this issue is of no concern for the candidates.

  Some blame the crisis on inefficiency in government management and claim that ridding the system of waste, fraud, and abuse will be enough to solve our fiscal problems and control the deficits. Therefore nothing needs to be cut, or so they say. There’s no recognition that government by its very nature is based on theft, threat of violence, and control by the privileged few.

  Blaming various social groups instead of flawed policies is a frequent exercise. Racial distinctions are convenient for gaining a special benefit and are the source of social and economic friction. There’s no incentive to objectively see cause-and-effect in the problems that generate fear and anger. This makes it very difficult to unemotionally solve the injustices that our system of government planning has generated.

  Equal justice under the law is constantly being abused. It’s easy to blame racism for all the problems while ignoring the war on drugs and true causes of poverty, which are the major contributing factors to our dilemma.

  The authoritarians cannot resist blaming free markets and sound money for our economic ills and they never make an effort to distinguish between free markets and crony capitalism in their accusations. Ignorance and a desire to increase the role of government in our everyday life provide a convenient argument for a bigger and more intrusive government. Today even declared socialists are well received with their promises of unlimited “free stuff.”

  The defenders of central economic planning, a powerful central bank, sacrificing liberty for security, and foreign interventionism to maintain an empire will never blame themselves for their contributions to the crisis. Therefore, expect anger and fear to accelerate. Do not expect the 2016 election to enlighten the people or the politicians.

  Big government enthusiasts are always looking outward and for others to blame. But without some introspection it is guaranteed that the social friction now building will get worse. False blame creates bad solutions.

  Terrorism is a real threat. The consensus of both Republicans and Democrats is that the only cause is “radical Islam.” Any other suggestion elicits charges of un-Americanism and a willingness to ignore danger. It is suggested that any support for those who seek a peaceful resolution to international problems are unpatriotic and endangering our country. Claiming our foreign policy of occupation and preemptive war significantly contributes to the danger of terrorism is unthinkable, but suggesting that we carpet bomb countries in the Middle East draws loud cheers. This is hardly a setting for making our country safe from terrorism. Blaming others for our failed policy of maintaining a world empire while never looking at our own shortcomings is acceptable to most Republicans and Democrats.

  Not only do the demagogues blame others for our foreign policy failings, they also blame others for our weak economy. The threat of terrorism, that we helped to create, is also used to justify our government’s attack on civil liberties here at home. The politicians never assume responsibility for our out-of-control budgets since neither party truly believes that deficits are a serious problem. In fact, both sides cooperate in spending and ignoring the deficits because both sides want to increase spending. Sometimes it’s for domestic welfare and other times the spending is for “rebuilding” the military; most of the time they want both.

  The most significant economic problems we face today – the $210 trillion of unfunded liabilities, the $19 trillion national debt, along with our overblown foreign debt – are dealt with by ignoring them as the platitudes and excuses flow.

  The financial markets will eventually make it clear that the debt has become the most significant issue. It’s crucial that proper blame is placed on the spenders and Keynesian apologists who argue it’s not a problem. Without proper blame, understanding how to achieve economic growth is impossible. The people are justified in being fearful and angry because the magnitude of the crisis is becoming more evident every day, and they no longer believe what the leaders of the country have been telling them. Wishful thinking for a political savior to rise up and rescue us is just that: wishful thinking.

  Lack of knowledge and understanding of the crisis has ignited hatred between the factions seeking to take charge, escape blame, and satisfy the demands of the current victims. As the truth of the seriousness of our crisis becomes more apparent, only a few are reassured that there is a politician who has an answer. It has been suggested that the description of what we’re facing is that one party is a party of “know nothings” and the other is a party that knows all the “wrong things.”

  REAL ISSUES IGNORED

  Since there has been a lot of blame and no understanding, no serious solutions have been offered. The big problem is that in spite of different rhetoric coming from the two parties, there’s little difference in fundamental political and economic beliefs. With the dramatic personal charges being made by the candidates, the important issues are avoided. This must be on purpose. Since no one has answers, it’s best not to draw attention to their ignorance and to the total failure of both political parties to solve the problems.

  The issues avoided are numerous, including especially the debt and the $210 trillion of unfunded liabilities. And even as our as our economy steadily weakens, no serious debate occurs. When the subject comes up it’s for narrow political reasons and no solutions are offered. It’s abundantly clear that to both sides, debt is not of enough concern to actually lead them to entertain the idea that spending should be reduced. That would be bad politics. Both sides support “rebuilding the military” by increasing military spending. Though there is no real threat, we continue to spend about as much as everyone else put together. Domestic welfare spending is treated the same way. Some will continue to claim that cutting waste, fraud, and abuse will provide the funds necessary to continue our spendthrift ways. That’s been talked about for decades to appease the people, without success. There are far too many “debt danger deniers” in Washington to expect spending limitations to emerge.

  The US can still borrow from foreign sources since we are the issuer of the world’s reserve currency. Reality declares that this will come to an end – and soon if we yield to the temptation of placing exorbitant tariffs on our trading partners and starting a trade war.

  For us to continue our spendthrift ways, it will require the Federal Reserve to monetize the debt at an accelerating rate without loss of confidence in the dollar. In the campaign there’s no talk of getting rid of our central bank, as Andrew Jackson did in 1833. Today the authoritarian big spenders on both sides are totally dependent on the Fed in the short run to constantly create massive amounts of new money out of thin air. Yet it’s the middle class that suffers the most from this policy. No one is talking about how the Fed created the crisis, nor do they realize what lies ahead for us as a consequence.

  The ignorance regarding monetary policy makes it impossible to understand the problems of recessions, depressions, inflation, huge debt, massive mal-investments, unfair distribution of wealth between rich and poor, and how the cost of excessive government gets dumped on the middle class and increases the poverty rate. A lack of desire to help is not the problem. The problem is the politicians’ ignorance of the business cycle and their obsession with resisting corrections of the mistakes that are a natural consequence of interest rate manipulation by the Fed. One can only imagine the mistakes that will evolve from negative interest rates! The only saving grace will be that market forces will eventually overwhelm and the needed correction will come, but unfortunately with a lot more pain and suffering.

  So far the only solutions that are offered are more of the same policies that have created this current crisis – a crisis that has generated anger and class warfare, more spending, more debt, more taxes, more regulations, and more warfare. This will lead to a lot less freedom for everyone. Without understanding the problem, anger will continue to build and will result in greater violent confrontations.

  The systematic attack on our privacy, private property rights, and other civil liberties is not an issue getting any significant attention in the 2016 election. The politicians don’t talk about it because they have chosen to ignore it. It’s just not a serious problem from their perspective. Too many people have come to accept the principle that safety and security are far more important than worrying about personal liberty. The 9/11 attacks and a hyped-up fear of ISIS have pushed this false idea that sacrificing liberty for security is necessary. The American people for a long time have been accepting this principle and have come to believe that it’s a fair trade-off. 

  The sad consequence of our foreign policy of interventionism, which has been supported by both Democrat and Republican politicians, has drawn no significant debate in 2016. The only argument has been over management style. No one makes the case for rejecting the notion that we have a moral duty to be the policeman of the world. Our military presence in over 130 countries is of little concern to the candidates. The burden of a $1 trillion per year military budget has elicited no warning that this spending is excessive and a tremendous economic burden to our economy.

  The contest unfortunately is to see who can sound the toughest and most jingoistic regarding dealing with the al-Qaeda and ISIS. This has led to the xenophobic targeting of Islam and refusing to even consider that our bipartisan foreign policy of preemptive war, occupation, and sanctions is a contributing factor in stirring the hatred that indeed makes us all less safe.

  Logic should tell us that continuing the same policy that has stirred up hate and retaliation, that serves as a recruiting tool for the radical jihadists, will only put us in greater danger. The financial burden, the attacks by our own government on our civil liberties, and the greater threat to our national security are all related to our radical interventionist foreign policy, which has been endorsed by both Republican and Democrats for decades.

  There’s been no concern expressed about the collapse of the current Keynesian economic system. This huge financial and social event will significantly increase the fear and anger the American people are already experiencing. Therefore there is no reason to expect any positive changes as a consequence of this year’s election, regardless of who wins the presidency. Unrealistic promises and blaming various scapegoats for our problems will only result in more anger and violence. A better understanding of the problems we face is vital if we expect to preserve both liberty and prosperity.

  Failing to recognize the significance of a major era ending is compounded by the lack of concern and ignorance regarding the “deep state” or the shadow government. This is the unidentifiable special interest groups and individuals who are actually in control of our government – regardless of whether the Republicans or Democrats are nominally in charge. If the American people understood this, they would realize that elections mean little more than pacifying the electorate with the false belief that the people actually have a say in the affairs of state.

  Great concerns about the threat of al-Qaeda and ISIS help direct attention away from the real crimes committed within our borders, like the ill-conceived war on drugs and a justice system out of control. Asset forfeiture is ignored as a serious problem and is strongly supported by law enforcement agencies.

  The original Constitution listed essentially six federal crimes. Today there are 4500 federal crimes on the books and over 400,000 regulations – most written illegally by the executive branch – and we hear nothing about this horrendous legal problem. Our courts do not provide equal justice, which justly infuriates the victims of this system of injustice. Militarization of the police and police brutality are out-of-control, yet the recipients of stolen goods known as “government benefits” have no compunction in demanding the use of violence to get what they have been taught they have a right to have. The result is that inner city violence is not going to be reduced with this election. 

  As the economic crisis worsens and the cities explode, with different factions competing for the handouts, there will be calls for military force and initiating martial law. This is a non-issue in the current political debate and without understanding the significance of this problem will not be recognized. It will only get worse. Most of the candidates have indicated that they would use whatever military force is needed to quell domestic unrest regardless of the Constitution. 

  If there’s a discussion of danger within the United States, the demagogues will say the threat comes from ISIS and is the reason they demand an increase in military spending. They remain in denial that our presence in the Middle East is precisely why there’s a threat here. Unfortunately the worse the conditions get here at home, the greater will be the demand for a more authoritarian leader to take charge and solve the problems they don’t understand. The campaign of 2016 will not bring about any significant improvement in the problems that precipitated the anger and generated our political and financial crisis that they have ignored.

  THE ANSWER

  A philosophic revolution is required. The American electorate is very angry and is demanding changes. Though the anger is justified, the exact cause and correction for it is poorly understood. Economic conditions are a driving force but are not recognized as such. There is no realization that the cataclysmic events that will be associated with an end to the current era require revolutionary changes in our economic and political thinking.

  Since the problems are poorly understood it was guaranteed that a blame game by all concerned – the politicians, the voters, the victims, and the political parties – would result. Scapegoats are found and blamed – guilty or not. All this prompts a variety of answers with wild promises made by socialists and crony capitalists. Demagogues with magic solutions are everywhere to be found.

  Ignorance, along with a struggle for power by those who claim they have the answers, ignores the actual causes of the social divide that are not readily apparent in the current election.  Some are pleased with this lack of discussion since it could identify those responsible for the mess and the failed ideas that need to be rejected.

  A serious discussion about the role of government is needed in order to redirect the failed course upon which we find ourselves. Different types of governments reflect the degree to which the people choose to live in a free society. The form of government that was proposed by the Founders is no longer recognizable. This fact explains the conditions that have generated the anger and fear that is prevalent today. Nobody likes to hear it, but the answers are not available to us unless we change the people’s attitudes about the role the government should play in our lives, the economy, and in the world.

  The only real answer to a failed interventionist/authoritarian system is to replace it with a system of nonintervention and voluntarism. It has to be based on the moral principle of liberty and non-aggression permitting all things peaceful. The false moral principle of government-directed “humanitarianism” must be intellectually refuted as a false God.

  Utilitarianism and pragmatism are code words for avoiding all viewpoints held by those who love liberty and only want to be left alone. Unregulated non-violent voluntarism is rejected as not being beneficial to the “common good.” It is argued that government-mandated equality is superior to any desire for individualism and self-reliance.

  Utilitarianism, pragmatism, and economic planning go together, which always leads to dependency and corruption of economic and political power. Sadly the result is that only the powerful and wealthy special interests thrive. A society that condones even a small amount of authoritarianism is compromised by rejecting the basic tenants of liberty. The system then grows like a cancer until that society is destroyed, which we are now in the process of doing to ourselves.

  When virtue becomes a government mandate, it makes it impossible for individuals to achieve it, which further destroys the social and economic order. Instead the result is: taxes to force people to be charitable; torture to protect the state; drug wars to improve behavior; elimination of privacy to protect government secrecy; thousands of laws and regulations to monitor our every action, all of which are performed in a non-virtuous manner. Only when efforts to improve oneself and others are done in a voluntary and nonviolent manner does it represent virtue. Government efforts, whether it’s to improve one’s personal behavior, legislate economic fairness, or direct the affairs of other countries only serves to inhibit virtue. This leads to society’s collapse, along with war and poverty. For liberty to work society must have a virtuous people who reject the use of all aggressive force, especially when it’s used by government in the name of humanitarianism.

  Even the 400,000 federal regulations and the 4500 federal laws cannot save a system of mandates that violates the moral standards that are vital to a moral society. Free markets are superior to government economic planning. Government rules on personal behavior cannot instill moral standards. Bombs, sanctions, and occupations of other countries cannot make the world safe or more prosperous.

  All these efforts result in the loss of liberty. Under these conditions a republic cannot exist. The system will always fail and the people will suffer. The solution will then have to be in the form of a revolution, hopefully peaceful, and with the insistence on recognizing the natural right to life and liberty.

  The worse the conditions get the louder the demagogues’ promises become. Competition between demagogues produces sharp rebuttals, and supporters of different candidates become overtly competitive and violence is threatened. With no understanding of the cause of the problems, arguments over solutions will vary. Since real evaluations and authentic solutions are absent it only incites more anger.

  Since the 2016 election distracts from the real issues, the correct solutions will not be believable. The system is broken and not fixable. Attempts to do so only lead to frustration that further divides the people. Under these conditions the guilty don’t want to hear the truth and deny it if they do.

  Whistleblowers like Edward Snowden and John Kariakou are despised for telling the truth and are more likely to be punished than those who were criminally negligent.

  H.L. Mencken had it right: “The most dangerous man to any government is the man who is able to think things out for himself,” and come to recognize that, “the government he lives under is dishonest, insane, and intolerable.” But will the campaign of 2016 answer these concerns?  Remember that while living in an empire of lies, pursuing truth is considered treasonous.

  Simple anger is not equivalent to understanding the predictable evil of authoritarian government. It’s the fear of losing the immoral benefits along with corrupt government that stirs their anger. The failure of the current system reveals the lies, the senseless wars, and the disdain for the people’s rights to life liberty, and property that generates the anger now being expressed by the masses.

  If the people continue to deny that government by its very nature throughout the ages has been notoriously inept, immoral, and corrupt, a solution is not possible. The only result will be a new government based on the same immoral principles. Nothing positive will occur. Basic moral principles of liberty, self-reliance, and strict limits on government power, are required if progress for peace and prosperity is to be achieved.

  This type of government cannot exist without a philosophical revolution regarding the proper role of government in a moral society. The election of 2016 will not guide us in that direction. It doesn’t even deal with the crucial issues of our time, and certainly not with the moral principles underpinning a free society. The conflict between candidates and parties is superficial and personal – without substance. The 2016 election will change nothing. It’s a great distraction from the policies that have delivered the current crisis to us. This is done on purpose since there is general agreement in both parties on the major issues and it’s not to their advantage for the people to understand this.

  The major issues that both parties and their candidates agree upon include: the central bank’s monetary policy; welfarism; federal government involvement in education and medicine; the drug war; privacy abuse; preemptive war; foreign interventionism; and the US as the policeman of the world with increased spending for the military.

  The 2016 election won’t make any difference in any of these areas. The American people continue to be deceived into believing elections are serious affairs that affect our future. The Deep State will remain in charge regardless of the outcome and few will even be aware of the invisible fist that rules over us.

  The whole process is a charade and no policy of substance is debated. The election will turn out like all the rest. The momentum toward bigger and more intrusive government will continue. The process distracts from what is really going on; sometimes out of ignorance and sometimes just out of wishful thinking; sometimes on purpose. The process has everyone looking in all the wrong places for the answers. The answers can only be found in an intellectual revolution that refutes the authoritarians who sanction government-directed aggression in all areas of society. What we need is to define and endorse the proper role of government in a free society. There is no serious talk in the campaign of the crucial issues that need corrected if we expect to escape from the mess we’re in.

  Following are a few of those concerns that should be addressed. 

  There is:

  • No talk of liberty and its moral foundation;
  • No talk of how conservatives and liberal authoritarians are equally harmful;
  • No challenge to the entitlement mentality;
  • No challenge to the bipartisan support for empire;
  • No challenge to the unsustainable debt accumulation;
  • No challenge to government secrecy and the government’s violation of the people’s privacy;
  • No concern for the violation of private property rights;
  • No understanding of how our foreign policy endangers our security;
  • No understanding of how free markets regulate economic activity for the purpose of serving the consumers;
  • No concern for government aggression in controlling habits, people’s bodies, thoughts, economic choices, prices, or wages;
  • No condemnation of the current doctrine of preemptive war;
  • No concern for our participation in worldwide organizations that cede political power to the elites at the expense of national sovereignty;
  • No mention of why sanctions are a prelude to war;
  • No demands that the insane war on drugs be ended;
  • No understanding that personality clashes and name-calling is a substitute for dealing with the issues;
  • No awareness of the need for a philosophic answer to our crisis.

  When it’s discovered that excessive government interference in voluntary and peaceful activities is the culprit, it will become clear that the solution can only come by successfully presenting the case for liberty. It will follow that reining in the government will be a necessity – not an option.

  The awakening will arrive when we face a total societal breakdown – once it’s realized that the accumulation of massive debt is unsustainable and the dollar suffers the consequences, which will negatively affect all Americans and many throughout the world. But it also provides an opportunity to open the door to a free society. Without the cost of war and welfare in a new system that accepts the moral principle of free markets, sound money, private property, and voluntary contracts, prosperity and peace will break out.

  The limited role for government in a republic is to provide equal justice for all, including the protection of life, liberty, and property. It becomes destructive when governments overreach and instead become the greatest threat to liberty and justice – something from which we are suffering today.

  Sadly these issues will not cross the minds of the leaders of either major political party at this time in our history. But they will when an upcoming generation of young people, enthusiastic about the cause of liberty and with a growing awareness of the problems, concludes that:

  ?LIBERTY IS THE ANSWER!

  

  

• "Sleepy" ECB Preview: What Every Bank Thinks Draghi Will Do Tomorrow

  Tomorrow's ECB meeting "looks set to be sleepy" according to Saxo Bank's Mads Koefed as Draghi is largely cornered into confirmation he will do "whatever it takes" and some additional details on the corporate bond purchase plan. Most of the sell-side's research suggests the same, as Bloomberg notes, ECB will probably leave the door open for further cuts if needed; but any downside risk for the euro is seen limited, as Draghi stays on hold by reinforcing its dovish stance after the mix of easing measures announced in March with some defense of the efficiency of his policies after recent criticism by Germany.

  The bund market appears to once again pricing in some further deposite rate cuts (deeper into negative territory), but has been disappointed twice now…

  

   

  And as Saxo's Mads Koefed notes, unlike the explosion of announcements that was the March ECB meeting, today's meeting of the governing council promises to be dull.

  Inflation has ticked up to 0% year-over-year in March from minus 0.2% when looking at the headline series while core inflation climbed back to 1% last month from a one-month visit to 0.8% in February.

  

   

  Economic activity has remained subdued since the last ECB meeting though the flash manufacturing PMI has climbed to 51.6 from 51.2. The services PMI index declined to 53.1 from 53.3 and overall data – for example, the EuroCOIN series – suggest GDP growth of around 0.3% q/q for Q1.

   

  This comes on the back of a similar print of 0.3% in both Q3 and Q4 of last year.

   

  Lending to households accelerated to 2.2% y/y in February from 1.9% in January with consumer credit climbing at a 5.2% annual rate, the highest level seen since early 2008. Lending to corporations, meanwhile, is evolving more tepidly with growth of just 0.6%.

   

  The M3 measure of the money supply climbed 5% y/y through February, unchanged compared to January.

   

  

   

  Turning to the markets, EURUSD has strengthened by 1.5% since the March 10 meeting to around 1.1340 following a 1.6% move higher on the day. More generally, however, the euro has traded sideways against a basket of currencies (EURJPY, for example, is down 1.9%), but this excludes the 1.2% move during March 10.

   

  Stocks (STOXX50) are 4.8% higher while EURIBOR has fallen.

   

  Taking it all into account, the meeting of the governing council looks to be a sleepy affair with not much new coming to the surface. We may get some additional details on the corporate sector purchase programme (part of the €80bn monthly purchases), but otherwise the stage is set for Draghi to reiterate that the ECB stands ready to combat low inflation while expressing confidence in the measures announced last month. 

   

  The ECB meeting always has the potential to be a market-mover, but this particular one looks destined to be a non-event.

   

  Will Draghi surprise? Again? Most of the sell-side thinks not…

   

  Goldman Sachs (Dirk Schumacher)

  • ECB to keep rates unchanged, Draghi will express confidence that package unveiled in March will help steer CPI toward target
  • Draghi also likely to express ECB’s willingness to respond if downside risks to growth and CPI materialize
  • Draghi will also clarify that further rate cuts remain part of monetary toolbox after his comments in March were interpreted by many as closing the door for further rate cuts
  • Some further details on new CSPP may be published
  • Expects CSPP to be conducted in similar fashion to covered bond and asset-backed securities program, and purchases to take place in primary and secondary market; ECB will decide in discretionary way how much corporate debt to buy
  • Expects an extension of APP to Sept. 2017 from March 2017 currently

  JPMorgan (Greg Fuzesi)

  • No action expected this week; see next round of easing to focus on extending QE program beyond March 2017
  • Chances of further rate cuts may be higher than initially thought
  • ECB concerned about pressure of negative rates on banks and about fueling currency war; that said, incremental deposit-rate cuts still seem possible, as does a tiered reserve charging system; Draghi is likely to clarify the message around this at this week’s press conference

  BofAML (Gilles Moec, Athanasios Vamvakidis)

  • Expect Draghi to defend ECB this week; he could also remind markets that QE is open-ended and won’t stop as long as ECB is missing CPI target
  • Draghi also likely to clarify that another depo-rate cut remains available
  • Expect Draghi to sound dovish but do not see a sustained market impact
  • More sustained EUR weakness requires a critical mass of strong U.S. data and stable global markets allowing Fed to sound more confident
  • Continue to forecast EUR/USD at parity by end-2016, expecting two Fed hikes this year

  BNP Paribas (Ken Wattret)

  • ECB should reiterate this week that it stands ready to take action to deliver on price-stability mandate
  • While expect the door to be left more open to further cut in policy rates than during Q&A session on March, there is limited room for maneuver
  • CSPP details possible but may take longer
  • Expect ECB to follow the template used for current asset-backed security and covered-bond purchase programs, suggesting no specific numeric target for monthly volume of purchases, buying in both primary and secondary markets, and opting for risk sharing

  Citigroup (Guillaume Menuet)

  • Don’t expect any new measure this week
  • Look for more policy measures in coming months including a refi rate cut by 5bp each in Sept., Dec. and March 2017
  • Also expect a QE extension by another 6 months in Sept., adjustment to issue/issuer limit for PSPP to ~40% and 10bp depo-rate cut in March next year

  HSBC (Karen Ward)

  • Draghi to convey the message that ECB can still do more
  • During Q&A, expect questions related to progress with Greece and IMF and on what might happen to Portugal’s access to QE if DBRS downgrades the country on April 29
  • Expects Draghi’s answers to be elusive

  UBS (Reinhard Cluse)

  • Expects a debate on limits of monetary policy, ‘helicopter money’, corporate bond purchases and credit conditions at this week meeting
  • Base-case scenario remains that ECB is “done” now and that it won’t add more stimulus over coming months

  Morgan Stanley (Elga Bartsch)

  • It might be too early yet to get full formal details on planned buying of corporate debt under new CSPP
  • Don’t expect any additional policy measures before 3Q
  • Expect another depo-rate cut of 10bp in 2H and see a near even chance of ECB upping and extending QE

  Natixis (Johannes Gareis)

  • Draghi likely to address recent EUR strength by downplaying comments made at March meeting that policy rates may already have reached the lower bound
  • More details about future corporate-bond purchases and TLTROs in focus this week
  • ECB will take a wait-and-see approach over coming months; from a long-term perspective, CPI might be too weak for ECB to remain on hold; the most likely easing step is an extension of QE program beyond March 2017

  UniCredit (Marco Valli)

  • ECB’s focus remains on implementing several measures already announced; expect a strong, open-hearted defense of ECB policies
  • This week’s meeting is unlikely to generate a meaningful impact on euro
  • ECB is very likely to be unhappy with stronger EUR; however, there is not much Draghi can do about it, at least for now

  Commerzbank (Bernhard Gruenaeugl)

  • Probably too early to add substantial detail on CSPP with still about two months to go before the actual start of the program
  • The question of whether insurance corporations’ seniors could be bought or not should remain a matter of lively debate for now

  Credit Suisse (Peter Foley)

  • ECB is likely to leave the door open to additional policy measures in future if economic situation deteriorates

  Nordea (Aureljia Augulyte)

  • Keep long EUR/USD
  • Market is pricing close to a full 10bps cut in year ahead, so EUR needs a really big surprise to get knocked

  ABN Amro (Nick Kounis)

  • Focus in April meeting will be on details of corporate- bond scheme; ECB will probably reveal a relatively large eligible universe of ~EU750b
  • It would include traditional non-financial corporates as well as “financial corporations other than credit institutions”
  • In this category, there are many funding entities of normal corporates, real-estate corporates and insurers
  • Expects ECB to also include floating-rate notes, bonds that mature within 1 year and those with an amount outstanding less than EU500m

  ING (Petr Krpata)

  • Negative impact on EUR should be very limited as any strong pre-commitment to further easing should be absent
  • It’s increasingly difficult for ECB to materially weaken EUR
  • Despite no real action, there would probably be some dovish comments, whereby ECB stresses downside risks to economic outlook

  BBVA (Roberto Cobo Garcia)

  • Draghi will likely stress that ECB keeps the door open to adopt further easing measures if needed; he will probably remark that further rate cuts aren’t out of the table
  • Expect ECB meeting outcome to be negative for EUR; also expect more details on CSPP

  Credit Agricole (Manuel Oliveri, Valentin Marinov)

  • ECB may not mention EUR but will keep the door wide open to more accommodation
  • While EUR may recover in immediate aftermath, the longer-term risks for currency should be on downside

  Finally we note that EURUSD did drop quite notably today…though still remains considerably stronger post-March meeting…

  

  “The euro has looked a bit vulnerable," said Shaun Osborne, chief foreign-exchange strategist at Bank of Nova Scotia in Toronto. "There has been some speculative selling ahead of the ECB on the view that Draghi will not do anything tomorrow policy-wise but might sound dovish, and could open the door to lower rates again."

  

  

• The Shocking Reason For FATCA… And What Comes Next

  Submitted by Nick Giambruno via InterntionalMan.com,

  If you’ve never heard of the Foreign Account Tax Compliance Act (FATCA), you’re not alone.

  Few people have, and even fewer fully grasp the terrible things it foreshadows.

  FATCA is a U.S. law that forces every financial institution in the world to give the IRS information about its American clients. Complying with it is a huge financial and administrative burden, measured in hundreds of billions of dollars. It’s a paper shuffler’s dream come true.

  FATCA is the reason the vast majority of banks, brokerages, and other financial institutions outside of the U.S. shun American clients.

  I was just in Singapore, which has one of the soundest banking systems in the world. I can personally attest that banks there treat potential American clients as radioactive liabilities to be avoided.

  This is how FATCA makes it much more difficult to move money outside of the U.S. Combined with other costly, extraterritorial U.S. regulations, the law amounts to de facto capital controls.

  It’s no surprise so few people understand FATCA. Governments and institutions often give their most dangerous laws and schemes dull and opaque names to cloud their true purposes.

  The Federal Reserve is an excellent example of this. After two central banking experiments failed to take root in the 1800s, anything associated with a central bank became deeply unpopular with the public. So, central bank advocates tried a fresh branding strategy.

  Rather than call their new central bank the Third Bank of the United States (the previous two were named the First and Second Bank of the United States, respectively), they gave it a vague and boring name to hide it in plain sight from the average person. They named it the Federal Reserve.

  Unfortunately, these smoke and mirrors worked pretty well. Nearly 100 years later, most Americans don’t have the slightest clue what the Federal Reserve is, what it does, or how it affects them.

  I think the same dynamic is at work with FATCA.

  Ostensibly, FATCA is about cracking down on offshore tax evasion. But I think the U.S. government has another, more sinister motive.

  Let’s peel back the layers of this onion…

  FATCA should bring in around $900 million per year, on average, and that’s an optimistic estimate. However, $900 million would only be a drop in the bucket (around 0.2%) next to the federal government’s $438 billion deficit.

  Even if the U.S. moderately reduces the federal deficit, FATCA revenue would still be a small pittance in comparison.

  This begs the question: Why would the U.S. government go to the enormous cost and trouble of implementing FATCA for such a relatively meager amount of money?

  FATCA on Steroids

  FATCA’s real purpose is not to collect money. It’s to pave the way for a global FATCA, informally known as GATCA.

  You see, complying with FATCA often breaks privacy laws in other countries. To get around this, the U.S. government has negotiated bilateral agreements with pretty much every country in the world. But it’s not practical for each and every country to create its own version of FATCA and accompanying web of bilateral agreements. That would be slow and tedious.

  So, the central economic planners at the G20 and OECD have devised a new “global standard” for the automatic exchange of financial information between governments. It’s called GATCA, and it’s modeled on FATCA.

  In other words, bureaucrats from these supranational institutions are foisting a “FATCA on steroids” on the world.

  This would have been impossible if the U.S. hadn’t cleared the path with FATCA. The G20 and OECD needed the U.S.—the sole financial superpower (for now at least)—to cram its privacy-killing measures down the throats of the rest of the world. No other country could have done it.

  FATCA is only possible because the U.S. carries a big stick: the ability to refuse access to its financial system and the world’s premier reserve currency. Don’t sign up for FATCA, and your country can forget about the vast majority of international trade.

  It didn’t take long for most of the world to fall in line.

  When Russia and China signed on to FATCA, it became a fait accompli. There are no other meaningful countries left to resist it.

  This set the stage for GATCA.

  Unfortunately, GATCA will likely be an irreversible reality in the not-so-distant future. It’s also highly probably that the OECD, the G20, and other organizations will sanction or otherwise blackmail countries that don’t comply. That pressure would likely be too enormous for the vast majority of countries to bear.

  In the end, this means a permanent record of every penny you have ever earned, saved, borrowed, or spent anywhere in the world will be instantly available for analysis and scrutiny by countless government agencies, regardless of any actual or suspected wrongdoing.

  But wait, there’s more!

  If FATCA wasn’t the end game, don’t expect GATCA to be either.

  Let’s peel back the next layer of the onion.

  What Comes Next

  Did you really think all these governments would go through all the trouble of creating the architecture to gather all this financial data… and then just sit on it?

  Of course not.

  They’re going to leverage the data as much as possible. This will have terrifying consequences for the individual.

  It’s no secret that advocates of big government have long fantasized about creating a global tax. Whether it’s the global carbon tax, a worldwide tax on financial transactions, or a UN tax on air and sea travel, all prior attempts haven’t really worked. The infrastructure wasn’t in place.

  However, that could all change with GATCA, which could ultimately make the disturbing dream of a global tax a reality.

  Bankrupt governments, like France and the UK, are also on board with GATCA. It would allow them to fleece and control their citizens more efficiently.

  Strangely, you never hear financially sound countries, like Switzerland, Singapore, or Hong Kong, advocating for FATCA, GATCA, or a global tax. It’s only the failed welfare states drowning in debt. And that’s no coincidence.

  Old Wine in New Bottles

  The government is selling FATCA the same way it originally sold the income tax to Americans: as a measure targeted only at the “rich.”

  Of course, once you give politicians an inch, they take a mile.

  When the federal income tax was introduced in 1913, individuals making up to $20,000 (around $475,000 today) were only taxed at 1%. The top bracket kicked in at $500,000 (around $12 million today) with a tax rate of only 7%.

  Of course, once the infrastructure was in place for the federal income tax, politicians naturally couldn’t resist ramping it up. Eventually, it snowballed into the monster we have today, which thoughtless Americans passively accept as “normal.”

  Expect a similar dynamic and gradualism with FATCA, GATCA, and a global tax.

  What You Can Do

  The government used obscure and boring wording to conceal the true purpose of the Federal Reserve from the average American. It’s done the same thing with FATCA.

  In reality, FATCA is all about setting up the architecture for a global tax.

  Politicians around the world see citizens as milk cows… They merely exist to be squeezed to the last drop.

  That’s why they’re so eager to kill financial privacy with FATCA and GATCA. They’re building a giant tax farm and erecting electric fences to keep the cows—and their milk—from escaping.

  Welcome to the new feudalism.

  Unfortunately, there’s little any individual can do to change the trajectory of this trend. You can only try to save yourself from the consequences of this stupidity.

  Politicians around the world are working hard to build this emerging prison planet. But it’s still possible to escape.

  We recently released a video to show you how. Click here to watch it now.

  

  

• The Smoking Gun: "Document 17" Links Saudi Embassy In Washington To Sept 11

  With the topic of Saudi Arabia’s involvement in the Sept 11 attack on everyone’s lips, if certainly not those of president Obama who is currently in Riyadh where he is meeting with members of Saudi royalty in what may be his last trip to the Saudi nation as US president, many have been clamoring for the information in the suddenly notorious “28-pages” (following the recent 60 Minutes episode) to be released to the public so the US population can finally relegate all those “conspiracy theories” surrounding the real perpetrator behind the Sept 11 terrorist attack to the “conspiracy fact” pile.

  

  It won’t have to wait that long.

  As The Times writes today, new evidence has come to light of a definitive link between Saudi Arabian officials and the 9/11 terrorist attacks “further raising tensions as President Obama travels to the kingdom.”

  According to the report, Ghassan Al-Sharbi, a Saudi who became an al-Qa’ida bomb maker, is believed to have taken flying lessons with some of the 9/11 hijackers in Arizona but did not take part in the attacks on New York and the Pentagon that killed 3,000 people in 2001.

  He was captured in Pakistan in 2002 and has since been held at Guantanamo Bay. According to a US memo, known as document 17, written in 2003 and quietly declassified last year, the FBI learnt that he had buried a cache of papers shortly before he was captured.

  Think of “Document 17” as a mini version of the “28 pages” whose content has yet to be revealed. The document was written by two US investigators examining the possible roles of foreign governments in the attacks.

  One detail leapt out at the FBI agents from the papers that Sharbi had tried to hide: his US flight certificate was in an envelope from the Saudi embassy in Washington.

  

  A car pulls into the Saudi Arabian embassy in Washington, AP Photo

   

  And there is your smoking gun, which has been fully available to the US government for the pat 13 years. It should have also been available to the American public.
  

  Understandably, Brian McGlinchey, the activist who uncovered document 17, asked a simple question: “The envelope points to the fundamental question hanging over us today: to what extent was the 9/11 plot facilitated by individuals at the highest levels of the Saudi government?”

  Here is the problem. As the Times puts it, “president Obama is expected to meet on Wednesday with King Salman, whose kingdom is under pressure from low oil prices, an emboldened Iran and Washington’s tougher stance. The Saudi government threatened last week to dump $750 billion in US Treasury securities and other American assets if congress passes a bill that would clear a path for the families of 9/11 victims to file lawsuits against the kingdom.”

  In other words, Obama will not ask any questions of King Salman, let alone the “fundamental” one.

  So perhaps it is time to get a president who will ask the question: Hillary Clinton and Bernie Sanders, the Democratic presidential candidates, backed the bill, which Mr Obama has signaled he will veto. Donald Trump and Ted Cruz, the leading Republicans in the race, have warned Saudi Arabia that its relationship with the US must change. “Friends do not fund jihadists that are seeking to murder us,” Mr Cruz said.

  Sp even as all of Obama’s potential replacements have at least promised to investigate further, we wonder: just why is Obama so terrified of the US public getting access to the truth?

  If he is so worried about the Saudi liquidation threat, he shouldn’t be: after all the Fed would be deliriously happy at the opportunity to monetize another $750 billion in assets and inject three-quarters of a trillion in fresh “reserves” aka liquidity into the system.

  Meanwhile, Obama has other problems: the US president also faces calls to release a redacted 28-page portion of a joint congressional report on the 9/11 attacks, produced in 2002 and thought to link senior Saudi figures to the plot. He suggested on Monday that a decision was imminent.

  We are confident his “decision” in this matter will be to likewise prevent the truth from emerging, because as Congressman Thomas Massie, a Republican from Kentucky, said: “I had to stop every couple of pages … to rearrange my understanding of history.” No further comment necessary.

  Meanwhile the lies go on.

  Bob Graham, a former chairman of the US senate intelligence committee, has alleged that Saudi Arabia was the principal financier of 9/11. “The effect of withholding [the pages] has been to embolden Saudi Arabia to be a continuing source of financial and human terror resources,” he said.

  Document 17, written by Dana Lesemann and Michael Jacobson, will deepen suspicions. Ms Lesemann is said to have been sacked from the 9/11 commission after she circumvented her boss to access the 28 pages.

  Mr Jacobson was the principal author of the 28 pages, and document 17 hints at his suspicions. “How aggressively has the US government investigated possible ties between the Saudi government and/or royal family and the September 11th attacks?” it asks.

  The answer: not at all. It’s about time the American people asked why not.

  

  

  

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