Feb 22

Today’s News 22nd February 2019

  • As The Real Estate Market Slows, Canadians Continue To Plunder Equity From Their Homes

    Canadians are accelerating the rate at which they borrow cash against their homes, despite the fact that the real estate market is slumping in the country. This exposes the country’s financial system to obvious vulnerabilities, according to rating company DBRS and Bloomberg.

    Home equity lines of credit in Canada reached a record $184.5 billion (USD) as of October 31, which equates to 11.3% of total household credit. This is the highest share since mid 2015, according to a report released last Thursday. Canadians are drawing on their home’s equity to fund everything from home renovations to car purchases.

    And they’re doing it so quickly that borrowing has grown faster than mortgages since 2017.

    Analyst Robert Colangelo, who published the report on Thursday, commented: “The flexibility of Helocs could increase financial system vulnerabilities. In the event of a correction, borrowers could find themselves with a debt load that exceeds the value of their home, which is often referred to as negative equity.”

    Obviously, home equity lines of credit can decrease visibility for lenders to identify credit problems as consumers use the equity in their homes to consolidate high interest loans and unsecured debt into one lump sum at a lower rate.

    Out of all of the Canadian banks, Toronto Dominion bank has the largest exposure to Helocs at about 39%, followed by Royal Bank of Canada which has 18% exposure. Other large banks are averaging 11% exposure, according to the report.

    And the timing for Helocs to grow couldn’t be worse. Toronto’s real estate market continues to feel pain. Sales of new homes in the city fell to the lowest in almost 2 decades in 2018 and a glut of unsold condominiums continue to pile up, according to a Building Industry and Land Development Association report released February 1. Vancouver, still feeling the deflationary effects of a foreign real estate bubble popping, saw home sales fall about 40% in January from the same month a year earlier.

    In early January, we reported that Canadian mortgage credit growth had dropped to 22 year lows, signalling the end of the housing boom. Per a report from RBC, mortgage credit growth had decelerated to 3.2%. 

    In late December, we reported that Canadian household debt to income levels were near record highs. In addition, we pointed out that principal repayment share has been increasing and that mortgages were the main contributor to Canada’s total debt burden. 

     

     

  • What's Up With Australia's 80 Tonnes Of Gold At The Bank Of England?

    Submitted by Ronan Manly of BullionStar

    Recently, news network RT.com asked for comments on the question of the 80 tonnes of the Reserve Bank of Australia’s (RBA) gold reserves and their supposed storage location at the Bank of England’s gold vaults in London. Based on some of those comments I made, RT has now published an article in its English language news website at www.rt.com about this Australian gold that the RBA claims is held in London.

    The RT.com article, which was published on 18 February 2018, is titled “Hey UK! It’s not just Venezuela, what happened to Australia’s gold?“, and can be read in full here on the RT website.

    For the commentary, RT actually asked me quite a few interesting questions on both the Australian gold and other related gold topics. Since both the extended questions and the answers might be of interest to readers, we have decided to publish below the full set of questions and answers in Q&A format, which are as follows:

    1) What happened to Australia’s gold? What’s your opinion?

    The Reserve Bank of Australia (RBA) claims to have 80 tonnes of gold bars stored in a bailment arrangement, in an allocated gold account, at the Bank of England vaults in London. Bailment means the Bank of England is custodian, and the RBA owns and has title to specific serial numbered gold bars.

    However, there have never been any independent physical audits of this gold, which means that there is no way to verify the RBA’s claim that it has all the gold that it claims to have.

    In 2013, the Bank of England allowed the RBA to do a partial audit of some of  the claimed RBA gold holdings, but the results of this audit remain secret, and even after FOIA requests, the documents from this audit were blocked by both the Bank of England and the RBA and never released. This also raises a red flag.

    Most importantly, the critical document to any gold holding held under bailment is a proper weight list of the gold bar holdings (including refiner serial numbers), and such a list has also never been published by the RBA. Such a weight list is fundamental to any claimed gold holding (for example, think about the gold-backed Exchange Traded Funds (ETFs) which publish their full gold bar weight lists online on a daily basis).

    The RBA has not made any gold purchases or sales over the last 20 years, so apart from gold lending, the RBA gold should be the same bars that it has held over at least the last 20 years. It would therefore be a simple matter to publish in a single zipped file all of the versions of the gold bar weight list that this 80 tonnes of gold has represented over the last 20 years. The Bank of England’s gold bar accounting system has all of this information and it would be simple to extract it.

    Throughout the last 20 years, the RBA also admits that a lot of its claimed gold holdings have been lent out in the secretive London Gold Lending Market, but there is no information whatsoever available on any of these lending transactions or the serial numbers of the gold bars involved. In other words, there has never even been one snapshot publication of a proper industry standard weight list for these RBA gold bars (by refiner serial numbers), let alone an updated weight list every time the RBA lent out or closed a gold lending deal.

    During the years 1999 – 2004, the RBA says that almost all of it’s gold was on loan, and the RBA is still in the gold lending market to this day, for example, 10 tonnes of its claimed 80 tonnes at the Bank of England were said to be on loan during 2018. The important point here is that the gold bars that the RBA would have title to at the completion of a gold lending deal would not be the same bars that it held prior to this gold being lent to a bullion bank in London.

    Independent physical audits, full and proper weight lists, details of gold lending transactions, and above all a transparent attitude, would all allow instant verification of the RBA’s claims about the sovereign Australian gold holdings. That the RBA and Bank of England refuse to do any of these things is highly suspicious. Therefore, there is no black and white way to say that the RBA has the 80 tonnes of gold it claims to have.

    2) Why are countries like Australia and Canada willing to part with physical gold assets? Is that a good idea in your opinion? How much gold does Australia really have?

    Up until late 1996, the Australian central bank held nearly 247 tonnes of gold, a considerable amount of gold by any measurement. However, it then went on a gold selling spree during the first half of 1997 and sold 167 tonnes, leaving it with the current claimed 80 tonnes.So why did the RBA sell this gold? At the time, the usual justifications were wheeled out by the RBA such as that the proceeds of gold sales could be better invested in financial assets, and that other countries were also selling gold at that time, including Canada, Netherlands and Belgium. But, these reasons have always stinked. Firstly, the RBA gold sales occurred just before a huge bull market run-up the gold price between 2000 and 2011, so the RBA made a huge opportunity loss on the gold sales.

    Secondly, selling gold just because another central bank is doing is nonsensical and void of investment rationale. The same goes for Canada which basically sold all of its gold, about 500 tonnes, in the late 1990s and early 2000s. Again, there was no investment rationale for doing so and the Canadians seem to have been coaxed into these sales by external parties. It’s also interesting that in hindsight, no one in the Canadian Department of Finance ever wanted to talk about these gold sales later on when asked by the media or investigative journalists.

    Of course, it was not a good idea for Australia to sell most of its gold and for Canada to sell all of its gold. The timing of these sales was also some of the worst ever. Beyond this, these central banks acted irresponsibly and had no accountability to the populations of their nations. Gold is the Wealth of Ages, the sovereign wealth of a nation. It is not some securitized financial asset to be sold and squandered by statist central bankers who answer to no one.

    3) Some experts believe that western central banks are “covertly disposing” of their gold or otherwise leasing it to China and India through bullion banks. Do you believe in that? Do you believe there’s some grand, global gold conspiracy involving the world’s central banks?

    There is a mountain of evidence that Western central banks despise the power of gold and will go to great lengths at the highest levels to contain the gold price through coordinated interventions and anti-gold policies. From the London Gold Pool of the 1960s, to the US and IMF gold sales in the 1970s, to the 1980s Gold Pool discussions at the Bank for International Settlements (BIS), to the Bank of England intervening into the London Gold Fixes in the 1980s, G10 central bank governors have often been personally involved in committing to gold market manipulation.

    This continued through the 1980s and 1990s with the growth of the secretive gold lending market and central bank gold leasing, the various European central bank gold “agreements” which did the opposite of what they claimed to do, the sabotage of transparent IMF gold accounting policies by the main European central banks in 1999, and the gold price fix manipulation by bullion banks in London where regulators looked the other way. All of this evidence and more is available if anyone wants to look, such as on the GATA website and elsewhere.

    As regards the Australian and Canadian gold sales, the more logical explanation for both of these was that they were coordinated gold sales by G10 central banks as part of a plan to fire-fight the physical gold market or to bail out gold short bullion banks, or that the sales were part of secretive gold re-distributions to other countries, such as to China. While this may seem far-fetched, you have to realize that central banks never tell the truth, especially when it comes to the gold market, and that the sheer numbers of central bank gold sales around that time in the 1990s and 2000s, including by the UK and Switzerland, point to something collusive about the sales rationales.

    All of these sales were also secretive, with nothing revealed about the identities of the buyers. Any lists of such central bank gold sales, for example in an FOIA connected to the UK’s gold sales, have the identities of the buyers redacted. So its totally possible that a central bank, such as China, was on the receiving end of these gold sales. There is evidence that the UK Treasury gold sales in 1999 done for bullion bank bailout purposes, so this could be true with the RBA sales.

    At a broader level, there seems to be collusive policy behind the scenes of western central banks offloading physical gold in a coordinated manner through secretive sales and leasing it to achieve various policy objectives. These objectives include inducing extra gold supply to dampening down the gold price, fire fighting physical shortages, at times bailing out bullion banks, and most intriguingly, redistributing some of the West’s central bank gold holdings to central banks such as the People’s Bank of China. Gold Pools (central bank syndicates) don’t have to take the form of advertised arrangements as in the 1960s. A central bank gold pool exists any time two or more central banks clandestinely use some of their gold holdings in a coordinated way.

    You can call this a conspiracy if you want. Try to ask central banks simple questions about their gold and you will see that not one central bank will ever divulge important information about its gold, or its gold operations, or its gold related policy discussions with other central banks. The Bundesbank, the Bank of England, the New York Fed, the Bank for International Settlements, the European Central Bank, the IMF, the Swiss National bank, De Nederlandsche bank, the Swedish Riksbank, the Banque de France, Banca d’Italia. The list is endless. All of these central banks keep a lid on revealing anything substantive about their gold holdings and their gold activities, and none produce proper weights lists of their gold bars.

    Due to the secrecy of the gold lending market, there is zero confidence that the Western central banks have the amount of gold that they claim to have.

    The secretive Bank for International Settlements (BIS), Basel

    4) What or who is behind the thinking in the West that after 5,000 years gold is now become obsolete as a store of value?

    Gold is the ultimate form of money and a 5000 year old store of value. Gold is no one else’s liability and is the antithesis of central bank fiat currency regimes. Gold is the world’s best inflation barometer and a long term inflation hedge. It is for these reasons that central bankers run in fear of gold and want to disparage gold’s image at every turn and to make gold obsolete as a form of savings and investment.

    Who is responsible for this? Those who have been running the Anglo and American and Western European central banks and their London and New York commercial bank counterparts for the last 50 years, the same people who congregate at the BIS in Basel and are represented on the Group of Thirty and the Bretton Woods Committee, i.e. the elitist central bankers and their investment bank backers.

    5) If Western countries are disposing of physical gold where does it go?

    Physical gold has flown from West to East. Some of these flows have been through normal channels where gold has been sold in the market and moved from London to the Swiss precious metals refineries to be transformed from 400 oz gold bars into smaller higher purity 1 kg and 100 oz gold bars, and onward shipped to India, Hong Kong and China.

    Gold has also moved directly to the East via mining exports of South Africa, Australia, Canada, the US and elsewhere, and imported directly into China, Hong Kong and India. Western central bank gold disposals will only show up in these gold flows to the extent that the gold has been classified as non-monetary gold. Any cross-border movements of ‘monetary gold’ (which is central bank gold), will not show up in trade statistics, which is what the central banks like, as they want to keep these transactions in the shadows.

    India has imported about 15,000 tonnes of gold since 2001. There are more than 25,000 tonnes of private gold held in India. There are at least 17,000 tonnes of gold held in China, not including the gold holdings of the Chinese central bank. Gold has flowed from the West into India and China, sometimes overtly, sometimes covertly.

    Some of the gold that the Western central banks still claim that they hold is in fact not there at all. It has been leased out in London, sold and shipped abroad, and now sits in China or India, and all the while the Western central banks still claim that this gold is on their balance sheets as they maintain the fiction that ‘gold receivables’ are in fact the same as physically held gold.

    6) Australian economist John Adams said: “In the last 20 years we’ve only seen the gold once.” According to Adams, the RBA audit was so flawed it was basically meaningless. Is there any chance that the BoE could manufacture bars with fake serial numbers?

    The Bank of England allowed Australia’s central bank to do its own partial gold audit in 2013, and to inspect a random sample of the RBA gold bars, This audit was basically meaningless, yes, and was flawed from start to finish.

    Knowledge of this gold audit kept out of the public domain and the results of the audit were totally censored and buried. Only via FOIA requests did the Australian public even get a glimpse into what was going on. The FOIA emails and correspondence that the RBA did release were heavily redacted without any details of how many gold bars were selected and what the sample size was, and the results of the audit were not published. No one in any industry would accept such conditions for an audit nor of the so-called audit results.

    At no time did the Bank of England supply a proper weight list to the RBA with the refiner serial numbers of the claimed gold holding. The RBA had to select some bars a month in advance and advise the Bank of England of the bars its wanted to examine. This in itself is ridiculous. For example, the SPDR Gold Trust (GLD) has full annual audits of all of its gold holdings (of nearly 800 tonnes), i.e. 10 times more than the RBA holds. Since the GLD can get its gold physically audited twice per year, there is no reason why the RBA cannot.

    In July 2013, just before the RBA’s flawed and partial audit, the RBA didn’t even have formal ‘gold safe-custody arrangements’ in place with the Bank of England since it had to ask for “gold safe-custody arrangements between the RBA and the BoE to be formally clarified”. That’s according to a glimpse of some RBA – Bank of England correspondence that did make it out in one of the FOIA emails released.

    One of the basement levels of the Bank of England, London

    After the audit, the RBA blocked publication of the audit results document stating that it “would, or could reasonably be expected to, cause damage to’ the relationship between the RBA and the BoE” and that it could “render less effective of procedures or methods for the conduct of tests, examinations or audits’ by the Bank”. This is complete nonsense.

    The real reasons that the Bank of England does not allow proper gold bar audits and the real reason that it will never provide central bank customers with proper weight lists of refiner serial numbers is that the Bank of England wants total secrecy about gold lending and where the lent gold goes to. Revealing the refiner serial numbers would blow open the entire central bank – bullion bank gold lending scheme, as the lent gold bars could be identified wherever they turn up. The Bank of England does not need to manufacture fake serial numbers. All it needs to do is prevent any serial numbers of gold bars going into the public domain by keeping the entire inventory of central bank gold bar weight lists a secret.

    At the end of the day, it’s important to remember that all central bank gold audits are basically meaningless, not just the gold audit of the RBA. Physical gold audits are only credible if they are unconditional, without any restrictions, and if they are undertaken by independent auditors.

    7) The Bank of England is globally recognized as one of, if not the primary destination of choice, for central banks to store their gold reserves. Do you think it’s the right place for Australian gold to be?

    No, there is absolutely no need for Australian gold to be in London. Its ridiculous. Australian gold should be stored in Australia. Australia has a sophisticated gold industry and perfectly good infrastructure for storing and handling gold, in fact better than most other countries.

    The rationale claimed by the RBA that it stores its gold in London so as to be in proximity to the London Gold Trading market is also wearing thin given that the Bank of England has now confiscated the gold of Venezuela’s central bank, the Banco Central do Venezuela (BCV). This is sovereign gold of another nation which was placed into custody storage by a foreign central bank. It is also absolutely extraordinary that the Bank of England has

    All central banks that store gold bars at the Bank of England should now sit up and take note that storing gold at the Bank of England is a wealth hazard  fraught with political and confiscational risk. And if any central bank gold custody customer of the Bank of England is too embarrassed to actually ask for its gold back straight up due to heightened confiscational risk factors, the current uncertainty over Brexit can act as a good cover story for worried central banks.

    Wisely, for example, all of the Bank of Russia’s gold is held in Russia, in Moscow and St Petersburg. The RBA should do likwise, and store its gold in somewhere such as Canberra, Sydney or Perth.

    Bank of Russia gold storage, Moscow

    7) ..continued ….Maybe it’s time for Australia to get it’s gold back? Is that possible?

    The Australian central bank could request it’s gold back at any time. Australia has vast logistical experience shipping gold around the world. Likewise, the Bank of England has vast logistical experience shipping physical gold around the world.

    Assuming the RBA’s gold is actually in custody in London, the RBA could withdraw this gold at any time. The Perth Mint in Western Australia flies gold around the world all the time. Its entirely feasible that the the Bank of England could contract a company such as Brinks to fly the RBA gold back to Australia in less than 2 days. It should take a maximum of 2-3 weeks to arrange insurance and transport and fly the gold out of Heathrow or one of the other London commercial airports, or even from a military air base such as RAF Mildenhall in Suffolk which the Bank of England has used many times in the past.

    8) Do you think the Reserve Bank of Australia has to start building its gold reserves again?

    Yes, it is irresponsible that Australia not only sold a majority of its gold at fire sale prices in 1997, but that it has since done nothing to rebuild its strategic monetary gold reserves. All the while, the Asian powers of China and Russia have been doing just that. As one of world’s largest gold mining producers, Australia also has the means at its disposal to rebuild its gold by tapping into primary gold production in the way that the Russian Federation has been doing.

    9) Gold has been traditionally recognized as a safe haven asset but its price action has raised some questions. Do you think gold is still worth to be accumulated or maybe it’s time to switch to something else, for example, to silver or palladium?

    Gold is money. Gold is a monetary metal with 5000 years of history. The global fiat currency experiment which has been in practice since 1971 is just a blip in time compared to gold’s long and important history. It is therefore dangerous to fixate on the US dollar gold price or the ‘international’ gold price.

    This US dollar gold price is set in the fractionally-backed London over-the-counter (OTC) and via COMEX gold futures trading. Both of these markets are essentially trading synthetic paper gold, unallocated gold, cash-settled gold, or screen gold. Call it what you will. The price action of this US dollar quoted gold price does not mean that gold is not a safe haven. Far from it. Physical gold is and always will be a safe haven. Gold demand is still very strong despite what the Western financial media would have you believe. Just look at Asian retail and wholesale gold demand and central bank gold demand in countries such as China, India, Russia, Mongolia, and Kazakhstan.

  • Breaking Down Elizabeth Warren's Terrible, Horrible, No Good, Very Bad Math Behind "Childcare For All"

    This week Elizabeth Warren proposed a fantastical entitlement program to provide free or affordable childcare to every single American family with a young child – suggesting that the program would cost $70 billion a year. 

    As Breitbart‘s John Carney notes – the whole plan is absurd; not because the price tag is so expensive, but because it’s way too cheap. 

    Start with the basics. There are around four million babies born in the U.S. every year. That means there are approximately 20 million children under school age who could be enrolled in a national childcare program. Moody’s Analytics Chief Economist Mark Zandi and Sophia Koropeckyj, the economists behind Warren’s figures, estimate that the cost of each child in the Warren Centers—or Baby Warrens, as we would inevitably call them–would be $14,500. –Breitbart

    At $14,500 times 20 million children, a national childcare program could cost up to $290 billion per year – or an extra 2 trillion per decade over her original estimate. That said, not every family qualifies, nor would every family take advantage of such a program as some people prefer to raise their own children or place them in the care of relatives. 

    That said, Warren’s proposal promises free childcare to any family with an income under 200% of the poverty line – or around $51,000 for a family of four. All other families would pay no more than 7% of their income on childcare.

    Zandi and Koropeckyj estimate that 1/3 of American households will choose to forego professional childcare; around the same percentage as today. This is magical thinking, suggests Carney – as it assumes that stay-at-home parents won’t change their preferences in light of a massive government program. 

    Warren’s plan assumes that the number of children in childcare centers would rise from 6.8 million to 12 million – however due to shifting preferences, that number would likely be much higher. 

    That said – the math behind Warren’s plan is still wrong at 12 million children. At $14,500 per head, the program would cost approximately $174 billion per year, not $90 billion. 

    How they shave that $100 billion off the cost is partly redistribution and mostly voodoo economics, magical thinking disguised as macroeconomics. Because families earning more than 200 percent of the federal poverty level would have to pay for some of their childcare–but never really more than half–the cost would be reduced. But the size of the subsidy for even very wealthy families is large enough that this doesn’t shave much off the total cost.

    The heavy lifting here is in the rosy economic forecasts Zandi and Koropeckyj produce. They predict that the childcare for all program will “quickly lift economic growth” by transferring wealth from the rich—Warren wants to pay for the program with a tax on ultra-millionaires. In the longer term, they see it boosting economic  growth because they foresee it boosting workforce participation and the number of hours worked. –Breitbart

    In short, the plan only works if economic growth is “quickly lifted” because of a massive wealth transfer from ultra-millionaires, and if the free childcare results in more parents leaving the home in search of jobs amid already-low unemployment. The analysis fails to consider that a flood of additional workers who aren’t at home raising their own kids would put downward pressure on wages. 

    “Cheapening labor costs while raising taxes on wealth would also diminish the return on capital investment, which would be a drag on productivity—the best driver of economic growth,” notes Carney.

    “In the end, we may end up with a diminished economy, families working more hours than before and spending less time with children, and an entitlement program that is much more expensive than anticipated (as entitlement programs tend to be).“

    That said, encouraging Americans to have more children by making it more affordable is not a bad idea, concludes Carney. It should just be done in a way that doesn’t require magical math – such as a much larger, fully refundable child tax credit, and allowing families to pay less in entitlement taxes when they have more than two children. After all, they will be supplying the next generation of workers who will pay for Social Security and Medicare, should it still exist by then.

    “Childcare Deserts”

    While Carney points out the crappy assumptions behind Warren’s plan, there may be another major problem; accessibility. According to the Center for American Progress, more than half of American households live in what are known as “childcare deserts” – places where there are up to 3 children for every available childcare slot, or no childcare options at all. 

    Warren addresses this in a blog post, suggesting that her plan would “establish and support a network of locally-run Child Care and Early Learning Centers and Family Child Care Homes so that every family, regardless of their income or employment, can access high-quality, affordable child care options.”

    The problem, as New Republic reports, “There are simply not enough providers in operation, either in formal centers or in informal home settings, with enough openings to meet current demand.”

    That demand is only likely to increase if Warren’s plan makes childcare far more affordable and better quality than it is today. Significantly increasing the funding available to provide care and compensate providers adequately will certainly entice more people to jump into the business. But there is nothing in the plan that absolutely ensures that enough providers open up shop and create new slots so that all families can take advantage of it. –New Republic

    In short, the federal government would need to become directly involved in solving the infrastructure problem – vastly expanding child development centers, which would add an entirely new set of costs to the proposal. 

    The Week‘s Ryan Cooper points out four flaws in Warren’s plan. 

    The limitations of Warren’s proposal are clearly driven in part by the desire to keep the headline price down, but somebody, in this case middle- and upper-class parents, will still have to make up the difference. Designing it in this way could easily increase the total cost (that is, including both state and private spending) of child care. The government could counter this problem by fixing prices, but there are no such controls mentioned in the proposal outline.

    Second is wasteful bureaucracy. Giving out subsidies based on income will require an administrative/surveillance apparatus to calculate payments and make sure that people aren’t cheating the system. That’s a lot of paperwork and very likely a lot of mistakes and headaches.

    Third is lower political durability. Families only eligible for smaller subsidies will be naturally resentful of the downscale families paying nothing, so there will be less resistance to a future Republican administration attempting to roll back the program. (Witness the last GOP Congress coming within a hair’s breadth of repealing ObamaCare, but largely leaving Medicare alone.)

    A fourth problem is that families in the phase-out zone of the subsidy will potentially face a high effective marginal tax rate, as a large portion of any additional income will be eaten up by reduced subsidies — especially when combined with other proposals for means-tested tax credits that would phase out in a similar way, like Kamala Harris’s LIFT Act.

    Any way you cut it, Warren’s plan – like so many before them, appears to be nothing more than a great sounding promise that would end up like California’s ill-fated bullet train.

  • Caitlin Johnstone Exposes "The Truly Obnoxious Mind Virus" Of Imperial Narrative Controllers

    Authored by Caitlin Johnstone via Medium.com,

    In an extremely weird article titled “Russia is backing a viral video company aimed at American millennials”, CNN reports that Facebook has suspended popular dissident media outlet In The Now and its allied pages for failing to publicly “disclose” its financial ties to a subsidiary of RT.

    According to CNN, such disclosures are not and have never been an actual part of Facebook’s official policy, but Facebook has made the exceptional precondition of public disclosure of financial ties in order for In The Now to return to its platform.

    I say the article is extremely weird for a number of reasons.

    Firstly, according to In The Now CEO Anissa Naouai, CNN knew that Facebook was going to be suspending the pages of her company Maffick Media before she did, suggesting a creepy degree of coordination between the two massive outlets to silence an alternative media platform.

    Secondly, the article reports that CNN found out about Maffick’s financial ties thanks to a tip-off from the German Marshall Fund, a narrative control firm which receives funding from the US government. In The Now’s Rania Khalek has described this tactic as “a case where the US government has found a legal loophole to suppress speech, in this case speech that is critical of destructive US government policies around the world.”

    Thirdly, and in my opinion weirdest of all, the article goes to great lengths to make the fact that a dissident media outlet supports the same foreign policy positions as Russia look like something strange and nefarious, instead of the normal and obvious thing that it is.

    https://platform.twitter.com/widgets.js

    The article repeatedly mentions the fact that all the people working for In The Now “claim” to be editorially independent as opposed to being told what to report by Kremlin officials, a notion which Khalek says was met with extreme skepticism when she was interviewed for the piece by CNN. As though the possibility of an American opposing US warmongering and the political establishment which drives it without being ordered to by a rubles-dispensing FSB officer was a completely alien idea to them.

    Check out the following excerpt, for example of this bizarre attitude:

    “Ben Nimmo, a senior fellow for information defense at the Atlantic Council’s Digital Forensic Research Lab, told CNN that while Russian state-backed outlets claim to be editorially independent, ‘they routinely boost Kremlin narratives, especially those which portray the West negatively.’

    “Nimmo said the tone of Maffick’s pages is ‘broadly anti-US and anti-corporate. That’s strikingly similar to RT’s output. Maffick may technically be independent, but their tone certainly matches the broader Kremlin family.’”

    This is a truly obnoxious mind virus we’re seeing the imperial narrative controllers pushing more and more aggressively into mainstream consciousness today: that anyone who opposes the beltway consensus on western interventionism is not simply an individual with a conscience who is thinking critically for themselves, but is actually “boosting the Kremlin narrative”. If you say it in an assertive and authoritative tone like Mr Nimmo does, it can sound like a perfectly reasonable position if you don’t think about it too hard. If you really look at it directly, though, what these manipulators are actually saying is “Russia opposes western interventionism, therefore anyone who opposes western interventionism is basically Russian.”

    Which is of course a total non-argument. You don’t get to just say “Russia bad” for two years to get everyone riled up into a state of xenophobic hysteria and then say “That’s Russian!” at anything you don’t like. That’s not a thing. More to the point, though, there is no causal relationship between the fact that Russia opposes western interventionism and the fact that many westerners do.

    As we discussed recently, there will necessarily be inadvertent agreement between Russia and westerners who oppose western interventionism, because Russia, like so many other sovereign nations, opposes western interventionism. If you discover that an American who opposes US warmongering and establishment politics is saying the same things as RT, that doesn’t mean you’ve discovered a shocking conspiracy between western dissidents and the Russian government, it means people who oppose the same things oppose the same things.

    https://platform.twitter.com/widgets.js

    We’re seeing this absurd gibberish spouted over and over again by the mainstream media now. The other day the delightful pro-Sanders subreddit WayOfTheBern was smeared as a Russian operation by the Washington Times,not because the Washington Times had any evidence anywhere supporting that claim, but because the subreddit’s members are hostile to Democratic presidential hopefuls other than Sanders, and because its posts “consistently support positions that would be amenable to the Kremlin.” All this means is that the subreddit is full of people who support Bernie Sanders and oppose US government malfeasance, yet an entire article was published in a mainstream outlet treating this as something dangerous and suspicious.

    If you really listen to what the CNNs and Ben Nimmos and Washington Timeses are actually trying to tell you, what they’re saying is that it’s not okay for anyone to oppose any part of the unipolar world order or the establishment which runs it. Never ever, under any circumstances. Don’t work for a media outlet that’s funded by the Russian government even though no mainstream outlets will ever platform you. Don’t even subscribe to an anti-establishment subreddit. Those things are all Russian. Listen to Big Brother instead. Big Brother will protect you from their filthy Russian lies.

    “If CNN would like to hire me to present facts against destructive US wars and corporate ownership of our political system, I’ll gladly accept,” Khalek told me when asked for comment.

    “But the corporate media doesn’t allow antiwar voices a platform. In The Now does. I’ve worked for dozens of different outlets, from Vice to Al Jazeera to RT, and my message has always been the same: leftist, antiwar and pro justice and equality. People should be asking why US mainstream media outlets that claim to be free and independent refuse to air critical and adversarial voices like mine.”

    Why indeed? Actually, if CNN is so worried about Russian media influence in America, all they’d have to do is put on a few shows featuring leftist, antiwar and pro-justice voices and that would be the end of it. They could easily out-spend RT by a massive margin, buy up all the talent like Khalek, Lee Camp and Chris Hedges, put on a sleek, high-budget show and steal RT America’s audience, killing it dead and drawing all anti-establishment energy to their material.

    But they don’t. They don’t, and they never will. Because Russian media influence is not their actual target. Their actual target is leftist, antiwar and anti-establishment voices. That’s what they’re really trying to eliminate.

    https://platform.twitter.com/widgets.js

    So yes, Moscow will of course elevate some western voices who oppose the power establishment that is trying to undermine and subvert Russia. Those voices will not require any instruction to speak out against that establishment, since that’s what they’d be doing anyway and they’re just grateful to finally have a platform upon which to speak. And it is good that they’re getting a platform to speak. If western power structures have a problem with it, they should stop universally refusing to platform anyone who opposes the status quo that is destroying nations abroad and squeezing the life out of citizens at home.

    It doesn’t take any amount of sympathy for Russia to see that the unipolar empire is toxic for humanity, and most westerners who oppose that toxicity have no particular feelings about Russia any more than they have about Turkey or the Philippines. Sometimes Russia will come in and give them a platform in the void that has been left by the mainstream outlets which are doing everything they can to silence them. So what? The alternative is all dissident voices being silenced. The fact that Russia prevents a few of them from being silenced is not the problem. The problem is that they are being silenced at all.

    *  *  *

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  • The Science Behind The Medical Cannabis Industry

    Submitted by Visual Capitalist

    There’s nothing quite like cannabis in the plant kingdom. Beneath its humble surface, over 750 unique compounds exist within – all of which have helped propel the cannabis industry into the multi-billion dollar market it is today.

    Today’s infographic from The Green Organic Dutchman takes a deep dive into the cannabis components which contribute to its therapeutic potential, how it interacts with the human body, and the ways it can be consumed.

    The Chemical Effects of Cannabis

    While many people would be familiar with THC and CBD as the two major cannabinoids, there are a few lesser-known cannabinoids which also play important roles: Cannabichromene (CBC), Cannabigerol (CBG), Cannabinol (CBN), Tetrahydrocannbivarin (THCv), and Tetrahydrocannabinolic acid (THCa).

    In different combinations, they work together with terpenes – aromatic oils that are present in most plants – to provide relief for a variety of ailments.

    When cannabinoids and terpenes interact, the human endocannabinoid system is already equipped to deal with the entourage effects that are created.

    Modern-Day Medical Cannabis

    It’s clear that many cultures embraced cannabis long before scientific research came into play. Its therapeutic properties were widely recorded and extolled around the world.

    After decades of restricted access and stigma, the tide is turning back towards what our ancestors discovered long ago. Millions of patients rely on medical cannabis today, with Canada and Israel paving the way in cannabis research.

    • Canada
      Medical cannabis has been legal nationwide since 2001, aiding scientists in studying its effects.
      Funding: CAD$1.4 million (US$1.05 million) invested by the government towards research projects.
    • Israel
      Since the 1990s, medical cannabis has been legal for patients of cancer, chronic pain, and PTSD.
      Funding: 8 million shekels (US$2.16 million) annual government funding to support innovation.

    Back in the day, typically only dried cannabis flower was used. However, consumption methods have evolved into three broad categories today: ingestion, inhalation, and application.

    • Ingesting
      The dosage of cannabis consumed is easy to control using edibles or beverages, tinctures or sprays, and capsules.
    • Inhalation
      The effects of cannabis are quickly felt through smoking, vaporizing, and/or dabbing concentrates.
    • Application
      Transdermal patches and topicals like balms offer localized relief through a controlled dose.

    Each of these methods have their own pros and cons, but in the end, they all offer the medical cannabis patient with a wide variety to choose from. Some of these forms, such as topicals and edibles, even lend themselves to the rapidly growing consumer cannabis segment.

    Courtesy of: Visual Capitalist

  • "Venezuela Was My Home, And Socialism Destroyed It. Slowly, It Will Destroy America Too"

    Authored by Daniel DiMartino

    While neither ‘Medicare for All’ nor a wealth tax will turn America into Venezuela overnight, all it would take is a series of catastrophic policies.

    The first time I couldn’t buy food at the grocery store, I was 15 years old. It was 2014 in Caracas, Venezuela, and I had spent more than an hour in line waiting. When I got to the register, I noticed I had forgotten my ID that day. Without the ID, the government rationing system would not let the supermarket sell my family the full quota of food we needed. It was four days until the government allowed me to buy more.

    This was fairly normal for me. All my life, I lived under socialism in Venezuela until I left and came to the United States as a student in 2016. Because the regime in charge imposed price controls and nationalized the most important private industries, production plummeted. No wonder I had to wait hours in lines to buy simple products such as toothpaste or flour.

    And the shortages went far beyond the supermarket.

    My family and I suffered from blackouts and lack of water. The regime nationalized electricity in 2007 in an effort to make electricity “free.” Unsurprisingly, this resulted in underinvestment in the electrical grid. By 2016, my home lost power roughly once a week.

    Our water situation was even worse. Initially, my family didn’t have running water for only about one day per month, but as the years passed we sometimes went several weeks straight without it.

    For all these problems, the regime has blamed an iguana, right-wing sabotage and even the weather.

    A rich country, wasted resources

    The excuses for these shortages were hollow: In reality, Venezuela has the largest proven oil reserves in the world to use for electricity, and three times more fresh water resources per person than the United States. The real reason my family went without water and electricity was the socialist economy instituted by dictators Hugo Chavez and Nicolas Maduro.

    The welfare programs, many minimum-wage hikes and nationalizations implemented by their regimes resulted in a colossal government deficit that the central bank covered by simply printing more money — leading to rampant inflation. Now, prices double every few weeks, and the standard of living continues to plummet.

    Mosaic depicts late Venezuelan President Hugo Chavez, left, and Venezuelan President Nicolas Maduro in Caracas on Jan. 30, 2019. (Photo11: JUAN BARRETO, AFP/Getty Images)

    I watched what was once one of the richest countries in Latin America gradually fall apart under the weight of big government.

    I didn’t need to look at statistics to see this but rather at my own family. When Chavez took office in 1999, my parents were earning several thousand dollars a month between the two of them. By 2016, due to inflation, they earned less than $2 a day. If my parents hadn’t fled the country for Spain in 2017, they’d now be earning less than $1 a day, the international definition of extreme poverty. Even now, the inflation rate in Venezuela is expected to reach 10 million percent this year.

    Venezuela has become a country where a woeful number of children suffer from malnutrition, and where working two full-time jobs will pay for only 6 pounds of chicken a month.

    American liberals embrace same failed policies

    Though so many of us Venezuelans fled to the USA to escape from the destructive consequences of socialism, liberal politicians like Sen. Bernie Sanders, I-Vt., and Rep. José Serrano, D-N.Y., have praised the same kind of policies that produced famine, mass exodus and soaring inflation in Venezuela.

    Even worse, in recent weeks, Democratic Reps. Ilhan Omar, Ro Khanna and Tulsi Gabbard have mischaracterized the protests against Maduro and condemned President Donald Trump’s widely supported moves to help end Maduro’s dictatorship.

    Additionally, many congressional Democrats support Medicare for All and the Green New Deal, proposals that would nationalize the health insurance industry, guarantee everyone who wants it a job and massively raise taxes, increasing government intervention in the economy like few countries except Cuba and Venezuela have seen before. Proponents think that they can give all Americans quality health care, housing and everything for free and that somehow, politicians can do a better job at running a business than the business owners themselves.

    Di Martino, center, with his parents in Caracas, Venezuela, in December 2016. (Photo11: Family handout)

    These proposals would skyrocket the budget deficit and national debt, which just reached a record $22 trillion. If that is not enough, Rep. Alexandria Ocasio-Cortez endorsed paying for the proposal by asking the Federal Reserve to print money. This is exactly what produced Venezuela’s nightmare.

    Even so, liberal economist Paul Krugman recently argued in a column that “whenever you see someone invoking Venezuela as a reason not to consider progressive policy ideas, you know right away that the person in question is uninformed, dishonest, or both.”

    I can assure Mr. Krugman that I’m neither uninformed nor dishonest. Of course, it’s true that neither Medicare for All nor a wealth tax alone would turn the United States into Venezuela overnight. No single radical proposal would do that. However, if all or most of these measures are implemented, they could have the same catastrophic consequences for the American people that they had for Venezuela.

    In his recent State of the Union address, President Trump said: “America will never be a socialist country.” I sincerely hope that the president is right, and that every American can resist the lure of false promises — so this great country can always shine above the dark cloud of socialism, and avoid Venezuela’s fate.

    Daniel Di Martino is a Venezuelan expatriate and Young Voices contributor studying economics at Indiana University-Purdue University Indianapolis. Follow him on Twitter @DanielDiMartino.

  • Air Force Requests Billions For F-15X Fighters

    The US Air Force is set to request funds to purchase F-15 fighter jets from Boeing, increasing its inventory with an upgraded version of the plane it last procured in 2001, even as the service pursues fifth-generation fighters from rival Lockheed Martin Corp.

    The service’s fiscal year 2020 budget request will include eight of Boeing’s new F-15X, Bloomberg reports, the first installment of an 80-plane order over the next five years.

    If the budget request is accepted, it will mark the first US purchase of the fighter jet since 2001.

    Even though the request has the Trump administration support, skeptical lawmakers have questioned the Air Force’s move to obtain a 45-year-old fourth-generation fighter for almost the same costs compared to the F-35 fifth-generation fighter.

    The reason could be due to its internal bomb bays; the F-35 cannot accommodate heavier weapons, such as hypersonic missiles.

    The Air Force is expected to purchase the F-15X without reducing the fleet of 1,763 F-35s that it has long planned, Bloomberg said.

    Lockheed told lawmakers and congressional members on why the F-35 is a better choice over the F-15X, including a “fact sheet” distributed in December.

    Boeing has offered the F-15X with the price tag of $80 million per plane under a fixed-price contract with delivers in 2022. By comparison, the Lockheed F-35 is estimated to cost $89 million each, a mere $9 million difference between the fourth and fifth generation jets.

    However, there seems to be a rift between the Air Force and lawmakers in Congress tasked with funding the new program. On Tuesday, five Republican senators sent a letter to President Donald Trump warning that an F-15 purchase would divert resources away from the F-35, thus jeopardizing national security.

    “We are extremely concerned that, over the last few years, the DoD has underfunded the F-35 Program and relied on Congress to fund increases in production, sustainment, and modernization,” the lawmakers  wrote. “In order to meet the overmatch and lethality goals laid out in the National Security Strategy, the DoD needs to make these investments in the F-35 to affordably deliver and operate this fifth-generation fighter fleet. The F-35 is the most affordable, lethal, and survivable air dominance fighter, and now is the time to double down on the program.”

    “New versions of old F-15s designed in the 1970s-1980s cannot survive against the newest Russian and Chinese fifth-generation fighter and surface to air missile threats, not to mention rapidly developing future threats,” they  added. “This action by the DoD would be a direct departure from the vision you have for a strong national defense.”

    In short: The Air Force’s request to procure the F-15x suggests that the F-35 has significant flaws. Why else would the Air Force revert to a 45-year-old airframe? There is a much bigger issue at play, China and Russia have put their fifth-generation jets into series production, a move that could jeopardize US national security.

  • Yellowstone Supervolcano Eruption Fears Rise As Geysers Become More Active

    Submitted by Mac Slavo of SHTFPlan.com

    Some of Yellowstone’s geysers have been more active lately reigniting fears that the massive supervolcano will erupt. The sudden bursts of steaming hot water highlight the dramatic nature of Yellowstone while reminding us we are all at the caldera’s mercy.

    While average people seemed concerned, geologists seemed excited and thrilled when Yellowstone’s steamboat geyser began erupting again in 2018. It has been erupting as often as once a week since last March, according to National Geographic, and scientists continue to say the volatile activity is not a sign of an imminent eruption.  The Yellowstone Volcano Observatory reported that Steamboat has now set a record by erupting a whopping 32 times in 2018, a personal best for the geyser for a single calendar year.  It’s the world’s tallest active geyser, and at the best of times, it can shoot hot water 300 feet into the air. However, it isn’t just the Steamboat Geyser that has been concerning people.

    Ear Spring Geyser, for example, has been almost since 1957, but it erupted spectacularly a few months back and sprayed human garbage from the 1930s all over the national park. But scientists insist this doesn’t mean an eruption is pending. “It’s a good lesson in how geysers actually work,” said Michael Poland, the scientist-in-charge at Yellowstone Volcano Observatory. “As soon as you start to recognize a pattern [in a geyser’s eruption], it changes.”

    “As [far as] geysers go, Steamboat is sort of typical in terms of having these sporadic, unpredictable eruptions,” Poland notes. “But because it’s this really tall geyser and it has this name recognition, it makes it that much more interesting.” But again, it’s not just Steamboat Geyser that has people concerned.  “But back in 2007 to 2008, Giant [geyser] went bananas,” Poland says. “It erupted many, many more times than it had in the past year—and Steamboat didn’t do anything of the sort.”

    Poland says that because there have been no underlying changes to the heat source which propels geysers, not have there been any geological changes, we should not be concerned about Yellowstone erupting in a cataclysmic event.  But Poland is either wrong on one front, or he’s being intentionally misleading. There has been a major geological change that could literally affect the entire globe, one which he conveniently left out for unknown reasons: Earth’s Magnetic North Pole Has Been Shifting Radpily In The Past 40 Years

    But have no fear, anyone who is worried about an eruption has fears which are “unfounded” according to a report by National Geographic. The scientists and media outlets who wish to control public thought and opinion would like for anyone concerned to take off their tin foil hat. Sometimes it feels like we are being conditioned and told what to care about and which things we should fear as opposed to allowing us the freedom to decide on our own. Is Yellowstone a threat? Maybe, maybe not. It’s not our place to tell you what to think, we ask that you take your own thoughts into your hands and decide for yourself if Yellowstone is a viable threat.

  • Why Startups Are Low-Balling Valuations When Assigning Employee Stock Options

    Start up companies become “conveniently” pessimistic about their valuations prior to going public when stock options are handed out to employees, according to a Wall Street Journal analysis. The lower valuations create a windfall for employees and can lower their tax burdens going forward.

    The report analyzed recent initial public offerings and identified 68 companies that gave employees stock options to buy about $1.5 billion worth of stock during the 12 month run up to each respective company’s IPO. The fair market value of those shares, however, was an estimated $2.2 billion at the time, based on a valuation model developed by academics. This is the equivalent of a 32% discount on shares for employees.

    Will Gornall, an assistant finance professor at the University of British Columbia, said: “The Journal’s findings show that the valuations being reported by companies are significantly below what the shares are really worth—the price that investors would pay for them.” 

    This year, these types of valuations will be in focus as names like Uber and Pinterest prepare to go public. A good example of this “low-balling” was Blue Apron Holdings. The founders of the company received a total of $30 million in October 2015 from stock sales to outside investors at $13.33 a share. This is more than triple the $3.69 per share that the company would use four months later as it granted options to employees. Blue Apron shares now trade at about $1.54 per share.

    Mukesh Bajaj, a financial economist who has testified in many valuation cases for the Internal Revenue Service said: “The law states employee-allocated stock should be priced at its fair value but doesn’t specify the basis of the pricing—which may give companies a tempting loophole to enrich their executives.”

    Stock options are one of the best weapons for startups to attract talent, and these types of discounts on stock can be a profitable benefit. Being such early investors and having options before a company goes public makes it easier for employees to reap profits, even though public market participants may see the company’s share price decline. In addition to getting stock cheap, these profits are taxed as capital gains instead of income, saving employees on taxes.

    Robert Willens, a New York-based tax analyst, said: “There’s a tremendous incentive to value the stock at the lowest possible figure. It’s a tried and true strategy and the IRS surprisingly is not very vigilant about it.”

    Private company valuations are usually far more opaque and subjective than public companies, whose valuation is constantly on display by public markets.

    The IRS is trying to clamp down on this tax avoidance by imposing penalties on companies and employees if options are granted to buy shares at less than fair market value. But IRS rules generally shield companies from action if they use an independent valuation firm, unless that valuation is deemed to be “grossly unreasonable”. As a result of this 2004 rule, many “independent” firms sprang up and got into the business of performing these types of valuations.

    Dan Eyman, managing director of San Francisco-based Meld Valuation, said online: “What we aim for … is to try and get you the lowest possible answer that is still defensible against an audit.”

    The IRS has done very little in enforcing these rules. The SEC has asked more than 180 companies that were planning an IPO to explain the pricing of their options or equity awards between 2016 and 2018. However, they didn’t ultimately require any of these companies to adjust their financial statements.

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