- Trump Ordered Secret Cyber Attacks On Iran As An "Alternative" To War Thursday Night
It’s been revealed that President Trump did order an attack on Iran – but not a military assault – instead, the US initiated a major cyber attack against an Iranian intelligence outfit the Pentagon believes was part of last week’s limpet mine incident involving two tankers in the Gulf of Oman.
According to Yahoo News, which first broke the story – which was later confirmed Saturday evening by CNN and The Washington Post – the “retaliatory digital strike” was launched on Thursday evening just as the world was bracing itself for possible US airstrikes on Iran:
On Thursday evening, U.S. Cyber Command launched a retaliatory digital strike against an Iranian spy group that supported last week’s limpet mine attacks on commercial ships, according to two former intelligence officials.
Image via FT.com <p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>The report relies on unnamed defense sources, which further added more details in a CNN follow-up, including that the group is tied to Iran’s elite Islamic Revolutionary Guard Corps (IRGC) and that the spy group had used unique software to track tankers that had been targeted in last week’s June 13 incident.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>CNN reported as follows:
USCC [U.S. Cyber Command] attacked the spy group, which has ties to the Islamic Revolutionary Guard Corps, after Iran attacked ships in the region, the officials said.
The US official added the strike targeted an Iranian spy group’s computer software that was used to track the tankers that were targeted in the Gulf of Oman on June 13.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>And the AP also noted that Thursday night’s cyber operation involved disabling computer systems which control Iran’s rocket and missile launchers, according to anonymous US officials. Trump was said to have ordered the cyber operations against IRGC computer systems as an alternative to starting an overt war.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>”Two officials told The Associated Press that the strikes were conducted with approval from Trump. A third official confirmed the broad outlines of the strike,” according to the AP’s reporting.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>The Pentagon has neither confirmed or denied the report; however, the Department of Homeland Security over the weekend said that cyber attacks from Iranian state-linked sources have increased dramatically in the past weeks as tensions have soared.
The DHS’s Cybersecurity and Infrastructure Security Agency said in a statement Saturday that it “is aware of a recent rise in malicious cyber activity directed at United States industries and government agencies by Iranian regime actors and proxies.”
“We will continue to work with our intelligence community and cybersecurity partners to monitor Iranian cyber activity, share information, and take steps to keep America and our allies safe,” the DHS statement added.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>The effectiveness of this latest alleged American cyber-attack is completely unknown at this point, and has not been confirmed by either the US or Iranian side.
<p content="The group, which has ties to the Iranian Revolutionary Guard Corps, has over the past several years digitally tracked and targeted military and civilian ships passing through the economically important Strait of Hormuz, through which pass 17.4 million barrels of oil per day. Those capabilities, which have advanced over time, enabled attacks on vessels in the region for several years.” data-reactid=”16″ type=”text”>Assuming it is indeed accurate, there’s little doubt this is a well-timed controlled and purposeful “leak” out of the Pentagon or White House designed to underscore the “tough” response to the Iranians out of Washington.
- Revolutionary Weapon-Detection-Machine Uses 3D-Radar And AI To Detect Guns
As the nation experiences frequent mass shootings, Liberty Defense is developing Hexwave, a new disruptive technology that was exclusively licensed from the Massachusetts Institute of Technology (MIT) uses 3D radar imaging and artificial intelligence to detect concealed weapons in urban settings.
Earlier this week, the company announced a partnership with German sports club FC Bayern München to test the new detection system inside the Allianz Arena stadium in Munich, reported Venture Beat.
“The reception to our Hexwave product has been fantastic, and we are excited about working alongside FC Bayern Munich, a team that is a household name in both Europe and North America,” said CEO Bill Riker.
“Our ability to deploy in either indoor or outdoor settings with both covert and overt applications sets us apart and has also been driving increasing interest from the market.”
Liberty Defense also signed deals with several other notable parties, including Vancouver Arena Limited Partnership, which operates Rogers Arena; Sleiman Enterprises, 150 shopping malls, and the Utah Attorney General.
Hexwave’s real-time active 3D radar imaging can detect metallic and non-metallic objects (guns, knives, explosives) on individuals, in clothing and bags.
Liberty Defense’s proprietary weapon detection and identification product consist of four major subsystems that work together:
Hexwave could be the next technology that replaces X-ray machines, such as for scanning bags in airports or other venues, and it also provides 3D scans of a person’s exterior as where X-ray can only provide 2D scans.
“Hexwave provides 3D imaging at a rate that is in real time — it can assess for threats while the person is still walking, which means it is well suited for higher, faster throughput,” Riker told VentureBeat.
The urban security market by 2020 to 2025 in North America is set to increase by 33%. The new 3D detection machine can revolutionize security at indoor high traffic crowded areas, like schools, malls, hotels, and places of worship, and protect outdoor high traffic areas, like airports, sports venues, government buildings, and bus/subway stations.
- China’s Aircraft Carrier Battle Group Emerges
Submitted by Richard D. Fisher, a senior fellow with the International Assessment and Strategy Center. Via the Epoch Times.
It’s been a long time coming, but Japanese reports on June 11 revealed that the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA) have realized a long-held ambition: to build and deploy an aircraft carrier battle group.
China’s first domestically manufactured aircraft carrier, known only as “Type 001A”, leaves port in the northeast city of Dalian early on May 13, 2018. AFP/Getty Images That means that China’s People’s Liberation Army Navy (PLAN) isn’t just able to deploy an aircraft carrier with a working air-wing of combat aircraft, but this carrier is also protected by escort combat ships and sustained by large, fast replenishment ships. This allows the carrier to undertake offensive missions against adversaries, while escort ships carry the burden of defending the carrier.
Also on June 11, the Japanese Ministry of Defense reported that a PLAN aircraft carrier battle group had cruised past the strategic Japanese island of Okinawa and was on its way to the Miyako Strait to depart the “First Island Chain.”
So deployed, this PLAN carrier battle group could assist blockade or strike operations directed at the eastern side of Taiwan. It also could assist attacks against the southern islands of Japan’s Ryukyu island chain, which might host combat aircraft and anti-ship missiles to disrupt attacks against Taiwan.
At the center of the group is the PLAN’s first aircraft carrier, the Liaoning, which, in January 2019, emerged from a period of maintenance and upgrading of its electronic combat systems. This 58,000-ton carrier was first purchased uncompleted from Ukraine and towed to China, reaching the port of Dalian in March 2002. A cover story was hatched that it was to be converted into a casino, but by 2005–2006, its reconstruction had begun in earnest, and by 2012, Liaoning was commissioned and was testing its new Shenyang J-15 carrier fighters.
Liaoning can carry 20 to 25 J-15s, an improved copy of the Russian Sukhoi Su-33 carrier fighter. While its range and payload are slightly limited because it’s launched via a “ski jump” instead of a catapult as on U.S. carriers, it’s a respectable fourth-generation fighter, which will be improved. Liaoning also carries about 12 large Z-18 helicopters equipped for anti-submarine and early-warning radar missions.
A second PLAN carrier, modeled on Liaoning with slight modifications, is in advance trials. It may soon begin testing with J-15 fighters and could be commissioned in one or two years.
What is also important to note is the composition of the Liaoning battle group. It includes one Type 052D multi-role destroyer; one Type 051C air defense destroyer; two Type 054A multi-role frigates; and one new large Type 901 underway replenishment ship. The combat support ships feature 128 vertical launchers for anti-aircraft, anti-submarine, and soon, anti-ship ballistic missiles. The Type 051C is equipped with 48 Russian-made S-300MF anti-aircraft missiles.
While the PLAN may in the next few years have only two carrier battle groups, compared to the 10 maintained by the U.S. Navy, it’s important to note that China’s is the only aircraft carrier battle group operated by an Asian navy.
On June 12, the South China Morning Post cited the People’s Daily social media account Xiakedao saying, “It is very unlikely that Chinese carriers will ever be involved in resolving maritime disputes with neighboring countries.” Such statements are not credible.
Also, while the Liaoning carries fewer aircraft than a U.S. carrier (up to 90), the PLAN can today compensate for its weakness—both in carrier battle groups and in carrier aircraft—with weapons the U.S. Navy doesn’t have today.
For example, in January, the PLAN held exercises in the South China Sea with the PLA’s new Rocket Force. PLAN ships, and perhaps submarines, coordinated simulated strikes with the Rocket Force’s medium- and intermediate-range anti-ship ballistic missiles. In addition, the PLA Air Force is testing a new medium-range air-launched ballistic missile, most likely carried by Xian H-6 medium bombers. The PLA will first try to sink U.S. Navy carriers with long-range ballistic missiles, coordinated with strikes by land-based aircraft, submarines, and then aircraft carriers and ships.
Of special note, the Liaoning carrier battle group has included the new 50,000-ton Type 901A underway replenishment ship. Capable of transferring fuel, ammunition, and solid stores, Type 901A’s are very similar to the U.S. Navy Supply-class.
Replenishment ships of this size can support global deployments for the PLAN’s carrier battle groups. In the next one or two years, it should be expected that the PLAN carrier battle groups may deploy into the South China Sea, the Indian Ocean, or to advance China’s naval diplomacy in the South Pacific. They also will be calling into ports in Africa and Latin America before long.
At the end of May, China’s state television aired a program stating that China would build 10 aircraft carriers by 2049, the 100th anniversary of the CCP dictatorship. The PLA will likely build its first nuclear-powered aircraft carrier in the mid- to late-2020s, followed by nuclear-powered escort cruisers and perhaps also nuclear-powered replenishment ships.
Washington must now determine how best to counter multiple globally deployed PLAN carrier battle groups. While it will remain important for the U.S. Navy to sustain 10 or more of its own carrier battle groups, the U.S. Navy, Air Force, and Army require large numbers of medium- and intermediate-range ballistic and cruise missiles capable of attacking China’s aircraft carrier battle groups at very long ranges.
In the 2002 issue of the congressionally mandated Department of Defense “China Military Power Report,” on page 20, it was stated that “while continuing to research and discuss possibilities, China appears to have set aside indefinitely plans to acquire an aircraft carrier.”
Such an ingrained tendency to downplay the intentions and capabilities of the People’s Republic of China likely is reinforced by a hubristic susceptibility to PRC deception and denial efforts; both flaws are costly and must be corrected. The United States should expect that China will deploy many carrier battle groups to challenge global American interests, and Washington must both develop forces to counter them, and begin developing new weapons systems to succeed the aircraft carrier.
- AI Can Be Used To Detect Deepfakes – For Now
Over the past several years, software has emerged which can create a lifelike digital model of just about anyone. Known as “deepfakes,” the technology can be used to deceive or entertain – such as Game of Thrones’ Jon Snow apologizing for the absolute disaster that was season eight.
Early deepfakes were easy to identify; while the AI-generated dupe looked real enough, there were many tells – such as jerky mouth movements or unnatural eye movements. As time has passed, however, deepfakes are getting harder to spot.
Here’s a far less convincing example:
Meanwhile, last week we reported that the staff at the Max Planck Institute for Informatics, Princeton University and Adobe Research have developed software that allows you to now edit and change what people are saying in videos, allowing anyone to edit anybody into saying anything – by using machine learning and 3-D models of the target’s face.
AI to the rescue?
As deepfakes become harder and harder to identify, recent research from USC’s Information Sciences Institute concludes that artificial intelligence can be used to spot the real McCoy, according to VICE.
To automate the process, the researchers first fed a neural network—the type of AI program at the root of deepfakes—tons of videos of a person so it could “learn” important features about how a human’s face moves while speaking. Then, the researchers fed stacked frames from faked videos to an AI model using these parameters to detect inconsistencies over time. According to the paper, this approach identified deepfakes with more than 90 percent accuracy.
Study co-author Wael Abd-Almageed says this model could be used by a social network to identify deepfakes at scale, since it doesn’t depend on “learning” the key features of a specific individual but rather the qualities of motion in general. –VICE
“Our model is general for any person since we are not focusing on the identity of the person, but rather the consistency of facial motion,” said Abd-Almageed.
“Social networks do not have to train new models since we will release our own model. What social networks could do is just include the detection software in their platforms to examine videos being uploaded to the platforms.”
It’s anyone’s guess what happens AIs can’t detect the work of other AIs, but might want to protect John Connor at all costs just in case it’s a slippery slope.
- Fake Meat: Big Food's Attempt To Further Industrialize What We Eat
Authored by Vandana Shiva via ConsortiumNews.com,
We need to decolonize our food cultures and our minds of food imperialism…
Food is not a commodity, it is not “stuff” put together mechanically and artificially in labs and factories. Food is life. Food holds the contributions of all beings that make the food web, and it holds the potential of maintaining and regenerating the web of life. Food also holds the potential for health and disease, depending on how it was grown and processed. Food is therefore the living currency of the web of life.
As an ancient Upanishad reminds us “Everything is food, everything is something else’s food.”
Good food and real food are the basis of health.
Bad food, industrial food, fake food is the basis of disease.
Hippocrates said “Let food be thy medicine.” In Ayurveda, India’s ancient science of life, food is called “sarvausadha” the medicine that cures all disease.
Industrial food systems have reduced food to a commodity, to “stuff” that can then be constituted in the lab. In the process both the planet’s health and our health has been nearly destroyed.
This project aims at enhancing the competiveness of agricultural value chains in Pakistan with a focus on horticulture and livestock including dairy, meat and fisheries. (USAID Agribusiness Project, via Wikimedia Commons)
Planetary Impacts
Seventy five percent of the planetary destruction of soil, water, biodiversity, and 50 percent of greenhouse gas emissions come from industrial agriculture, which also contributes to 75 percent of food-related chronic diseases. It contributes 50 percent of the greenhouse gases driving climate change. Chemical agriculture does not return organic matter and fertility to the soil. Instead it is contributing to desertification and land degradation. It also demands more water since it destroys the soil’s natural water-holding capacity. Industrial food systems have destroyed the biodiversity of the planet both through the spread of monocultures, and through the use of toxics and poisons which are killing bees, butterflies, insects, birds, leading to the sixth mass extinction.
Biodiversity-intensive and poison-free agriculture, on the other hand, produces more nutrition per acre while rejuvenating the planet. It shows the path to “zero hunger” in times of climate change.The industrial agriculture and toxic food model has been promoted as the only answer to economic and food security. However, globally, more than 1 billion people are hungry. More than 3 billion suffer from food-related chronic diseases.
It uses 75 percent of the land yet industrial agriculture based on fossil fuel intensive, chemical intensive monocultures produce only 30 percent of the food we eat. Meanwhile, small, biodiverse farms using 25 percent of the land provide 70 percent of the food. At this rate, if the share of industrial agriculture and industrial food in our diet is increased to 45 percent, we will have a dead planet. One with no life and no food.
The mad rush for fake food and fake meat, ignorant of the diversity of our foods and food cultures, and the role of biodiversity in maintaining our health, is a recipe for accelerating the destruction of the planet and our health.
GMO Soya is Unsafe
In a recent article “How our commitment to consumers and our planet led us to use GM soy,” Pat Brown, CEO & founder of Impossible Foods, says: “We sought the safest and most environmentally responsible option that would allow us to scale our production and provide the Impossible Burger to consumers at a reasonable cost.”
Given the fact that 90 percent of the monarch butterflies have disappeared due to Roundup ready crops, and we are living through what scientists have called an “insectageddon,” using GMO soya is hardly an “environmentally responsible option.”
Monarch butterflies roosting in Port Louisa National Wildlife Refuge, Iowa. (USFWS Midwest Region via Flickr)
In writing this, Pat Brown reveals his ignorance about weeds evolving to resist Roundup and becoming “superweeds” now requiring more and more lethal herbicides. Bill Gates and DARPA are even calling for the use of gene drives to exterminate amaranth, a sacred and nutritious food in India, because the Palmer Amaranth has become a superweed in the Roundup Ready soya fields of the U.S.
At a time when across the world the movement to ban GMOs and Roundup is growing, promoting GMO soya as “fake meat” is misleading the eater both in terms of the ontology of the burger, and on claims of safety.
The “Impossible Burger” based on GMO, Roundup sprayed soya is not a “safe” option.
Zen Honeycutt and Moms across America just announced that the Impossible Burger tested positive for glyphosate. “The levels of glyphosate detected in the Impossible Burger by Health Research Institute Laboratories were 11 X higher than the Beyond Meat Burger. The total result (glyphosate and its break down AMPA) was 11.3 ppb. Moms Across America also tested the Beyond Meat Burger and the results were 1 ppb.
“We are shocked to find that the Impossible Burger can have up to 11X higher levels of glyphosate residues than the Beyond Meat Burger according to these samples tested. This new product is being marketed as a solution for ‘healthy’ eating, when in fact 11 ppb of glyphosate herbicide consumption can be highly dangerous. Only 0.1 ppb of glyphosate has been shown to destroy gut bacteria, which is where the stronghold of the immune system lies.”
An Impossible Burger given out in 2016 promotional event, San Francisco. (Dllu, CC BY-SA 4.0, via Wikimedia Commons)
Recent court cases have showcased the links of Roundup to cancer. With the build up of liabilities related to cancer cases, the investments in Roundup Ready GMO soya is blindness to the market.
Or the hope that fooling consumers can rescue Bayer/Monsanto.
There is another ontological confusion related to fake food. While claiming to get away from meat, “fake meat” is about selling meat-like products.
Pat Brown declares “we use genetically engineered yeast to produce heme, the “magic” molecule that makes meat taste like meat — and makes the Impossible Burger the only plant-based product to deliver the delicious explosion of flavor and aroma that meat-eating consumers crave.”
I had thought that the plant-based diet was for vegans and vegetarians, not meat lovers.
Big Food & Big Money Driving Fake Food Goldrush
Indeed, the promotion of fake foods seems to have more to do with giving new life to the failing GMO agriculture and the junk food industry, and the threat to it from the rising of consciousness and awareness everywhere that organic, local, fresh food is real food which regenerates the planet and our health. In consequence, investment in “plant-based food companies” has soared from nearly zero in 2009 to $600 million by 2018. And these companies are looking for more.
Pat Brown declares, “If there’s one thing that we know, it’s that when an ancient unimprovable technology counters a better technology that is continuously improvable, it’s just a matter of time before the game is over.” He added, “I think our investors see this as a $3 trillion opportunity.”
This is about profits and control. He, and those jumping on the fake-food goldrush, have no discernible knowledge, or consciousness about, or compassion for living beings, the web of life, nor the role of living food in weaving that web.
Their sudden awakening to “plant-based diets,” including GMO soya, is an ontological violation of food as a living system that connects us to the ecosystem and other beings, and indicates ignorance of the diversity of cultures that have used a diversity of plants in their diets.
Interconnections
Ecological sciences have been based on the recognition of the interconnections and interrelatedness between humans and nature, between diverse organisms, and within all living systems, including the human body. It has thus evolved as an ecological and a systems science, not a fragmented and reductionist one. Diets have evolved according to climates and the local biodiversity the climate allows. The biodiversity of the soil, of the plants and our gut microbiome is one continuum. In Indian civilization, technologies are tools. Tools need to be assessed on ethical, social and ecological criteria. Tools/technologies have never been viewed as self-referential. They have been assessed in the context of contributing to the wellbeing of all.
Through fake food, evolution, biodiversity, and the web of life is being redefined as an “ancient unimprovable technology.” That ignores sophisticated forms of knowledge that have evolved in diverse agricultural and food cultures in diverse climate and ecosystems to sustain and renew the biodiversity, the ecosystems, the health of people and the planet.
The Eat Forum, which brought out a report that tried to impose a monoculture diet of chemically grown, hyper-industrially-processed food on the world has a partnership through FrESH with the junk food industry, and Big Ag such as Bayer, BASF, Cargill, Pepsico amongst others.
Fake food is thus building on a century and a half of food imperialism and food colonization of our diverse food knowledges and food cultures.
Big Food and Big Money are behind the Fake Food Industry. Bill Gates and Jeff Bezos are funding startups.
We need to decolonize our food cultures and our minds of food imperialism
The industrial West has always been arrogant, and ignorant, of the cultures it has colonized. “Fake Food” is just the latest step in a history of food imperialism.
Soya is a gift of East Asia, where it has been a food for millennia. It was only eaten as fermented food to remove its anti-nutritive factors. But recently, GMO soya has created a soya imperialism, destroying plant diversity. It continues the destruction of the diversity of rich edible oils and plant-based proteins of Indian dals that we have documented.
Women from India’s slums called on me to bring our mustard back when GMO soya oil started to be dumped on India, and local oils and cold press units in villages were made illegal.
That is when we started the “sarson (mustard) satyagraha” to defend our healthy cold pressed oils from dumping of hexane-extracted GMO soya oil.
Hexane is a neurotoxin. While Indian peasants knew that pulses, or legumes, fix nitrogen, the West was industrializing agriculture based on synthetic nitrogen, which contributes to greenhouse gases, dead zones in the ocean and dead soils. While we ate a diversity of “dals” in our daily “dal roti” the British colonizers, who had no idea of the richness of the nutrition of pulses, reduced them to animal food. Chana became chick pea, gahat became horse gram, tur became pigeon pea.
We stand at a precipice of a planetary emergency, a health emergency, a crisis of farmers livelihoods. Fake food will accelerate the rush to collapse. Real food gives us a chance to rejuvenate the earth, our food economies, food sovereignty and food cultures. Through real food we can decolonize our food cultures and our consciousness. We can remember that food is living and gives us life.
Boycott GMO Impossible Burger. Make tofu. Cook Dal.
- How Trump Outplayed Powell, And Here's What Happens During Next Week's Critical Trump-Xi Meeting
When it comes to the near- and medium-term trajectory of the market, there were two events that mattered: as we summarized back on June 14, the first major catalyst was last Wednesday’s FOMC meeting, where Powell had a choice – lose the “patience” and end the rate hike cycle or stun the market risking a crash, and continue tightening financial conditions. Of course, as everyone knows by now, “Powell threw in the towel”, capitulating to both the market and president Trump’s relentless barrage and confirmed that a July rate cut is virtually assured, at least according to the market which now see greater than 100% odds of such an event. The second catalyst is next week’s G-20 summit in Osaka, Japan, where Trump will meet with China’s president Xi and perhaps put an end to the trade war.
The updated 2×2 matrix from Bank of America of these events is shown below, with the hawkish FOMC outcome no longer in play.
However, unlike the FOMC where a dovish outcome was virtually assured, a fvorable outcome next week is a far less likely outcome. Indeed, as we noted last Wednesday, Goldman has created a “barometer” index tracking the probability of a trade resolution. It now stands at just 20%, or a one in five chance that the two superpowers will find an amicable resolution, and while this is up from 7% one month ago, it is down from 80% back in March.
So does that mean that traders betting on a bullish outcome from this week’s main event should start buying puts? According to a Friday follow up analysis from Goldman’s chief political economic, Alec Phillips, the answer is “while the meeting between Presidents Trump and Xi at the G20 meeting will clearly be an important event for financial markets, it seems unlikely to be decisive, as the odds of a formal detailed agreement at the meeting seem very low”, although the silver lining is “that further tariff escalation would probably not be announced right away either.“
This in turn means that both sides will seek to kick the can and avoid the downside scenario portrayed by BofA which sees the S&P dropping to 2,750, propped up by the backstop of the newly-dovish Fed.
Here is what Phillips believes is the most likely outcome from next week’s G-20 meeting which the Goldman strategist dubs “A hiatus, not a breakthrough.” Below is the executive summary:
The G20 meeting is important but is unlikely to be decisive. Financial markets are once again focused on trade policy, in anticipation of the upcoming meeting between President Trump and President Xi at the G20 meeting in Osaka, Japan (June 28-29). However, we do not expect whatever announcement they make following the meeting to provide very much clarity on whether the US has finished increasing tariffs or whether a deal will eventually be reached with China. While we can imagine several potential outcomes from the upcoming meeting, the most likely outcome seems likely to prolong trade policy uncertainty.
So while continuation of the status quo is the most likely outcome that is announced next Saturday, what are the nuances? Below we repost some of the key observations by Phillips:
A formal agreement at the G20 seems very unlikely. There has been little communication among US and Chinese officials since talks broke down over a month ago, and discussions over the next week seem insufficient to result in a formal detailed agreement. Chinese officials might also look at the tariffs that President Trump recently threatened on Mexico as a sign that reaching a formal agreement (as the US and Mexico did in the USMCA) might not be sufficient to eliminate the risk of tariffs, which would reduce their incentive to offer concessions.
Immediate post-G20 escalation is possible but fairly unlikely. The public comment period on the next round of tariffs ends July 2, after which the White House would be free to issue a final tariff notice on imports from China (implementation of tariffs would probably take another couple of weeks). In light of the breakdown in talks in early May, there is clearly a chance that the two leaders might be unable to reach even a preliminary understanding. If so, we expect that President Trump would indicate that additional tariffs would be imposed, as the time to negotiate an agreement before the 2020 presidential election is growing shorter, and we expect that President Trump would be unwilling to postpone further tariffs if he believed there was little chance of reaching a deal without further pressure. While we view this as a possibility, we think immediate escalation is fairly unlikely.
A commitment to re-engage seems the most likely outcome. US officials, including President Trump and US Trade Representative Lighthizer, have emphasized their interest in restarting talks. In the two analogous face-to-face meetings that President Trump previously held with foreign leaders—with European Commission President Juncker in July 2018 and President Xi in December 2018—he agreed to postpone tariff increases in return for an unspecified commitment to negotiate an agreement. This seems to be the most likely outcome once again.
The White House might set a new deadline. We note that the only agreements the White House has reached with major US trade partners have come at the last minute ahead of clear deadlines. USMCA was finalized on August 27, 2018, just a few days before an important procedural deadline. More recently, Mexico agreed to an immigration-related deal less than three days before tariffs would have taken effect. By contrast, the White House indefinitely delayed the step-up in the tariff rate from 10% to 25% on $200bn of imports from China, and talks ultimately broke down. While imposing a new deadline on negotiations might add counterproductive public pressure on China, it would not be surprising for the White House to take this approach in light of the failure of open-ended negotiations to produce agreements.
A pause in escalation in the near-term could still lead to additional tariffs later this year. In the two analogous leader-to-leader meetings noted earlier, President Trump agreed to postpone further tariffs. However, in both cases, this détente was only temporary, as the White House eventually imposed additional tariffs on imports from China and has indicated it will impose auto tariffs on the EU and Japan if an agreement is not reached by November.
Financial markets do not appear to be an obstacle to tariff escalation… The last two times President Trump seriously escalated trade tensions with China, the S&P 500 was near record highs. By contrast, President Trump’s decision to delay tariff escalation in December 2018 came after two months of equity market declines. The S&P 500 closed on June 20 slightly higher than its level during the prior instances of escalation, suggesting that concerns regarding financial markets are unlikely to deter the White House from imposing tariffs.
…And monetary policy considerations might motivate the President to prolong trade policy uncertainty. One of the factors that led financial markets to reprice expectations for monetary policy is rising trade policy uncertainty, as demonstrated by the sharp repricing in fed funds futures after the President proposed tariffs on Mexico on May 30. More recently, Chair Powell’s press conference comments also referenced trade policy uncertainty. While it seems unlikely that President Trump had monetary policy in mind when he made the latest round of tariff proposals, we would expect that the President now views tariff threats as not only a successful negotiating tactic following the immigration agreement with Mexico but also a useful tool in pressing for looser monetary policy. If so, this suggests that the White House will at least threaten further tariff increases and might follow through with some of them.
Tariffs still seem more likely to rise before the 2020 presidential election than to hold at current levels. While it is a close call, we still think tariffs are slightly more likely to rise further over the next several months. The White House seems likely to continue to use tariff threats as a negotiating tactic. However, since not all trading partners will be willing to make the concessions the US wants, it seems likely that at some point the President will follow through with at least one of the tariff increases he has proposed. It is hard to predict when this will happen or on which imports. A further increase in tariffs on imports from China seems more likely than other targets, since the White House has already formally proposed further tariffs and will be in a position to impose them in July, and political support for tariffs on imports from China is still much greater than support for tariffs on Mexico or the EU.
However, we doubt that the White House will impose a 25% tariff on all remaining imports from China. Our expectation continues to be that the Trump Administration will impose a 10% tariff on remaining imports from China to reduce the economic disruption and impact on consumers that a 25% tariff would have. We note that in congressional testimony this week, USTR Lighthizer described the pending tariff notice as providing authority to impose tariffs of “up to 25%”.
A “deal” between the US and China seems more likely than not prior to the 2020 election. Like most other aspects of the trade policy outlook, this also has become a closer call. We believe that President Trump will want to demonstrate success in the US-China negotiation prior to the 2020 election, which could bring him to accept a deal that stops short of the agreement that the US sought a couple of months ago. That said, while the political pressure to reach an agreement will increase as the election approaches, the political scrutiny of the specifics of the agreement will also increase. Since domestic political pressures in the US and China will push against either side making meaningful concessions, we expect that the most likely scenario for an eventual deal would be for a few genuine reforms coupled with a commitment to purchase a substantial amount of US exports, in return for a phase-out of US tariffs.
Of all of the above – much of which focuses on the period 6-9 months ahead of the 2020 elections and is therefore less relevant for the immediate future, the one aspect of Goldman’s analysis we find most relevant (and credible) is the bank’s consideration of interplay between trade policy – and trade war – and Trump’s growing indirect influence over the Fed, to wit:
… we would expect that the President now views tariff threats as not only a successful negotiating tactic following the immigration agreement with Mexico but also a useful tool in pressing for looser monetary policy. If so, this suggests that the White House will at least threaten further tariff increases and might follow through with some of them.
As was extensively reported last week, Trump considered firing or demoting Powell at the start of the year; realizing he can’t do so directly, he instead decided to pressure Powell to do his bidding in response to Trump’s actions!
To be sure, by now Trump has certainly figured out that his strongest leverage over the Fed is by escalating the uncertainty in the trade and political arena, forcing the Fed to tip its cards and unveil its open-ended dovish policy which the market now expects will result in as many as 4 rate cuts in the next 12 months, setting up Trump nicely for the election, with the S&P at or near all time highs, even if the overall economy continues to deteriorate (it is, however, unclear how much longer markets will ignore the growing risk of a recession just because the Fed has promised to cut rates further).
As such, if Trump feels the need to extract more concession from Powell, all he needs to do is to make good in part or in whole on his $300BN in new Chinese tariffs, which will force the Fed to take on an even more dominant role to preserve the economic cycle by doing the only thing it knows how to do: push assets to new all time highs with even more dovish policies.
And since for Trump the stock market is the only barometer that matters for his “approval rating” as today’s tweet on the topic confirmed…
Stock Market is on track to have the best June in over 50 years! Thank you Mr. President! @WSJ
— Donald J. Trump (@realDonaldTrump) June 22, 2019
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… the perverse outcome is that the White House is now confident that the more it pushes China – in word or in deed – toward a full blown trade war, the more Powell will be forced to concede to Trump in the simmering feud between the executive and the money printing branches of US government. Which is why, even if Goldman is confident that a perpetuation of the status quo is the most likely outcome, traders may be wise to buy the occasional put: if Trump really wants the Fed to consider doing QE (or more), all he has to do is to achieve a total collapse in trade with China, which will leave the Fed, and its money printers, the last recourse the US has to avoid a recession, effectively taking the ball out of Trump’s court and strategically putting it into Powell’s, where depending on what Powell does, the consequences could be dire on both sides: as DB’s Aleksandar Kocic explained earlier:
In the case of unresponsive Fed it is a recession, while in the case of an accommodative Fed it is the loss of central bank independence and potentially another round of trade wars and even more pressure on the Fed to cut rates with further markets addiction to stimulus and possibly higher inflation etc.
What is most surprising about all of the above, is how skillfully Trump played both China and the Fed to get his desired outcome: a continued belligerent stance with his superpower adversary even as Powell – who is hardly Trump’s biggest fan – is forced to do everything in his power to protect Trump’s back.
- "Somebody" Finally Cares About Gold
Authored by Adam Taggart via PeakProsperity.com,
…and now that $1,400/oz has been breached, there’s plenty of room to run…
Grant Williams pithily summed up the situation that has been plaguing gold since 2013: No One Cares.
Yes, it’s highly likely that the price has been suppressed. But not enough buyers cared to fight the bullion bank/central bank cartel or make life difficult enough for the politicians — and thus, the regulators — to change things.
So gold languished. For years.
But last August, gold quietly entered a bull market after breaking above $1200.
As the price began rising (for both fundamental & technical reasons), we’ve been tracking its progress closely. We do so on a daily basis via Peak Prosperity’s Precious Metals Daily Commentary updates (outstanding authored by user davefairtex), as key developments happened via our premium reports (like this prediction), and via expert interviews such as our recent in-depth discussions with TFMetals and Incrementum’s Ronni Stoeferle.
As we entered 2019, the increasingly dovish/desperate policy retracements of the central banks — which now appear will NEVER normalize their balance sheets — have boosted the bull run.
Lower real interest rates are gold price-positive. And not only are real rates falling right now, there’s already currently $13 trillion in negative *nominal* debt trading worldwide right now:
And based on this week’s further dovish announcements from both the Fed and the ECB, we can expect more $trillions to be added to that pile soon.
On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year.
That — plus a downed US drone patrolling the Iran border — poured gasoline on gold, which spiked as high as $1,410/oz, finally breaking free of the $1,350 ceiling that had blocked its advance for years.
Technically, if gold can hold above $1,385, it has a lot of room to run from here. As the chart below shows, gold has traced out a reverse head-and-shoulders pattern and has now punched through the neckline — a bullish breakout — currently trading at $1,400/oz at the time of this writing, the highest price it has traded at since 2013.
source: Northman Trader
Short of a raid orchestrated by the central planners to fasten tighter the cap on gold (which remains a real possibility given the historical record), the yellow metal shouldn’t encounter much price resistance until above $1,500/oz.
The metal itself and the miners are now in uptrends across all three timelines of the proprietary forecaster maintained by Peak Prosperity’s Precious Metals analyst davefairtex . We haven’t seen such strong indicators in, well…forever.
Here’s gold, which while registering overbought after its recent $100 spike, remains in a very strong uptrend:
source: Peak Prosperity Gold forecaster 6.20.19
And here are the miners (represented by the XAU index), following gold nicely as would be expected, confirming a breakout:
source: Peak Prosperity’s Gold Miner forecaster 6.20.19
While we may see some price retracement over the immediate term, to be expected after such a monster run-up and as war-with-Iran fears (hopefully) ebb, Dave explains why the current macro situation remains bullish for gold:
The problem is, we have a newly-semi-dovish Fed happening at the same time as renewed interest in a US-China trade deal, a possible impending lockup of China’s banking system (!), the Iranian shoot-down of a US drone (over either Iranian territory – or Iranian waters – or International Airspace, take your pick), while Draghi over in Europe has been accused of lying about the ECB’s renewed dovishness, for which there is apparently no consensus after all. And Draghi is almost out the door himself, so there’s that uncertainty too. Who will replace him? Will they still be as print-happy? Italy may be about to pay its debts using a new currency (the mini-BOT) which may or may not be illegal, and the EU is looking to fine Italy for having a high debt/GDP. This, while Apple has apparently decided to diversify its globalized supply chain outside China. Oh yeah. Boris Johnson appears to be a shoo-in for UK PM.
Enough moving parts?
So what can we expect going forward?
Well if peace breaks out, gold will probably retrace. Silver isn’t quite keeping up with gold, so it will probably retrace also.
This is the problem with safe haven moves. They spike higher, and then they deflate. And that history is why the commercials (I’m guessing here) play the odds and assume the world won’t end this time, and they go short into these big spikes. That, and there is probably some official intervention too.
Ultimately today’s breakout above 1382 is bullish. Even if we do retrace the safe haven move, the 5-year resistance has been broken. Although it appears as though it was the “Iran drone shootdown” snowflake that caused today’s gold buying avalanche, in truth it was probably a whole collection of snowflakes that led to an increase in overall uncertainty. After all, gold has rallied for 4 weeks now. The drone shootdown just pushed prices over the edge – turning it into a spike higher that even 134 “tons” of paper gold was unable to stop.
On the fundamental side, more and more experts and pundits are waking up to what PP has been saying all along: the central banks have painted themselves into a corner they don’t know how to get out of. So they keep using the one tool they have, hoping for a different outcome (and yes, perhaps pushing all of the wealth into the hands of the 0.1% *is* their desired outcome).
But that strategy is based on perverted logic; it can’t be sustained. You can’t print prosperity. There’s only so far asset prices can rise while real wages remain stagnant. Housing prices can’t long stay above people’s ability to put food on the table, even with <3% mortgages. There’s a point at which more stimulus no longer has any effect.
The smarter minds we talk with agree with us that the unfolding action we’re watching in real time is the total capitulation of the central banks. There’s nothing left after this one except money for Main Street, which we think the banks will hold in store to have *something* left for the arriving global recession (to be cutting rates at this point is absolutely insane).
So it’s quite likely a nasty deflationary downdraft lies in our future. While this may initially cause gold to drop in price, the metal should fare much better than the pantheon of risk-assets falling from their current all-time bubble highs. As we often say in our live presentations: “In a bear market, expect to lose money. The trick is to lose a lot less than everybody else”.
But even if the central banks succeed in preventing such a deflationary rout, then it will soon become confetti time for the word’s fiat currencies.
Do you realize that if you have a cool $1mil of cash on hand, you make only $20k/year if you have it in T-bills, or (much) less than that if kept in your bank account? Less than 5% of Americans have that kind of scratch on hand, and yet it produces an income below the US poverty level. If we stay on the trajectory we’re on, that $1 million won’t be worth diddly soon.
But gold? Gold should truly shine in this situation: both by maintaining its purchasing power and increasing in value as $trillions in capital look for safe haven.
Remember that the $7 trillion gold market is a small doorway compared to the $164 trillion held in stocks and bonds. (And the <$1 trillion silver market is ridiculously tiny relatively). If (more likely, “when”) just a few $trillion flee risk assets into the precious metals, the prices of gold and silver will explode.
Of course, our long-standing advice remains the same: Position yourself for this predictable outcome in advance.
Especially since the long awaited breakout above $1,350 has finally taken place. That technical milestone, combined with the last-gasp desperation the Fed and ECB have shown this week, indicate that the really big moves for the precious metals are now cleared to happen. Things could move quite quickly from here.
Specifically, we recommend availing yourself of the following three free resources if you haven’t yet already:
-
Get educated on how/where to buy & store gold and silver. Read our free primer here.
-
For the rest of your portfolio, talk with an advisor who understands the risks warned of here. If your current professional doesn’t fit the bill, schedule a free consultation & portfolio crash-audit with our endorsed advisor.
-
Follow the daily action in the precious metals by reading our excellent Precious Metals Commentary (referenced several times in the article above). You can do so here.
Finally, gold is no longer being ignored.
Someone Cares. Which is why we’re now at the highest levels seen in over half a decade.
Just imagine what the price will be like when Everybody Cares…
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- Iran Activated Air Defenses In Syria After Learning Of US Attack: Report
The Iranian forces in Syria activated their air defenses after learning of the U.S. planned attack this week, the Russian publication Avia.Pro reported on Friday.
According to the Russian publication, the Iranian forces learned of the U.S. planned attack and prepared for their air defense systems for the confrontation.
The Iranians got intelligence about a coming US attack on the IRGC in Syria. Following this, the Iranian military contingent located in the eastern part of the country was placed on high alert, including the air defense systems, which, as it turned out, are located in the territory of the Syrian Arab Republic. — Google translate of Avia.Pro reporting
Iran’s Supreme Leader Ayatollah Ali Khamenei is seen near a “3 Khordad” system which is said to had been used to shoot down a U.S. military drone, according to news agency Fars, in this undated handout picture. Photo by Fars news/Handout via Reuters. Prior to this, a source from the Syrian military in Damascus told Al-Masdar that Iran’s Islamic Revolutionary Guard Corps (IRGC) had placed their troops on high alert near the border city of Albukamal.
The Iranian presence in the border city of Albukamal is incredibly close to the U.S. Armed Forces, who are currently deployed in eastern Deir Ezzor.
While the U.S. and Iran often avoid each other in eastern Syria, the American forces have attacked the Iranian-backed paramilitaries near the Tanf Zone in southeastern Syria.
These attacks were often carried out by the U.S. Air Force after the Iranian-backed paramilitaries and their allies from the Syrian Arab Army (SAA) approached the rebel groups near Tanf.
The IRGC is primarily based in two locations in Syria: Al-Safira (southern Aleppo) and Albukamal (eastern Deir Ezzor). While Iran’s downing of a U.S. drone near the Strait of Hormuz has made headlines across the world, this is not the first time that they have targeted American unmanned aerial vehicles.
In February, Iran allegedly hacked a U.S. drone in eastern Syria, reportedly forcing the American forces to destroy the UAV.
- Mysterious Flying Objects Over Kansas Turn Out To Be Top-Secret DARPA Experiment
There was such as vast public response to the mystery objects spotted over Kansas City that none other than the National Weather Service of Kansas City felt compelled to tweet on Thursday, June 20 that “we honestly have no explanation for the floating objects over Kansas City,” along with a sub-tweet of an image showing two “floating objects” in the sky.
We honestly have no explanation for the floating objects over Kansas City.
— NWS Kansas City (@NWSKansasCity) June 21, 2019
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Re: Floating objects (two small white spheres above the anvil shield). Others farther north may have a better view. pic.twitter.com/fFTYi59vGM
— NWS Kansas City (@NWSKansasCity) June 21, 2019
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Social media was ignited by this news (or lack thereof) with many speculating (and the NWS’s vague tweet not helping) that an alien invasion was taking place. However, just hours later it was revealed that the mystery flying objects were a top-secret DARP (Defense Advanced Research Projects Agency) project, dubbed Adaptable Lighter Than Air (ALTA) program.
ALTA was developed to test high altitude lighter-than-air vehicle capable of wind-borne navigation over extended ranges. The balloons can fly at altitudes of more than 75,000 feet while carrying a small payload.
DARPA launched three ALTA balloons from Cumberland, Maryland, about 80 miles west of Camp David, on June 18, 2019. According to C⁴ISRNET, DARPA was tracking the balloons, the agency said the ALTA balloon flights are coordinated with the FAA.
Last night, DARPA launched 3 balloons from Cumberland, Maryland, in a flight test for the Adaptable Lighter Than Air prgm. Over next few days, ALTA will demonstrate capability for wind-borne navigation of a lighter-than-air vehicle over extended ranges. https://t.co/Og8dWCvszc pic.twitter.com/NjUB6Got94
— DARPA (@DARPA) June 18, 2019
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“The balloons are controlled from fixed and mobile ground stations, with consistent point-to-point links and satellite relays,” said Dr. Alexander M.G. Walan, ALTA program manager, noting that the balloons have sensors used to assess flight performance. Also, the ballons have an entirely different shape from weather balloons because they are larger and look like orbs.
The real purpose of the mission is classified, as apparently is the reason why DARPA decided to make the balloons look like giant alien spaceships.
A group of unknown Kansas City residents spotted giant balloons floating across the sky. Some thought it was, who esle, the Russians while others were concerned it was an alien invasion.
On Twitter, many speculated the balloons were alien spaceships.
THIS IS IT
THEY’VE COME BACK
FINALLY, IT’S ALL OVER https://t.co/vhZs0Isvgs— Sam Sykes (@SamSykesSwears) June 21, 2019
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Please be the Mothership
Please be the Mothership
Please be the Mothership
Please be the Mothership
Please be the Mothership
Please be the Mothership https://t.co/ola6YalNAz— Brooke Binkowski (@brooklynmarie) June 21, 2019
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— moving to kansas city soon! (@AngelaSorensen3) June 21, 2019
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According to Flightradar24, two of the balloons are approaching Denver, Colorado this weekend.
The news of alien-looking ballons over the Midwest comes at a time when the US government is officially starting to acknowledge reports of “unidentified aerial phenomenon” more seriously than ever before, and last week three senators received a detailed report of UFO sightings.
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