Today’s News 28th October 2017

• Bombshell: Hillary Clinton, DNC Colluded With Russia In An Attempt To Steal The Election From Donald Trump

  Authored by Alex Thomas via SHTFplan.com,

  Fresh off the heels of a shocking report, published by the Washington Post, that confirmed that the infamous “Russia dossier” was actually funded by both the Clinton campaign and Democratic National Committee, an even more startling revelation has emerged – The Clinton-DNC machine colluded with the Russians to fabricate and spread serious disinformation about Donald Trump in a failed attempt at swaying the election in the favor of Hillary Clinton.

  That’s right, in a literal reverse of what the entire mainstream media has fed the American people for over a year, we now have evidence that, either wittingly or unwittingly, the Clinton campaign and the DNC paid for what amounted to disinformation that came directly from “Russian sources”.

   

  Obviously this may seem truly unbelievable to some, but the facts speak for themselves and there is no denying that Democrats paid a shady opposition research company to try and dig up dirt on Donald Trump who then subsequently hired former British spy Christopher Steele. Steele then openly used Russian sources for most of the serious allegations in the “Russia dossier”.

  Clinton Lawyer Hires Fusion GPS For Disinformation

  According to The Washington Post report, which was later confirmed by Politico, Clinton and DNC lawyer Marc Elias hired the “opposition research” (see disinformation) company Fusion GPS who then outsourced the work to former British spy Christopher Steele who eventually went on to release the “Russian dossier” which was chalked full of disinformation, including lurid sexual allegations against Donald Trump.

  The fact that the Clinton campaign would hire Fusion GPS in the first place paints a clear picture of a campaign willing to pay for any dirt on then candidate Donald Trump whether it was true or not. This becomes even more clear when you consider the history of Fusion GPS itself.

  As Breitbart reported, “Fusion GPS is not some usual-usual oppo-research firm. Among other things, the company has been accused of being a “Democrat-aligned misinformation firm” aligned with Russia. While refusing to cooperate with congressional investigations, including taking the fifth, Fusion GPS has also been accused of advocating for “the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.”

  The Federalist’s Mollie Hemingway also noted the serious allegations against the company:

  At a July hearing, Senate Judiciary members were told Fusion GPS helped advocate the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.

   

  Fusion GPS has been accused of illegally working as an undisclosed foreign agent and is currently refusing to comply with federal subpoenas for information on its foreign clients.

  Fusion GPS also has deep connections to the mainstream media, including the fact that it was literally founded by a team of former mainstream media reporters who have deep connections to those currently in the profession.

  Again Hemingway notes:

  The principals at Fusion GPS are well-connected to mainstream media reporters. They are former journalists themselves, and know how to package stories and provide information to push narratives. They are, in fact, close friends with some of the top reporters who have covered the Russia-Trump collusion story.

   

  Fusion GPS has placed stories with friendly reporters while fighting congressional investigators’ attempts to find out the group’s sources of funding. Fusion GPS leaders have taken the Fifth and fought subpoenas for information about the group’s involvement with Russia.

   

  Their close friendships with key reporters on these stories have paid huge dividends for the firm, although these friendships and cooperative relationships have not served the public well.

  Former Spy Used “Russian Sources” For Infamous Trump Dossier 

  This is where the story turns from shocking to downright unbelievable, especially when you consider the year long mainstream media disinformation narrative that claims that the Russians helped Donald Trump win the election.

  The spook working for Fusion GPS, (which was hired by the Clinton campaign) Christopher Steele, openly bragged about his sources being within the Russian government itself.

  Buried deep in a report by Vanity Fair that spends thousands of words trying to pretend that the dossier could be legitimate, is this nugget that paints a picture of direct or indirect collusion between the Clinton team and Russia.

  How good were these sources? Consider what Steele would write in the memos he filed with Simpson: Source A—to use the careful nomenclature of his dossier—was “a senior Russian Foreign Ministry figure.” Source B was “a former top level intelligence officer still active in the Kremlin.” And both of these insiders, after “speaking to a trusted compatriot,” would claim that the Kremlin had spent years getting its hooks into Donald Trump.

   

  Source E was “an ethnic Russian” and “close associate of Republican US presidential candidate Donald Trump.”

  After “gathering” the information, Steele was then directed by Fusion GPS to “brief” the media about the Russian government fueled allegations against Trump.

  As The Daily Caller noted in July:

  In one, dated May 18, Steele says that he was instructed by Fusion GPS to meet with reporters at various outlets in order to publicize some of the allegations made in the dossier.

   

  It has been widely known that Fusion GPS and Steele were in contact with reporters to discuss the dossier. It has been reported that rumors of the dossier were floating around in Washington, D.C. political and journalist circles for months prior to BuzzFeed’s decision to publish it on Jan. 10.

   

  […]

   

  In the response, Steele’s lawyers state that the former spook briefed several reporters at the end of September at the instruction of Fusion GPS, which was working on behalf of a Democratic ally of Hillary Clinton’s.

   

  The outlets were The New York Times, The Washington Post, Yahoo! News, The New Yorker and CNN.

   

  Steele met once more — and again at Fusion GPS’s instruction — with The Times, The Post, and Yahoo! News. Fusion GPS took part in all of those meetings, Steele’s lawyers say.

   

  “In each of those cases the briefing was conducted verbally in person,” the document reads.

   

  In October, Fusion GPS instructed Steele to brief a journalist from Mother Jones. The interview, which was conducted through Skype, was likely with reporter David Corn.

  It doesn’t get any clearer than this. Fusion GPS was paid by Democrats to dig up dirt, that dirt was then supplied by the Russians, and subsequently became a major part of the narrative surrounding Donald Trump and Russia.

  “What you clearly have here is the Clinton campaign openly COLLUDING with a foreign country, with the Russians, to fabricate scurrilous lies about Trump, which were then fed to a willing media as a means to affect their news coverage, and by extension, sway the election,” Breitbart’s John Nolte wrote.

  Fusion GPS “Was Acting On Behalf Of Russia”

  Amazingly, testimony and evidence already exists that Fusion GPS has in the past worked directly for Russia and may have been doing so with the Trump disinformation dossier.

  At a Senate Judiciary Hearing in late July, Hermitage Capital Management chief William Browder testified that the company was acting on behalf of Russia after co-founder Glenn Simpson was hired by a person connected to lawyer Natalia Veselnitskaya to lobby for the repeal of the  Magnitsky Act.

  The following exchange between Browder and Senator Lindsey Graham is shocking to say the least.

  SEN. LINDSEY GRAHAM: This whole story reads like some kind of novel that nobody would buy, it’s got to be fiction, but unfortunately maybe it’s true. Let’s just break down sort of why you’re here. You believe that Fusion GPS should of registered under FARA, because they were acting on the behalf of the Russians?

   

  WILLIAM BROWDER: That’s correct.

   

  SEN. GRAHAM: So, I just want to absorb that for a moment. The group that did the dossier on President Trump hired this British spy, wound up getting it to the FBI. You believe they were working for the Russians?

   

  BROWDER: And in the Spring and Summer of 2016 they were receiving money indirectly from a senior Russian government official.

   

  SEN. GRAHAM: Okay. So, these are the people that were trying to undermine Donald Trump by showing the nefarious ties to Russia. Is that what you’re saying?

   

  BROWDER: Well, what I’m saying with 100% certainty is that they were working to undermine the Magnitsky act and the timing of that.

   

  SEN. GRAHAM: But, the Fusion GPS products apparently as they hired a guy to look into Trump?

   

  BROWDER: Yes.

   

  SEN. GRAHAM: Right

   

  BROWDER: Correct.

  When you put all the evidence together, keeping in mind that this is only what has been released so far, you can see a clear picture of, at the very least, indirect collusion between the highest levels of the Democratic Party and unknown figures within the Russian government. The scheme was then directly propped up and spread by the mainstream media.

  As Nolte so aptly notes, “If purchasing misinformation from Kremlin official as a means to manipulate media coverage and sway public opinion is not colluding with the Russians to rig an election, nothing is.”

  

  

• Spain PM Fires Catalan Government, Calls Snap Elections In Retaliation For Independence Vote

  Update 4: In a live TV address to the nation, Spain's PM Rajoy just announced that it is a "sad day" in which Catalans showed "contempt" for democracy, and ignored the general interest; that the Catalan declaration is unacceptable to majority of Catalans, and that, as a result and as expected, he is firing Catalan president Carles Puigdment, the Catalan police chief, and the entire Catalan government as "prudence" and "serenity" are now needed: "we never wanted to reach this situation".

  Ministries in the central government will assume powers of the Catalan administration.

  The Prime Minister also announced he has dissolved the Catalan Parliament and called for snap elections to be held on December 21 which will be "free, legal and clean".

  As The Spain Report adds, the central government also ordered all of Catalonia's "embassies" abroad closed, along with the region's publicly funded Diplocat diplomacy service, and sacked the director general of the Catalan Police (Mossos), Pere Soler.

  Rajoy also said Spain has enough resources to "recover normality" in Catalonia within the law and thanked the Spanish Socialist Party (PSOE) and Ciudadanos for their support.

  * * *

  Update 3: Spain’s top prosecutor will seek rebellion charges for those responsible for a vote in favor of declaring an independent Catalan republic, an official Spanish spokesman said according to The Independent. The spokesman said the prosecutor is looking to determine if the charges should be limited to the Catalan cabinet, including President Carles Puigdemont and Vice President Oriol Junqueras, or if they should also include members of the parliament’s governing board and lawmakers.

  The official, who spoke under condition of anonymity in line with internal rules, said the charges could be brought as early as Monday. As Mr. Maza warned,"The rebellion crime is punishable by 30 years in prison if it is a crime of considerable gravity, of course…if the Catalan police did not comply with the order, Spain would take over control of the force."

  As a reminder, and as The Spain Report tweeted what happened the last time the Catalan republic was declared, in 1934:, there was i) State of war; ii) Lasted 10 hours and iii) led to 46 dead in Barcelona.

  Puigdemont has called on fellow separatists to remain peaceful ahead of the expected crackdown by Spanish authorities. Facing a crowd of hundreds of supporters packing Catalonia’s parliament building, he said: “In the days ahead we must keep to our values of pacificism and dignity. It’s in our, in your hands to build the republic.” Good luck.

  * * *

  Update 2: Article 155 is now official, after Spain's Constitutional Court lists the series of measures allowing central government to force Catalonia regional administration to obey national law. The two-page document was published Friday in Spain's Official Gazette, in step necessary to becoming law. The measures approved by the Senate follow government proposal, under Article 155 of Constitution. By way of explanation, the actions were taken due to “extraordinary seriousness of the breach of constitutional obligations and the carrying out actions gravely against the general interest” by Catalonia institutions.

  

  As Article 155 was codified by publication in the Spanish Official Gazette, at the top of the list published by the Constitutional Court was the potential removal from office of the region’s president, vice-president and cabinet. The list was published along with a two-page addendum of modifications by the Senate. The Catalan administration will continue to function, though the central government in Madrid can veto its decisions. Additionally, the region’s police, the 17,000-member Mossos d’Esquadra, must take direct orders from Madrid, which can supplement their role with national police, which already are under control of the central government. The measures took immediate effect on publication.

  * * *

  Update: Just minutes after the Catalan government voted for Independence from Spain, with a former Decision of Independence likely to follow momentarily, over in Madrid wasted no time in responding, and moments ago, with 214 for and 47 against, voted to approve Article 155 of Spain's 1978 Constitution, aka the Nuclear Option which has never been used before, suspending home rule in Catalonia, and giving Prime Minister Rajoy the power to oust the Catalan government.

  What happens next?

  Spain will promptly move to remove the Catalan president, suspend his ministers and assume authority over the region's public media, police and finances, the only question is how, and what this process will look like.

  Indeed, as Bloomberg reported earlier, Spanish politician Garcia Albiol tweeted that Spanish Prime-Minister Mariano Rajoy will restore democracy in Catalonia, adding that courts will reprimand the “plotters.” Furthermore, Spain's El Pais reported that rebellion charges will likely be leveled soon at Catalans for Secession.

  An angry Rajoy spoke to reporters in Madrid after the Catalan parliament declared independence and said that "the Catalan parliament has approved something that in the opinion of the great majority of people doesn’t just go against the law but is a criminal act because it supposes declaring something that is not possible which is the independence of Catalonia.”

  He also said that he will address Spain at the end of the evening.

  In terms of immediate next steps, there will be a Spanish Cabinet Meeting, which has been moved ahead to 5pm local time.

  After that, things may get delicate, especially if Spain sends in the proverbial cavalry.

  Incidentally, here is the historic moment Catalonia declared independence from Spain:

  This is the moment Catalonia declared independence from Spain. pic.twitter.com/4F9kBrtUHX

  — Channel 4 News (@Channel4News) October 27, 2017

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

  * * *
  It's Official! The Catalan Parliament has just voted for independence – 70 'Yes' (needed 68), 10 'No', 2 blank.

  As AP reports, Catalan separatist lawmakers pass motion to establish a new republic independent of Spain, as the opposition boycotts the vote…

  “We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the preamble to the resolution, read out by speaker Carme Forcadell before the ballot.

  Catalan vice-president Oriol Junqueras tweeted…

  Sí. Hem guanyat la llibertat per construir un nou país.

  — Oriol Junqueras (@junqueras) October 27, 2017

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

  What happens next is anyone's guess, but we suspect it will involve heavy police state intervention and the Franco-ian regime that separatists fear will rear its ugly head.

  The Washington Post reports:

  “The next move could be a formal declaration of statehood, less than a month after a referendum that backed the push for independence […]

   

  If the Senate invokes the never-before-used Article 155 of Spain's 1978 constitution, the central government could move swiftly to remove the Catalan president, suspend his ministers and assume authority over the region's public media, police and finances.”

  The Spanish government will undoubtedly now move swiftly to implement Article 155.

  Spanish PM Rajoy immediately tweeted "I call tranquility to all Spaniards. The rule of law will restore the legality in Catalonia. MR"…

  Pido tranquilidad a todos los españoles. El Estado de Derecho restaurará la legalidad en Cataluña. MR

  — Mariano Rajoy Brey (@marianorajoy) October 27, 2017

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

  And Spanish bond yields are snapping higher…

  

  And blowing out relative to bunds…

  

  And Spanish stocks dumped – erasing all oif yesterday's hype-fueled hope-buying…

  

  *  *  *

  Live Feed: Catalan Speaker reads the independence declaration before the vote…

  “We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the proposed resolution, read out by the speaker before the vote.

  *  *  *

  Update (0900ET): The Catalan Parliament confirms the secession proposal will be voted in a secret ballot. This immediately led to the PP MPs leaving the parliament chamber.

  *  *  *

  Update (0850ET): Catalan's opposition party members have just abandoned parliamnet as voting begins on minor resolutions (ahead of the big 'independence' decision) but Rajoy's PP remains in session. Additionally, the separatists have called for the ballot to be private.

  *  *  *

  Update (0820ET): CUP Deputy Carles Riera rages that the time has come to "build the republic in a context of fight and resistance."

  “We propose that Catalonia becomes an independent state in the form of republic."

   

  “Today we start the removal of the 1978 regime."

  As Spain's prime minister urged the Senate on Friday to grant his government special constitutional measures that would allow it to take control of Catalonia's autonomous powers and halt the region's independence bid.

  *  *  *

  As we detailed earlier, after yesterday's chaotic Spanish event rollercoaster, when the Catalan leader Carles Puidgement was going to press ahead with independence only to change his mind, and propose elections, before reversing again and punting the independence decision to parliament, we hoped to get some further clarity on how he’s planning to proceed. Today, the chaos continues.

  First, Bloomberg reported that Catalonia would seek approval for elections from Madrid:

  The rebel government of Catalonia is making a last ditch effort to win concessions from Madrid. According to a person familiar with the matter, Catalan President, Carles Puigdemont, wants to convince supporters to accept regional elections instead of a declaration of independence. A senior Catalan official will ask the Spanish government to suspend the process of seizing direct control of the region if there is a snap election.

  However, shortly afterwards, The Spain Report carried breaking news that the secessionists would debate a motion to declare independence in today’s session of the Catalonian Parliament.

  MAJOR BREAKING: Separatist Parties Register Motion To Declare Independence Of Catalonia In Regional Parliament https://t.co/oa4fhhwXgc

  — The Spain Report (@thespainreport) October 27, 2017

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

  More from the report:

  Catalan separatist parties—Junts Pel Sí ("Together For Yes") and the CUP (Popular Unity Candidacy)—have registered a motion to declare the independence of Catalonia in the regional parliament.

   

  A copy of the document published by Spanish media included the phrase: "We constitute the Catalan Republic as an independent sovereign democratic, social state of law".

   

  The text would also approve the activation of the secession bill approved by the regional chamber at the beginning of September and voided by the Constitutional Court and "begin the constituent process".

  * * *

  The Speaker's Committee is currently deciding on which motions to accept for the second part of the session in the Catalan Parliament on Article 155, which is due to begin at 12 p.m.

  

  At the same time, there are unconfirmed reports that police are closing off roads around the regional parliament.  Meanwhile, the Spanish senate has been debating the implementation of Article 155 in Madrid. Rajoy told lawmakers that Spain faced an exceptional situation and asked them to support his proposal on Article 155. The Spain Report shows video of Rajoy receiving a standing ovation.

  Another video of the standing ovation for Rajoy in the Senate, from the visitors' gallery.
  Via @pilarportero pic.twitter.com/jVTl7oooYk

  — The Spain Report (@thespainreport) October 27, 2017

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

  Here are flash reports from Bloomberg on the parliamentary debate in Madrid:

  • Spanish Prime Minister Mariano Rajoy speaks in Senate.
  • Spain’s Rajoy Asks Senate to Support Proposal on Art. 155
  • Rajoy: Nothing Substantial Happened Since Govt Approved ART.155.
  • “The only talks I was invited to was to discuss terms and conditions of Catalan independence,"
  • Spain confronts exceptional situation, Rajoy tells Senate
  • “Exceptional measures should only be adopted when there is no other possible remedy’’:

  As Bloomberg reported this morning, Puigdemont has been running out of options.

  Backed into a corner by his own hardliners and Rajoy’s refusal to give him a dignified way out, Catalan President Carles Puigdemont will address the regional parliament in Barcelona as demonstrators clamor for a declaration of independence. After a day of high drama that saw Puigdemont caught between the might of the Spanish state and the anger of the street, western Europe’s worst constitutional crisis for decades may be coming to a head with the separatist leader running out of options…

   

  The day of confusion saw the president make a televised address after two postponements, lawmakers quit his party and a senior Catalan official jump ship, all while Spanish ministers were repeating their mantra that the Catalans must be brought to heel. The Spanish stock market posted its biggest gain since Oct. 5 only to pare the advance as events unfolded. Puigdemont said he had considered calling the regional vote, but he didn’t get the concessions he sought from officials in Madrid. "I tried to get the guarantees to carry out these elections, but didn’t get a responsible answer,” he said.

  Last night, reports from the secessionist camp implied that independence would be declared.

  "We are winning," Lluis Corominas, the head of Puigdemont’s PDeCat group, told lawmakers on Thursday night. "We should materialize the effects of the Oct. 1 referendum and implement them." That’s code for declaring independence.

  Maybe they are correct, but until then this remains a dangerously fluid and volatile situation.

  

  

• Nobody's Buying Hamptons Mega-Mansions Because 'Small Is The New Big'

  Any realtor worth their salt will tell you, when it comes to the home-buying habits of wealthy hedgies and bankers, gaudy McMansions and sprawling estates are so last season.

  Or, as they say in Greenwich: “Small is the new big."

  

  Owners of large homes in tony Hamptons neighborhoods hoping to cash in on a frothy housing market before the inevitable rise in mortgage rates will be disappointed to learn that the trend of buyers favoring lower-priced homes continued in the third quarter, according to the latest Douglas Elliman Real-Estate Report. This left the high end of the market in a double-bind as supplies of new homes hit the market while sales tapered off…

  Purchasers agreed to pay more than the asking price in 10 percent of deals for properties under $3.3 million — this quarter’s definition of “non-luxury” homes, making up the bottom 90 percent of the market, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest share of transactions with bidding wars since the firms began tracking the data in the second quarter of 2016.

   

  In their zeal for lower-end deals, buyers snapped up condos as well. Those units — with a median sale price of $567,500 — were available for just 97 days on average before going under contract, the fastest clip in six years of record-keeping. On the high-end, buyers showed less interest in acquiring luxury homes than sellers did in listing them. Inventory in that top 10 percent of the market jumped 22 percent, the biggest pile-up in two years.

   

  “The market is looking towards those smaller, more manageable homes,” said Carl Benincasa, a regional vice president at Douglas Elliman who oversees sales in the Hamptons. “That’s certainly been a trend we’ve been observing.”

  Bloomberg, which obtained an advance copy of the report, noted that the Hamptons housing market often parallels performance in the financial industry, seeing as many buyers of luxury homes out east are wealthy finance types.

  

  With markets at record highs, the Hamptons housing market is doing reasonably well – but buyers’ unwillingness to snap up the most expensive homes in a way mirrors the trepidation surrounding stretched stock valuations and record low volatility.

  With stocks at record highs, people are in a buying mood in the Hamptons. The beachside towns on Eastern Long Island, whose fortunes are closely linked to the performance of the financial industry, had 517 total sales in the three months through September — or 12 percent more than the 10-year quarterly average, Miller Samuel and Douglas Elliman said. Even with all that buying, inventory declined only in the non-luxury category, with listings dropping 10 percent from a year earlier to 1,143.

   

  Deals for less than $500,000 fell 12 percent to 57 — because there weren’t many such properties available, Town & Country Real Estate said in its report on Hamptons. But sales of homes priced between $500,000 and $999,000 jumped 22 percent to 131, and those between $1 million and $1.99 million climbed 12 percent to 76, the brokerage said.

  One realtor noted that inventory is thinnest in the under-$1 million category, which has forced some buyers to the next rung of the market.

  “When you look at the inventory under a million, that’s the largest shortage, so buyers stepped up to the next level of the market,” said Ernest Cervi, a senior vice president at Corcoran Group, which released its own report Thursday.

  One couple recounted their struggle finding a new home in the Hamptons for under $1 million after selling their old home for $1.4 million.

  For Brian DeSesa, it was much easier to sell his under-$2 million home than it was to buy one in that price tier. Sensing the market demand for lower-cost properties, he and his wife listed their three-bedroom Sag Harbor Village house in June at $1.45 million. It went into contract in July, to a buyer offering $1.35 million but willing to pay all cash and close within 14 days, said Jessica von Hagn, the Brown Harris Stevens broker who marketed the property.

   

  Then came the hard part: finding a new house in the area for less than $1 million. The couple bid on at least three such properties, offering the asking price each time and getting outbid within hours, said DeSesa, 36, a land-use attorney with the Adam Miller Group in

   

  Bridgehampton. On the next try, they offered the $795,000 asking price on a ranch-style home — and then, in a second round of bidding, offered $860,000, which won them the deal.

   

  “It’s pure competition,” von Hagn said. “At the $1 million mark, you’re competing with year-rounders trying to live out there, you’re competing with builders who are going to tear it down, and you’re competing with flippers.”

  To be sure, there were still some ultra-luxury deals in the quarter, including two for more than $20 million, the same as a year earlier, Bloomberg reported. Purchases between $5 million and $9.99 million plummeted 56 percent to just 11. Sales were up 30 percent in Bridgehampton, with six deals over $10 million, but plunged 29 percent in the Sag Harbor area, where none of the 17 transactions were for more than $5 million.

  Of course, as we noted last quarter, “smaller” in the Hamptons is purely relative, because apparently there’s nothing more modest among today’s Hamptons set than trading a 13,000 square-foot home for an 8,000 square-foot home.
   

  

  

• J. Edgar Hoover: "Need To Convince Public That Oswald Is Real Assassin"

  Amid the thousands of new files released yesterday – though less than expected – were two intriguing memos to, and from, FBI Director J. Edgar Hoover on November 24th, 1963 – the day that Jack Ruby killed Lee Harvey Oswald as the gunman was being transported to the Dallas County Jail after the assassination of President John F. Kennedy.

  

  In a memo issued by Hoover, he appeared to be particularly concerned that the public would have to be compelled to believe that Oswald was a lone actor – not part of a larger conspiracy.

  "There is nothing further on the Oswald case except that he is dead."

  In the 1964 Warren Report on Kennedy's assassination, NBC notes, Hoover was firm in stating that he hadn't seen "any scintilla of evidence" suggesting a conspiracy – a sentiment he expressed in other public forums, as well, but not in words as blunt as those he used the day Oswald was killed.

  Referring to Nicholas Katzenbach, the deputy attorney general at the time, Hoover dictated:

  "The thing I am concerned about, and so is Mr. Katzenbach, is having something issued so we can convince the public that Oswald is the real assassin."

  It's not clear from the memo whether Hoover thought there might have been a conspiracy but didn't want it to be known or whether he sincerely believed Oswald acted alone and hoped to head off public fear and confusion. Hoover also indicated that his concern may have been influenced, in part, by diplomacy, dictating that there could be serious international complications if the public thought Oswald might have been part of a larger plot. Katzenbach is known from previously released documents to have shared Hoover's concern, writing in a memo the next day, on Nov. 25, 1963, that:

  "the public must be satisfied that Oswald was the assassin; that he did not have confederates who are still at large; and that evidence was such that he would have been convicted at trial."

  Interstingly, Hoover was angry at Oswald's murder (especially after the police had been warned by The FBI that Osawld's life was in danger)…

  "Oswald having been killed today after our warnings to the Dallas Police Department was inexcusable," Hoover dictated.

   

  "It will allow, I am afraid, a lot of civil rights people to raise a lot of hell because he was handcuffed and had no weapon.

   

  There are bound to be some elements of our society who will holler their heads off that his civil rights were violated — which they were."

  Though hard to read, here is Hoover's full memo…

  Then to top things off, in a memo sent back to FBI Director Hoover, it was confirmed that "no effort should be made to defend alleged assassin Lee H. Oswald or "scream frame-up."

  Of course, we suspect there are plenty more interesting revelations within the files that were released and perhaps the ones that have not been released… Julian Assange's Wikileaks has offered a $100,000 reward for any evidence of wrongdoing…

  WikiLeaks issues a $100,000 reward for the withheld JFK documents should they show violations of law, inefficiency, or administrative error. pic.twitter.com/SiQ6GUVNLz

  — WikiLeaks (@wikileaks) October 27, 2017

  

  

• Saudi Arabia Might Recognize Israel Because Of NEOM

  Authored by Andrew Korybko via Oriental Review,

  The half-a-trillion-dollar initiative to build a tristate city at the Saudi, Egyptian, and Jordanian border in the Gulf of Aqaba will more than likely lead to Riyadh recognizing Israel and integrating Tel Aviv into the project.

  

  The ambitious Saudi Crown Prince Mohammed Bin Salman unveiled a $500 billion project at an investment forum earlier this week in an effort to bring some serious substance to his Vision 2030 project of fundamentally diversifying his country’s oil-dependent economy in the coming decade. The proposal calls for a gigantic city called NEOM to be built at the entrance to the Gulf of Aqaba in the northeastern corner of the Red Sea, with the plan being for it to eventually extend into neighboring Egypt and Jordan as well. The Crown Prince promised that it would be a technologically advanced city with its own laws and administration, and it will also be free from anything “traditional”.

  The latter remark hints that Mohammed Bin Salman won’t allow the Kingdom’s traditional Wahhabi socio-cultural “regulations” to be enforced there, which goes along with his other headline-grabbing statement during the event when he said that Saudi Arabia will “return…to moderate Islam” and “swiftly deal a blow to extremist ideologies”. Quite clearly, as analyzed in the author’s earlier piece this month about Saudi Arabia’s shifting grand strategy, a “deep state” conflict is indeed being fought in the country between its monarchic and clerical factions, with the former poised to carry out a “soft coup” against the latter as it seeks to “modernize” the country. This will surely result in some behind-the-scenes tumult in the coming future, if not overt destabilization, but the point of the present article isn’t to dwell too much on that tangent.

  Instead, it’s relevant to have brought that up in order to make the case that Saudi Arabia is on the cusp of an unprecedented paradigm change that will likely see it recognizing Israel if the monarchy is successful in snuffing out the clerics’ political influence. Saudi Arabia’s Egyptian and Jordanian NEOM partners have already recognized and signed peace treaties with Israel, and Riyadh is known to be coordinating with Tel Aviv in crafting a comprehensive anti-Iranian regional policy, amongst other strategic commonalities that they share. Moreover, the secret meetings between Saudi Arabia and Israel over the years suggest that their relationship is much warmer in private than either side publicly presents it as for their own respective domestic political reasons.

  Israel has always wanted relations with Saudi Arabia, though Riyadh has traditionally shirked away from this because it wanted to present itself as a strong supporter of the Palestinian cause, made all the more symbolic by the Saudi monarchy’s custodianship over the Two Holy Mosques given the religious dimensions of the Israeli-Palestinian conflict. However, if Mohammed Bin Salman comes out on top in his “deep state” “soft coup” against the Wahhabi clerics, then he can easily lay the “blame” on them for his country’s refusal to recognize Israel after all of these decades. Not only could he be interested in doing this as the ultimate expression of his country’s radically transformed identity under his stewardship, but he might be just as importantly driven by the geostrategic imperatives related to Vision 2030’s flagship NEOM project.

  

  The Gulf of Aqaba was chosen not just because it would allow NEOM to spread into Egypt and Jordan, but also because of its proximity to Israel, which is promoting its “Red-Med” railway proposal as the perfect Mideast complementary component of the New Silk Road. Tel Aviv keenly knows that the Chinese are always looking for backup plans and transport route diversification in order to not be too dependent on any single connectivity corridor, and in this case, overland rail transit from the Gulf of Aqaba to the Eastern Mediterranean via Israel comes off as exceedingly attractive to Beijing’s strategists. Furthermore, China has fantastic relations with both Saudi Arabia and Israel, so from Beijing’s perspective, this is the perfect Mideast “win-win”, especially if the People’s Republic can find a way to insinuate that its possible financing of both the NEOM and “Red-Med” projects contributed to bringing peace to the Mideast.

  In addition, there’s also the Russian factor to take into consideration, and it’s objectively known – though commonly denied in the Alt-Media Community – that Moscow and Tel Aviv are on excellent terms with one another and basically cooperate as allies in Syria. When accounting for the fast-moving Russian-Saudi rapprochement and Moscow’s envisioned 21^st-century grand strategic role in becoming the supreme balancing force in Eurasia, it’s likely that Russia would be in favor of any Saudi recognition of Israel and Tel Aviv’s integration into the NEOM project because it would then allow the Russian business elite both in the Russian Federation and Israel to invest in this exciting city-state and the complementary “Red-Med” Silk Road corridor.

  Seeing as how Mohammed Bin Salman is trying to purge the clerics’ political influence from the Kingdom, it’s very possible that Saudi Arabia will end up recognizing Israel in the near future and blaming its decades-long delay in doing so on the Wahhabis. The grand intent behind this isn’t just to formalize the Saudi-Israeli anti-Iranian partnership or to show the world just how serious the Crown Prince is in changing the course of his country, but to please Riyadh’s newfound Multipolar Great Power partners in Moscow and Beijing, both of which enjoy exceptional relations with Tel Aviv but would probably be reluctant to invest in the Kingdom’s NEOM city-state project so long as its connectivity access remained dependent on the Suez Canal chokepoint.

  Russia and China would feel more strategically secure if Israel was incorporated into this megaproject so that its territory could be used for overland transshipment between the Red and Mediterranean Seas via the “Red-Med” railway proposal, which would then make NEOM infinitely more attractive from a logistics perspective for all sorts of investors.

  

  If Saudi Arabia doesn’t recognize Israel, then this non-Suez workaround is impossible and the NEOM city-state loses its grand strategic significance in the context of the Multipolar World Order, which could consequently lead to a lack of investment and therefore the potential failure of Vision 2030’s flagship project. As such, due to the economic-strategic imperatives associated with NEOM, as well as the geopolitical paradigm shift staking place in Saudi Arabia, Riyadh will probably recognize Israel in the coming future in order to guarantee that its city-state initiative succeeds and ultimately transitions the Kingdom away from its oil-exporting dependency.

  

  

• Orban Launches Intelligence Probe Into George Soros' "Open Society" Network

  Apparently, Hungarian Prime Minister Viktor Orban thinks his propaganda campaign to discredit Hungarian-born billionaire George Soros – Orban’s political archnemesis – hasn’t been sufficiently effective.

  As Orban’s ruling party gears up for parliamentary elections in April – where it is the prohibitive favorite to win largely thanks to its refusal to accept refugees under a plan devised by the European Commission – the prime minister has instructed his intelligence services to map what he described as the networks run by the billionaire financier’s “empire” targeting his country, Bloomberg reported.

  Intelligence agencies will help evaluate what he sees as efforts by Soros to get Hungary punished by EU institutions pursuing a “mixed-population” continent, Orban said in an interview with Kossuth Radio on Friday.

  

  The Associated Press added that the investigation will also focus on alleged Hungarian members of the network.

  Intelligence agencies will help evaluate what Orban sees as efforts by Soros to get Hungary punished by EU institutions pursuing a “mixed-population” continent, Orban said in an interview with Kossuth Radio on Friday.

  Orban speaks often of a coming split in Europe between “migrant-free zone” and those in the west who refuse calls to “haul” undocumented migrants away.

  The unraveling of the friendship between Orban and Soros in some ways mirrors the falling out between Turkish President Recep Tayyip Erdogan and US-based cleric Fehtullah Gulen in terms of the extent of the deterioration.

  Three decades ago, billionaire financier George Soros paid for a young Viktor Orbán to study in Britain. And as recently as 2010, Soros donated $1 million to Orbán’s government to help the cleanup effort following the infamous “red sludge” disaster.

  But the once-warm relationship between the two men has deteriorated substantially over the past seven years, as Orban has drifted further to the right. In 2014, the leader of Hungary’s Fidesz party declared he would seek to model Hungary’s government after “illiberal” democracies like the government of Russian President Vladimir Putin. In response, Soros this summer denounced his former protege and accused him of creating a “mafia state” in Hungary.

  

  One of dozens of billboards around Hungary bearing anti-Soros messaging…

  Orban responded by accusing Soros's network of using the European Union to achieve its own aims, including the promotion of mass migration into Europe.

  Orban was no doubt provoked to launch the probe by reports Soros has donated $18 billion from his family office to his “Open Society” foundation, his primary tool for influence policy throughout the west. The group funds a network of dozens of organizations that fund liberal, globalist causes throughout Europe and the US. At times, recipients of funding have included Black Lives Matter groups, and even Antifa.

  But will Orban’s investigation morph into a full-on, Turkey-style purge of anyone with ties to Soros’ linked organizations, regardless of their actual complicity? That, of course, remains to be seen.
   

  

  

• Mueller Reportedly Ready To File First Charges In Russia Probe

  Update (10:35 pm ET): For what it's worth, Reuters has has "confirmed" the report after talking to a single source…

  Reuters confirms CNN report that charges have been filed, citing a single source.

  — Byron Tau (@ByronTau) October 28, 2017

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

  * * *

  Five months after Assistant Attorney General Rod Rosenstein tasked Robert Mueller with taking over the Justice Department investigation into possible collusion between the Trump campaign and Russia, CNN is reporting that the first charges have been filed, and that arrests could be made in the coming days.

  A federal grand jury in Washington, DC, on Friday approved the first charges in the investigation led by special counsel Robert Mueller, according to sources briefed on the matter.

   

  The charges are still sealed under orders from a federal judge. Plans were prepared Friday for anyone charged to be taken into custody as soon as Monday, the sources said. It is unclear what the charges are.

   

  A spokesman for the special counsel's office declined to comment.

  To be sure, CNN's version of events leaves room for doubt. And importantly, it doesn't name the subject of the charges.

  On Friday, top lawyers who are helping to lead the Mueller probe, including veteran prosecutor Andrew Weissmann, were seen entering the court room at the DC federal court where the grand jury meets to hear testimony in the Russia investigation.

  Reporters present saw a flurry of activity at the grand jury room, but officials made no official announcements. The flurry… implies someone being charged… presumably – though CNN says it talked to a source close to the investigation who corroborated its suspicions.

  

  The special counsel's investigation has focused on two things: potential collusion between the Trump campaign and Russia, and obstruction of justice by the President, who might have tried to impede the investigation. CNN has previously reported that Mueller's team was scrutinizing Trump and his associates' financial ties to Russia. Former campaign executive Paul Manafort and Trump son-in-law have both been subject to intensive scrutiny during the investigation. Manafort has had his financial records thoroughly probed and his home raided by the FBI. Mueller has also scrutinized Manafort's foreign lobbying efforts, as well as those of former National Security Adviser Michael Flynn.

  Mueller impaneled a grand jury over the summer, a sign that he intended to file charges. If the report is accurate, it's certainly an interesting coincidence that Mueller is moving ahead with charges just as calls to shut down his investigation are picking up steam. Meanwhile, Congress has launched several investigations into the Obama-era Uranium One deal to scrutinize the Clinton's dealings with the Russians.

  Republicans have been skeptical of Mueller’s ability to be impartial in the investigation – suspicions that have intensified following reports that Hillary Clinton and the Democratic National Committee helped fund research into the infamous "Trump dossier." Rep. Trent Franks of Arizona told Fox News Friday that “the federal code could not be clearer – Mueller is compromised by his apparent conflict of interest in being close with James Comey.”

  New Jersey Gov. Chris Christie suggested Friday that Mueller should "step aside"

  "If the facts that you just laid out are true, then somebody with Bob Mueller's integrity will step aside, and should," Christie said. The Russia probe was launched in the summer of 2016 by then-FBI Director James Comey.

  

  

• The One Paragraph You Need To Read From The JFK Assassination Files That May Change Everything

  TruePundit.com warns that one haunting paragraph unearthed from 3,000 never-before-seen documents will shake Patriots to their core about the assassination of President John F. Kennedy.

  Or perhaps worse. Make that haunting three paragraphs.

  This is not pretty.

  

  But it is likely President Donald Trump understands what Kennedy comprehended, which now appears to have led to his murder:

  The out-of-control shadow government in this country threatens the fabric and the future of the United States.

  See for yourself.

  As a reminder, here is the position of the alleged shooter explained…

  

  So how do 'they' explain this…

  From Jan 31st 1964 FBI memo…

  

  For clarity…

  …the "Surgeon General's Report" on the assassination stated that the first bullet entered the President's throat below the adams apple, clearly showing that two persons were involved with the first shot being fired from the bridge across the park way in front of the car.

   

  To further substantiate this, POTITO said there was a bullet hole in the wind shield of the President's car…

  Not exactly the narrative that was sold to the world – and certainly not the narrative that J. Edgar Hoover proclaimed must be defended to the world.

  Here is Douglas P. Horne, via LewRockwell.com, detailing the photographic evidence of a bullet hole in JFK's limousine's windshield "hiding in plain sight."

  In 2009, I believed I had discovered new evidence in the JFK assassination never reported by anyone else: convincing photography of the through-and-through bullet hole in the windshield of the JFK limousine that had been reported by six credible witnesses. I revisited that evidence today, and am more convinced than ever that the bullet hole in the limousine windshield is what I am looking at in those images. But the readers of this piece don’t have to take my word for it — you can examine the images yourself, and make up your own minds. The evidence is contained in one of the banned, suppressed episodes of Nigel Turner’s The Men Who Killed Kennedy — episode 7 in the series, called “The Smoking Guns,” which was aired in 2003, and then removed from circulation by The History Channel in response to intense political pressure by former LBJ aides Jack Valenti and Bill Moyers.

  I’ll tell you about the stunning evidence I have found in that episode at the end of this article, but first we need to set the stage by reviewing the eyewitness testimony about the damage to the windshield observed the day of JFK’s assassination, on Friday, November 22nd, 1963; as well as three days later, on Monday, November 25th, 1963.

  Introduction

  Before I reveal the details about the “new” photographic evidence I am talking about here, let’s review the Big Picture, the “evidentiary landscape” on this issue (see pages 1439-1450 of Volume V of my book, Inside the Assassination Records Review Board, for full details):

  (1) Dallas motorcycle patrolmen Stavis Ellis and H. R. Freeman both observed a penetrating bullet hole in the limousine windshield at Parkland Hospital. Ellis told interviewer Gil Toff in 1971: “There was a hole in the left front windshield…You could put a pencil through it…you could take a regular standard writing pencil…and stick [it] through there.” Freeman corroborated this, saying: “[I was] right beside it. I could of [sic] touched it…it was a bullet hole. You could tell what it was.” [David Lifton published these quotations in his 1980 book, Best Evidence.]

  (2) St. Louis Post-Dispatch reporter Richard Dudman wrote an article published in The New Republic on December 21, 1963, in which he stated: “A few of us noted the hole in the windshield when the limousine was standing at the emergency entrance after the President had been carried inside. I could not approach close enough to see which side was the cup-shaped spot which indicates a bullet had pierced the glass from the opposite side.”

  (3) Second year medical student Evalea Glanges, enrolled at Southwestern Medical University in Dallas, right next door to Parkland Hospital, told attorney Doug Weldon in 1999: “It was a real clean hole.” In a videotaped interview aired in the suppressed episode 7 of Nigel Turner’s The Men Who Killed Kennedy, titled “The Smoking Guns,” she said: “…it was very clear, it was a through-and-through bullet hole through the windshield of the car, from the front to the back…it seemed like a high-velocity bullet that had penetrated from front-to-back in that glass pane.” At the time of the interview, Glanges had risen to the position of Chairperson of the Department of Surgery, at John Peter Smith Hospital, in Fort Worth. She had been a firearms expert all her adult life.

  (4) Mr. George Whitaker, Sr., a senior manager at the Ford Motor Company’s Rouge Plant in Detroit, Michigan, told attorney (and professor of criminal justice) Doug Weldon in August of 1993, in a tape recorded conversation, that after reporting to work on Monday, November 25th, he discovered the JFK limousine — a unique, one-of-a-kind item that he unequivocally identified — in the Rouge Plant’s B building, with the interior stripped out and in the process of being replaced, and with the windshield removed. He was then contacted by one of the Vice Presidents of the division for which he worked, and directed to report to the glass plant lab, immediately. After knocking on the locked door (which he found most unusual), he was let in by two of his subordinates and discovered that they were in possession of the windshield that had been removed from the JFK limousine. They had been told to use it as a template, and to make a new windshield identical to it in shape — and to then get the new windshield back to the B building for installation in the Presidential limousine that was quickly being rebuilt. Whitaker told Weldon (quoting from the audiotape of the 1993 interview): “And the windshield had a bullet hole in it, coming from the outside through…it was a good, clean bullet hole, right straight through, from the front. And you can tell, when the bullet hits the windshield, like when you hit a rock or something, what happens? The back chips out and the front may just have a pinhole in it…this had a clean round hole in the front and fragmentation coming out the back.” Whitaker told Weldon that he eventually became superintendent of his division and was placed in charge of five plant divisions. He also told Weldon that the original windshield, with the bullet hole in it, had been broken up and scrapped — as ordered — after the new windshield had been made.

  When Doug Weldon interviewed Whitaker in August of 1993, his witness insisted on anonymity. Weldon reported on the story without releasing Whitaker’s name in his excellent and comprehensive article titled: “The Kennedy Limousine: Dallas 1963,” which was published in Jim Fetzer’s anthology Murder in Dealey Plaza, in 2000. After Weldon interviewed Whitaker in August of 1993, Mr. Whitaker subsequently — on November 22, 1993 (the 30th anniversary of President Kennedy’s assassination) — wrote down all he could remember about the events he witnessed involving the Presidential limousine and its windshield. After George Whitaker’s death in 2001, his family released his written testament to Nigel Turner, who with their permission revealed Mr. Whitaker’s name, as well as the text of his “memo for history,” in episode 7 of The Men Who Killed Kennedy, “The Smoking Guns.”

  In “The Smoking Guns,” the text of Whitaker’s memo can be read on the screen employing freeze frame technology with the DVD of the episode. It said, in part: “When [I] arrived at the lab the door was locked. I was let in. There were 2 glass engineers there. They had a car windshield that had a bullet hole in it. The hole was about 4 or 6 inches to the right of the rear view mirror [as viewed from the front]. The impact had come from the front of the windshield. (If you have spent 40 years in the glass [illegible] you know which way the impack [sic] was from.”

  (5) The sixth credible witness to a bullet hole in the windshield of the limousine was Secret Service agent Charles Taylor, Jr., who wrote a report on November 27, 1963 in which he detailed his activities providing security for the limousine immediately after the car’s return to Washington following the assassination. The JFK limousine and the Secret Service follow-up car known as the “Queen Mary” arrived at Andrews AFB aboard a C-130 propeller-driven cargo plane at about 8:00 PM on November 22, 1963. Agent Taylor rode in the Presidential limousine as it was driven from Andrews AFB to the White House garage at 22nd and M Streets, N.W. In his report about what he witnessed inside the White House garage during the vehicle’s inspection, he wrote: “In addition, of particular note was the small hole just left of center in the windshield from which what appeared to be bullet fragments were removed.”

  Summary of the Eyewitness Testimony About the Windshield Bullet Hole

  Summarizing, six credible witnesses — Stavis Ellis, H. R. Freeman, Richard Dudman, Evalea Glanges, George Whitaker, and Charles Taylor — all reported seeing a bullet hole in the windshield of JFK’s limousine either on the day of the assassination (for five of the six witnesses), or on the following Monday (in the case of Mr. Whitaker, who did not see the limousine and its windshield until he reported to work at the Ford Motor Company’s Rouge Plant, in Detroit, on Monday morning, November 25th, 1963).

  Two of these witnesses — Evalea Glanges and George Whitaker — were absolutely positive that the bullet causing the damage had been a shot from the front, which had entered the front surface of the windshield, and exited the inside surface.

  WHY IS THIS IMPORTANT? Because if true, the windshield bullet evidence alone disproves the lone assassin myth aggressively promoted by the U.S. government for 49 years now, since the accused assassin, Lee Harvey Oswald, was supposedly firing from above and behind the limousine as it traveled down Elm Street.

  The Windshield Evidence Was Twice Switched-Out — Substituted — By the U.S. Government…

  The windshield in evidence today at the National Archives is not the windshield that was in the Presidential limousine on Elm Street, in Dallas, on November 22, 1963. It simply cannot be. Why? Remember, according to George Whitaker, Sr. of the Ford Motor Co., the original was destroyed, per company orders, after it was used as a template to make a replacement on November 25th, 1963.

  But it gets much worse than that. The first replacement, the one installed by Whitaker’s two lab technicians in Detroit, was damaged on the wrong side by an incompetent Secret Service organization (incompetent not only at protecting the 35th President, but also in implementing a cover-up). Secret Service agent Roy Kellerman (who rode in the right front seat of the limousine in Dallas) testified before the Warren Commission, in March of 1964, that when he examined the windshield (obviously the replacement, installed by Whitaker’s team in Detroit) on November 27th, it was smooth on the outside, and damaged on the inside. This is consistent with damage caused by an impact on the front side of the windshield. (Safety glass exhibits damage on the opposite side from which it is struck). Researcher Robert P. Smith (as reported by David Lifton in Best Evidence) interviewed a Mr. Bill Ashby, crew leader at the Arlington Glass Company, who told Smith he removed the limousine’s windshield in Washington, D.C. on November 27th; this occurred after Roy Kellerman had felt the interior surface earlier that day and determined it to be damaged on the inside, and smooth on the outside.

  But the windshield at the National Archives today exhibits long cracks — not a through-and-through bullet hole — and is damaged on the outside, which is the opposite of what Kellerman noted by physical examination on November 27th.

  Co-owner Willard Hess of the automotive firm Hess and Eisenhardt in Cincinnati, Ohio told Doug Weldon that his company also replaced the windshield in the Presidential limousine, and that the glass removed was standard safety glass — consistent with what George Whitaker said his team reinstalled in the limousine in Detroit, immediately after the assassination. Hess and Eisenhardt replaced the standard safety glass with special bullet resistant glass made by the Pittsburgh Plate Glass Company. (Presumably, the windshield removed by Hess and Eisenhardt was the second new windshield installed — by the Arlington Glass Company — on November 27th, 1963, and is the one in the National Archives today.) Mr. Hess told Weldon that the windshield his company removed was not damaged at the time it was removed.

  The clear implication here is that the windshield in the Archives today, which exhibits cracks but not a bullet hole, was intentionally damaged by someone involved in the cover-up AFTER its removal by Hess and Eisenhardt.

  This distressing (and depressing) tale of cover-up, deceit, and deception mirrors what was going on with the JFK medical evidence (namely, the President’s cranial wounds and throat wound; and the autopsy photographs and x-rays), and the Zapruder film, during the weekend following the assassination — that is, alteration and gross substitution. The pattern is the same, and the pattern is one of lying, and intentionally covering up the truth, by destroying some evidence, and substituting altered evidence in its place. All of this substitution of evidence — tampering with wounds prior to the commencement of the autopsy through clandestine post mortem surgery; the alteration of some of the key autopsy photographs and x-rays (and the destruction of others); and the alteration of the Zapruder film — was all intended to suppress evidence of shots from the front (i.e., proof of conspiracy), so the government could more easily promote its lone assassin cover story.

  …And the U.S. Government Later Suborned Perjury in the Matter of the Damage to the Limousine Windshield

  Unfortunately for Mr. Charles Taylor of the Secret Service, he — like Galileo Galilei before the Inquisition in the 17th century — was forced to recant, for he had committed heresy when he wrote in his official report on November 27th that he had observed a bullet hole in the windshield of the limousine as the car was closely examined in the White House garage the evening of the assassination, in 1963. In his 1976 recantation, an affidavit prepared for the House Select Committee on Assassinations (HSCA), Taylor indicated that he changed his mind after examining the windshield stored in the Archives on December 19, 1975. Like Galileo, when prompted by his inquisitors, Taylor reversed himself, saying: “…I never examined this apparent hole [on November 22, 1963] to determine if there had been any penetration of the glass, nor did I even get a good look at the windshield in well-lighted surroundings…”. This is hardly credible. SA Kinney drove JFK’s limousine from Andrews AFB to the White House garage on November 22nd, 1963, and Taylor was the only passenger. The back seat bench (as revealed by horrifying color photographs taken in the White House garage) was still covered with gore, so we know Taylor did not sit there amidst the blood and brain tissue; and it is most doubtful that he sat in one of the uncomfortable jump seats in the middle of the car. Surely, he sat in the right front seat of the limousine all the way from Andrews AFB, to the garage where it was examined that evening — an ideal spot for noticing the bullet hole in the windshield, which would have been within arm’s reach for him. Inevitably, when the interior of the car was disassembled that evening inside the White House garage by FBI and Secret Service agents working together, the lights must have been on for this crucial joint inspection! Taylor reported on their activities in detail in his report, prepared on November 27th, 1963. The report makes clear that the agents could see what they were doing. In that context, consider Taylor’s written statement in his 1976 HSCA affidavit, about thirteen years later, in which he stated: “I have no doubt that the cracks [seen in the windshield placed in the Archives and in official photographs]…cracks in the inner layers of the glass only, are the ones I noticed on the trip from Andrews Air Force Base…it is clear to me that my use of the word ‘hole’ to describe the flaw in the windshield was incorrect.” Taylor’s sworn affidavit in 1976, shortly after he was asked by someone in government to examine the switched-out windshield deposited in the Archives, can only be viewed and described for what it was: perjury.

  Previously Known Photographic Evidence of a Windshield Bullet Hole

  As I documented in chapter 15 of my book, Inside the Assassination Records Review Board, the famous “Altgens photo” taken on Elm Street, the one reported to be equivalent to Zapruder frame 255 in the extant film, appears to many who study it to show a bullet hole in the windshield in some of the versions of that photograph that have been published: namely, in The Torch Is Passed (1964), on page 16; in Groden’s The Killing of a President, on pages 30 and 36; on page 314 of Trask’s Pictures of the Pain; and in the version published in Fetzer’s Murder in Dealey Plaza, on page 149. The apparent bullet hole detected by many viewers in the Altgens photo appears to be just to the right of the rightmost edge of the rear view mirror, as seen from the front. But there is another Altgens photo taken on Elm Street, showing Jackie Kennedy on the trunk of the limousine after the assassination, which also shows damage in the area of the windshield that is left-of-center, as seen from inside the car. Frustratingly, the damage seen in this photograph appears to be some cracks emanating from a frosted white area of the windshield that is left-of-center. It is most clearly seen in The Torch Is Passed, on page 17; in my view, it is unclear whether we are looking at a round bullet hole with two cracks emanating from it, or simply cracks. The poor quality versions of this image published in The Killing of a President (on page 42) and in Pictures of the Pain (on page 316) are useless in resolving this issue.

  Therefore, any additional photographic evidence captured the day of the assassination might prove decisive in resolving the windshield debate, once and for all — which leads us back to the headline of this journal entry: “Photographic Evidence of Bullet Hole in JFK Limousine Windshield Hiding in Plain Sight.”

  HIDING IN PLAIN SIGHT SINCE 2003

  On pages 1473-1474 of Volume V my book (in chapter 16), I wrote about the circumstances in which The History Channel, in 2003, was forced by political pressure and by threat of legal action to stop airing the remarkably popular seventh, eighth, and ninth episodes of the series The Men Who Killed Kennedy: “The Smoking Guns,” “The Love Affair,” and “The Guilty Men.” Not only did The History Channel agree to stop broadcasting the three episodes (which were getting very high ratings), but it also pulled all of the DVDs from stores (where they were selling like hotcakes), and agreed to stop selling the three episodes, which were packaged together in a two-disc, three episode A & E network video product titled: The Men Who Killed Kennedy: The Final Chapter, Cat. No. AAE-71255. (Thanks to Phil Singer of Chicago, I own a set of these three banned DVDs.)

  Not only did former LBJ aides Jack Valenti and Bill Moyers engage in a high-profile publicity campaign against The History Channel, but an enraged Jack Valenti (who had long been the chief lobbyist in the nation’s capital for the motion picture industry) summoned the executive producer of episodes 7, 8, and 9 (including the LBJ episode, “The Guilty Men”) — Dolores Gavin — to Washington, D.C., where she was given the “Valenti treatment,” i.e., browbeaten and intimidated in private, in a rather brutal fashion. (I was informed of this by a Hollywood-based professional who had worked with her on the project; Dolores Gavin herself was the source of the information.) Shortly afterwards, The History Channel succumbed to this overt censorship and all three episodes were added to a new, twenty-first century Index Expurgatorius.

  The presumptive cause of this Holy Edict of the American Establishment was the LBJ episode, “The Guilty Men,” which fingered Lyndon Baines Johnson with involvement in the JFK assassination conspiracy. But in retrospect, I now wonder if perhaps the real, principal (but unacknowledged) cause of the suppression was actually the episode titled “The Smoking Guns.” The LBJ episode may have simply been the excuse to ban “The Smoking Guns,” for this episode contains multiple evidentiary proofs of a U.S. government cover-up of the Kennedy assassination evidence.

  The Stunning Content of “The Smoking Guns”

  There is some “B-roll” in “The Smoking Guns” episode, only a little over two seconds long, which definitely appears to show the bullet hole in the limousine windshield — the through-and-through bullet hole described by the six credible witnesses cited above. This is shown during the segment of the program in which Evalea Glanges was interviewed. This “B-roll” footage appears between the times of 14:02 and 14:04 on the DVD, and consists of a total of 84 video frames (there are 30 video frames per second in a U.S. television broadcast). The black-and-white images appear to come from standard 16 mm B & W newsreel footage, taken by a stocky man wearing a hat who had approached the Presidential limousine as it was parked outside the Parkland Hospital emergency room (and before the bubble top was installed). The point of view (POV) of the camera was that of someone sitting in the limousine, or rather standing just beside it and to the right side. The camera is pointed at the inside surface of the windshield from behind — that is the POV. One man in a suit and tie can be seen standing on the front side, or forward of, the windshield, and two DPD motorcycle patrolmen (are they Ellis and Freeman?) can be seen leaning in and examining the windshield. What looks to me like a through-and-through bullet hole is visible in all 84 video frames, left of center on the windshield (adopting the POV of the camera) and approximately halfway down from the top, although these are only rough approximations. The location appears to be entirely consistent with that described by Charles Taylor and George Whitaker (above).

  I wish to make something very clear here: you cannot access the images I am describing above in the U-Tube segment in which this episode has been put up on the internet. First, the timing is different in the U-Tube segment (13:08, vice 14:02), because the U-Tube segment was copied from the broadcast. [The factory DVD location of the clip is at a later point in the program, at 14:02, because of advertising material inserted at the beginning of the DVD.] Second, the size of the U-Tube presentation is so small on one’s computer screen, and the resolution so poor in comparison with a big screen HD television, that you can forget seeing this windshield bullet hole on U-Tube. The viewer needs the factory-produced DVD; a good DVD player with functioning frame-by-frame advance; and a big screen, High Definition (1080p) TV. The bullet hole shows up clearly on my 52″ SONY Bravia television. So anyone concerned with doing research here simply must obtain the factory-produced DVD.

  Now, no doubt the “lone-nutter” crowd — both those who are in denial of the reality of an American coup in 1963 (because they can’t handle the truth), and the U.S. government’s third-party surrogates in the midst of the research community (whose job it is to cast doubt on all new research pointing to conspiracy and cover-up) — will react violently to this essay, and that is predictable. But you don’t have to listen to their opinions…EXAMINE THE EVIDENCE YOURSELF AND MAKE UP YOUR OWN MIND. Just obtain a factory-produced DVD of “The Smoking Guns,” by hook or crook (or E-Bay); put it in your DVD player; go to the specified time of 14:02 into the program; and then examine the 84 video frames, one at a time, on an HD big screen TV. You will find that video frames 1, 15, 31, 37, 47, 59, and 71 best depict the bullet hole. The 16 mm camera was hand-held, so there is some motion and some blurring of the images, and that is why some video frames are more clear than others. In my opinion, the best frames are #1 and # 71 in the windshield sequence.

  Then consider how dangerous this two-seconds of “B-roll” footage is to the U. S. government’s contrived position on the assassination as we approach the 50th anniversary of President Kennedy’s assassination: a through-and-through hole in the limousine windshield, made by a frontal shot traveling from front-to-back (as stated by George Whitaker and Evalea Glanges), all by itself, demolishes the lone-assassin myth still being perpetuated by the U.S. government and by its surrogates in the mainstream media in America. No wonder the establishment in America felt this episode had to be suppressed.

  And consider the other reasons for its suppression. This episode also features Dr. David Mantik, M.D., PhD., eloquently and clearly discussing his conclusion — based on his nine visits to the National Archives to view the autopsy materials — that the autopsy photographs of the rear of JFK’s head are photographic forgeries. It also features former USIA photographer Joe O’Donnell discussing how White House photographer Robert Knudsen showed him two sets of post mortem photos of JFK’s head wounds late in 1963: one set that consisted of authentic, pre-alteration images, showing the true entry and exit wounds in the head (an entry wound high in the right forehead, and a large exit wound in the right rear of the skull); and another set of images that was post-alteration, with the entry wound high in the forehead no longer visible, and the back of the head seemingly intact. It also features Dr. Gary Aguilar, M.D., discussing in convincing terms G. Robert Blakey’s suppression of the content of interviews the HSCA conducted with JFK autopsy witnesses, and Blakey’s intentional misrepresentation of the contents of those interviews in the HSCA’s report; the JFK Records Act resulted in the “premature release” of the suppressed autopsy witness interviews in 1993, and the “Big Lie” in the HSCA report was exposed. (The HSCA report, in volume 7, stated that all of the Dallas doctors had to be wrong about the exit wound they recalled in the back of JFK’s head, since all of the autopsy witnesses the HSCA had interviewed said the wounds they observed matched the autopsy photos which show the back of the head intact. The release of the interview reports in 1993 revealed that the HSCA had lied about what those witnesses had said.) All of this, and more, was presented in this one key episode.

  So ask your friends, go on E-Bay, and one way or another, get your hands on the banned episode of The Men Who Killed Kennedy titled “The Smoking Guns,” and see the bullet hole in the windshield yourself. Then compare it to the photographs of the windshield in the National Archives, and ask yourself what this sorry episode says about the integrity of our national government.

  President Kennedy was killed in Dealey Plaza by a crossfire, meted out by shooters firing from multiple directions, from both the front and behind — therefore, he was felled by a conspiracy, by definition. The windshield bullet hole evidence, all by itself, proves a conspiracy; and its clumsy and unsuccessful suppression, all by itself, is proof of a government cover-up of the facts in President Kennedy’s assassination, since the U.S. government controlled all of the windshield evidence. The facts contained in this tale prove that we had a coup in America in 1963, and that powerful and influential people were still covering it up in 1975, and 1976, and 1979, and in 2003. Former CIA Director William Colby once said that everyone of any significance in the U.S. media was owned by the CIA. I believe it — otherwise, this windshield nonsense would have been exposed long ago on a show like “60 Minutes.”

  I have expressed here my own strong opinion about what is shown in the 84 video frames visible in this documentary. A good follow-on step here would be to obtain the original 16 mm camera footage (presumably a black and white negative, not some multi-generational stock footage), perform a high-resolution digital scan of the film frames in Hollywood, and have them analyzed by motion picture professionals in the film industry who have no axe to grind — not by Gary Mack at the Sixth Floor Museum (who has never been to film school, or worked in the motion picture industry), or by any member of the JFK research community who has espoused a conspiracy or cover-up in the assassination. A true, third-party independent analysis of the camera negative, or of the earliest surviving generation of this newsreel footage, would be a good next step in the process of evaluating these images.

  I have sounded the alarm here — and I am not afraid of a truly independent third-party analysis. Let’s do a little honest science here, and “let the chips fall where they may.”

  *  *  *

  Douglas P. Horne graduated Cum Laude from Ohio State University in 1974, with a B.A. in History. He served for ten years as a Surface Warfare Officer in the U.S. Navy, and then worked for the Navy for ten more years as a Federal civilian. In 1995 he joined the staff of the President John F. Kennedy “Assassination Records Review Board,” and rose to the position of Chief Analyst for Military Records. In that capacity, he focused on the medical evidence surrounding the JFK autopsy; the Zapruder film; and ensured the release of military records on Cuba and Vietnam. In 2009 he published the extensive five-volume work, Inside the Assassination Records Review Board, which documents the U.S. government’s coverup of the medical evidence surrounding JFK’s assassination, and the alteration of the Zapruder film of President Kennedy’s assassination.

   

  

  

• The World's New Reserve Currency? Everything You Need To Know About PetroYuan

  Earlier this week, we pointed out that the 'PetroYuan' is on the verge of becoming reality with Graticule's Adam Levinson noting that the birth of a yuan-denominated oil contract will be a “huge story” in the fourth quarter, and will be a “wake up call” for investors who haven’t paid attention to the plans.

  As a reminder, nothing lasts forever…

  

  Judging by the interest in the topic, investors are less informed than many believed and so the different teams within Société Générale Cross Asset Research examine what this contract would mean for the global oil markets and for the internationalisation of the yuan – if it gets off the ground.

   

  Part 1 The proposed yuan-denominated crude oil futures contract

  • Why is a yuan-denominated Chinese crude futures contract interesting to think about?  Why is it potentially significant?
  • Would yuan-denominated Chinese crude futures affect the physical markets?
  • Has China actually proposed changing its crude buying from USD to yuan?
  • What about the crude producers and exporters?
  • How much non-USD crude trade currently exists?
  • If small volumes don’t change how the oil market operates, how big would the volumes have to be to make a difference?
  • Is there another commodity that trades in multiple currencies at different exchanges that we can learn lessons from?

  Part 2 Another step towards currency internationalisation?

  • Why does China want to introduce a yuan-denominated crude oil futures contract? 
  • How can the yuan succeed in becoming a reserve currency?
  • What does the status of an international currency mean for the yuan?
  • What will an internationalised yuan mean to China’s FX reserves?

  *  *  *

  Part 1: The proposed yuan-denominated crude oil futures contract

  In November 2013, the Shanghai International Energy Exchange (INE) was established. Fully owned by the Shanghai Futures Exchange, the INE began efforts to offer an alternative crude oil futures contract to the global oil markets. After four years, these efforts are continuing. The proposed contract is for medium sour crude oil, is physically deliverable, and – most significantly – would be denominated in yuan.

  We begin with the oil markets.

  Why is a yuan-denominated Chinese crude futures contract interesting to think about? Why is it potentially significant?

  Such a contract would be a tool that would make it possible for crude exporters selling to Chinese refiners to hedge their sales in yuan. This could help any future effort by China to import crude using yuan; on the other side of the coin, it could also help any future effort by various crude exporters to sell crude in a currency other than USD. 

  In the abstract, the potential volumes are large, which is why this is worth thinking about.  China is the world’s biggest crude importer, with net imports in January-July 2017 of 8.4 Mb/d (and trending higher); the second biggest crude importer is the US, with net imports of 7.2 Mb/d in January-July 2017 (and trending lower). 

  To put this into context, according to the IEA, in 4Q17, global product demand will be 98.5 Mb/d and global crude demand will be 82.2 Mb/d (including refinery runs and direct burn).  Crude trade is much less, at 42.4 Mb/d in 2016, according to the BP Statistical Review; this excludes crude that is produced and consumed in the same country. In other words, Chinese net crude imports account for over 10% of the global crude market and almost 20% of global crude trade. 

  Would yuan-denominated Chinese crude futures affect the physical markets?

  No, not at all. That’s not what this is about – there would be no impact on physical supply (like the example of natural gas – see below). In theory, if this were to happen, it would purely be about pricing. The global oil markets are denominated almost entirely in USD, so it is interesting to think about that landscape changing.

  Has China actually proposed changing its crude buying from USD to yuan?

  No. In recent years, there has been occasional general talk from China of moving away from the USD for purchases of crude oil and other commodities; however, we are not aware of any serious or concrete proposal on the table to start buying crude in yuan any time soon. That said, it is worth acknowledging that most Chinese crude buying is done by three large stateowned oil companies. Therefore, if it so chooses, the Chinese government certainly has the ability to push such an agenda; similarly, the government has the ability to push the use of INE crude futures for hedging crude in yuan.

  What about the crude producers and exporters?

  This is an important question to ask because it’s not just about what the Chinese want. As with any commercial transaction, both the buyer and the seller need to agree. In the case of crude oil, they need to agree on the volume, price, type and quality of crude as well as the delivery date and delivery location, among other things. However, the currency is almost always the USD – that is not a point of negotiation.

  Over the years, including 2017, major crude producers such as Iran, Russia and Venezuela have talked about selling and exporting crude in non-dollar currencies. The reasons have been general geopolitical tensions with the US and Europe, and more specifically, oil-related sanctions; the use of non-dollar currencies may offer a way to circumvent oil-related sanctions, at least partially.  

  Hypothetically, if China were to have serious talks with Iran, Russia and Venezuela about importing crude and paying in yuan, that would be important because it would add another dimension to the geopolitical analysis. If sanctioned countries could simply side-step the measures by selling crude in yuan or other non-dollar currencies, it would mean that the risk of supply disruptions and potential upside risk for oil prices would be reduced.

  How much non-USD crude trade currently exists?

  It is very difficult to make an accurate and confident estimate. Again, depending on the political context, talk of non-dollar crude trade from the countries mentioned above comes and goes, and sometimes some deals are done more for political and public relations purposes than for anything else. 

  Our “guesstimate” is that such volumes probably amount to no more than 300-350 kb/d out of the 82.2 Mb/d global crude market noted above. For reference, to put that in terms of physical crude trade, 5 VLCC-size tankers each month carrying 2 Mb each would equal 333 kb/d. We would consider that, or its equivalent in smaller vessels, to be a generous estimate. We would consider 10 VLCCs or equivalent each month, or 666 kb/d, to be an extreme upside estimate but highly unlikely. This excludes barter arrangements and loans-for-crude deals. China lent Russia large sums of money after the global financial crisis in 2008-2009 in exchange for longterm crude supply deals; more recently, China had such an arrangement with Venezuela.

  The bottom line, in our view, is that actual crude trade paid in cash but not using USD has never amounted to more than a few token cargoes. Importantly, when this does happen, the entire transaction and negotiation of the price is done in USD as usual, with pricing done the normal way; for example, both Urals and Dubai, which are key marker crudes in their own right, are priced as differentials to Brent. The only difference when a non-USD currency is used is that a last step is added, where the amount for the invoice is converted from USD into a different currency.

  If small volumes don’t change how the oil market operates, how big would the volumes have to be to make a difference?

  The question is really: what is the tipping point? How much non-USD crude trade does there need to be for the entire negotiation to take place in yuan, or rubles, or euros?  In other words, what does it take for price discovery and price formation to take place not in USD but in another currency?

  The short answer is that we don’t know. But something on the order of 7-8 Mb/d of crude trade seems to be a sensitive level from a practical standpoint. How do we come up with this?  It’s simple: we are thinking about Saudi Arabia. Saudi crude exports have averaged 7 Mb/d through the first eight months of this year; in 2016, before the current OPEC cuts took effect, they averaged 7.6 Mb/d. The 7-8 Mb/d range works out to 16-19% of the 42.4 Mb/d global traded crude volumes.

  Our view is that physical efforts to shift global crude trade away from US dollars seem doomed to failure unless the Saudis fully participate. Usually in matters of pricing, the other Middle East exporters follow the lead of the Saudis, so there is a “double whammy” effect and the volumes could start to increase quickly.

  In this context, the warming relationship between Saudi Arabia and Russia becomes more interesting, too. Could the two countries cooperate on this in the same way they’ve cooperated on cutting production this year, in order to stabilise prices? Perhaps. That would add even more volumes because Russia is the second-biggest crude exporter in the world.  According to the BP Statistical Review, Russian crude exports averaged 5.5 Mb/d in 2016.

  However, the geopolitics of oil quickly gets complicated. Why would the Saudis want to do something (like encourage non-USD crude trade) that would benefit Iran? This is always true, but is even more true now at a time when US-Iran tensions are ramping up and the US is threatening to re-impose oil sanctions on Iran. Also, why would the Saudis want to do something that would diminish the value of their currency, which is pegged to the USD, their huge USD reserves, and other USD-denominated assets?

  If it would take the Saudis to make a real fundamental change in moving the oil markets away from a sole reliance on the USD to a multiple currency market, from a Saudi perspective, the arguments “against” are at least as strong as the arguments “in favour”. In short, we are sceptical of Saudi support for such a move.

  Rather than support from Saudi Arabia or a cooperative effort between Saudi Arabia and Russia, a more realistic and higher-probability scenario would be a move to non-USD crude exports led by Russia on its own or perhaps a cooperative effort between Russia and Iran – with China being the key crude buyer, using yuan, in all the scenarios. Without the inclusion of Saudi Arabia and other Middle East exporters such as the UAE, Kuwait and Iraq, the volumes involved with Russia and Iran would be much less; this would make a fundamental change in oil price formation away from USD slower and more difficult but not impossible.

  Is there another commodity that trades in multiple currencies at different exchanges that we can learn lessons from?

  The answer to this question is yes and the best example is natural gas. The point of making this comparison is that ultimately different denominated prices in the same underlying commodity do not affect the physical balances but do influence trade flows, arbitrage and market analysis.

  The US natural gas market is the largest regional market in the world (IEA estimates it alone represented 21% of total global gas demand) and is almost entirely priced in USD (AECO, Canada’s most liquid supply point, prices in CAD/GJ). The US LNG market (imports and exports) are also denominated in USD.

  The global LNG market is heavily indexed to USD as well, but that is due to the dominance of oil indexation in long-term LNG sales agreements; the USD dominance of the global LNG market thus reflects the dominance of USD in oil prices.

  In Europe (which represents 13% of total global gas demand according to IEA estimates), there are two main natural gas price points. In the UK, the National Balancing Point (NBP) – the hub of UK gas trading – is denominated in GB pounds and pence/therm. In the Netherlands, the hub of natural gas trading is known as Title Transfer Facility (TTF), and this contract is in euros and euro cents per MWh. Recently, there has been an observed shift in the dominance of these price points regionally; critically, this is a function of the physical characteristics of the market rather than the currency used or the exchange rate.

  Historically, NBP was the most liquid point and also the price structure included in European LNG sales contracts, making it the dominant global representation of the European market. Recently, however, TTF has seen an increase in liquidity (increased open interest) and has become increasingly reflective of the physical continental European market. Factors such as the higher carbon price in the UK, which has an impact on gas competitiveness/pricing within the regional power generation stack, the declining trend of the UK production profile, and the region’s increased dependence (seasonal switching) on the Interconnector pipeline between the UK and continental Europe have all contributed to the reduced ability of NBP to reflect the wider European market; hence the rise of TTF. Importantly, it is the changes in the physical market that have changed the competitive landscape among TTF and NBP, and it has little to nothing to do with the different exchange rates (although Brexit may have decreased NBP’s popularity).

  The existence of varying price structures in the global natural gas market is a critical comparison to make for oil, which has the potential to see a rise in pricing in currencies other than the USD. It is important to emphasise that even with multiple price structures, global natural gas trading behaviour is dominated by physical market conditions. At the same time, there is sometimes an influence from fluctuations in exchange rates, making analysis of flows, arbitrage, and trading somewhat more complicated; however, supply and demand dynamics are not fundamentally affected.

  Part 2: Another step towards currency internationalisation? 

  Why does China want to introduce a yuan-denominated crude oil futures contract? 

  The Chinese government wants the yuan to become an international currency. This means that it wants the yuan to be used widely in international transactions (a settlement currency), to be adopted as a pricing currency for goods and services in global markets (an invoicing currency), and to be considered as a store of value by international investors (an investing currency). The goal of internationalisation also goes hand in hand with the profile objective for the yuan to obtain a reserve currency status since these two are highly correlated. While it is currently unclear (or too early to discern) whether China is aiming for the yuan to become the reserve currency – dethroning the dollar – Chinese policymakers are certainly eyeing the yuan as one of the major reserve currencies.

  

  China has been working much harder on this project since 2009. The process has moved at varying speeds depending on capital account pressures, domestic asset prices and growth considerations, but much progress has been made (see the timeline on the next page). A quarter of China’s exports and imports are settled in yuan, although most of them are still invoiced in other hard currencies.

  The proposed yuan-denominated crude oil futures contract to be listed on the Shanghai International Energy Exchange (INE), fully owned by the Shanghai Futures Exchange, is another step on the road to promote internationalisation and erode the USD hegemony in the global financial system. While over the years, there have been some relatively small volumes of oil traded in non-USD currencies, including the yuan (as discussed in the oil section above), the value of oil is still priced in dollars. One of the main impacts of the proposed new crude futures contract, and presumably one of the intentions behind the proposal, is that by providing a yuandenominated financial hedging tool for crude oil, this will likely help to promote the appeal of the yuan as a pricing currency in global oil trade.

  From the Chinese policymakers’ perspective, China should arguably have a bigger say in the pricing of commodities since it has become the biggest consumer of many of them. Also, the petro-dollar system seems to be a successful model to imitate: first, the yuan would be more widely accepted by natural resource exporters, and in turn, these exporters could invest their yuan revenues (as FX reserves) into yuan-denominated financial assets.

  

  How can the yuan succeed in becoming a reserve currency?

  To improve the yuan’s chances of becoming an international and reserve currency, the main areas of development would be strengthening the institutional framework, fully opening the capital account to foreign residents, allowing market forces to play a greater role and establishing and managing a policy framework that alleviates the risk of crisis over an extended period.

  China technically joined the reserve currency club when the IMF added it to the SDR basket in September 2016. The narrow definition of a reserve currency is for currencies used for international trade and willing to be held by other central banks as part of their reserves. On these narrow criteria, China has achieved what few currencies have been able to do.

  Realising “true” reserve status and supplanting or even meaningfully competing with the USD in the global financial system is a very high hurdle that will take time (maybe 10-20 years) and require further enhancements in various areas. A broader set of criterion (listed below) of a reserve currency highlights the enormous challenges that China faces:

  Medium of exchange. Entities outside China would need to widely adopt the RMB for transactional purposes (i.e. trade settlement). The yuan trade/investment settlement, the offshore yuan market and the Belt & Road Initiative (BRI) would need to be promoted. China is making steady strides in this area, with now 25% of China’s cross-border transactions settled by yuan. According to the SWIFT, however, the yuan share in international payments has not been able to advance and has hovered around 2% since late 2014.

   

  Store of value. Individuals, companies and central banks would need to have faith in the currency as able to preserve wealth. About 60 central banks now hold some RMB assets in their portfolios, but this amount only represented 1% of total global reserves at the end of 2016.

   

  Liquidity and market access. To become widely accepted, a currency would need to have high liquidity with foreigners having unencumbered access to local financial markets. China has created numerous schemes for global investors to access its equity and bond markets, but it is only a start, with foreign investors’ share in onshore capital markets at merely 2%. Further liberalising the capital account for foreign residents would be a necessary condition.

   

  Institutional framework. Ultimately, confidence in the legal, regulatory and policy framework would need to be paramount for foreigners to hold large quantities of the currency. The current (USD) and previous (GBP) dominant global reserve currencies already had these qualities before attaining their status.

  In many ways, China is working in reverse order – pushing internationalisation before the others condition are in place. Critically, policy priorities would need to be reoriented. It will be a challenge for China to meaningfully challenge the USD’s dominance, but it is not insurmountable over the next 10-20 years provided China takes steps in opening up (full capital account convertibility), giving up control of markets and strengthening and improving transparency in its legal, regulatory and policymaking framework.

  What does the status of an international currency mean for the yuan?

  Before the reserve currency status can support the yuan, the yuan may have to continuously prove itself as a stable currency to boost its status as a reserve currency. We think that the fundamental factors of economic growth, debt risk and interest rate differentials will continue to play dominant roles in the yuan’s FX trends over the medium term.  
  A quick check of the history of the four major currencies – the dollar, euro, yen and sterling – since the 2000s suggests a visible and positive correlation between a currency’s traded weighted performance and its share in global FX reserves. However, correlation does not necessarily mean causality, and the causality can go both ways.

  For instance, in the case of the yen and sterling, however, changes in their valuations look to have led their changing popularity among global reserve managers. The strength of the yen between 2009 and 2013 did not attract significantly more reserve inflows right away, probably because of the lacklustre economic development at the time. Sterling only started to gain a share in global reserves in 2003 despite its persistent strength since late 1990s.

  

  For the yuan, we observe that the pace of yuan internationalisation was faster during the phase of currency appreciation or stability and slower when the yuan depreciated. This came despite the continuous policy efforts.

  For the past seven years, USD/CNY has moved surprisingly closely with US-China yield differentials, and in the past three years the correlation of CNY to broad dollar moves has increased. Contrary to popular belief, the CNY shows few idiosyncratic tendencies and rather behaves in a similar manner to other EM/G10 currencies.

  No matter what happens, the correlation between the CNY and the USD could remain high. The simple fact is that the correlation across most currencies is high over the cycle given that many top-down macro factors tend to drive FX over the medium term. 

  The CNY may, however, play an increasing role in leading currency cycles, just as the USD does now. This would mean an increasing importance of Chinese data, monetary and fiscal policy in affecting global currency trends.

  

  What will an internationalised yuan mean to China’s FX reserves?

  The project of yuan internationalisation comprises currency liberalisation, capital account open-up and domestic capital market deepening. Liberalising the currency implies that the central bank will intervene less and less in the currency market, and a relatively stable level of FX reserves is therefore most consistent with the goal of making the yuan an international currency. 

  Indeed, Chinese policymakers have repeatedly expressed their commitment to making the yuan a more flexible currency, freer from direct currency interventions by the central bank. However, it is also a stated goal for the yuan to maintain relatively stability against a basket of China’s major trade partners’ currencies. These two goals are only compatible when there is no major depreciation (or appreciation) pressure on the yuan resulting from major outflow (or inflow) pressure. 

  China’s FX reserves can recover this year after the $1tn drop over the previous 2.5 years because the yuan has managed to stabilise against the dollar and a basket of currencies. The yuan’s stability should be a function of 1) dollar weakness, 2) capital controls and 3) China’s stable growth this year. These three factors will likely be the main drivers of the trend in China’s FX reserves over the next few years. While there remains much uncertainty around the dollar, it seems that Chinese policymakers have honed the skill of capital controls. This ought to reduce the risk of sharp declines in FX reserves going forward.

  In the meantime, we think the chance of China persistently increasing its FX reserves is also limited unless the weak dollar trend continues and accelerates. The relationship with the US is one factor, and domestically there will likely remain strong demand from Chinese households and corporates for investment diversification if China continues to rely on rapid debt growth and money creation to sustain its economic model (see Anatomy of China's outflows). As the developments in 2015 and 2016 proved, such capital outflow pressure could outweigh the support from a decent current account surplus for the yuan.

  

  What will the yuan’s internationalisation mean to global FX reserves?

  China’s share of global reserve portfolios should increase over time. Depending on whether it achieves true reserve currency status in the eyes of foreign participants, that share will be either low (5%), high (25%) or very high (25%+). 

  Emerging market central banks still need a significant amount of dollars to undertake intervention assuming their currency regimes are not fully flexible, and a precautionary stockpile is desired to manage balance of payments shocks. Against all EM currencies, except most notably the CEE euro bloc, the dollar is by far the most widely traded and liquid FX cross. Virtually all intervention is done in USD crosses, and one prerequisite for central banks to shift their anchor currency to the RMB would be CNY crosses that are tradable without underlying dollar transactions being required. For instance, while EUR/CNY is quoted and traded onshore through the CFETS, it requires dealers to facilitate the trade through two separate transactions (USD/CNY and EUR/USD). The sheer size of the Chinese economy, growing global financial linkages and increasing RMB trade settlement will see a shift in this direction over time, but it will be a very long and slow process. Products such as the proposed yuan-denominated crude oil futures contract will help to marginally speed up the progression. 

  Reserves can be divided into two broad categories: precautionary and excess. The precautionary portion needs to be in liquid assets to meet demand for foreign currency/dollars on short notice and mitigate balance of payments stress. Currently, these are mostly held in US government bonds or deposits, followed by European bonds, then UK, Japan, Canada and Australia down the list. China is below these. Gold is liquid but somewhat lower on the scale compared to deposits or government bonds, so there are natural limitations to how much central banks would hold. 

  The excess portion of reserves can be invested in anything, and central banks have an excess globally. Central banks have undertaken various diversification efforts over the past few decades, with the share of euros in global reserve portfolios for example having increased from 20% in 2002 to 27% in 2008 before falling back to 20% in 2016. Central banks have been more active in holding commodity currencies (CAD and AUD) over the past five years.  
  Russia has been buying a lot of gold. To do this, it either sells existing USD or other currency holdings, or when it intervenes and accumulates dollars it then diverts the currency to gold instead of treasuries. If central banks have excess reserves or do not want to accumulate more dollars, they could hold gold instead. 

  The proposed yuan-denominated crude oil futures contract reduces the need to use dollars for the transaction, but it does not change the outcome or address the fundamental question: do central banks want/need USD or yuan? They could have bought yuan previously. The proposed yuan-denominated crude oil futures contract does not make it an easier process. But for those countries subject to sanctions, it might be attractive. According to the 4Q16 IMF COFER report (link), foreign central banks held USD85bn in allocated reserves in the CNY (or 1% of global reserves). Total foreign holdings of Chinese bonds amounted to USD135bn, according to ChinaBond, suggesting the vast majority of holdings are from central banks.

  

  If reserve manager allocations to the RMB doubled over the next five years, and if those inflows were spread out evenly over the period, they would amount to roughly USD6bn per quarter (or another USD100bn). While not insignificant, that is still a drop in the ocean compared to other balance of payments components. However, if reserve manager allocations reached the weighting of the JPY in allocated global reserves (4%), the inflows could be closer to USD500bn over five years. An allocation equivalent to the euro (around 20% of global) reserves could see nearly USD1.5trn in inflows.

  It could be challenging for the CNY to reach a high weight if global reserves are not rising. In 2002-2008, when central banks were diversifying into euros, global FX reserves were rising sharply and a significant portion of the growth in reserves was due to China. During this period, central banks were buying dollars through intervention (in an attempt to keep their currencies weaker than otherwise) and with some of those newly acquired dollars they decided to diversify their holdings and buy euros. However, in the absence of a strong increase in global FX reserves going forward, it would present a significantly higher hurdle for reserve managers to diversify into the CNY. It would require active diversification out of other currency holdings (i.e. sell existing dollar assets) to acquire the CNY.

  

  

Digest powered by RSS Digest