Today’s News 2nd March 2018

• Tor Project "Almost 100% Funded By The US Government": FOIA

  The Tor Project – a private nonprofit known as the “NSA-proof” gateway to the “dark web,” turns out to be almost “100% funded by the US government” according to documents obtained by investigative journalist and author Yasha Levine.

  

  The Tor browser, launched in 2001, utilizes so-called “onion routing” technology developed by the US Navy in 1998 to provide anonymity over computer networks. 

  In a recent blog post, Levine details how he was able to obtain roughly 2,500 pages of correspondence via FOIA requests while performing research for a book. The documents include strategy, contract, budgets and status updates between the Tor project and its primary source of funding; a CIA spinoff known as the Broadcasting Board of Governors (BBG), which “oversees America’s foreign broadcasting operations like Radio Free Asia and Radio Free Europe.”

  By following the money, I discovered that Tor was not a grassroots. I was able to show that despite its indie radical cred and claims to help its users protect themselves from government surveillance online, Tor was almost 100% funded by three U.S. National Security agencies: the Navy, the State Department and the BBG. Following the money revealed that Tor was not a grassroots outfit, but a military contractor with its own government contractor number. In other words: it was a privatized extension of the very same government that it claimed to be fighting.

  The documents conclusively showed that Tor is not independent at all. The organization did not have free reign to do whatever it wanted, but was kept on a very short leash and bound by contracts with strict contractual obligations. It was also required to file detailed monthly status reports that gave the U.S. government a clear picture of what Tor employees were developing, where they went and who they saw. –Yasha Levine

  The FOIA documents also suggest that Tor’s ability to shield users from government spying may be nothing more than hot air. While no evidence of a “backdoor” exists, the documents obtained by Levine reveal that Tor has “no qualms with privately tipping off the federal government to security vulnerabilities before alerting the public, a move that would give the feds an opportunity to exploit the security weakness long before informing Tor users.”

  Exit nodes

  Cybersecurity experts have noted for years that while Tor may be technically anonymous in theory – the ‘exit nodes’ where traffic leaves the secure “onion” protocol and is decrypted can be established by anyone – including government agencies.

  Anyone running an exit node can read the traffic passing through it. 

  In 2007 Egerstad set up just five Tor exit nodes and used them to intercept thousands of private emails, instant messages and email account credentials.

  Amongst his unwitting victims were the Australia, Japanese, Iranian, India and Russia embassies, the Iranian Foreign Ministry, the Indian Ministry of Defence and the Dalai Lama’s liaison office.

  He concluded that people were using Tor in the mistaken belief that it was an end-to-end encryption tool.

  It is many things, but it isn’t that.

  Dan Egerstad proved then that exit nodes were a fine place to spy on people and his research convinced him in 2007, long before Snowden, that governments were funding expensive, high bandwidth exit nodes for exactly that purpose. –Naked Security

  Interestingly, Edward Snowden is a big fan of Tor – even throwing a “cryptoparty” while he was still an NSA contractor where he set up a Tor exit node to show off how cool they are. 

  In a 2015 interview with The Intercept’s (Wikileaks hating) Micah Lee, Snowden said: 

  LEE: What do you think about Tor? Do you think that everyone should be familiar with it, or do you think that it’s only a use-it-if-you-need-it thing?

  SNOWDEN: I think Tor is the most important privacy-enhancing technology project being used today.

  “Tor Browser is a great way to selectively use Tor to look something up and not leave a trace that you did it. It can also help bypass censorship when you’re on a network where certain sites are blocked. If you want to get more involved, you can volunteer to run your own Tor node, as I do, and support the diversity of the Tor network.”

  

  Interesting...

  

• Prisons Of Pleasure Or Pain: Huxley's "Brave New World" Vs. Orwell's "1984"

  Authored by Uncola via TheTollOnline.com,

  Definition of UTOPIA

  1: an imaginary and indefinitely remote place

  2: a place of ideal perfection especially in laws, government, and social conditions

  3:   an impractical scheme for social improvement

   

  Definition of DYSTOPIA

  1: an imaginary place where people lead dehumanized and often fearful lives

  2: literature: anti-utopia

  – Merriam-Webster.com

  Many Americans today would quite possibly consider Aldous Huxley’s “Brave New World” to be a utopia of sorts with its limitless drugs, guilt-free sex, perpetual entertainment and a genetically engineered society designed for maximum economic efficiency and social harmony.

  Conversely, most free people today would view Orwell’s “1984” as a dystopian nightmare, and shudder to contemplate the terrifying existence under the iron fist of “Big Brother”; the ubiquitous figurehead of a perfectly totalitarian government.

  Although both men were of British descent, Huxley was nine years older than Orwell and published Brave New World in 1932, seventeen years before 1984 was released in 1949. Both books are widely considered classics and are included in the Modern Library’s top ten great novels of the twentieth century.

  Brave New World

  Aldous Huxley was born to academic parents and he was the grandson of Thomas Henry Huxley, a famous biologist and an enthusiastic proponent of Darwin’s Theory of Evolution who was known as “Darwin’s Bulldog”. Huxley’s own father had a well-equipped botanical laboratory where young Aldous began his education. Given the Huxley family’s appreciation for science, it makes perfect sense that Brave New World began in what is called the “Central London Hatchery and Conditioning Centre” where human beings are artificially grown and genetically predestined into five societal castes consisting of: Alpha, Beta, Gamma, Delta and Epsilon.

  Initially, the story centers on Bernard Marx, who is a slightly genetically flawed Alpha Plus psychologist with an inferiority complex due to his short stature. By the end of the novel, however, the protagonist becomes a boy named “John the Savage” who is the bastard child of the “Director of the Central London Hatchery”, and a lady named Linda, who naturally birthed John on a remote American Indian Reservation. When Bernard discovers the true identities of John and Linda, he arranges to fly them back to London in order to leverage his position with John’s biological father, the Hatchery Director.

  Bernard is in love with a beautiful fetus technician named Lenina Crowne, who, upon meeting John the Savage falls madly in lust. Lenina is a gal who enjoys multiple lovers because, in the Brave New World, “everyone belongs to everyone else”. In other words, sexual promiscuity is encouraged as sort of a societal “pressure relief valve” designed to discourage negative emotions such as jealousy and envy. John the Savage, however, suppresses his sexual attraction to Lenina because he considers her a slut.

  Eventually, John’s sexual repression contributes to him violently attacking some children of the Delta caste who were waiting in line for their “Soma”, a mood-altering drug; and the outburst causes both Bernard and John to be brought before the powerful Mustapha Mond, who is one of ten world controllers. A debate ensues between John and Mr. Mond who explains to the Savage that a stable society requires the controlled suppression of science, religion, and art. John, who is an avid admirer of William Shakespeare, argues that human life is not worth living without these things.

  In Brave New World, the State achieves a harmonic equilibrium via the economic parity of production and consumption while utilizing Eugenics as a means to counterbalance the life and death of the citizens. Technology is employed as a means of control in lieu of any search for scientific, or spiritual, truth; as these are considered a threat to the established order. People are cloned in hatcheries in accordance to the needs of the State and trained into obedience through “Hypnopedia”, or sleep-teaching. Happiness is valued over dignity and morality, and emotions are regulated through the use of the drug, Soma, amid constant entertainment including superficial games and virtual reality venues called the “feelies”. Although there is no God or religion, per se, in Brave New World, Henry Ford is canonized in the place of a deity as a testament to corporate efficiency, assembly line production and rampant consumerism.

  1984

  Like Huxley, George Orwell also envisioned a future where government monitored and controlled every aspect of human life; yet the world is much more terrifying in 1984. Orwell actually volunteered and fought in the Spanish Civil War in 1936 before being injured by a sniper’s bullet in May of 1937; it was there where he witnessed, first-hand, the ghastly barbarism of political fascism. Moreover, he previously observed the rise of Joseph Stalin in the Soviet Union and, later, Adolf Hitler in Germany. In turn, Orwell published Animal Farm in 1945 and four years later, his novel 1984, as literary warnings to mankind.

  The setting of 1984 takes place in a futuristic, post-apocalyptic Great Britain which, at that time, was part of “Oceania”; one of three world super-states all engaged in never-ending warfare. The protagonist of the novel is Winston Smith, a middle-class member in the Outer Party of INGSOC, a totalitarian regime led by the figurehead known only as “Big Brother”.

  Winston works in the Records Department of the “Ministry of Truth” where he revises history on behalf of the Party while under constant surveillance both at work and home. Everywhere he goes; there are posters with a photo of the party’s leader and the words: “BIG BROTHER IS WATCHING YOU”. In an act of rebellion, Winston acquires a diary and begins to record what Big Brother and the INGSOC party would label as “crimethink” and “thoughtcrime”.

  Eventually, Winston meets and falls in love with a beautiful coworker named Julia, and they engage in what they believe to be a secret affair whereby they have illicit sex as a form of political rebellion. In 1984, the Party members living in Oceania are brainwashed to have sex only for procreation and this is how sexual repression is channeled into enthusiasm for the State.

  Under the threat of detection by the “Thought Police”, torture and even “vaporization”, which would eliminate every last vestige of proof he ever existed, Winston persists in his rebellion against the Party with certain fatalism. In fact, just before he and Julia are captured by the militant, jackbooted INGSOC Party authoritarians, Winston told Julia “we are the dead”; to which she replied the same words back to him.

  Throughout Orwell’s dark narrative, various themes are explored such as “Newspeak” which is a language of mind control; the terrifying tyranny of totalitarianism; historical revisionism; torture, and psychological manipulation. The INGSOC Party’s prisonlike control and complete invasion of individual privacy is such that a citizen’s own facial expression could betray their inner disloyalty to the Party through what Orwell labeled as “crimeface”:

  Your worst enemy, he reflected, was your own nervous system. At any moment the tension inside you was liable to translate itself into some visible symptom.

  – Winston Smith, 1984, part 1, chapter 6

  Orwell was near prophetic in describing the proliferation of listening devices in both public and private settings as well as “telescreens”, which simultaneously broadcast propaganda while relaying live video feeds back to the Party watchers. In Orwell’s chilling story, free will and individuality are sacrificed to the extreme demands of Collectivism and in deference to complete societal control by an authoritarian government.

  Compared and Contrasted

  In both, Brave New World and 1984, common themes are addressed including government, orthodoxy, social hierarchy, economics, love, sex, and power. Both books portray propaganda as a necessary tool of government to shape the collective minds of the citizenry within each respective society and towards the specific goals of the state; to wit, stability and continuity.

  In Brave New World, The “Bureaux of Propaganda” shared a building with the “College of Emotional Engineering” and all media outlets including radio, television, and newspaper. Much of the brainwashing of the citizens in Huxley’s world included messaging to stay within their genetically predetermined castes or to encourage the daily use of the drug, Soma, in order to anesthetize emotional agitation:

  a gramme in time saves nine

  A gramme is better than a damn

  One cubic centimetre cures ten gloomy sentiments

  When the individual feels, the community reels.

  The “Ministry of Truth”, in 1984, also known as “minitrue” in Newspeak, served as the propaganda machine for Big Brother and the INGSOC regime. Although its main purpose was to rewrite history in order to realign it with Party doctrine and make the Party look infallible, the Ministry of Truth also promoted war hysteria in order to unite the citizens of Oceania while broadcasting simple messages designed to discourage any self-determination or autonomous thought.

  Who controls the past controls the future. Who controls the present controls the past.

  war is peace

  freedom is slavery

  ignorance is strength

  

  Whereas the citizens of Brave New World used the drug Soma and cursory material distractions to vanquish any desire for real knowledge or truth; the “memory hole” in 1984 was a chute connected to an incinerator and served as the mechanism by which the Ministry of Truth would abolish historical archives as if they never existed.

  In other words, truth was unimportant to the citizens of Brave New World and it was summarily rescinded from the realm of 1984.

  

  Furthermore, in order to additionally fill the empty existence of those living in Brave New World, Huxley envisioned a character by the name of Helmholtz Watson as a creator of hypnopaedic phrases designed to fill the mental and emotional vacuum vacated by knowledge:

  Alpha children wear grey. They work much harder than we do, because they’re so frightfully clever. I’m really awfuly glad I’m a Beta, because I don’t work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don’t want to play with Delta children. And Epsilons are still worse. They’re too stupid to be able to read or write. Besides, they wear black, which is such a beastly colour. I’m so glad I’m a Beta.

  – BNW, Chapter 2, pg. 27

  In 1984, however, Orwell conceived of a character named Syme, who was an enthusiastic Newspeak redactor of language:

  It’s a beautiful thing, the destruction of words.

  Don’t you see that the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it. Every concept that can ever be needed will be expressed by exactly one word, with its meaning rigidly defined and all its subsidiary meanings rubbed out and forgotten.

  – Syme, 1984, part 1, chapter 5

  In Brave New World, Helmholtz Watson worked to fill the mind of people with hypnotic messages. In 1984, Syme strived to remove words from the English language in order to eliminate what the Party considered to be “thoughtcrime”.

  Although the methodologies varied, mind control was prevalent throughout both the fictional worlds of Huxley and Orwell.

  Social hierarchies were also present in both futuristic novels. The citizens of Brave New World consisted of the Alpha caste which held the highest jobs in the world state, and Betas, who were allowed to interact with the Alphas. The Gamma’s were considered to have average intelligence, they were eight inches shorter than Alpha’s in height, and they maintained the office jobs and held administrative positions. The Delta’s were trained from a very young age to despise books and were conditioned to work in manufacturing, while the Epsilon caste members were considered as morons who performed the menial labor within the lowest strata of society.

  Although 1984 doesn’t have a caste system, per se, the citizenry were still separated into three groups: the Inner Party, the Outer Party, and the Proles, or the proletariat. The Proles constituted 85% of the population and were allowed privacy and anonymity, yet they lived in extreme privation in pursuit of bread and circuses.

  As the Party slogan put it: ‘Proles and animals are free.’

  – ”1984”: part 1, chapter 7

  Although both Inner and Outer Party members of 1984’s Oceania lived under constant surveillance, the members of the Inner party led lives of relative luxury compared to the middle-class lifestyle of those within the Outer Party. Additionally, the members of the Outer Party were denied sex, other than within marriage and for the sole purposes of procreation. They were also denied motorized transportation and were allowed cigarettes and gin as their only vices.

  Governments of both Brave New World and 1984 also filtered information and propaganda in accordance to the class ranking of their citizens.

  In Brave New World, the separate castes, except for the Epsilons who couldn’t read, received their own newspapers delivering specific propaganda for each class of society; whereas the INGSOC party members of 1984 were allowed newspapers and to view broadcasted reports of world news via their telescreens.

  Even though there is no actual organized religion described in either book, there were deities endorsed by the government, primarily for economic reasons, and complete with mandated rigorous orthodoxies.

  Again, the aforementioned god of Brave New World was called “Ford”, after Henry Ford, in celebration of his efficient assembly-line production of goods that was worshiped by both the overseers and citizenry of the world state.

  In 1984, Big Brother served as the almighty “beginning and end”, creator, judge, grand architect and savior for the INGSOC party disciples.

  In Huxley’s vision of the future, the higher power of consumerism guided the people; complete with memorized short phrases designed to encourage the replacement of material items in lieu of repairing them; and, those wearing older clothes were shamed into purchasing new apparel:

  Ending is better than mending.

  The more stitches, the less riches.

  BNW, Chapter 3, pg. 49

  Orwell, on the other hand, considered war as the means by which a collectivist oligarchy could maintain a hierarchical society by purging the excess production of material goods from the economy; thus, keeping the masses impoverished and ignorant by denying them the surplus “spare time” that is afforded via the convenience of modern technology:

  The essential act of war is destruction, not necessarily of human lives, but of the products of human labour. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent.

  — Emmanuel Goldstein, ”1984”: part 2, chapter 9

  

  The futuristic societies envisioned by Huxley and Orwell, additionally, both discouraged romantic love, yet diverged on the subject of sex. As mentioned earlier, Brave New World treated sex as a “pressure relief valve” remaining constantly open in order to release any negative emotions like suspicion, distrust, jealousy, rage or envy. “Everyone belonged to everyone else”, so there was no need for secrets. Even children were encouraged to sexually experiment guilt free. Of course, sex was meant to be enjoyed only as a means of pleasure in Brave New World; as procreation was considered an anathema by the people and beneath the dignity of mankind.

  In Orwell’s dark dystopia, however, promiscuous sex was encouraged among the proletariat and the Ministry of Truth even had a pornography division called “Pornosec”, which distributed obscene media for consumption by the Proles alone. Conversely, and also as mentioned prior, the members of the INGSOC party were required to abstain from sex; except for married couples attempting to procreate solely on behalf of the government.

  In reading both books, it was also fascinating to see how both Huxley and Orwell painted their female protagonists, Lenina Crowne and Julia, respectively, as shallow nymphomaniacs.

  Nevertheless, the procreative sterilized purity and casual sexual promiscuity of Brave New World along with 1984’s hierarchical rationing of sex, combined with the twisted morality of the INGSOC Party, represented the power of government invading into the most personal means of expression, and engenderment, between individuals of both worlds.

  The concept of “everyone belongs to everyone else” in Brave New World allowed intimate acts to be considered merely as trivial recreation whereas the Party’s power over copulation in 1984, created a sense of fatalism within Winston and Julia as they made love knowing they were “the dead”.

  In spite of any differences, both scenarios were the end result of extreme philosophical collectivism manifested into distorted and perverse destinies of speculative, future populations.

  The Future is Now

  For reasons described heretofore, many might consider Brave New World to be a utopian dream. In the context of individual autonomy, however, as well as the pursuit of truth, the opportunity for personal self-actualization, the dilemma of ethical considerations and the governmental dispensation of immoral law; Huxley’s vision of the future removes the lid of a veritable Pandora’s Box of questions. In reality, the societal structure as delineated in Brave New World would greatly resemble what could be called a “prison of pleasure” and, perhaps, even a “penitentiary of profligate practicality”.

  Applying the same philosophical critique of 1984, and in similar fashion, Orwell’s nation-state of Oceana would be considered as a bona fide dystopian “prison of fear”.

  As a matter of fact, both societies portray prisons of man’s own making, formed by governments following their own directions toward their respective future destinations. To say it another way: The road to hell is actually paved with bad intentions. As the Inner Party member (and administrator of torture), “Obrien”, admitted to Winston Smith in Room 101 of The Ministry of Love:

  We know that no one ever seizes power with the intention of relinquishing it.Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.

  – Obrien, ”1984”: part 3, chapter 3

  Both power structures in Brave New World and 1984 chose to diminish individual rights in order to achieve societal stability. To the governments of both super-states, their citizens were considered as mere “means to an end”; namely, the continuation of power.

  Now I will tell you the answer to my question. It is this. The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness; only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that.

  – Obrien, ”1984”: part 3, chapter 3

  This is a perfect description of mankind striving to be as gods; an attempt to create metaphysical law from carnal desire. Foregone were the virtues of mercy, humility, temperance, autonomy, self-reliance, and restraint.

  Mustapha Mond, one of ten world controllers in Brave New World and the evil Obrien of 1984’s nation of Oceana, both knew what they were doing. They were fully conscious in order to exert complete control and ensure the continuation of their respective, fictional nation-states.

  But, could this type of power consolidation occur in the real (non-literary) world?

  To answer that question one only needs to study history then, go turn on all of the various “telescreens” in their private homes: Televisions, smartphones, tablets, lap-taps and desktop computers. Tyrannical regimes have been centralizing and fortifying ramparts of power from the time man first crushed grapes. And, obviously, as the exiled enemy of the State, Edward Snowden, has revealed, modernity is no antiserum to the cancerous systematization of power.

  When considering the prosperous technological paradise of Brave New World, where the societal elite had unrestricted access to intercontinental transportation and private helicopters; where even the lower classes enjoyed pampered lives of perennial comfort, ceaseless entertainment, and eternal recreation; as compared to the dingy, post-apocalyptically war-torn, third-world existence of 1984; it becomes difficult not to view both Huxley and Orwell as prophets.

  Indeed, both futures have come to pass and are merely economically separated and dispersed into diverse geographic locations.

  Today, it is the westernized cultures of the world, including Asian nations like Japan and South Korea, that more closely resemble Brave New World, whereas vestiges of 1984 can be seen in the eastern bloc communist countries, China, North Korea and the Islamic societies of the middle-east.

  Although Adam Smith’s “invisible hand” of Capitalism had created a rising economic tide that lifted many boats; much of the world’s population still languishes in squalor and will never rise from the muck.

  Moreover, even the modernized nations today have sacrificed individual freedom upon the altar of Collectivism as political correctness stifles free speech; families suffocate beneath mountains of debt and United Nations Agenda 21 policies release a deluge of regulations causing extra-governmental autonomous innovation to collapse before the inexorable, gravitational pull of the hive-mind.

  Corporations like Amazon, Google, Microsoft, Samsung and Apple have become the eyes and ears of Big Brother who is always watching, and ever listening.

  To the sounds of mouse-clicks, once free people have “accepted” the “terms” of their surrender and have forfeited their liberty in the name of convenience. Like buzzing insects, the citizens of modern societies are caught in silicon honey traps mortgaged with plastic and electronically powered via USB cable nooses wrapped tightly around their collective throats.

  The Technocratic Powers That Be wield weapons far more powerful than any time prior in history and soon, people will wake up to realize the electronic buzzing sound ringing in their ears was not emanating from their own wings, but rather, it was merely the sound of drones over their heads.

  Like in Brave New World, science now rules supreme over ethics as medical professionals sell fetus organs to advance the cause of genetic research. The United States currently leads the world in illegal drug use and consumes near all of the global opioid supply; according to U.S. Surgeon General Vivek Murthy:

  In most countries, the use of opioid prescriptions is limited to acute hospitalization and trauma, such as burns, surgery, childbirth and end-of-life care, including patients with cancer and terminal illnesses. But in the United States, every adult in America can have “a bottle of pills and then some.

  Just as 1984’s Ministry of Truth purveyed pornography to the Proles, statistics show at least 35% of all internet downloads and at least 30% of all data transferred across the internet are porn-related. Also similar to Huxley’s Brave New World, sex runs rampant throughout the modernized nations as cases of sexually transmitted disease have reached a record high in the United States.

  In correlation to the ever-expanding gulf between rich and poor, strict adherence to orthodoxy now determines how high one can rise in the societies of the westernized nations, as political correctness defines the faith of the pantheistic disciples of Mother Earth in the form of Gaia worship; and social hierarchy is increasingly determined via the identity politics of the collectivist left. The American body politic has now witnessed the rise of the warrior cop and the militarization of domestic law enforcement, as interminable wars are eternally fought on foreign shores and sovereign nations are bombed under false pretense.

  Even 1984’s “Victory Gin” has manifested in the form Russian Vodka within the eastern nations, as Oceania’s type of man-made orthodoxy silently drowns the human spirit in devastating despair, while contorted moralities overtake both the Christian and Islamic societies of the modern age.

  Orwell defined “doublethink” as:

  the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them

  — Emmanuel Goldstein, ”1984”: part 2, chapter 9

  Only in wealthy westernized nations do billionaires own multiple mansions, fly private jets and ride in eight-cylinder limousines to climate-change conferences where policies are decreed to lower the carbon footprint of the proletariat. Only in wealthy westernized nations, do ever-increasing numbers of women consider white men to be pigs while simultaneously striving to be their equals. And, only in the wealthy Christian nations of the northern hemisphere will citizens support a women’s right to third-trimester abortions, while rigorously and righteously battling for legislation to save endangered dung beetles.

  Throughout Islamic societies, drinking alcohol and gambling is forbidden, but the governments and their citizens gladly tolerate canings, whippings, lashings, honor killings, suicide attacks, and the genital mutilation of young girls.

  This does NOT prevent, however, the citizens of the wealthy Christian nations in the West to welcome with open arms, and in the name of “tolerance”, the pervading flood of Islamic immigrants.

  The writings of Huxley and Orwell resonate by the echoes of history, over the canyons of time, and to the very cliff upon where mankind now stands. Propaganda daily spews via the machinations of five corporations which control 90% of all mainstream media channels. These companies toe the war-party line and wield their great powers of disinformation to contort facts or even censor the failures of the politicians whom they favor while, simultaneously, attacking their political enemies with lies and innuendo; even to the point of creating a phony election hacking narrative to satisfy their radioactive lust for war with nuclear powered enemies.

  Even the characters of both Brave New World and 1984 are resonant of familiar archetypes from days gone by. Brave New World portrayed the character Bernard Marx as being short like Hitler, with a small man’s inferiority complex and complete with the surname of Karl Marx, the eponymous founder of Marxism.

  The noble sounding Lenina Crowne’s name contains the surname of Vladimir Lenin, and Orwell’s portrayal of Julia does not seem overly diverse from former President’s Obama’s vision of “The Life of Julia”. Even the mustachioed, evil-eyed Big Brother from 1984’s dystopian nation of Oceana, looks eerily similar to just about every other tin-pot dictator who ever walked the earth.

  

  Art imitating life? Indeed.

  Yet the irony fails to impress America’s young social justice warriors of the Millennial generation who have been raised on a steady diet of socialism, political correctness, and participation trophies; a far cry from the rugged individualists of previous American generations. In the 2016 U.S. Democratic Party Primaries, and with the same sense of vague dissatisfaction as exhibited by Huxley’s Bernard Marx, millions upon millions of rainbow worshipping Snowflakes, old and young alike, turned out in force to show their support for another Bernard: Bernard Sanders, a redistributionist of the line of Robin Hood who, in the spirit of Santa Claus, offered free college educations to all of Uncle Sam’s children.

  Sadly, Big Brother is here to stay and, with time, he will only grow more bigly; regardless of any transitory elected politicians in the governments of the world’s “sovereign” nations today.

  Although Aldous Huxley and George Orwell valiantly spun fictional narratives in order to warn the real world’s future citizens, they were not alone in their efforts.

  On January 17, 1961, former President Dwight D. Eisenhower warned of an ever-encroaching “Military Industrial Complex” in his farewell address to the nation:

  In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

  Exactly 100 days after Ike’s farewell, on April 27, 1961, John F. Kennedy spoke before the American Newspaper Publishers Association in an address that later became known as his “Secret Society” speech. In that address, he stated the following:

  For we are opposed around the world by a monolithic and ruthless conspiracy that relies on covert means for expanding its sphere of influence: on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations. Its preparations are concealed, not published. Its mistakes are buried not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. Without debate, without criticism, no Administration and no country can succeed– and no republic can survive. That is why the Athenian lawmaker Solon decreed it a crime for any citizen to shrink from controversy.

  Thirty months after that speech, President Kennedy was assassinated in Dallas, Texas on November 22, 1963.

  

  Many people consider Kennedy to have been the last American president not controlled by a financial global elite hell bent on world domination.

  In one of the twentieth century’s minor ironies, Aldous Huxley died on the very same day that John F. Kennedy was killed. It was also the exact day C.S. Lewis, the British author, and Christian apologist, passed from this earth.

  Coincidence? Only God knows.

  Regardless, by 1984 all had been forgotten; and, in a Brave New World, none of it really matters anyway.

  

• The Army's Next High-Tech Assault Rifle Will Pack A Punch Like A Tank

  The United States Army is planning for decades of hybrid wars across multiple domains — space, cyberspace, air, land, and, maritime.

  Back in October, we dissected the Army’s latest Training and Doctrine Command report, which highlights the next round of hybrid wars could start somewhere around 2025 and last through 2040.

  

  Currently, the Army is in a transitional period before the next round of wars begin. In doing so, the Army has made it clear that it will replace its legacy M249 SAW and the M4 Carbine, with a lightweight and higher chamber pressure assault rifle.

  It now appears the Army has selected a new high-tech assault rifle that can release a high rate of specialty designed bullets with as much chamber pressure as an M1A2 Abrams tank, to pierce through the world’s most advanced body armor.

  The LSAT (Lightweight Small Arms Technologies) light machine gun is a powerful weapon produced by the AAI Corporation, an aerospace and defense development and manufacturing firm, located in Hunt Valley, Maryland. Textron acquired AAI in 2007 and currently operates as a unit of Textron Systems Corporation.

  Textron provides more information about the LSAT light machine gun: 

  

  Col. Geoffrey A. Norman, force development division chief at Army HQ, told Task & Purpose, “the service plans on fielding a Next Generation Squad Automatic Rifle (NGSAR) — the first version in the Army’s Next-Generation Weapons System that chambers a round between 6.5mm and 6.8mm — as a potential replacement for its 80,000 M249 SAWs starting in fiscal 2022 rather than the original target date of fiscal 2025.”

  

  Norman said the NGSAR will weigh less, shoot farther, and pack more punch than any the military’s existing small arms. More importantly, the colonel harped on the fact the chamber pressure of the weapon is far superior than any other light machine gun in the world, which means, a bullet from the machine gun can penetrate the most advanced body armor from around 600 meters. Norman hopes this high-tech weapon will be integrated into a fire team or squad “that fires a small bullet at the pressure equivalent to what a tank would fire.”

  “The chamber pressure for the standard assault rifle is around 45 KSI [kilopound per square inch], but we’re looking for between 60 and 80 KSI … the chamber pressure when an M1 Abrams tank fires is on that order,” Norman told Task & Purpose. “We’re looking to reach out around 600 meters and have lethal effects even if the target is protected by body armor.”

  Norman told Task & Purpose that the new lightweight machine gun is in trial tests by the Soldier Lethality Cross-Functional Team at Fort Benning, Georgia. Soldiers are testing the advanced weapon with a 7.62mm XM11158 Advanced Armor Piercing (ADVAP) round. The army is split between the 5.56mm and 7.62mm round but wants to find a happy medium between both.

  “The challenge of the 5.56mm is that it doesn’t have enough mass [to defeat enemy body armor],” Norman said, referring to Chief of Staff Gen. Mark A. Milley’s April 2017 testimony before lawmakers on the Army’s growing ammo problem.

  

  “But the challenge with 7.62mm ammo is that it has too much mass and not enough propellant. The right solution is somewhere between the two, where you have enough mass to penetrate but you’re still moving fast enough,” he added.

  

  Task & Purpose says the Army has spent a great deal of time searching for the next generation of assault rifles: 

  But the real heart of the NGSW program is the fire control system, developed independently from the receiver and chamber. While the Army has spent years evaluating off-the-shelf options for soldiers’ next assault rifle — see the Interim Combat Service Rifle program aborted in November due to weight concerns rather than budget jousting — Norman characterized the proprietary fire-control system as a miniaturized version of the systems utilized by ground vehicles and aviation platforms.  

  “We’re exploring several options to ensure that what the gun aims at, it actually hits,” Norman said. “The system will adjust and potentially only fire when the muzzle will line up with its target. It will take into account atmospheric conditions, even automatically center the weapon using an internal system. We’re looking to get these capabilities ready as soon as possible.”

  Task & Purpose further states the hard release of the light machine gun is in 2022: 

  The Army’s hard target of a 2022 fielding may seem ambitious, especially given the maddeningly batshit nature of defense acquisition. But the service isn’t the only one putting the NGSW in the crosshairs: According to Norman, the Corps is also interested in adopting the NGSAR alongside the M27 and M1101 CSASS sniper rifle the Army has eyed in recent years. And with the campaign against ISIS in close-quarters environs like Iraq and Syria winding down, soldiers and infantry Marines could use the range and the punch of the system sooner rather than later.  

  “We’ve got support from Congress and the Secretary of Defense as part of our close combat strategic portfolio review,” Norman told Task & Purpose. “We’re not going to replace all 80,000 SAWs right away — but the intent is to get this AR variant out to infantry squads as soon as possible.”

  

• 'Russiagate' Is Revealing Alarming Truths About America's Political-Media Elites

  Authored by Stephen Cohen via The Strategic Culture Foundation,

  Its allegations and practices suggest disdain for American institutions, principles, best interests, and indeed for the American people…

  

  Stephen F. Cohen, professor emeritus of Russian Studies and Politics at NYU and Princeton, and John Batchelor continue their (usually) weekly discussions of the new US-Russian Cold War. (Previous installments, now in their fourth year, are at TheNation.com.)

  The nearly two-year-long series of allegations and investigations now known as “Russiagate” were instigated by top American political, media, and (probably) intelligence elites (mostly Democratic or pro-Democratic, but not only). What they have wrought suggests profoundly disturbing characteristics of people who play a very large role in governing this country.

  Cohen specifies six such barely concealed truths, which he and Batchelor then discuss.

  1. Russiagate promoters evidently have little regard for the current or future institution of the American presidency.

  At the center of their many allegations is the claim that the current president, Donald Trump, achieved the office in 2016 because of a conspiracy (“collusion”) with the Kremlin; or as a result of some dark secret the Kremlin uses to control him; or due to “Russian interference” in the election; or to all three. Which means, they say outright or imply daily, that he is some kind of Kremlin agent or “puppet” and thus “treasonous.”

  Such allegations are unprecedented in American history. They have already deformed Trump’s presidency, but no consideration is given to how they may affect the institution in the future. Unless actual proof is provided in the specific case of Trump—thus far, there is none—they are likely to leave a stain of suspicion (or similar allegations) on future presidents. If the Kremlin is believed to have made Trump president and corrupted him, even if this is not proven, why not future presidents as well?

  That is, Russiagate zealots seek to delegitimize Trump’s presidency, but risk leaving a long-term cloud over the institution itself. And not only the presidency. They now clamor that the Kremlin is targeting the 2018 congressional elections, thereby projecting the same dark cloud over Congress, as some embittered losers are likely to blame Putin’s Kremlin.

  2. These same Russiagate promoters clearly also have no regard for America’s national security.

  This is revealed in three ways:

  1. By loudly and regularly proclaiming that Russia’s “meddling” in the 2016 US presidential election was “an attack on American democracy” and thus “an act of war,” comparable to Pearl Harbor and 9/11, as recently inventoried by Glenn Greenwald, they are literally practicing the dictionary meaning of “warmongering.” Can this mean anything less than that Washington must respond with “an act of war” against Russia? Tellingly, Russiagaters rarely if ever mention the potentially apocalyptic consequences of war between these two nuclear superpowers.

  2. Still more, by their Russiagate accusations against Trump, whom they characterize as a “mentally unstable president,” they risk prodding or provoking the president to undertake just such a war against Russia in order to demonstrate that he is not the “Kremlin’s puppet.”

  3. Meanwhile, by repeatedly stating they do not trust Trump to negotiate with Russian President Putin, Russiagate zealots severely limit his capacity, possessed by all American presidents since the onset of the atomic age, to resolve potential nuclear crises through diplomatic means rather than by military action, as President John F. Kennedy did in the 1962 Cuban missile crisis. (Imagine, Cohen adds, the outcome had Kennedy been so assailed by the allegations being leveled against Trump today.)

  In short, as Cohen has argued previously, Russiagate and its elite adherents are now the number-one threat to American national security, not Russia itself.

  3. Having found no factual evidence of such a plot, promoters of Russiagate have shifted their focus from the Kremlin’s alleged hacking of e-mails at the Democratic National Committee to Russia’s social-media “attack on our democracy.” In so doing, they reveal something bordering on contempt for American voters, for the American people.

  A foundational principle of theories of democratic representative government is that voters make rational and legitimate decisions. But Russiagate advocates strongly imply—even state outright—that American voters are easily duped by “Russian disinformation,” zombie-like awaiting a signal as how to act and vote. The allegation is reminiscent of, for people old enough to remember, the classic Cold War film “Invasion of the Body Snatchers.” But, Cohen proposes, let the following representatives of America’s elite media speak for themselves:

  According to Washington Post columnist Kathleen Parker, Russia social-media intrusions “manipulated American thought.… The minds of social media users are likely becoming more, not less, malleable.” And this, she goes on, is especially true of “older, nonwhite, less-educated people.” New York Times columnist Charles Blow adds that this was true of “black folks.” Times reporter Scott Shane is entirely straightforward, writing about “Americans duped by the Russian trolls.” And Evan Osnos of The New Yorker spells it out without nuance: “At the heart of the Russian fraud is an essential, embarrassing insight into American life: large numbers of Americans are ill-equipped to assess the credibility of the things they read.”

  Cohen emphasizes (though this is hardly necessary) that these are lead writers for some of America’s most elite publications. He adds, their apparent contempt for “ordinary” Americans is not unlike a centuries-old trait of the Russian intelligentsia, which held the Russian narod(people) in similar contempt, while maintaining that it therefore must lead them, and not always in democratic ways.

  4. Russiagate was initiated by political actors, but the elite establishment media gave it traction, inflated it, and promoted it to what it is today.

  These most “respectable” media include The New York Times, The Washington Post, The New York Review of Books, The New Yorker, and, of course, CNN and MSNBC, among others. These media outlets constantly proclaim themselves to be factual, unbiased, balanced, and thus another essential component of American democracy—a “fourth branch of government.”

  But that has been far from the case in their reporting and commentary on Russiagate. Their combined loathing for Trump and “Putin’s Russia” has produced one of the worst episodes of media malpractice in the history of American journalism. This requires a special detailed study, though no media critics or journalism schools seem interested. But a somewhat close reader of these mainstream newspapers, and television “news” viewer, will note their selective, disproportionate coverage of some stories to the exclusion of others; the prejudicial language and prosecutorial slant often employed; the systematic violation of journalistic due process and presumption of innocence; the equal exclusion of contrary “sources” and “expert” opinions in their pages and on their televised panels; and other disregard for long-established journalistic standards.

  Nor are these elite media outlets above slurring the reputations of people who dissent from their prosecutorial coverage of Russiagate. Very recently, for example, The New York Times traduced a Facebook vice president whose own study suggested that “that swaying the election was *NOT* the main goal” of Russian use of Facebook. Even more revealing, a brand name of the liberal-progressive MSNBC, John Heilemann, suggested on air, referring to Congressman Devin Nunes, “that we actually have a Russian agent running the House Intel Committee on the Republican side.” The Democratic senator being interviewed, Chris Murphy, was less than categorical in brushing aside the “question.”

  And not to be overlooked, these mainstream media have done little if anything to protest the creeping Big Brother censorship programs now being assiduously promoted by government and private institutions in order to ferret out and ban “Russian disinformation,” something of which any American dissenter from the orthodox Russiagate narrative might be “guilty” entirely on his or her own. Indeed, leading media have abetted and legitimized these undemocratic undertakings by citing them as legitimate sources.

  Cohen leaves to others to decide what the Russiagate role of establishment media reveals about the elites who run them.

  5. Briefly regarding the obvious role being played by the Democratic Party, or at least by its leading members, in Russiagate…

  whatever the serious commissions and omissions of the Republican Party may be: In a word, as it looks ahead to congressional elections in 2018, this essential component of the American (perhaps lamentably) two-party democratic system is now less a vehicle of positive domestic and foreign-policy alternatives than a party promoting conspiracy theories, Cold War, and neo-McCarthyism. (According to conversations with a number of local candidates, these electoral approaches are less their initiatives than cues, or directives, coming from high party levels—that is, from the Democratic elite.) And this leaves aside the Russiagate social-media narrative that blames the Kremlin for “divisions” in America that have pitted American citizens, and Democrats and Republicans, against each other for decades, often in “exacerbated” ways, not merely since 2016.

  6. Finally, but no less revealing…

  American elites have long professed to be people of civic courage and honor. But Russiagate has produced very few “profiles in courage” – people who use their privileged positions of political or media influence to protest the abuses itemized above.

  Hence another revelation, if it is really that: America’s elites are composed overwhelmingly not of “rugged individualists” but of conformists – whether that is due to ambition, fear, or ignorance hardly matters.

  

• China Prepares For New Cold War With Massive Military Buildup

  As we have been documenting for quite some time, China has been not-so-quietly transforming itself into a serious threat to the West – beefing up its military to contend with the Washington’s air, sea, space and cyber weapons capabilities, while scrapping constitutional term limits for President Xi Jinping. 

  Since 2000, China has built more submarines, destroyers, frigates and corvettes than Japan, South Korea and India combined. To put this further into perspective, the total tonnage of new warships and auxiliaries launched by China in the last four years alone is significantly greater than the total tonnage of the French navy. –IISS

  Analysts on both sides of the Pacific believe Xi’s aggressive military buildup and power grab have put Beijing on a direct course for conflict with Washington – with the heavy U.S. presence in the region setting the stage for a new Cold War.

  

  “In the Asia-Pacific, the dominant role of the United States in a political and military sense will have to be readjusted,” said Cui Liru, former president of the China Institutes of Contemporary International Relations, a think tank under the Ministry of State Security that often reflects official thinking. “It doesn’t mean U.S. interests must be sacrificed. But if the U.S. insists on a dominant role forever, that’s a problem.” Cui added that it was “not normal for China to be under U.S. dominance forever. You can’t justify dominance forever.” 

  “China’s military objective is to break through the first chain of islands,” said Mr. Cui, referring to the waters beyond Japan and Taiwan where the Chinese military wants to establish a presence. –NYT

  China’s navy is also deploying further from home, including Europe, while their base in the Eastern African country of Djibouti will enable more naval deployments. In terms of military computing technology, China has also set out on an ambitious course, as vast resources have been sunk into “extremely high-performance computing and quantum communications,” which, along with their weapons advancements and overall defense capabilities mean the country is no longer merely “catching up” with Western progress. 

  Meanwhile, Xi and other Chinese officials are of the firm belief that the United States is a superpower in decline – which will require China to step into the vacuum left behind. 

  “It is now clear Xi’s agenda to rebuild an Asian order with China at its center is here to stay,” said Hugh White, a scholar and former defense official in Australia who has argued that the United States must be prepared to share power with China in the Asia-Pacific region.

  “I think Xi is impatient,” Mr. White added. “He wants China to be the predominant power in the Western Pacific. He wants to do it himself and for it to go down in history as his achievement. That makes him formidable.” –NYT

  In a keynote speech to China’s Communist Party Congress last October, Xi promised to make China’s armed forces world-class by the middle of the century. In a January speech, Xi told thousands of Chinese soldiers to “neither fear hardship nor death,” during an inspection visit Wednesday to the People’s Liberation Army’s (PLA) Central Theater Command in northern Hebei province, according to the official Xinhua news agency.

  Xi advised the military to continue improving upon its equipment, tactics, technology, and combat readiness by engaging in “real combat training.” The Chinese president – for life, spoke of the need to “create an elite and powerful force that is always ready for the fight, capable of combat and sure to win in order to fulfill the tasks bestowed by the Party and the people in the new era.”

  He [Xi] has accelerated the military’s plans to build a blue-water navy, increased spending on weaponry in outer space, and established China’s first military bases abroad. He has promoted a global infrastructure program to extend Beijing’s influence and ignored Western concerns about human rights, which have diminished under the Trump administration. –NYT

  Indeed, with the rollout of stealth jets, new high-tech naval artillery such as a “secret railgun,” and Chinese media reports bragging about aggressive maneuvers that “dare to shine the sword,” our trading partner to the West has made it perfectly clear that they intend on being a dominant global force, both economically and militarily.

  

  Is #China‘s #PLAN About to Test a #Railgun at Sea ? https://t.co/WuCnkOzkfh

  — NavyRecognition (@NavyRecognition) January 31, 2018

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

  Last November, we reported on a secretive hypersonic weapons program, which if successful would be able to hit the United States in under 14 minutes. 

  “China and the US have started a hypersonic race,” said Wu Dafang, professor at the school of aeronautic science and engineering at Beihang University in Beijing who received a national technology award for the invention of a new heat shield used on hypersonic vehicles in 2013.

  

  

  And just two weeks ago the International Institute for Strategic Studies reported that China’s rapid military modernization is “remarkable,” and is set to challenge the West on several fronts.

  “China’s emerging weapons developments and broader defence-technological progress mean that it has become a global defence innovator” says Dr. John Chipman, Director-General and Chief Executive of the London-based think tank. Of note, Chipman points out that China’s Chengdu J-20 low-observable combat aircraft is set to challenge America’s “monopoly on operational stealthy combat aircraft.”

  

  

  The IISS report also notes that China’s expanding array of advanced guided-weapons projects, such as the PL-15 extended range air-to-air missile which could enter service this year. “This weapon appears to be equipped with an active electronically scanned array radar, indicating that China has joined the few nations able to integrate this capability on an air-to-air missile,” reports Chipman.

  

  Trump and China

  Trump has clearly changed his tune Chinese trade – declining to label them a currency manipulator last year because the “timing was bad,” and refusing to impose sanctions – however the U.S. President has committed to beefing up defenses with a new nuclear policy calling for the revitalization of the nation’s nuclear arsenal, while also reaching out to forge a stronger “Indo-Pacific” coalition with Australia, India and Japan in order to counter China’s rapid rise. 

  “Trump is obsessed with strategic forces,” said Shi Yinhong, a professor of international relations at Renmin University. “He is determined to maintain American military predominance in face of China’s strategic buildup. That will make the relationship more profoundly confrontational.”

  Chinese analysts downplayed Trump’s efforts, however, noting that the United States has been unwilling to fund the projects. “In the short term,” said Shi, “China does not care about it because the ability to form a real coalition is limited.”

  Meanwhile, many feel that President Trump will be pressured into taking a harder line with China going into the midterm elections – as Democrats have signaled that they will compare his campaign promises with his softline approach to a country he spent much of the 2016 election railing against. 

  “Now that it’s clear that President Xi isn’t going anywhere, getting tough on China is even more of an imperative,” said Senator Chuck Schumer (D-NY). “If President Trump and Congress don’t crack down on their rapacious trade practices,” he added, “China will continue eating our lunch for years to come.”

  And while Wall Street continues to broker lucrative investment-banking deals with the Chinese government, US manufacturers are growing increasingly frustrated at the prospect of competing with Chinese businesses who steal corporate secrets and regularly undercut their competition. 

  Manufacturers tend to be more fed up than Wall Street, which continues to do lucrative investment-banking business with the Chinese government. Technology companies have soured on China, though the market is so vast that they are still willing to consider concessions they would make nowhere else in the world.

  The Trump administration reflects those fissures. Advisers like Gary D. Cohn, director of the National Economic Council, and Treasury Secretary Steven Mnuchin, who both worked at Goldman Sachs, have persuaded Mr. Trump to hold off on tough trade measures against China in the past. –WSJ

  Infiltrating Universities

  On the national security front, the Trump administration has been using “Cold War-like terms,” referring to China as a revisionist power that will try “to erode American security and prosperity.” 

  This extends to U.S. colleges, which according to FBI Director Christopher Wray, are underestimating the ability for Chinese students to gather sensitive national security intelligence. Public universities have long been instrumental in the development of both offensive and defensive capabilities for a multitude of US agencies such as the Department of Defense and DARPA.

  “The reality is that the Chinese have turned more and more to more creative avenues using non-traditional collectors (of information),” Wray said during the Senate Intelligence Committee’s annual open hearings on the greatest threats to the country. 

  “The use of non-traditional collectors, especially in the academic setting—whether it’s professors, scientists, students—we see in almost every field office that the FBI has around the country, Wray said, adding “They’re exploiting the very open research-and-development environment that we have, which we all revere, but they’re taking advantage of it.’

  Specifically, the FBI is “watching” programs at dozens of Confucius Institutes, funded by China’s Ministry of Education that are widely embedded within American universities and public schools to teach the Mandarin language.

  The Confucius Institute program, which started operations in 2004, has been the subject of vast criticisms, concerns, and controversies during its international expansion. Many such concerns stem from the program’s close relationship to the Communist Party of China.

  According to the South China Morning Post, some 350,000 Chinese students are actively enrolled at American universities, which is about thirty-five percent of the one million foreigners, said the Institute of International Education.

  Bottom line: China’s rapid military buildup and commitment to becoming a dominant global force will require that the United States either cede power in Asia, or face another Cold War of steadily increasing temperatures. Keep in mind – times are good. The next recession, whenever that might occur, will most certainly push already-strained economic and military relations between the Washington and Beijing into uncharted territory.

  

• There Are Fewer School Shootings Now Than During The 1990s

  Authored by Ryan McMaken via The Mises Institute,

  Now that I have several children, I’m often in the company of other parents who talk about the way things “used to be.” When the issue of child safety comes up, I hear parents sadly shake their heads and say things like “it’s not like it was when we were kids…the world is so much more dangerous now.” 

  Usually, the sentiment behind this idea is that there are more murders now than there used to be. 

  Now, I’m not exactly known for being a Pollyanna, but I am willing to admit when things are not, in fact, getting worse. 

  And when it comes to things like homicides, there is no evidence that things are getting worse. It is indeed true that things aren’t like they were “when we were kids,” but that’s a good thing. There were far more homicides in the United States during the 1980s and 1990s than there are today. Things were even worse than that during the 1970s. In fact, the homicide rate in the US was cut in half between 1991 and 2014. And while the homicide rate has inched up over the past two years, it is nowhere near where it was “when we were kids.” 

  

   

  For anyone familiar with these trends, it should not be shock to hear that a subset of those homicides — school shootings — have decreased over that period as well. 

  In response to the latest shooting in Florida, Northeastern University released a preview of new research by James Alan Fox slated for publication this fall which shows, quite clearly, that there is no growing trend in school shootings. The university notes: 

  Mass school shootings are incredibly rare events. In research publishing later this year, Fox and doctoral student Emma Fridel found that on average, mass murders occur between 20 and 30 times per year, and about one of those incidents on average takes place at a school.

  Fridel and Fox used data collected by USA Today, the FBI’s Supplementary Homicide Report, Congressional Research Service, Gun Violence Archive, Stanford Geospatial Center and Stanford Libraries, Mother Jones, Everytown for Gun Safety, and a NYPD report on active shooters.

  Their research also finds that shooting incidents involving students have been declining since the 1990s.

  Four times the number of children were killed in schools in the early 1990s than today, Fox said.

  “There is not an epidemic of school shootings,” he said, adding that more kids are killed each year from pool drownings or bicycle accidents. There are around 55 million school children in the United States, and on average over the past 25 years, about 10 students per year were killed by gunfire at school, according to Fox and Fridel’s research.

  In a February 22 article, New York Magazine came to a similar conclusion, noting: 

  Schools in the United States are safer today than at any time in recent memory. Criminal victimization in America’s education facilities has declined in tandem with the nation’s collapsing crime rate. Meanwhile, as of 2013, the year after the Newtown massacre, mass shootings accounted for only 1.5 percent of all gun deaths in the United States, or 502 total fatalities. 

  New York was drawing on research from the US Justice Department showing that “school victimization” rates have plummeted since 1992, as a graph provided by the Justice Department shows: 

  

   

  Fox, the author of the Northeastern University research, does not oppose policy changes like increasing the age for purchasing guns. But he notes it’s unlikely to impact the numbers very much: 

  The thing to remember is that these are extremely rare events, and no matter what you can come up with to prevent it, the shooter will have a workaround,” Fox said, adding that over the past 35 years, there have been only five cases in which someone ages 18 to 20 used an assault rifle in a mass shooting.

  Ironically, those most familiar with the data on shootings are often less likely to assume that gun control measures are are an easy solution to the problem of homicide. 

  For example, last year, Leah Libresco at the Washington Post — hardly an organ of the NRA — concluded that gun control measures are of extremely limited value:

  …my colleagues and I at FiveThirtyEight spent three months analyzing all 33,000 lives ended by guns each year in the United States, and I wound up frustrated in a whole new way. We looked at what interventions might have saved those people, and the case for the policies I’d lobbied for crumbled when I examined the evidence…

  I researched the strictly tightened gun laws in Britain and Australia and concluded that they didn’t prove much about what America’s policy should be. Neither nation experienced drops in mass shootings or other gun related-crime that could be attributed to their buybacks and bans. Mass shootings were too rare in Australia for their absence after the buyback program to be clear evidence of progress. And in both Australia and Britain, the gun restrictions had an ambiguous effect on other gun-related crimes or deaths…

  By the time we published our project, I didn’t believe in many of the interventions I’d heard politicians tout. I was still anti-gun, at least from the point of view of most gun owners, and I don’t want a gun in my home, as I think the risk outweighs the benefits. But I can’t endorse policies whose only selling point is that gun owners hate them.

  What Libresco did conclude, was that a host of societal issues are driving much of what we hear about in terms of so-called gun violence. Mental illness, suicide, gang violence, and domestic violence are all important factors that drive gun violence. The problem, Libresco admits, is that simply prohibiting certain types of guns doesn’t really address these issues.

  Accepting the “Crisis” Narrative

  In the wake of last month’s Florida shooting, many opponents of gun control made the mistake of simply accepting the claim that school shootings are getting worse, and are more deadly overall. 

  According to Fox’s research, though, this is simply not the case. And we also certainly know that homicides overall are way down from where they were in the good ol’ days of my youth. 

  These apparent facts, of course, don’t stop even rightwing professional Cassandras like Rod Dreher from authoring articles like this one called “Underestimating American Collapse” which uses school shootings as evidence that American civilization is basically on the brink of collapse:

  Why are American kids killing each other? Why doesn’t their society care enough to intervene? Well, probably because those kids have given up on life — and their elders have given up on them. Or maybe you’re right — and it’s not that simple. Still, what do the kids who aren’t killing each other do? Well, a lot of them are busy killing themselves.

  Maybe American society is in a more perilous position that in the 1980s. But if we’re looking for evidence of that, the homicide data won’t help the argument. Dreher is right to question why American kids are killing each other. But an equally relevant question might also be “why are fewer American kids killing each other now than 25 years ago?”

  School Shootings and Opportunity Cost

  Part of the problem with accepting the crisis narrative is that it ignores other priorities and other problems that may deserve our attention elsewhere. 

  After all, resources for schools — or anything else — are not unlimited, and it is unclear that extremely rare events like school shootings can be put forward as a priority. 

  This problem of priorities can be seen in the fact that cities where snow falls irregularly do not maintain a huge fleet of snowplows. In Naples, Italy last week, for example, the city experienced the largest snowfall it’s seen in 50 years. According to the Daily Mail, the snowfall were seen as a citywide emergency and “[r]esidents have been told not to leave their homes unless it is ‘strictly necessary.'” One man was said to have even frozen to death in the unexpectedly frigid temperatures. 

  Now, if even a few inches of snow can bring the city to a standstill and endanger the lives of residents, why does the city not have far more snow plows than it does? Why is there not a network of emergency workers to ensure that residents are not caught in the cold where they can be injured or even killed by cold temperatures? 

  The answer, of course, is that the opportunity cost of such measures would be extremely high. By maintaining personnel and equipment designed to address a rare snowfall, the city would be foregoing the opportunity to train people or purchase equipment for a wide variety of other activities that are no doubt also deemed essential. 

  While school shootings no doubt have a greater psychological impact than frigid temperatures, it is no less true that spending large amounts of resources on anti-shooting measures carry with them their own costs. 

  Now, in the US, many organizations, both public and private have elected to devote sizable amounts of resources to security. But none of them deny that there is an opportunity cost to doing so. 

  Indeed, opponents of added security in schools have been quick to point out the costs of more security measures. 

  And yet, proponents of more gun control act as if there are no opportunity costs to these measures. In reality, of course, the costs of enforcing government prohibitions can be very high, both in terms of tax dollars and costs imposed upon otherwise law abiding citizens. The drug war has made this quite clear. In the absence of individual gun ownership, professional security will become more necessary, and in many cases more costly. This imposes a real cost on citizens, especially on those who cannot afford professional security. Relying on the police for protection, of course, has been shown to be unwise at best.

  What Are We Doing Right?

  Many observers will still point out that even a small number of school shootings is too many. That’s true enough, but when the multi-decade trend is downward, it would hardly be honest to attempt to frame the current situation as a “crisis.” Indeed the challenge should be to discover what factors have led to the decline in violence, and act accordingly.

  

  Given that gun ownership has greatly increased in recent decades, it may be that the answer lies somewhere beyond a simply government prohibition on guns.

  

• US Sells 210 Javelin Anti-Tank Missiles And Launchers To Ukraine

  Well, it’s finally official – after years of preparation by the Obama administration to provide lethal offensive weapons to Ukraine over the vocal objections of the Kremlin, today the Trump administration announced it would sell Ukraine 210 Javelin anti-aircraft missiles and 37 launchers for $47 million. The sale, which was first reported last December, marks a significant increase in U.S. military support for Ukraine and another major deterioration US-Russian relations, and is the first lethal weapons sale of its kind since the breakout of a Russian-backed proxy civil war against the central government in Ukraine’s eastern provinces.

  As discussed previously, President Trump approved the plan in the days just before Christmas 2017, and began informal notifications with Congress about it. With Thursday’s formal notification, Congress now has 30 days to sink the deal or it will go through, which is expected.

  
  The FGM-148 Javelin Portable Anti-Tank Missile. Image source: US Army. 

  Trump has said the sale represents evidence of his “tougher” stance on Russia than President Barack Obama’s, although according to ABC, the Special Representative for Ukraine Negotiations sought to downplay the significance on Monday.

  “There is what I view as an artificial distinction between lethal and non-lethal military equipment,” Ambassador Kurt Volker said in Washington on Monday, comparing anti-tank missiles to a counter-battery radar that improves targeting to attack and kill an enemy firing mortars. “That’s non-lethal and an anti-tank missile, which sits in a box and doesn’t get used unless you have a tank coming at you, is lethal. Both are clearly defensive weapons.”

  Moscow may disagree, especially since sale is intended to boost Ukrainian military forces as they continue to fight Russian-backed separatists, while U.S. officials argue the U.S. is only supporting Ukraine’s right to self-defense.

  “The Javelin system will help Ukraine build its long-term defense capacity to defend its sovereignty and territorial integrity in order to meet its national defense requirements,” the Pentagon’s Defense Security Cooperation Agency said in a statement Thursday. U.S. personnel will travel to Ukraine to train their military on its use, the agency added.

  * * *

  While Russia has not yet commented on the official notification, Russia’s deputy foreign minister, Sergei Ryabkov,  responded harshly in December when news of the sale first broke.

  “The United States in a certain sense crossed the line, announcing the intention to transfer weapons of direct damaging action to Ukraine,” the statement said, translated from Russian. “American weapons can lead to new victims in our neighboring country, to which we cannot remain indifferent.”

  Kremlin spokesperson Dmitry Peskov said then that the sale “will once again motivate the hotheads” in the Ukrainian government and “unleash bloodshed again.”

  Trump’s approval of the arms deal was a major shift from the Republican party platform, which was amended when Trump was the party’s nominee for president, from supporting “lethal defensive arms” to Ukraine to the more vague “appropriate assistance” — language that ran counter to traditional Republican foreign policy.

  Needless to say, Trump himself promised a reset with Russia, but since taking office, relations with Moscow have not improved.

  * * *

  So is this a deep state victory? The Washington Post previously described that “the decision over whether to allow lethal arms sales to Ukraine had been sitting on Trump’s desk for months” even after The National Security Council presented the president with various options for moving forward “months ago”. But concerning the impetus behind internal White House deliberations to move on the issue, the Washington Post reported:

  Another senior Trump administration official said that Trump personally approved the decision to allow the issuing of the license after being presented a decision memo by Defense Secretary Jim Mattis and Secretary of State Rex Tillerson. While there was never a formal ban on such weapons transfers, the decision was discussed internally as a lifting of the de facto Obama administration restrictions, the official said.

  Congressional anti-Russia hawks have long sought greater long-term military engagement along Russia’s European border, especially after the May 2014 referendum which saw the pro-Russian Ukrainian regions of Donetsk and Luhansk declare independence from Kiev. And though Congress originally authorized weapons sales via the Ukraine Freedom Support Act signed into law in December 2014, the Obama administration never made the decision to actually follow through on the legislation.

  Almost as if Obama “had more flexibility” with Putin than even Trump, who allegedly is only president thanks to Russia…

  But after years of covert American involvement in the Ukrainian proxy and civil war which has raged since 2014 – and which a leaked recording confirmed was precipitated by the US State Department – it appears that neocon hawks like McCain, Cotton, and Corker are finally getting their way. 

  Perhaps more scary in terms of escalating an unnecessary war which has already taken more than 10,000 lives since 2014, the Kiev government and some in Washington are already pushing for putting anti-aircraft weapons in the hands of Ukrainian forces.

  “What we are awaiting and have called for is the provision of lethal defense weapons that are more advanced – a larger package that is under consideration right now, including anti-tank and anti-aircraft missiles,” a Ukrainian official told ABC News. “We are expecting this decision and would welcome it.”

  And as multiple reports have noted in recent weeks, fighting in eastern Ukraine is heating up after a period of relative stalemate and calm, and after general Western media silence on the war. Likely with the announcement of US supplied anti-tank missiles and the additional possibility of US anti-aircraft weapons being openly shipped into the conflict, it will most certainly return to the international and media spotlight.

  

• What's Going Down In China Is Very Dangerous – Part 2

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  One of the more concerning ramifications of China’s recent turn toward a more totalitarian stance at home is what it means for the geopolitical environment in the years ahead. Several people asked in the comment section of Part 1 why I care about what’s going on in China when we have so many serious problems in the U.S.

  

  The reason is because a major shift in the polices of the second largest economy in the world, populated with over a billion people and run by leadership intent on establishing a far more dominant position on the world scale militarily and politically, will affect everyone.

  Government propaganda is one of the most insidious and dangerous things that regularly occurs within human society, and it’s been pervasive in essentially all civilizations to-date. The media’s always a key ally in the dissemination of propaganda, something much of the American public has finally come to understand. The election of Donald Trump despite the U.S media’s unanimous support of Hillary Clinton was the real wakeup call, and has led to incessant calls for platform monopolies like Google and Facebook to censor speech that questions the dominant intelligence agency narratives. There’s nothing more terrifying to an entrenched power structure than a loss of the narrative, and the election of Trump proved to them that they lost it. The American establishment isn’t really afraid of Trump, it’s far more concerned that his election signified a loss of narrative control.

  Narrative is particularly important to lunatics who run a global empire, and the U.S. media’s almost always happy to oblige. For example, the media’s enthusiasm to swallow government propaganda is what led to the Iraq war disaster, in addition to so many other societal tragedies I write about here on a daily basis. While the marriage between U.S. government propaganda and a complicit corporate media has been a demonstrable danger to the world, we shouldn’t for a moment think American propaganda is the only threat. Other powerful governments use it as well, and China is no exception.

  With Russia obsession dominating almost every domestic media headline these days, Americans are woefully ignorant regarding the explicit intentions the Chinese government has for the world. Fortunately, you can get into the mindset of China’s leadership via their state-sponsored media channels. Global Times is one example, and I want to call attention to two recent opinion pieces published there.

  First, from the piece: Constitutional Amendment Responds to New Era:

  It can be argued that the current ruling team of China is progressive and ambitious with clear goals and willingness to take on responsibilities. They want to make contributions to this nation which can stand the test of time.

  Interestingly, in the era of globalization and the internet, although China has stunning economic might, it has not yet become a leading power in terms of ideology and information.

  The most influential value system in the world now is the Western value system established by the US and Europe. It has shaped and affected quite a few Chinese people’s mind-sets. But some key parts of the Western value system are collapsing. Democracy, which has been explored and practiced by Western societies for hundreds of years, is ulcerating.

  As is clear, Chinese officialdom see their anti-democratic, one-party, command and control paradigm with no political freedom as a rival model for the world to accept. They believe the vacuum that will be left by a decadent and declining U.S. empire will provide a perfect opportunity to promote this vision globally. Ignore this all you want, but it’s explicit.

  As interesting as that is, the extremely defensive and insecure way in which the paper subsequently lashed out at Western criticism over its decision to scrap presidential term limits is equally illuminating.

  A perfect example can be seen in the excerpts from the following piece Global Times piece, Solidarity Cornerstone of China in New Era:

  No sooner had the Communist Party of China (CPC) Central Committee made public its proposal to amend the country’s Constitution than the Western media began bad-mouthing China in their usual and various ways. It is worth noting that for some time the Western media have been growing strident in their abuse of Beijing, almost using curse words.

  The biggest reason for all this is that the rise of China has reached a critical point where some Westerners cannot psychologically bear it any longer. They wish to see misfortune befall the country. Even if it might hurt their own interests, they are willing to see China crumble first.

  Such hysteria by some people in the West will subtly influence the way their countries interact with China. It will increase the risks Beijing faces while emerging, and complicate communication between Chinese society and the outside world.

  The author talks about hysteria, but where do you see hysteria? From Westerners criticizing this creepy move toward forever rule, or in the above three paragraphs?

  Here’s some more.

  It is believed that cooperation between China and the West will continue. The normal pattern of Sino-US and Sino-European relations will remain fundamentally unchanged.

  But in the days to come, tough stances against China will find more support in Western nations. Friction between China and the West will become more likely.

  The solidarity of Chinese society will face tests. Pressure from the outside world may activate negative factors at home, which in turn, increase the costs of China maintaining stability.

  Facing external impacts and hostility, the Chinese nation is a community of common destiny. All Chinese people, whether they work for State-owned institutions or not, whether they support the nation’s path or not, even dissidents, are enjoying development opportunities as well as the might of China, which did not come easily. If China collapses the way the outside world wishes, all Chinese people will lose.

  Solidarity is a necessary precondition for China to successfully complete the second half of its modernization. It is the cornerstone of China in the new era. The CPC has made us Chinese all closely connected to each other. Over the years, the authority of the CPC Central Committee and the prosperity of our Chinese society have both risen. The authority of the Central Committee is the most outstanding part of China’s competitiveness. It is the source of the country’s efficiency and ability to mobilize people and make adjustments. It is the thing the outside world most envies about China and the target of Western anti-China rhetoric.

  Chinese society must strengthen its resolve. We must be aware that the world is full of competition. Solidarity is for Chinese the nation’s most crucial political resource and firm support for the CPC Central Committee is the lifeline of China’s long-term unity.

  This is some serious propaganda, with two principle objectives. First, there’s this notion (stated as fact) that the Chinese people would be incapable of progress without the authority of the “outstanding” Communist Party leadership. Second, the author prepares readers for tough times ahead, while also offering assurances that any problems faced within Chinese society are the fault of foreigners, especially Westerners, who apparently want China to collapse. It’s fostering increased nationalism ahead of difficult times, and then lays out who the Chinese should blame. This is very dangerous.

  I know how dangerous this is precisely because I’ve seen my own country’s intelligence agencies and oligarchs do it time and time again. I saw them do it in the run up to the Iraq war, and I see them doing it right now with Russia; blaming Putin for every inconvenient political movement that threatens the neocon/neoliberal establishment.

  Here’s where it gets scary. The press in the U.S. was able to sell the Iraq war despite a relatively robust first amendment and in the face of massive street protests. The war hawk propagandists still got the war they wanted, so what do you think the Chinese government might be able to get away with in a society where zero real dissent is allowed?

  Let me cut to the chase. I expect the global economy to crater once again within the next 12-24 months, and that means everyone. China’s economy is as much a debt fueled house of cards as the U.S., and money printing/bailouts won’t save either of them this time around. As such, I suspect “leaders” around the world, including in both the U.S. and China, will shift blame for internal problems to enemies abroad despite the fact that domestic sociopaths and oligarchs are the true culprits.

  The incentive to shift blame to external forces will be too powerful for politicians to resist, and the press in these respective countries will likely fan such flames (to avoid their own blame and protect their owners). This will vastly increase the odds of unnecessary and dangerous global conflicts. As always, the masses will lose while the elites sit on top deflecting blame to anyone and everyone but them. I really hope we can avoid this situation, but I also can’t ignore the writing on the wall.

  The problem of crooked leadership destroying countries and then starting wars to blame outsiders is as old as human civilization itself. We’ll never escape this trap until we grow up, face reality and refuse to be manipulated into murdering other humans across the world for no good reason.

  As I tweeted earlier today:

  Power plays going on everywhere. From mega governments to mega corporations.

  Concentrations of power are always dangerous and undesirable. The only way out is global, decentralized networks.

  — Michael Krieger (@LibertyBlitz) March 1, 2018

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

  Can humanity rise up and break the vicious cycle? We’ll know soon enough.

  *  *  *

  If you liked this article and enjoy my work, consider becoming a monthly Patron, or visit our Support Page to show your appreciation for independent content creators.

  

• An Apocalyptic Paul Tudor Jones Warns The Fed Is About To Lose Control

  In a striking interview with Goldman’s Allison Nathan, legendary trader Paul Tudor Jones argues that US inflation is set to accelerate sharply, making bonds a very poor investment, and that the Fed must act swiftly to tackle financial bubbles created by prolonged monetary easing.

  Joining such luminaries as Bill Gross and Ray Dalio, who have both claimed the bull market in bonds is over, PTJ joins the choir and warns that “markets disciplined Greece for its budget transgressions; it’s just a matter of time before they discipline us” and as a result he sees the 10-year yields rising to 3.75 percent by year-end as a “conservative” target amid the now traditional and widely discussed bogeymen: supply outweighing demand, economic momentum outpacing the monetary policy response, and “glaring” bond valuations. Oh, and central banks ending the party, of course:

  Beginning next September, when the ECB concludes its asset purchases, the aggregate balance sheet of the main central banks will start contracting after nearly a decade of expansion. That will be a major data break, making it a horrible time to own bonds.

  PTJ also pours cold water on the repeated suggestion that higher yields will lead to more buying from pension funds: “Bond pension buying, for example, is very pro-cyclical. When stock prices rise, pensions reallocate their capital gains from stocks into bonds. As we’ve seen, this depresses the term premium and fuels more gains in the stock market. If and when the Fed raises rates enough to stop and reverse the stock market rise, that virtuous circle predicated on increasing capital gains will reverse, and bonds and stocks will decline together like they did in the 1970s.“

  The biggest factor, however, which is preventing PTJ from owning any risk assets is today’s unnaturally low rates: “with rates so low, you can’t trust asset prices today. And if you can’t tell by now, I would steer very clear of bonds.”

  There is another reason PTJ is not deploying capital: last month’s vol shock was just the beginning:

  In my view, higher volatility is inevitable. Volatility collapsed after the crisis because of central bank manipulation. That game’s over. With inflation pressures now building, we will look back on this low-volatility period as a five standard- deviation event that won’t be repeated.

  When would Tudor buy stocks? “When would I want to buy stocks? When the deficit is 2%, not 5%, and when real short-term rates are 100bp, not negative“… in other words not for a while.

  So what is he buying: “I want to own commodities, hard assets, and cash… The S&P GSCI index is up more than 65% from its trough two years ago. In fact, relative to financial assets, the GSCI is at one of its lowest points in history. That has historically been resolved by commodities putting on a stunner of a show, stoking inflation. I wouldn’t be surprised if that happened again.“

  In other words, PTJ and Gundlach agree on two things: stay away from bonds, and buy commodities.

  But the most notable part of the interview, and where PTJ’s most apocalyptic sentiment shines through, is his description of where he sees Fed Chair Powell right now: as General Custer before the Battle of Little Big Horn, a battle which – at least in the history books – was lost.

  Let me describe to you where I think Jerome Powell is right now as he takes the reins at the Fed. I would liken Powell to General George Custer before the Battle of the Little Bighorn, looking down at an array of menacing warriors. On the left side of the battlefield are the Stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. They have generally been held at bay and well-behaved, but they are just spoiling to show their true color: two-way volatility. They gave you a taste of that in early February. Look to the middle and there waits the army of Corporate Credit, which is also larger than ever relative to the economy, as ultra-low rates have encouraged it to gain in size, stature, and strength. This army is a little more docile right now, but we know its history, and it can be deadly when stressed. And then on the right are the Foreign Currency Fighters, along with the Crypto Tribe, an alternative store of value that only exists because of the games central banks are playing; the opportunity cost of Crypto is so low, why not own some? The Foreign Currency Fighters have strengthened by 10% over the past year. Compounding the problem, they have a powerful, ascending leader, the renminbi, to challenge the US dollar’s hegemony as the reserve currency. All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates.

  So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities. He might take comfort that he is not alone on the battlefield. But then he looks over at the Washington, DC, fiscal battalion and realizes they are drunk on 5% deficit beer. That’s what Powell is facing, whether he recognizes it or not. And how he navigates this is going to be fascinating to watch.

  * * *

  His full must read interview is below:

  Interview with Paul Tudor Jones

  Allison Nathan: You’ve said that you would rather hold a burning coal than a 10-year Treasury. Why?

  Paul Tudor Jones: The bear market in bonds is the natural upshot of the bull market in monetary and fiscal laxity. My view on bonds is based on three major factors. First, there is a huge flow of funds imbalance with supply overwhelming demand. We are in a unique historical situation with the Fed stepping away from the market while the  US government is significantly increasing its auction sizes. I assume bonds will fall until the peak in full Treasury  auction sizes, which I don’t think will be before 2Q2019. At the current pace, next February we might have a quarterly auction of $20bn 30-years vs. $15bn recently. That is so big it will only clear at substantially lower prices.

  Second, economic momentum is now overwhelming the pace of the monetary policy response. We’re in the third-longest economic expansion in history. Yet we’ve somehow managed to pass a tax cut and a spending bill, which together will give us a budget deficit of 5% of GDP—unprecedented in peacetime outside of recessions. This reminds me of the late 1960s when we experimented with low rates and fiscal stimulus to keep the economy at full employment and fund the Vietnam War. Today we don’t have a recession, let alone a war. We are setting the stage for accelerating inflation, just as we did in the late ‘60s.

  Finally, and most importantly, adverse valuations are becoming more glaring. Bonds are the most expensive they’ve ever been by virtually any metric. They’re overvalued and over-owned. Valuations haven’t been that relevant in recent years because of central bank manipulation outside of the US, but with the Fed in motion and the US economy in fifth gear, they start to matter a lot. I believe we’re at that critical threshold right now.

  Allison Nathan: Inflation expectations have been very well-anchored; does that make history a less useful guide?

  Paul Tudor Jones: No. I think we’re experiencing a hysteresis effect in global groupthink, led by the Fed, believing that we can depress term and risk premia without consequences for inflation or financial stability. That may have been the case for the past six to seven years. When it comes to inflation, you need to be careful what you wish for. At the end of other big asset price booms—Japan in 1989 or the US in 1999—inflation did not increase in a measured way. Rather, it accelerated in a non-linear fashion until the central bank had to come in and stop it with substantially higher real rates than we have today.

  Allison Nathan: Is the market underestimating commodity-related inflation today? 

  Paul Tudor Jones: Absolutely. The S&P GSCI index is up more than 65% from its trough two years ago. In fact, relative to financial assets, the GSCI is at one of its lowest points in history. That has historically been resolved by commodities putting on a stunner of a show, stoking inflation. I wouldn’t be surprised if that happened again.

  Allison Nathan: Some argue that it will be difficult to overcome structural deflationary forces, like technological progress or demographic change. You don’t agree?

  Paul Tudor Jones: On technology, what I’ve seen during this disinflationary period is the concentration of economic power into a few corporate hands. Once they have cleared the playing field of their competitors, they could ratchet up prices to decompress margins. So I am not sure these technological disruptions will continue to bring disinflation. In terms of demographics, economists at the Bank for International Settlements (BIS) have shown that it is the relative size of the working-age population that influences long-term trends in inflation. Unlike the prior decade, the share of the working-age population globally is beginning to shrink, and that would argue for inflation trending up.

  Allison Nathan: Does all of this just boil down to the Fed being behind the curve?

  Paul Tudor Jones: Central banks love to look in the rearview mirror. They typically operate by waiting for the most obvious moment they can to make a decision to fight yesterday’s battles. Heck, the ECB hiked rates in July 2008! It is why price targeting is such a bad idea in rate decisions, as is its first cousin, gradualism. There is little in human nature that is linear, so why should rate policy be that way?

  But the elephant in the room—the most important point that doesn’t get discussed enough—is the level of real interest rates. The peacetime 10-year real interest rate that has determined the efficient allocation of capital averaged 3½% since 1790 and 2½% in modern times. Yet in 2018, with the economy operating at full employment, our real 10-year rate is 0.64%, well below historical averages. Why? It seems the reason is the Fed is trying to bring core inflation from a smidge below 2% to a smidge above it. But since 1790, US inflation has averaged 1.3% in peacetime. And yet somehow we have this magical 2% inflation target. It’s a unicorn we keep chasing at the expense of everything else.

  Sitting where we are today, this grand experiment with negative real rates might seem successful: We have the strongest economy in 40 years, at full employment. The mood is euphoric. But it is unsustainable and comes with costs such as bubbles in stocks and credit. Navigating these bubbles will be one of the most difficult jobs any Fed chair has ever faced.

  Allison Nathan: Is the Fed up to the task?

  Paul Tudor Jones: Let me describe to you where I think Jerome Powell is right now as he takes the reins at the Fed. I would liken Powell to General George Custer before the Battle of the Little Bighorn, looking down at an array of  menacing warriors. On the left side of the battlefield are the Stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. They have generally been held at bay and well-behaved, but they are just spoiling to show their true color: two-way volatility. They gave you a taste of that in early February. Look to the middle and there waits the army of Corporate Credit, which is also larger than ever relative to the economy, as ultra-low rates have encouraged it to gain in size, stature, and strength. This army is a little more docile right now, but we know its history, and it can be deadly when stressed. And then on the right are the Foreign Currency Fighters, along with the Crypto Tribe, an alternative store of value that only exists because of the games central banks are playing; the opportunity cost of Crypto is so low, why not own some? The Foreign Currency Fighters have strengthened by 10% over the past year. Compounding the problem, they have a powerful, ascending leader, the renminbi, to challenge the US dollar’s hegemony as the reserve currency. All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates.

  So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities. He might take comfort that he is not alone on the battlefield. But then he looks over at the Washington, DC, fiscal battalion and realizes they are drunk on 5% deficit beer. That’s what Powell is facing, whether he recognizes it or not. And how he navigates this is going to be fascinating to watch.

  Allison Nathan: So, what should Powell do?

  Paul Tudor Jones: Unlike his predecessors, he needs to be symmetrically fearless. Policy unorthodoxy needs to be reversed as quickly as it was deployed. After Alan Greenspan ignored the NASDAQ bubble, it crashed and led to this incredible foray into negative real rates. That created the mortgage bubble, which was initially ignored by Ben Bernanke and ultimately spawned the financial crisis, leading us to fiscal and monetary measures that were unfathomable 20 years ago.

  Today, we need a Fed chair who is proactive, not reactive. Policy-wise, that means moving as quickly as possible to  raise rates and restore appropriate risk premia so as to promote the long-term, efficient allocation of capital. While this will hurt a bit in the short run, it is better than the intergenerational theft that is being perpetrated now with the combination of low rates and high deficits. And it definitely will promote a more stable long-term economic equilibrium.

  It also means having honest discussions about financial stability. A “symmetrical” way to signal that our policy path is unsustainable is to conventionally use what has now become an unconventional tool through its disuse: raise margin
  requirements on stock borrowing. Whether you’re an individual or a corporation, now is not the time to be aggressively leveraging your balance sheet. In fact, for individuals, given the record-low personal savings rate, now is the time to be doing the exact opposite. Remember, saving is the seed corn of future investment and worthy of as much discussion as inflation. If the Fed doesn’t change its course, the systemic threat to the economy will only increase, making the eventual unwind that much more painful.

  Allison Nathan: You’ve repeatedly mentioned fiscal policy. Can you elaborate on your views on that?

  Paul Tudor Jones: I think the recent tax cuts and spending increases are something we will all look back on and regret. And I lay them firmly at the feet of the Fed for encouraging such a fiscal transgression by pursuing this experiment with negative real rates at full employment. With central banks globally experimenting with negative rates, zero rates, quantitative easing, and price targeting, it is easy to see how central governments could feel green-lighted to pursue unconventional fiscal policies. Certainly, central banks are not in a position to criticize them… If real rates had been at their long-term averages, would we have enacted a $1.5tn tax cut? My guess is the Congressional Budget Office’s scoring of the increased interest burden would have nixed it.

  Allison Nathan: In this context, what do you want to own?

  Paul Tudor Jones: I want to own commodities, hard assets, and cash. When would I want to buy stocks? When the deficit is 2%, not 5%, and when real short-term rates are 100bp, not negative. With rates so low, you can’t trust asset prices today. And if you can’t tell by now, I would steer very clear of bonds. Just think, Greece will have a budget deficit below 2% of GDP by the time ours grows to 5%-plus. The markets disciplined Greece for its budget transgressions; it’s just a matter of time before they discipline us. I think that time could be starting now with 10-year Treasuries rising to 3.75%, and 30-years to 4.5%, by year-end, and those are conservative targets.

  Allison Nathan: Won’t easier monetary policy in Europe and Japan cap the rise in US yields?

  Paul Tudor Jones: I don’t think so. Beginning next September, when the ECB concludes its asset purchases, the aggregate balance sheet of the main central banks will start contracting after nearly a decade of expansion. That will be a major data break, making it a horrible time to own bonds.

  Allison Nathan: Won’t rising yields attract some buyers?

  Paul Tudor Jones: No. Bond pension buying, for example, is very pro-cyclical. When stock prices rise, pensions reallocate their capital gains from stocks into bonds. As we’ve seen, this depresses the term premium and fuels more gains in the stock market. If and when the Fed raises rates enough to stop and reverse the stock market rise, that virtuous circle predicated on increasing capital gains will reverse, and bonds and stocks will decline together like they did in the 1970s.

  Allison Nathan: You are well-known for calling Black Monday. Is the recent surge in volatility behind us?

  Paul Tudor Jones: In my view, higher volatility is inevitable. Volatility collapsed after the crisis because of central bank manipulation. That game’s over. With inflation pressures now building, we will look back on this low-volatility period as a five standard- deviation event that won’t be repeated.

  

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